--- page 1 ---
Cover Size: 210 x 280 mm / Open Size: 457 x 280 mm /       width: 37mm
Re/f_ire PPTUS Cover
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--- page 2 ---
IMPORTANT : If you are in any doubt about any of the contents of this prospectus, you should obtain professional independent advice.
Shanghai REFIRE Group Limited
ʮ̡
(A joint stock company incorporated in the People’ s Republic of China with limited liability)
Global Offering
Number of Offer Shares under
the Global Offering
: 4,827,920 H Shares (subject to the Over-
allotment Option)
Number of Hong Kong Offer Shares : 482,800 H Shares (subject to reallocation)
Number of International Offer Shares : 4,345,120 H Shares (subject to reallocation
and the Over-allotment Option)
Maximum Offer Price : HK$165.00 per H Share, plus brokerage of
1.0%, SFC transaction levy of 0.0027%,
AFRC transaction levy of 0.00015% and
Hong Kong Stock Exchange trading fee of
0.00565% (payable in full on application in
Hong Kong dollars and subject to refund)
Nominal value : RMB1.00 per H Share
Stock code : 2570
Sole Sponsor, Joint Overall Coordinator, Joint Global Coordinator, Joint Bookrunner and
Joint Lead Manager
Joint Overall Coordinators, Joint Global Coordinators, Joint Bookrunners and
Joint Lead Managers
Joint Global Coordinators, Joint Bookrunners and Joint Lead Managers
Joint Bookrunners and Joint Lead Managers
(in alphabetical order)
Financial Adviser
Hong Kong Exchanges and Clearing Limited, The Stock Exchange of Hong Kong Limited and Hong Kong Securities Clearing Company Limited take no responsib ility for the contents of this
prospectus, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arisin g from or in reliance upon the whole or any
part of the contents of this prospectus.
A copy of this prospectus, having attached thereto the documents specified in the section headed “Appendix VII — Documents Delivered to the Registrar of Companies and Available on Display”
in this prospectus, has been registered by the Registrar of Companies in Hong Kong as required by Section 342C of the Companies (Winding Up and Miscella neous Provisions) Ordinance (Chapter
32 of the Laws of Hong Kong). The Securities and Futures Commission of Hong Kong and the Registrar of Companies in Hong Kong take no responsibility as to t he contents of this prospectus
or any other documents referred to above.
The Offer Price is expected to be fixed by agreement between the Joint Overall Coordinators (for themselves and on behalf of the Underwriters) and us on the Price Determination Date. The
Price Determination Date is expected to be on or around Wednesday, December 4, 2024 (Hong Kong time) and, in any event, not later than 12:00 noon on Wedne sday, December 4, 2024 (Hong
Kong time). The Offer Price will not be more than HK$165.00 per Offer Share and is currently expected to be not less than HK$145.00 per Offer Share. If, fo r any reason, the Offer Price is
not agreed by 12:00 noon on Wednesday, December 4, 2024 (Hong Kong time) between the Joint Overall Coordinators (for themselves and on behalf of the Und erwriters) and us, the Global
Offering will not proceed and will lapse. Applicants for Hong Kong Offer Shares are required to pay, on application, the maximum Offer Price of HK$165. 00 for each Hong Kong Offer Share
together with a brokerage fee of 1%, a SFC transaction levy of 0.0027%, a Stock Exchange trading fee of 0.00565% and an AFRC transaction levy of 0.00015% .
The Joint Overall Coordinators (for themselves and on behalf of the Underwriters) may, with our consent, reduce the number of Offer Shares being offer ed under the Global Offering
and/or the indicative Offer Price range below that stated in this prospectus at any time on or prior to the morning of the last day for lodging applicatio ns under the Hong Kong Public
Offering. In such case, an announcement will be published on the websites of the Stock Exchange at www.hkexnews.hk and our Company at www.refire.com not later than the morning
of the last day for lodging applications under the Hong Kong Public Offering. Details of the arrangement will then be announced by us as soon as practica ble. For further information,
see “Structure of the Global Offering” and “How to Apply for Hong Kong Offer Shares” in this prospectus.
The obligations of the Hong Kong Underwriters under the Hong Kong Underwriting Agreement are subject to termination by the Joint Overall Coordinator s (for themselves and on
behalf of the Underwriters) if certain events occur prior to 8:00 a.m. on the Listing Date. 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 of fered, sold, pledged or transferred
within the United States, or to, or for the account or benefit of U.S. persons, except in transactions exempt from, or not subject to, the registration r equirements of the U.S. Securities Act. The
Offer Shares are being offered and sold outside the United States in offshore transactions in reliance on Regulation S.
ATTENTION
We have adopted a fully electronic application process for the Hong Kong Public Offering. We will not provide printed copies of this prospectus to the p ublic in relation to the Hong
Kong Public Offering.
This prospectus is available at the website of the Hong Kong Stock Exchange at www.hkexnews.hk and our website at www.refire.com. If you require a prin ted copy of this prospectus,
you may download and print from the websites above.
IMPORTANT
November 28, 2024


--- page 3 ---
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 www.refire.com. If you require a printed
copy of this prospectus, you may download and print from the website addresses above.
To apply for Hong Kong Offer Shares, you may use one of the following
application channels:
Application Channel Platform Target Investors Application Time
White Form eIPO
service /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/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 Thursday, November
28, 2024 to 11:30 a.m.
on Tuesday,
December 3, 2024. The
latest time for
completing full payment
of application monies
will be 12:00 noon
on Tuesday, December
3, 2024.
HKSCC EIPO
channel /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Your broker or custodian
who is a HKSCC
Participant will submit
an EIPO application on
your behalf through
HKSCC’s FINI system
in accordance with your
instruction.
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 .
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 “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


--- page 4 ---
Your application through the White Form eIPO service or the HKSCC EIPO channel
must be made for a minimum of 20 Hong Kong Offer Shares and in multiples of that number
of Hong Kong Offer Shares as set out in the table below.
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 H Shares you have selected. You must pay the
respective amount payable on application in full upon application for Hong Kong Offer Shares.
If you are applying through the HKSCC EIPO channel, you are required to pre-fund your
application based on the amount specified by your broker or custodian, as determined based on
the applicable laws and regulations in Hong Kong.
No. of
Hong Kong
Offer Shares
applied for
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$
20 3,333.28 400 66,665.61 6,000 999,984.16 80,000 13,333,122.00
40 6,666.56 500 83,332.01 7,000 1,166,648.18 90,000 14,999,762.26
60 9,999.84 600 99,998.41 8,000 1,333,312.20 100,000 16,666,402.50
80 13,333.13 700 116,664.82 9,000 1,499,976.23 120,000 19,999,683.00
100 16,666.40 800 133,331.22 10,000 1,666,640.26 140,000 23,332,963.50
120 19,999.68 900 149,997.62 20,000 3,333,280.50 160,000 26,666,244.00
140 23,332.96 1,000 166,664.03 30,000 4,999,920.76 180,000 29,999,524.50
160 26,666.24 2,000 333,328.06 40,000 6,666,561.00 200,000 33,332,805.00
180 29,999.52 3,000 499,992.08 50,000 8,333,201.26 220,000 36,666,085.50
200 33,332.80 4,000 666,656.10 60,000 9,999,841.50 241,400
(1) 40,232,695.64
300 49,999.21 5,000 833,320.13 70,000 11,666,481.76
(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).
No application for any other number of Hong Kong Offer Shares will be considered and
any such application is liable to be rejected.
IMPORTANT


--- page 5 ---
If there is any change in the following expected timetable of the Hong Kong
Public Offering, we will issue an announcement in Hong Kong on the websites of the
Stock Exchange at www.hkexnews.hk and our Company at www.refire.com.
Hong Kong Public Offering commences ............................. .9:00 a.m. on
Thursday, November 28, 2024
Latest time for completing electronic applications
under White Form eIPO service through the
designated website www.eipo.com.hk (2) ........................... 1 1:30 a.m. on
Tuesday, December 3, 2024
Application lists of the Hong Kong Public
Offering open (3) .............................................. 1 1:45 a.m. on
Tuesday, December 3, 2024
Latest time to (a) completing payments of White
Form eIPO applications by effecting internet
banking transfer(s) and (b) giving electronic
application instructions to HKSCC (4) ........................... .12:00 noon on
Tuesday, December 3, 2024
If you are instructing your broker or custodian who is a HKSCC Participant and will
submit an EIPO application on your behalf through HKSCC’s FINI system in accordance with
your instruction, you are advised to contact your broker or custodian for the earliest and latest
time for giving such instructions, as this may vary by broker or custodian.
Application lists of the Hong Kong Public
Offering close
(3) ............................................ .12:00 noon on
Tuesday, December 3, 2024
Expected Price Determination Date (5) .................. W ednesday, December 4, 2024
Announcement of the final Offer Price, the level of
indications of interest in the International Offering,
the level of applications in the Hong Kong Public
Offering and the basis of allocation of the Hong
Kong Offer Shares to be published on the websites
of our Company at www.refire.com
(6) and the
Stock Exchange at www.hkexnews.hk at or before ................... 1 1:00 p.m. on
Thursday, December 5, 2024
EXPECTED TIMETABLE (1)
–i–


--- page 6 ---
Results of allocations in the Hong Kong Public
Offering (with successful applicants’ identification
document numbers or Hong Kong business
registration numbers, where appropriate) to be
available through a variety of channels, including:
 in the announcement to be posted on our website
and the website of the Stock Exchange at
www.refire.com and www.hkexnews.hk
respectively ................................... a to r before 11:00 p.m. on
Thursday, December 5, 2024
 from the designated results of allocations website
at www.eipo.com.hk (alternatively: www.eipo.com.hk/
eIPOAllotment ) with a “search by ID” function
from .................................................. 1 1:00 p.m. on
Thursday, December 5, 2024 to
12:00 midnight on
Wednesday, December 11, 2024
 from the allocation results telephone enquiry by
calling +852 2862 8555 between 9:00 a.m. and
6:00 p.m. on .................................. Friday, December 6, 2024,
Monday, December 9, 2024,
Tuesday, December 10, 2024 and
Wednesday, December 11, 2024
H Share certificates in respect of wholly or partially
successful applications to be dispatched or deposited
into CCASS on or before
(7) ........................ .Thursday, December 5, 2024
White Form e-Refund payment instructions/refund
cheques in respect of wholly or partially successful
applications if the final Offer Price is less than the
maximum Offer Price per Offer Share initially paid
on application (if applicable) or wholly or
partially unsuccessful applications to be
dispatched on or before
(8)(9) .......................... .Friday, December 6, 2024
Dealings in the H Shares on the Main Board of the
Stock Exchange to commence at ................................. .9:00 a.m. on
Friday, December 6, 2024
EXPECTED TIMETABLE (1)
–i i–


--- page 7 ---
Notes:
(1) All dates and times refer to Hong Kong local dates and times, except as otherwise stated.
(2) You will not be permitted to submit your application under the White Form eIPO service through the
designated website at www.eipo.com.hk after 11:30 a.m. on the last day for submitting applications. If you
have already submitted your application and obtained an application reference number from the designated
website prior to 11:30 a.m., you will be permitted to continue the application process (by completing payment
of the application monies) until 12:00 noon on the last day for submitting applications, when the application
lists close.
(3) If there is/are a “black” rainstorm warning signal, a tropical cyclone warning signal number 8 or above and/or
Extreme Conditions in force in Hong Kong at any time between 9:00 a.m. and 12:00 noon on Tuesday,
December 3, 2024, the application lists will not open and close on that day. See the section headed “How to
Apply for Hong Kong Offer Shares — E. Severe Weather Arrangements”.
(4) Applicants who apply for Hong Kong Offer Shares by giving electronic application instructions to HKSCC
via HKSCC’s FINI system should refer to the section headed “How to Apply for Hong Kong Offer Shares —
A. Applications for Hong Kong Offer Shares — 2. Application Channels”.
(5) The Price Determination Date is expected to be on or around Wednesday, December 4, 2024 and, in any event,
not later than 12:00 noon on Wednesday, December 4, 2024. If, for any reason, the Offer Price is not agreed
between the Joint Overall Coordinators (for themselves and on behalf of the Underwriters) and us by 12:00
noon on Wednesday, December 4, 2024, the Global Offering will not proceed and will lapse.
(6) None of the websites or any of the information contained on the websites forms part of this prospectus.
(7) The H Share certificates will only become valid evidence of title at 8:00 a.m. on the Listing Date provided that
the Global Offering has become unconditional and the right of termination described in “Underwriting —
Underwriting Arrangements and Expenses — Hong Kong Public Offering — Grounds for Termination” has not
been exercised. Investors who trade the H Shares on the basis of publicly available allocation details prior to
the receipt of H Share certificates or prior to the H Share certificates becoming valid evidence of title do so
entirely at their own risk.
(8) White Form e-Refund payment instructions/refund cheques will be issued in respect of wholly or partially
unsuccessful applications pursuant to the Hong Kong Public Offering and in respect of wholly or partially
successful applicants in the event that the final Offer Price is less than the price payable per Offer Share on
application. Part of the applicant’s Hong Kong identity card number or passport number, or, if the application
is made by joint applicants, part of the Hong Kong identity card number or passport number of the first-named
applicant, provided by the applicant(s) may be printed on the refund check, if any. Such data would also be
transferred to a third party for refund purposes. Banks may require verification of an applicant’s Hong Kong
identity card number or passport number before encashment of the refund check. Inaccurate completion of an
applicant’s Hong Kong identity card number or passport number may invalidate or delay encashment of the
refund check.
(9) Applicants being individuals who are eligible for personal collection may not authorize any other person to
collect on their behalf. Individuals must produce evidence of identity acceptable to our H Share Registrar at
the time of collection.
Applicants who have applied for Hong Kong Offer Shares through HKSCC EIPO channel should refer to
“How to Apply for Hong Kong Offer Shares — D. Dispatch/Collection of H Share Certificates and Refund of
Application Monies” for details.
Applicants who have applied through the White Form eIPO service and paid their applications monies
through single bank accounts may have refund monies (if any) dispatched to the bank account in the form of
White Form e-Refund payment instructions. Applicants who have applied through the White Form eIPO
service and paid their application monies through multiple bank accounts may have refund monies (if any)
dispatched to the address as specified in their application instructions in the form of refund checks by ordinary
post at their own risk.
Further information is set out in the paragraph headed “How to Apply for Hong Kong Offer Shares — D.
Dispatch/Collection of H Share Certificates and Refund of Application Monies”.
EXPECTED TIMETABLE (1)
– iii –


--- page 8 ---
The above expected timetable is a summary only. For details of the structure of the Global
Offering, including its conditions, and the procedures for applications for Hong Kong Offer
Shares, see “Structure of the Global Offering” and “How to Apply for Hong Kong Offer
Shares”, respectively.
If the Global Offering does not become unconditional or is terminated in accordance with
its terms, the Global Offering will not proceed. In such a case, our Company will make an
announcement as soon as practicable thereafter.
EXPECTED TIMETABLE (1)
–i v–


--- page 9 ---
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.
Y ou should rely only on the information contained in this prospectus to make your
investment decision. The Hong Kong Public Offering is made solely on the basis of the
information contained and the representations made in this prospectus. We have not
authorized anyone to provide you with information that is different from what is
contained in this prospectus. Any information or representation not contained nor
made in this prospectus must not be relied on by you as having been authorized by us,
the Sole Sponsor, the Joint Overall Coordinators, the Joint Global Coordinators, the
Capital Market Intermediaries, 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
Contents ......................................................... v
Summary ......................................................... 1
Definitions ........................................................ 3 4
Glossary of Technical Terms ......................................... 4 6
Forward-Looking Statements ......................................... 5 2
Risk Factors ...................................................... 5 4
CONTENTS
–v–


--- page 10 ---
Waivers from Strict Compliance with Listing Rules and Exemption from Strict
Compliance with the Companies (Winding Up and Miscellaneous Provisions)
Ordinance ...................................................... 8 9
Information about this Prospectus and the Global Offering ................ 9 7
Directors, Supervisors and Parties Involved in the Global Offering .......... 1 0 2
Corporate Information .............................................. 1 1 2
Industry Overview ................................................. 1 1 4
Regulatory Overview ............................................... 1 8 3
History, Development and Corporate Structure .......................... 1 9 6
Business .......................................................... 2 4 6
Directors, Supervisors and Senior Management .......................... 3 6 9
Relationship with Our Single Largest Group of Shareholders ................ 3 9 4
Substantial Shareholders ............................................ 3 9 7
Share Capital ..................................................... 4 0 3
Cornerstone Placing ................................................ 4 0 6
Financial Information ............................................... 4 1 1
Future Plans and Use of Proceeds ..................................... 5 0 5
Underwriting ...................................................... 5 1 0
Structure of the Global Offering ...................................... 5 2 3
How to Apply for Hong Kong Offer Shares ............................. 5 3 4
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 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
–v i–


--- page 11 ---
This summary aims to give you an overview of the information contained in this
prospectus. As this is a summary, it does not contain all the information that may be
important to you. You should read this prospectus in its entirety before you decide to
invest in the Offer Shares. There are risks associated with any investment in the Offer
Shares. Some of the particular risks in investing in the Offer Shares are set out in the
section entitled “Risk Factors” in this prospectus. You should read that section carefully
before you decide to invest in the Offer Shares.
OVERVIEW
During the Track Record Period, as a leading hydrogen technology company in China, we
focused on the design, development, manufacture, and sales of hydrogen fuel cell systems,
hydrogen production systems, and related components, as well as providing fuel cell
engineering and technical services catering to customers’ needs, enabling us to provide
one-stop solution for hydrogen production and end-use applications. In terms of hydrogen fuel
cell systems, we mainly focused on hydrogen fuel cell systems used for heavy-duty trucks
during the Track Record Period. We have proven track record in policy-driven projects, as well
as in market-driven projects. Our presence in the domestic hydrogen market is complemented
by our successful and constant expansion into overseas markets, with a growing revenue
contribution in overseas markets.
We generated revenue primarily from the (i) sales of hydrogen fuel cell systems and
components; (ii) provision of fuel cell engineering and technical services; (iii) sales of
hydrogen production systems and related components, and (iv) others, which primarily
included provision of after-sales services. The table below sets out revenue breakdown of our
business segments during the Track Record Period:
Y ear Ended December 31, Five Months Ended May 31,
2021 2022 2023 2023 2024
RMB’000 % RMB’000 % RMB’000 % RMB’000 % RMB’000 %
(unaudited)
Sales of hydrogen
fuel cell systems
and components
(1) 513,742 98.0 573,562 94.9 857,258 95.8 85,696 97.3 8,987 71.8
Provision of fuel cell
engineering and
technical services /H1118 7,251 1.4 26,473 4.4 23,444 2.6 – – 966 7.7
Sales of hydrogen
production systems
and related
components /H1118/H1118/H1118/H1118/H1118– – – – 7,681 0.9 – – – –
Others
(2) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,116 0.6 4,613 0.8 6,895 0.8 2,372 2.7 2,568 20.5
Total revenue /H1118/H1118/H1118/H1118524,109 100.0 604,648 100.0 895,278 100.0 88,068 100.0 12,521 100.0
SUMMARY
–1–


--- page 12 ---
Notes:
(1) Components mainly included hydrogen supply systems, fuel cell engine accessories, energy storage systems
and others for fuel cell vehicles, and DC-to-DC boost converters, hydrogen circulation systems and others for
fuel cell systems.
(2) Others mainly included provision of after-sales services.
We sold various hydrogen fuel cell systems with different rated power, widely ranging
from 32kW to 220kW. Our hydrogen fuel cell systems were mainly sold to hydrogen fuel cell
commercial vehicle manufacturers and some fuel cell stack manufacturers. We provided
customized fuel cell product solutions, where we provided Components for Fuel Cell Vehicles
in addition to hydrogen fuel cell systems to our customers. Since August 2023, we have
launched proton-exchange membrane (“ PEM”) water electrolysis hydrogen production
systems, PEM water electrolysis cells, hydrogen production membrane-electrode assemblies
(“MEAs”), hydrogen production power sources, and electrodes for ALK electrolysis, which are
mainly sold to hydrogen production facilities and hydrogen production system manufacturers
for high purity hydrogen production.
According to Frost & Sullivan, we ranked the first in the hydrogen fuel cell system market
in China, in terms of the sales power output of hydrogen fuel cell systems in 2023, with a
market share of 23.8%. We ranked the first in the hydrogen fuel cell system market in China,
in terms of the total sales power output of hydrogen fuel cell systems that have been used for
heavy-duty trucks in 2023, with a market share of 42.4%. We ranked the third in the hydrogen
fuel cell system market in China, in terms of the total sales value of hydrogen fuel cell systems
in 2023, with a market share of 16.2%. We ranked the first in the hydrogen fuel cell system
market in China, in terms of the total sales value of hydrogen fuel cell systems that have been
used for heavy-duty trucks in 2023, with a market share of 29.4%. As of May 31, 2024, our
hydrogen fuel cell systems had powered over 5,900 fuel cell vehicles on the road in China. By
the same date, these vehicles had accumulated around 210 million kilometers of operations and
reduced carbon emissions of around 116,851 tons.
In recent years, we have further explored into the upstream of hydrogen industry, where
we have independently developed PEM water electrolysis hydrogen production systems,
hydrogen production power sources, electrodes for alkaline (“ ALK”) electrolysis and other key
components that can effectively utilize electricity to produce hydrogen. Our comprehensive
product and service portfolio enables us to achieve the synergies among hydrogen and
electricity, therefore forming a new business model of “electricity-hydrogen-electricity”,
where our hydrogen fuel cell systems and hydrogen production systems can be used for our
customers’ one-stop solution for utilizing rich renewable power resources in generating
electricity, which will be then used to produce green hydrogen with our PEM and ALK water
electrolysis technologies and products.
SUMMARY
–2–


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As of the Latest Practicable Date, our product and service portfolio covered the entire
industrial chain of hydrogen. Embracing the “dual-carbon” goals of China, which aim to peak
carbon dioxide emissions by 2030 and achieve carbon neutrality before 2060, we are dedicated
to providing full-services in hydrogen industry, including effective, cost-efficient, safe and
reliable hydrogen generation and application products and services, to help achieve a
sustainable future. Below is an illustration of our products and their applications:
Industry Chain of the Hydrogen Market
Midstream Downstream
Hydrogen Production Hydrogen Storage, Transportation, Refuel End-use Applications
Upstream
Directly use
Hydrogen
storage
Transportation
Industry Power
Distributed power generation
Off-grid power generation
Hydrogen energy storage
Heat supply
Steel
Chemical
Industry
Construction
CHP
Backup power
Rail transit
Hydrogen
transportation
Hydrogen
refueling
Using industrial by-product
Using fossil fuel
Fuel Cell System
Fuel
Cell
Stack
Bipolar plate
MEA
Balance
of Plant
(BOP)
Air compressor
Hydrogen circulation
system
FCU
Heavy truck
Construction
machinery
Omnibus
Ship
DC-to-DC converters
Medium and
light-duty truck
Using water electrolysis
(ALK, PEM, SOEC)
Notes:
1. the blue-colored text represents items which fall within the Group’s business scope.
2. the green-colored text represents downstream applications of the Group’s products.
Source: Frost & Sullivan
We attribute our success to the following factors, including, (i) products featuring great
reliability, long lifespan, environmental adaptability, which combined with our ability to offer
comprehensive after-sales services and technical support, enable adaption to vehicles carrying
heavy loads and working under complicated conditions; (ii) high power generation efficiency
and low hydrogen consumption, which help reduce associated costs in heavy-load and long
distance transportation scenarios; and (iii) our ability to continuously drive down production
costs of our fuel cell systems, as we are able to develop and produce greater variety of
components, and source high-quality raw materials and components locally.
SUMMARY
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--- page 14 ---
We also had business relationships with renowned international enterprises in hydrogen
fuel cell industry, such as, Schaeffler Group in Germany, and Toyota Motor in Japan. In
addition, we have been deeply engaged in the development of hydrogen fuel cell system
technologies. Leveraging our industry influence, we are the support institution for the
Hydrogen fuel cell Subcenter of the National Power Battery Innovation Center (ਗɢཥϫ
ཥϫʱʕː) and serve as the chairman enterprise of the Hydrogen fuel cell
Subdivision of the China Automobile Power Battery Industry Innovation Alliance ( ʕ਷ӛԓਗ
ཥϫʱึ). We have joined the International Hydrogen Council,
being among the first batch of PRC enterprises to join the Hydrogen Council, along with GWM
(ӛԓ), Weichai Power (ਗɢ), State Energy Group (ঐ๕ණྠ), and Sinopec ( ʕ
਷ͩʷ).
OUR INDUSTRY
Hydrogen Industry
Hydrogen is an alternative that possesses the characteristics and advantages of being able
to have zero emissions during the energy conversion process, high efficiency, high energy
density and storable on large scale. It can be produced from a variety of sources, including (i)
traditional sources (such as fossil fuels or industrial by-products), (ii) traditional sources
combined with CCUS (Carbon Capture, Utilization, and Storage) technology, and (iii)
renewable energy sources. In particular, hydrogen produced through traditional methods
currently constitutes the predominant form of hydrogen globally, accounting for approximately
86.9% of the total, measured by the sales volume of hydrogen in the global market in 2023. For
related risk, please refer to “Risk Factors — Risks Relating to Our Business — Hydrogen
produced by traditional methods is commonly used in China to operate hydrogen fuel cell
vehicles, which causes certain environmental impact and may in turn, adversely affect
business, results of operations, financial condition, and prospects of our Company” in this
prospectus.
The market size of hydrogen consumption measured by value in China increased from
RMB244.3 billion from 2018 to RMB355.2 billion in 2023, and is expected to increase to
RMB578.1 billion in 2028. In addition, low carbon hydrogen consumption measured by value
in China increased from approximately RMB20.8 billion in 2018 to approximately RMB78.0
billion in 2023, with a CAGR of 30.3%, and is expected to significantly increase to RMB267.7
billion in 2028, with a CAGR of 28.0% for the period from 2023 to 2028.
SUMMARY
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Hydrogen Fuel Cell Industry
We are a leading market player in hydrogen fuel cell industry. The hydrogen fuel cell
industry witnessed the promulgation of various supporting policies and clear developmental
goals both in China and abroad. For more information, see “Industry Overview — Overview
of the Hydrogen Industry — Preferential Policies and Regulations” in this prospectus.
Supported by the favorable policies, the hydrogen industry is expected to grow continuously.
Hydrogen fuel cell industry is mainly policy-driven at current stage, where market players
heavily rely on governmental policies, subsidies and incentives to drive their growth and
market acceptance. However, it has been gradually transitioning from a policy-driven one to
a market-driven one, where market players start to rely less on government support and shift
their focus to market-driven factors, such as performance, cost-effectiveness, and consumer
preferences. Pursuant to the Notice on Launching the Pilot Application of Fuel Cell Vehicles
(‘), demonstration city clusters, led by Beijing,
Shanghai, Guangdong, Zhengzhou and Zhangjiakou, were established to promote the adoption
and acceptance of core technologies for fuel cell vehicles with a demonstration period of four
years. The PRC government will adopt the “award in lieu of subsidy” policy to give incentives
to market participants in the demonstrative city clusters. Demonstration cities refer to cities
included in the demonstration city clusters, while non-demonstration cities refer to all other
cities in China.
In hydrogen fuel cell industry, the customers will generally determine how much supplies
they need after assessing and determining their product and sales plans, and then we commence
production according to the customers’ demands in the second half of the year. As the hydrogen
fuel cell industry is mainly policy-driven, the customers generally settle the contract price with
us only after they receive the awards from government. As a result, the turnover days of our
receivables tend to be relatively long.
According to Frost & Sullivan, except for certain FCEV manufacturers, a majority of the
market players, along the hydrogen value chain in China, whose main businesses are related
to hydrogen industry, are still loss-making, mainly because the industry is still in a relatively
early stage, requiring substantial investment in research and development as well as sales and
marketing, which in turn demand significant financial resources, and the industry is still
primarily policy-driven, with market players more or less rely on government subsidies, while
production costs of related products are relatively high.
SUMMARY
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--- page 16 ---
OUR STRENGTHS
We believe the following competitive strengths contributed to our success and position us
for continued growth:
 A leader in the fast growing hydrogen industry, with full-service capabilities
covering the entire industrial chain in hydrogen industry;
 Strong technological and research and development capabilities, enabling continual
iteration in products;
 Commercially viable application in heavy-duty trucks in low-price hydrogen market
in non-demonstration cities;
 Extensive and expanding global presence evidenced by international business
network and numerous international certifications;
 Proven ability to satisfy various power demands with rich hydrogen related product
matrix and comprehensive applications; and
 Seasoned management team, with strong shareholder support.
OUR STRATEGIES
To drive our continued growth and achieve this mission, we will implement the following
strategies:
 Further expand our customer base and footprint nationally and internationally;
 Further advance the R&D of hydrogen fuel cell systems, hydrogen production
systems and other products to improve product performance, competitiveness and
cost-efficiency;
 Expand the production capacity to meet the growing market demand;
 Actively venture into supply chains of the industry and enhance industry-wide
synergies; and
 Continue to attract and cultivate professional talents, improve team building,
management and operation efficiency.
SUMMARY
–6–


--- page 17 ---
SUMMARY OF MATERIAL RISK FACTORS
Our business and the Global Offering involve certain risks as set out in “Risk Factors” in
this prospectus. Some of the major risks we face include the following:
 Our business depends on the PRC government policies and regulatory framework
supporting the hydrogen industry, which the PRC government could change or
eliminate;
 The demand for our products depends on the future trend and development of the
PRC fuel cell vehicle industry and the availability of other types of new energy
vehicle. There are uncertainties in future market demand and we cannot assure that
we will continue to obtain sufficient purchase orders in the future;
 We recorded net losses in the past and had negative cash flows from operating
activities, and our trade receivables turnover days remained at a relatively high
level, all of which may continue if we may not be able to implement our business
plans successfully in the future;
 We are in a new industry where emerging technologies used in fuel cell systems or
hydrogen production system may not be mature. Any major product defects,
malfunctions or negative news concerning the hydrogen industry may damage our
reputation and adversely affect our business, financial condition and results of
operations;
 The industry we operate in is characterized by rapid technological changes and
advancements. We may not be able to maintain our revenue growth and any delay
by us in bringing new and competitive products to the market could adversely affect
our financial performance;
 We depend on a concentration of major customers and we do not enter into
long-term sales agreements with them. Any loss of these customers or future
purchase order from them would adversely affect our business, financial condition,
results of operations and cash flows; and
 Our research and development efforts may not yield the results as expected to
maintain our market share and competitiveness in China’s fuel cell market.
SUMMARY
–7–


--- page 18 ---
OUR OPERATING RESULTS
Revenue
During the Track Record Period, we generated revenue primarily from the (i) sales of
hydrogen fuel cell systems and components; (ii) provision of fuel cell engineering and
technical services; (iii) sales of hydrogen production systems and related components, and (iv)
others, which primarily included provision of after-sales services. The table below sets out
revenue breakdown of our business segments:
Y ear Ended December 31, Five Months Ended May 31,
2021 2022 2023 2023 2024
RMB’000 % RMB’000 % RMB’000 % RMB’000 % RMB’000 %
(unaudited)
Sales of hydrogen
fuel cell systems
and components
– Hydrogen fuel cell
systems /H1118/H1118/H1118/H1118/H1118/H1118/H1118452,725 86.4 423,265 70.0 637,176 71.2 52,996 60.2 7,091 56.6
– Components
(1) /H1118/H1118/H111861,017 11.6 150,297 24.9 220,082 24.6 32,700 37.1 1,897 15.1
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118513,742 98.0 573,562 94.9 857,258 95.8 85,696 97.3 8,987 71.8
Provision of fuel cell
engineering and
technical services /H1118 7,251 1.4 26,473 4.4 23,444 2.6 – – 966 7.7
Sales of hydrogen
production systems
and related
components /H1118/H1118/H1118/H1118/H1118– – – – 7,681 0.9 – – – –
Others
(2) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,116 0.6 4,613 0.8 6,895 0.8 2,372 2.7 2,568 20.5
Total revenue /H1118/H1118/H1118/H1118524,109 100.0 604,648 100.0 895,278 100.0 88,068 100.0 12,521 100.0
Notes:
(1) Components mainly included hydrogen supply systems, fuel cell engine accessories, energy storage systems
and others for fuel cell vehicles, and DC-to-DC boost converters, hydrogen circulation systems and others for
fuel cell systems.
(2) Others mainly included provision of after-sales services.
SUMMARY
–8–


--- page 19 ---
During the Track Record Period, our largest revenue contributor was the sales of
hydrogen fuel cell systems and components, which accounted for 98.0%, 94.9%, 95.8% and
71.8% of our total revenue in 2021, 2022, 2023 and the five months ended May 31, 2024,
respectively. The tables below set out details on sales volume, sales power output, revenue, and
average selling prices of our hydrogen fuel cell systems during the Track Record Period:
Y ear Ended December 31,
Five Months Ended
May 31,
2021 2022 2023 2023 2024
Sales volume (unit)
Fuel cell systems equipped with
fuel cell stacks provided by:
– Our Group /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118639 790 1,234 85 11
– Third party suppliers /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118507 456 668 152 2
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,146 1,246 1,902 237 13
Sales power output (kW)
Fuel cell systems equipped with
fuel cell stacks provided by:
– Our Group /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111869,155 82,958 158,916 9,010 943
– Third party suppliers /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111846,438 49,757 83,410 12,060 160
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118115,593 132,715 242,326 21,070 1,103
Average selling price
(RMB per kW)
Fuel cell systems equipped with
fuel cell stacks provided by:
– Our Group /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,635 3,720 2,982 3,796 6,665
– Third party suppliers /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,846 2,305 1,958 1,558 5,038
Overall /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,917 3,189 2,629 2,515 6,429
Our revenue from sales of hydrogen fuel cell systems and components increased by 11.6%
from RMB513.7 million in 2021 to RMB573.6 million in 2022, and further increased by 49.5%
to RMB857.3 million in 2023. The continued growth was primarily driven by higher sales
volumes in both (i) fuel cell systems equipped with our in-house manufactured fuel cell stacks,
and (ii) components. The increase in sales volume of fuel cell systems equipped with our
in-house manufactured fuel cell stacks, rising from 639 units in 2021 and 790 in 2022, and
further reaching 1,234 in 2023, was attributed to our efforts to improve product performance,
cost reduction initiatives, and facilitating commercialization. Additionally, the growth in
demand for components, particularly hydrogen supply systems, energy storage systems and
fuel cell stacks which were offered alongside our fuel cell systems as comprehensive product
solutions, reflected the increasing trust and recognition from customers in our ability to
provide quality solutions. In particular, in September 2023, we launched a pioneer project, with
SUMMARY
–9–


--- page 20 ---
its first phase involving a one-time order for a large volume of fuel cell systems and hydrogen
supply systems, contributing RMB162.6 million to our total revenue in 2023. As this project
progresses, we may receive new orders in the future. The increase in sales volume was partially
offset by a decrease in the average selling price of our fuel cell systems, which resulted from
our continuous pursuit of technology advancements and cost efficiencies that allowed us to
offer more competitive pricing.
During the Track Record Period, we have seen a continuous increase in results from sales
of hydrogen fuel cell systems equipped with our in-house manufactured fuel cell stacks, in
terms of both the absolute amount and the percentage of our sales volume and sales power
output, respectively. This continued growth was primarily attributed to the strong growth in
market recognition of the quality of our products and services that rest upon our solid
technology capabilities, our increased marketing and sales efforts, as well as the growing
pricing capacity capitalizing on the increased utilization of our in-house manufactured fuel cell
stacks.
During the Track Record Period, the proportion of our revenue from sales of fuel cell
systems in regions other than demonstration city clusters increased from 21.0% in 2021 to
27.9% in 2022, and further to 36.0% in 2023. This was attributable to our strategic expansion
into hydrogen-rich regions like Shaanxi, Shanxi, as well as energy-rich regions such as Ningxia
and Inner Mongolia, fostering our focus on select key demonstration cities, including Shanghai
and those in Henan province. This strategic positioning allows us to continually enhance our
market presence and foster established relationships with industry chain enterprises that reside
in demonstration city clusters, while leveraging such achievements to promote our market
penetration and capture opportunities driven by market demands in regions with strong growth
potential.
During the Track Record Period, the revenue generated from sales of fuel cell systems to
be equipped in heavy-duty trucks as a percentage of the total revenue from sales of fuel cell
systems witnessed a continuous increase, rising from 61.6% in 2021 to 68.7% in 2022, and
further to 86.3% in 2023. This continued growth was primarily due to: (i) the transition towards
high-output fuel cell systems that has expanded their potential applications in the heavy-duty
trucks. According to Frost & Sullivan, the rapid development and iteration of high-output fuel
cell systems in China have accelerated their adoption within the heavy-duty truck market; (ii)
the economic viability of heavy-duty truck applications. In particular, in regions where
hydrogen prices are relatively low, the use of fuel cell systems in heavy-duty trucks has
demonstrated cost-effectiveness even without substantial government subsidies; and (iii) the
strong demand for heavy-duty trucks in various application scenarios, such as mining areas,
where transportation needs are high and routes are generally highly concentrated or even fixed,
which effectively reduced the costs associated with building an extensive hydrogen refueling
infrastructure, and in turn, making fuel-cell heavy-duty truck applications feasible.
SUMMARY
–1 0–


--- page 21 ---
For the five months ended May 31, 2024, our revenue from sales of hydrogen fuel cell
systems and components amounted to RMB9.0 million, representing a decrease from RMB85.7
million for the same period in 2023. This was mainly due to a decrease in the sales volume of
fuel cell systems and components driven by fluctuations in timing of order deliveries. Our main
customers, fuel cell vehicle manufacturers, generally place orders with us after assessing their
production and sales plans which are influenced by various factors including the timing of
related government award projects. As a result, large-scale orders and deliveries of our fuel cell
systems and components are usually concentrated in the second half of the year. Given the
relatively fewer orders delivered in the first half of the year, fluctuations in the timing of
individual order deliveries may have a greater impact on our revenue during this period. In the
first five months of 2024, we delivered only 11 fuel cell systems, down from 85 in the same
period in 2023. Nonetheless, we had received orders for 60 fuel cell systems that were not yet
delivered by May 2024, with an aggregate contract value of over RMB21 million. Additionally,
in June 2024, we received orders for over 80 fuel cell systems placed by our customers, with
an aggregate contract value of over RMB29 million, and we also delivered 30 fuel cell systems
to our customers, with an aggregate contract value of over RMB16 million. The decrease in
sales volume of components was driven by fluctuations in customers’ demands for applying
various components, which were influenced by their vehicle production schedules. Although
the volume of components delivered in the first five months of 2024 was relatively small, the
aggregate contract value of the components we delivered to customers in June 2024 exceeded
RMB70 million.
For the five months ended May 31, 2024, all of our revenue from sales of fuel cell systems
was generated from non-demonstration cities, and the proportion of revenue from sales of fuel
cell systems to be equipped in heavy-duty trucks decreased to 21.1% of our total revenue from
sales of fuel cell systems. However, considering the relatively low sales volume in the first half
of the year due to seasonality, we do not believe the product mix and corresponding revenue
contribution percentages observed in the first five months are representative of the full-year
trends. We expect that for the full year ending December 31, 2024, the majority of the sales
of our fuel cell systems will continue to be in demonstration cities, mainly for heavy-duty truck
applications.
SUMMARY
–1 1–


--- page 22 ---
Cost of Sales
The following table sets forth a breakdown of our cost of sales by nature for the periods
indicated:
Y ear Ended December 31, Five Months Ended May 31,
2021 2022 2023 2023 2024
RMB’000 % RMB’000 % RMB’000 % RMB’000 % RMB’000 %
(unaudited)
Cost of sales of
goods and
services
Raw materials
– Fuel cell stacks
produced by our
Group /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118181,754 43.8 133,066 28.1 177,866 26.0 24,981 33.1 1,329 4.7
– Hydrogen supply
systems /H1118/H1118/H1118/H1118/H1118/H1118/H111838,273 9.2 89,544 18.9 146,837 21.5 11,676 15.5 315 1.1
– Fuel cell stacks
from external
suppliers /H1118/H1118/H1118/H1118/H1118/H111846,367 11.2 38,841 8.2 64,553 9.4 – – 995 3.5
– Other raw
materials
(1) /H1118/H1118/H1118/H1118/H111894,351 22.8 131,875 27.9 210,135 30.7 22,029 29.2 5,622 19.9
Subtotal of raw
materials /H1118/H1118/H1118/H1118/H1118/H1118360,745 87.0 393,326 83.2 599,392 87.6 58,685 77.7 8,261 29.2
Depreciation and
amortization /H1118/H1118/H1118/H111815,284 3.7 24,936 5.3 24,768 3.6 5,939 7.9 8,356 29.6
Employee benefit
expense /H1118/H1118/H1118/H1118/H1118/H1118/H111815,859 3.8 20,044 4.2 25,434 3.7 4,041 5.3 4,375 15.5
Others (2) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111822,765 5.5 34,405 7.3 34,304 5.0 6,898 9.1 7,254 25.7
Subtotal of cost of
sales of goods and
services /H1118/H1118/H1118/H1118/H1118/H1118/H1118414,653 100.0 472,712 100.0 683,897 100.0 75,563 100.0 28,246 100.0
Impairment losses on
inventories /H1118/H1118/H1118/H1118/H111847,671 82,113 31,765 16,470 8,476
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118462,324 554,825 715,662 92,033 36,722
Notes:
(1) Other raw materials mainly included energy storage systems, fuel cell engine accessories, air compressors and
controllers, humidifiers, DC-to-DC boost converters and hydrogen circulation pumps.
(2) Others mainly included rental costs, utilities, and repair and maintenance fees.
SUMMARY
–1 2–


--- page 23 ---
Gross Profit and Gross Profit Margin
Our gross profit represents our revenue less cost of sales, and our gross profit margin
represents our gross profit divided by our revenue, expressed as a percentage. The following
table sets forth a breakdown of our gross profit and gross profit margin by business activity for
the periods indicated:
Y ear Ended December 31, Five Months Ended May 31,
2021 2022 2023 2023 2024
Gross
Profit
Gross
Profit
Margin
Gross
Profit
Gross
Profit
Margin
Gross
Profit
Gross
Profit
Margin
Gross
Profit
Gross
Profit
Margin
Gross
Profit
Gross
Profit
Margin
RMB’000 % RMB’000 % RMB’000 % RMB’000 % RMB’000 %
(unaudited)
Sales of hydrogen
fuel cell systems
and components
– Hydrogen fuel cell
systems /H1118/H1118/H1118/H1118/H1118/H1118/H111897,845 21.6 98,288 23.2 178,265 28.0 8,100 15.3 (18,435) (260)
– Components
(1) /H1118/H1118/H11186,146 10.1 12,604 8.4 13,113 6.0 2,504 7.7 633 33.4
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118103,991 20.2 110,891 19.3 191,378 22.3 10,604 12.4 (17,802) (198.1)
Provision of fuel cell
engineering and
technical services /H1118 2,858 39.4 17,291 65.3 15,206 64.9 – N/A 627 64.9
Sales of hydrogen
production systems
and related
components /H1118/H1118/H1118/H1118/H1118– N/A – N/A 1,271 16.5 – N/A – N/A
Others
(2) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,608 83.7 3,754 81.4 3,526 51.1 1,901 80.2 1,450 56.5
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118109,456 20.9 131,936 21.8 211,381 23.6 12,505 14.2 (15,726) (126.0)
Impairment losses on
inventories /H1118/H1118/H1118/H1118/H1118(47,671) (82,113) (31,765) (16,470) (8,476)
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111861,785 11.8 49,823 8.2 179,616 20.1 (3,965) (4.5) (24,202) (193.3)
Notes:
(1) Components mainly included hydrogen supply systems, fuel cell engine accessories, energy storage
systems and others for fuel cell vehicles, and DC-to-DC boost converters, hydrogen circulation systems
and others for fuel cell systems.
(2) Others mainly included provision of after-sales services.
SUMMARY
–1 3–


--- page 24 ---
Our gross profit for sales of hydrogen fuel cell systems and components increased by
6.6% from RMB104.0 million in 2021 to RMB110.9 million in 2022, with the gross profit
margin decreasing slightly from 20.2% to 19.3%. In 2023, our gross profit for sales of
hydrogen fuel cell systems and components further increased by 72.6% to RMB191.4 million
with a gross profit margin of 22.3%. The continued increase in gross profit from 2021 to 2023
was due to the fact that the sales growth of fuel cell systems and components outpaced the rise
in related cost of sales as a result of our effective cost control measures. The slight decrease
in 2022 in gross profit margin was attributed to the higher proportion of revenue generated
from sales of components, which generally have lower profit margins compared to fuel cell
systems. Specifically, the gross profit margin for fuel cell systems increased from 21.6% in
2021 to 23.2% in 2022, which further increased to 27.9% in 2023. This was mainly due to our
endeavors in procuring high-quality domestic raw materials, which have quality comparable to
previously imported materials, and leveraging proprietary key components, which enabled us
to optimize costs. The gross profit margin for components decreased from 10.1% to 8.4%, and
further to 5.9% in 2023, primarily due to variations in the component mix sold, as different
components carry different profit margins based on customer needs.
We recorded gross loss for sales of hydrogen fuel cell systems and components of
RMB17.8 million for the five months ended May 31, 2024, with a negative gross margin of
198.1%. This was mainly due to the seasonality of our business that resulted in low sales
volume and revenue in the first five months of the year, while costs of sales such as employee
benefit expense and depreciation and amortization did not decline proportionately during the
same period, resulting in a gross loss.
OUR PRODUCTION
We have established three manufacturing plants in Changshu Jiangsu, Jiaxing Zhejiang
and Shanghai, respectively. Our hydrogen fuel cell systems are mostly produced in our plant
in Changshu (“Changshu Plant”). There are two production lines in our Changshu Plant, which
have partially realized automated production. Our Components for Fuel Cell Systems are
produced in our plants in Jiaxing (“Jiaxing Plant”) or Shanghai (“Shanghai Plant”). In addition,
we may assess and test our new products at our Shanghai Plant, including but not limited to
functional and quality conformance test prior to production, pressure test, electrical test, and
bench test.
We have established and implemented a customized management system that covers the
entire production process to ensure effective control of design, procurement, manufacturing,
inspection and testing. We regularly inspect and maintain our production facilities and conduct
overall overhauls of specific production equipment. We implement specific maintenance
procedures for production equipment based on each equipment’s unique characteristics to
ensure their proper operations. During the Track Record Period, we did not experience any
major or long-lasting cessation of business due to failure of machinery, equipment or other
facilities. For more information, see “Business — Our Production” in this prospectus.
SUMMARY
–1 4–


--- page 25 ---
OUR RESEARCH AND DEVELOPMENT
Since our establishment in 2015, we have continuously invested in research and
development, iteration and optimization of hydrogen fuel cell systems and components. Since
2022, we started to devote ourselves to developing hydrogen production systems and related
components. As of the Latest Practicable Date, we have obtained core technologies in hydrogen
fuel cell system design, simulation, control, integration, and production, as well as design and
production of fuel cell stack, MEA, and bipolar plate, which collectively contribute to the good
performance, long lifespan, high reliability, great environmental adaptability, and cost-
effectiveness of our hydrogen fuel cell systems and components. As evaluated by the China
Society of Automotive Engineers and the Shanghai Society of Transportation Engineering ( ʕ
਷ӛԓʈ೻ኪึձɪऎ̹ʹஷʈ೻ኪึ), our hydrogen fuel cell system technologies applied in
commercial vehicles excel in system control, low-temperature damage-free freeze-start and
durability.
Our independent research experience and mass-production experience also allows us to
accumulate valuable technology and know-how that enabled us to streamline and modularize
development process of hydrogen fuel cell systems and components. Our other core
technologies include but not limited to high-performance controller and high robust control
system design technology; iterative optimization control technology of hydrogen fuel cell
system based on big data platform; non-destructive fast start technology for hydrogen fuel cell
system at -30°C without auxiliary heat; fuel cell water-heat balance management technology
and high-power system heat dissipation management technology; high-temperature resistance
technology of fuel cell stacks; long lifespan technology of fuel cell stacks; highly-automated
fuel cell stack production technology; long lifespan, high-temperature resistance, high
consistency membrane electrode design, and mass production technology; high-strength,
high-performance, and long-lifespan composite graphite bipolar plate seal structure design and
mass production technology, etc. For more information, see “Business — Research &
Development” in this prospectus.
OUR SINGLE LARGEST GROUP OF SHAREHOLDERS
As of the Latest Practicable Date, our Single Largest Group of Shareholders was able to
exercise approximately 21.96% voting rights in our Company. Immediately upon completion
of the Global Offering (assuming the Over-allotment Option is not exercised and the options
granted under the Pre-IPO Share Option Scheme are not exercised), our Single Largest Group
of Shareholders will be entitled to exercise approximately 20.73% voting rights in our
Company and will remain as our single largest group of Shareholders. There will be no
controlling shareholder of our Company under the Listing Rules upon Listing. For details, see
“Relationship with Our Single Largest Group of Shareholders” in this prospectus.
SUMMARY
–1 5–


--- page 26 ---
PRE-IPO INVESTMENTS
Between July 2016 and December 2022, our Company obtained several rounds of
investments from the Pre-IPO Investors and raised RMB3,938.9 million in total. For details,
see “History, Development and Corporate Structure — Principal Terms of the Pre-IPO
Investments” in this prospectus.
SUMMARY HISTORICAL FINANCIAL INFORMATION
The following tables set forth summary financial data from our consolidated financial
information as of the dates indicated, extracted from the Accountants’ Report set out in
Appendix I to this prospectus. The summary consolidated financial data set forth below should
be read together with, and is qualified in its entirety by reference to, the consolidated financial
statements in this prospectus, including the related notes. Our consolidated financial
information was prepared in accordance with International Financial Reporting Standards.
Selected Items of Our Consolidated Statements of Profit or Loss
Y ear Ended December 31, Five Months Ended May 31,
2021 2022 2023 2023 2024
RMB’000 % RMB’000 % RMB’000 % RMB’000 % RMB’000 %
(unaudited)
Revenue /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118524,109 100.0 604,648 100.0 895,278 100.0 88,068 100.0 12,521 100.0
Cost of sales /H1118/H1118/H1118/H1118/H1118/H1118/H1118(462,324) (88.2) (554,825) (91.8) (715,662) (79.9) (92,033) (104.5) (36,722) (293.3)
– Cost of sales of goods
and services /H1118/H1118/H1118/H1118/H1118/H1118(414,653) (79.1) (472,712) (78.2) (683,897) (76.4) (75,563) (85.8) (28,246) (225.6)
– Impairment losses on
inventories /H1118/H1118/H1118/H1118/H1118/H1118/H1118(47,671) (9.1) (82,113) (13.6) (31,765) (3.5) (16,470) (18.7) (8,476) (67.7)
Gross profit /H1118/H1118/H1118/H1118/H1118/H1118/H111861,785 11.8 49,823 8.2 179,616 20.1 (3,965) (4.5) (24,201) (193.3)
Other income and gains /H1118 53,950 10.3 59,792 9.9 59,825 6.7 15,421 17.5 19,532 156.0
Selling and marketing
expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(90,475) (17.3) (102,826) (17.0) (134,833) (15.1) (36,702) (41.7) (43,076) (344.0)
Administrative expenses /H1118(218,227) (41.6) (242,695) (40.1) (339,670) (37.9) (103,914) (118.0) (196,575) (1,570.0)
Research and
development expenses /H1118(230,891) (44.1) (198,688) (32.9) (220,880) (24.7) (99,498) (113.0) (90,281) (721.0)
Impairment losses on
financial assets and
a financial guarantee
obligation, net /H1118/H1118/H1118/H1118/H1118(144,636) (27.6) (15,459) (2.6) (63,965) (7.1) (18,881) (21.4) (41,455) (331.1)
Others
(1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
(81,808) (15.7) (95,420) (15.8) (59,861) (6.7) (21,715) (24.6) (35,340) (282.2)
Loss before tax /H1118/H1118/H1118/H1118/H1118(650,302) (124.1) (545,473) (90.2) (579,768) (64.8) (269,254) (305.7) (411,396) (3,285.6)
SUMMARY
–1 6–


--- page 27 ---
Y ear Ended December 31, Five Months Ended May 31,
2021 2022 2023 2023 2024
RMB’000 % RMB’000 % RMB’000 % RMB’000 % RMB’000 %
(unaudited)
Income tax
credit/(expense) /H1118/H1118/H1118/H1118(3,990) (0.8) (626) (0.1) 2,237 0.2 2,551 2.9 1,965 15.7
Loss for the
year/period /H1118/H1118/H1118/H1118/H1118/H1118(654,292) (124.8) (546,099) (90.3) (577,531) (64.5) (266,703) (302.8) (409,431) (3,270.0)
Loss attributable to:
Owners of the parent /H1118/H1118/H1118(572,802) (109.3) (505,966) (83.7) (529,472) (59.1) (247,137) (280.6) (394,115) (3,147.6)
Non-controlling interests /H1118(81,490) (15.5) (40,133) (6.6) (48,059) (5.4) (19,566) (22.2) (15,316) (122.3)
Note:
(1) Others include fair value gains or losses on financial assets at fair value through profit or loss, fair value loss
on a derivative financial instrument, finance costs, share of losses of associates and a joint venture and other
expenses.
Non-IFRS Measure
To supplement our consolidated financial statements, which are presented in accordance
with IFRS, we also use adjusted net loss (non-IFRS measure) as an additional non-IFRS
measure, which is not required by, or presented in accordance with, IFRS.
We believe the presentation of this non-IFRS measure when shown in conjunction with
the corresponding IFRS measures provides useful information to investors and management in
facilitating a comparison of our operating performance from year to year and period to period
by eliminating potential impacts of certain items. However, our presentation of adjusted net
loss (non-IFRS measure) may not be comparable to similarly titled measures presented by
other companies. The use of this non-IFRS measure has limitations as an analytical tool, and
you should not consider it in isolation from, or as a substitute for an analysis of, our results
of operations or financial condition as reported under IFRS.
SUMMARY
–1 7–


--- page 28 ---
We define “adjusted net loss (non-IFRS measure)” as loss for the year/period adjusted by
adding back share-based payment and listing expenses. Share-based payment was non-cash in
nature, representing the employee incentive scheme through which we offered share awards to
our employees. For more information, see note 34 to the Accountants’ Report in Appendix I to
this prospectus. The following table reconciles our adjusted net loss (non-IFRS measure) for
the years/periods:
Y ear Ended December 31,
Five Months
Ended May 31,
2021 2022 2023 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Loss for the
year/period /H1118/H1118/H1118/H1118/H1118/H1118(654,292) (546,099) (577,531) (266,703) (409,431)
Adjustment:
Share-based payment
expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111831,326 27,094 87,066 19,123 117,484
Listing expenses /H1118/H1118/H1118/H1118– – 19,084 – 9,003
Adjusted net loss
(non-IFRS
measures) /H1118/H1118/H1118/H1118/H1118/H1118/H1118(622,966) (519,005) (471,381) (247,580) (282,944)
For more information, see “— Our Operating Results” in this section and “Financial
Information — Description of Selected Components of Consolidated Statements of Profit or
Loss” in this prospectus.
Our profitability is impacted by various factors associated with the early stage of the
hydrogen fuel cell industry and the hydrogen fuel cell vehicle industry in China, including
relatively limited downstream applications, relatively high production costs, and limited
development in the upstream and downstream of these industries. We incurred net losses of
RMB654.3 million, RMB546.1 million, RMB577.5 million and RMB409.4 million in 2021,
2022, 2023 and the five months ended May 31, 2024, respectively. The net losses were
primarily attributable to (i) the continuous expansion of our business scale during the Track
Record Period that led to increased expenses and raw material costs; (ii) substantial impairment
losses on trade receivables recognized; and (iii) significant impairment losses on inventories,
particularly in 2022, resulting from rapid product iterations towards high-output fuel cell
systems and the decline in market prices. Considering the early stage of industry development
and our ongoing investment in R&D expenses, production costs, and other expenses to seize
market share and enhance product competitiveness, we anticipate recording net losses in 2024.
SUMMARY
–1 8–


--- page 29 ---
Our net loss declined by 16.5% from RMB654.3 million in 2021 to RMB546.1 million in
2022, primarily due to (i) reduced net impairment losses on financial assets and a financial
guarantee obligation resulting from higher net loss allowance on trade receivables in 2021 as
we made full provisions on trade receivables due from a third-party customer who experienced
financial difficulties; (ii) decreased research and development expenses attributed to the higher
raw material costs incurred in 2021 for testing and validating our in-house developed MEAs
and completing the development of fuel cell systems with a rated power of 120kW to 130kW
and corresponding fuel cell stacks; and (iii) revenue growth surpassing the increase in cost of
sales, selling and marketing expenses, and administrative expenses, reflecting our efforts in
cost control and improved operating leverage. Our net loss increased slightly by 5.8% from
RMB546.1 million in 2022 to RMB577.5 million in 2023, which was mainly due to (i) an
increase in employee benefit expenses, particularly the share-based payments as we granted
options under our employee incentive scheme in April 2023; and (ii) a rise in impairment losses
on trade receivables as a result of the increased trade receivables along with revenue growth
and prolonged settlement. Our net loss also increased from RMB266.7 million for the five
months ended May 31, 2023 to RMB409.4 million for the five months ended May 31, 2024,
primarily attributable to (i) a RMB98.4 million increase in share-based payments as we granted
options under our employee incentive scheme in January 2024; and (ii) the fact that our
revenue was relatively small in the first five months of 2024 due to the seasonality and
fluctuations in our customers’ demands for application of fuel cell systems and components,
which were in relation to their vehicle production schedules, while our costs and expenses such
as employee salaries and rent did not decline proportionately, resulting in a gross loss during
that period.
The prolonged settlement of our trade receivables was primarily influenced by the fact
that there is usually a relatively long time gap between the sale of a vehicle and the receipt of
a subsidy by a vehicle manufacturer (i.e. our customer) under the current governmental policy.
Our major customers are mainly vehicle manufacturers, including publicly listed companies
and their subsidiaries, state-owned enterprises, and reputable companies. According to Frost &
Sullivan, China’s fuel cell vehicle industry is still in the early stages of development and is
highly affected by government subsidy policies. Hydrogen fuel cell vehicle manufacturers
typically sell vehicles to customers and adjust prices by deducting applicable subsidies at the
time of sale, with the expectation of receiving government subsidies afterward. However, the
process of collecting these subsidies from the government typically takes a significant amount
of time, often exceeding two years. This, coupled with the fact that hydrogen fuel cell
commercial vehicle manufacturers have strong bargaining power given the industry is still in
the early stages of development, ultimately contributing to the prolonged settlement of our
trade receivables.
SUMMARY
–1 9–


--- page 30 ---
As of December 31, 2021, 2022, 2023 and May 31, 2024, our provision for impairment
losses on trade and bills receivables and contract assets amounted to RMB373.4 million,
RMB400.1 million, RMB461.1 million and RMB503.0 million, respectively. This was
primarily due to (i) the prolonged settlement, as discussed above, from certain customers to
which we made provision for and increased the respective expected loss rates accordingly, (ii)
the increase in the gross carrying amount of trade receivables along with the revenue growth,
and (iii) impairment provision for trade receivables from certain customers who faced financial
difficulties, including a full provision of RMB118.1 million made in 2021 for trade receivables
due from a customer based on Shanghai that purchased our products prior to the Track Record
Period.
Our net impairment losses on financial assets and a financial guarantee obligation
decreased significantly from RMB144.6 million in 2021 to RMB15.5 million in 2022, mainly
due to a higher net loss allowance on trade receivables in 2021 because, as mentioned above,
we made a full provision on trade receivables due from a customer based on Shanghai who
experienced financial difficulties to settle our payment. Our net impairment losses on financial
assets and a financial guarantee obligation increased significantly from RMB15.5 million in
2022 to RMB64.0 million in 2023, mainly representing the increased provision for impairment
losses on trade receivables, mainly because the gross carrying amount of trade receivables
increased as a result of our increased revenue and the aforesaid prolonged settlement.
Additionally, our net impairment losses on financial assets and a financial guarantee obligation
amounted to RMB41.5 million for the five months ended May 31, 2024.
For further information of our trade receivables, see “Financial Information — Discussion
of Certain Selected Items from the Consolidated Statements of Financial Position — Trade and
Bills Receivables and Contract Assets” in this prospectus.
Selected Items of Our Consolidated Statements of Financial Position
As of December 31,
As of
May 31,
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Total current assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,560,532 3,172,217 2,784,791 2,609,424
Total current liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,373,662 1,028,067 1,317,259 1,690,202
Net current assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118186,870 2,144,150 1,467,532 919,222
Total non-current assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118933,711 968,917 1,251,784 1,175,152
Total assets less current
liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,120,581 3,113,067 2,719,316 2,094,374
Total non-current liabilities /H1118/H1118/H1118/H1118/H1118/H1118584,126 873,935 968,852 633,187
Net assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118536,455 2,239,132 1,750,464 1,461,187
Equity attributable to owners of
the parent /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118566,024 2,271,548 1,824,400 1,541,345
Non-controlling interests /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(29,569) (32,416) (73,936) (80,158)
SUMMARY
–2 0–


--- page 31 ---
As of December 31, 2021, 2022, 2023 and May 31, 2024, we recorded net current assets
of RMB186.9 million, RMB2,144.2 million, RMB1,467.5 million and RMB919.2 million,
respectively. The significant increase in net current assets in 2022 was mainly due to to the (i)
a substantial increase in cash and cash equivalents as we received capital injection from
shareholders in 2022, (ii) an increase in financial assets at fair value through profit or loss due
to our purchase of structured deposits issued by commercial banks, and (iii) an increase in trade
and bills receivables in line with our sales growth. The decrease in net current assets in 2023,
mainly attributable to (i) a decrease in cash and cash equivalents, and (ii) a decrease in
financial assets at fair value through profit or loss due to the maturity of certain investments
in structured deposits. The decrease in net current assets as of May 31, 2024 was mainly due
to (i) a decrease in cash and cash equivalents, (ii) a decrease in prepayments, other receivables
and other assets, and (iii) an increase in interest-bearing bank and other borrowings.
We recorded net assets of RMB536.5 million, RMB2,239.1 million, RMB1,750.5 million
and RMB1,461.2 million as of December 31, 2021, 2022, 2023 and May 31, 2024, respectively.
The increase in net assets in 2022 was primarily attributable to a capital injection of
RMB2,182.8 million from our Shareholders, partially offset by our loss for the year of
RMB546.1 million in 2022. The decrease in net assets in 2023 was mainly due to our loss for
the year of RMB577.5 million, partially offset by share-based payment of RMB87.1 million in
2023. The decrease in net assets as of May 31, 2024 was mainly due to our loss for the period
of RMB409.4 million, partially offset by share-based payment of RMB117.5 million in the first
five months of 2024.
For more information, see “Financial Information — Discussion of Certain Selected Items
from the Consolidated Statements of Financial Position” in this prospectus.
Summary of Our Consolidated Statements of Cash Flows
Y ear Ended December 31,
Five Months Ended
May 31,
2021 2022 2023 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Operating cash flow before
movements in working
capital /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(285,804) (243,384) (232,644) (154,104) (167,382)
Changes in working
capital /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(486,887) (490,968) (498,312) (284,790) 20,863
Interest received and
income tax paid /H1118/H1118/H1118/H1118/H1118/H1118/H11184,480 6,291 12,551 4,751 2,465
Net cash flows used in
operating activities /H1118/H1118/H1118/H1118/H1118(768,211) (728,061) (718,405) (434,143) (144,054)
Net cash flows from/
(used in) investing
activities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(185,465) (560,340) 116,804 79,724 (75,302)
Net cash flows from
financing activities /H1118/H1118/H1118/H1118/H1118368,354 2,088,391 181,412 132,552 (5,523)
SUMMARY
–2 1–


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Y ear Ended December 31,
Five Months Ended
May 31,
2021 2022 2023 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Net (decrease)/increase in
cash and cash
equivalents /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(585,322) 799,990 (420,189) (221,867) (224,879)
Cash and cash equivalents
at the beginning of the
year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118862,206 276,220 1,079,456 1,079,456 664,510
Effect of foreign exchange
rate changes, net /H1118/H1118/H1118/H1118/H1118/H1118(664) 3,246 5,243 980 (3,921)
Cash and cash
equivalents at
end of year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118276,220 1,079,456 664,510 858,569 435,710
We recorded net operating cash outflows in 2021, 2022, 2023 and the five months ended
May 31, 2024, primarily due to (i) the significant operating expenses incurred to support our
business development. These expenses encompassed various aspects, including the purchase of
raw materials for our productions, research and development expenditures to enhance our R&D
capabilities, selling and marketing expenses, and administrative expenses to support the
development and promotion of our products; and (ii) the prolonged settlement of trade
receivables. The fuel cell vehicle industry in China is still in its early stages and influenced by
government subsidy policies. Commercial vehicle manufacturers typically deduct applicable
subsidies from their prices at the time of sale, but collecting the relevant subsidies from the
government usually takes a lengthy period of time. This, combined with the relatively strong
bargaining power of vehicle manufacturers in the industry, contributes to the prolonged
settlement of trade receivables. For details, see “Financial Information — Discussion of
Certain Selected Items from the Consolidated Statements of Financial Position — Trade and
Bills Receivables and Contract Assets” in this prospectus.
For more information, see “Financial Information — Liquidity and Capital Resources” in
this prospectus.
KEY FINANCIAL RATIOS
As of or for the Y ear Ended December 31,
As of or for the
Five Months Ended
May 31,
2021 2022 2023 2024
Gross profit margin (1) /H1118/H1118/H1118/H1118/H1118/H1118/H111811.8% 8.2% 20.1% (193.3)%
Current ratio (2) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181.1 3.1 2.1 1.5
Quick ratio (3) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11180.9 2.8 1.9 1.3
Gearing ratio (4) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182.1 0.5 0.7 0.9
Notes:
(1) Calculated by dividing gross profit by revenue for the period multiplied by 100%.
(2) Calculated by dividing total current assets by total current liabilities as of the end of the period.
SUMMARY
–2 2–


--- page 33 ---
(3) Calculated by dividing total current assets minus inventories by total current liabilities as of the end of the
period.
(4) Calculated by dividing total interest-bearing bank and other borrowings and lease liabilities divided by total
equity as of the end of the period multiplied by 100%.
For more information, see “Financial Information — Key Financial Ratios” in this
prospectus.
BUSINESS SUSTAINABILITY
We were established in 2015. Since our inception, we have achieved growth. During the
Track Record Period, our total revenue amounted to RMB524.1 million, RMB604.6 million,
RMB895.3 million and RMB12.5 million for 2021, 2022, 2023 and the five months ended May
31, 2024.
Despite our continued growth in business, we are not yet profitable. We have incurred net
losses during the Track Record Period. In 2021, 2022, 2023 and the five months ended May 31,
2024, we recorded net losses of RMB654.3 million, RMB546.1 million, RMB577.5 million and
RMB409.4 million, respectively. Our net loss position was primarily because we are vigorously
expanding our product portfolio, and exploring upstream and downstream network and
collaborations in order to achieve the synergies among “electricity-hydrogen-electricity” in our
business model, and thus incur significant amount of research and development expenses,
selling and marketing expenses, as well as various other operating expenses.
Considering that hydrogen industry is still in its early developing stage, and is gradually
shifting from policy-driven to market-driven, to pave the way for a long-term success in such
new and fast-growing market, we believe it is more important to focus on building and
developing our research and development and production capacity, rather than seeking
immediate financial returns or profitability, so as to lay a solid foundation for future growth
as the hydrogen industry continues to mature. In the medium term, we aim to maintain
sustainability and achieve profitability through: (i) business expansion and revenue growth; (ii)
ability to manage costs and enhance operating leverage; and (iii) improving cash flow and
ability to raise funds. With our improved profitability, we also expect our cash flow to improve
concurrently.
Business Expansion and Revenue Growth
Favorable Policies in Hydrogen Industry
We are operating in one of the fastest-growing industries in China with strong government
support. The PRC government has been announcing various favorable policies to develop the
hydrogen industry. Many local governments in China have also proposed specific plan and
target supporting the development of hydrogen industry and fuel cells systems, such as the
Development Plan of Hydrogen Energy Industry in Hebei Province for the “14th Five Year
Plan” Period (˜ɤ̬ʞ™஝ྌ‘) and the Implementation Plan for
Accelerating the Development of New Energy Vehicle Industry in Shanghai for 2021–2025
(ྌ(2021–2025 ϋ)‘).
SUMMARY
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Business Development
In the future, we plan to further expand our business development in the following
aspects:
 Expanding application scenarios : In addition to commercial vehicles, we will also
expand our presence in vehicle applications such as special-purpose vehicles, and
passenger cars; and non-vehicle applications, such as railways, vessels, airplanes,
and power generation applications. To achieve this goal, we will continue to focus
on product iteration. We also plan to conduct pilot projects with industry
stakeholders in such industries, to showcase the practicality and benefits of
hydrogen fuel cell systems.
 Expanding geographical presence : We plan to expand into new non-demonstration
cities, where hydrogen fuel cells offer comparative advantages over other power
sources, such as in Qingdao, Ningbo, Chongqing, Wuhan, Jiyuan, Linfen, Jinan, and
Hohhot. These target markets share similarities with other non-demonstration cities
where we have already established proven track record. These markets possess
unique geographic, industrial, and/or market characteristics that promote the
utilization of hydrogen energy. These characteristics include but not limited to,
strong hydrogen supply with competitive prices, abundant industrial materials that
require heavy-duty logistics, and supportive local policies encouraging the adoption
of FCEVs to reduce carbon emissions in public transportation.
 Accelerating global expansion : We will continue to provide high-quality
engineering and technical services, enhance international cooperation, and improve
our competitiveness and reputation in overseas markets. In addition, we will
participate in international expos, such as FC Expo in Tokyo, Japan, which attract
a diverse range of industry professionals, potential customers around the world, by
showcasing our fuel cell systems, solutions and technologies, we can significantly
increase our visibility and brand recognition in the global market, as well as
establish connections with key stakeholders in the global fuel cell industry.
 Further development of hydrogen production products : By 2027, we plan to
launch: (i) standardized industrial PEM hydrogen production system that is capable
of producing hydrogen for long period with remote control, that facilitates mass
production and scalable management; (ii) integrated hydrogen production and
refueling solution, for one-stop hydrogen production, storage, and refueling; and
(iii) compact hydrogen production and refuelling unit, which is primarily developed
as a standardized solution to meet the hydrogen refuelling needs of non-road
vehicles.
SUMMARY
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 Enhancing marketing efforts : We plan to attend or hold more industrial forums,
events and activities so as to increase adherence of existing customers and gain new
customers. We intend to offer attractive performance-based compensation schemes
to incentivize marketing team to enhance their efforts and achieve our marketing
goal. In addition, we plan to actively promote the application of our products by (i)
assisting commercial vehicle manufacturers in their research and development and
testing of fuel cell vehicle prototypes; and (ii) leveraging the various local
supportive policies for the hydrogen fuel cell industry to enter different markets and
expand our sales channels.
Management of Cost and Enhancement of Operational Leverage.
We plan to carry out the following measures to manage cost:
 In-house Development : Over the past eight years, we achieved significant
breakthroughs in the field of hydrogen fuel cell systems, conducting independent
R&D of crucial components to lower prices. Going forward, we will leverage
technology advancements and optimize our production processes to enhance yield,
cycle time and labor efficiency for the components we produce in-house.
 Supply Management : We plan to increase the utilization of domestically sourced
raw materials, and collaborate with suppliers capable of delivering quality products
at competitive prices. We also anticipate a further decrease in purchase cost from
domestic suppliers, driven by advancements in their technologies, increased
production resulting from industry development, among others. Additionally, we
aim to optimize production plans and manage inventory more efficiently through
collaboration with domestic suppliers.
 Product Iteration and Upgrades : We have achieved cost reduction through annual
product iterations and upgrades, and we will continue to pursue further cost
reduction through ongoing product improvements. These iterations and upgrades
encompass various approaches, including but not limited to the application of new
technologies to enhance performance, streamlining system architecture and process
improvements.
 Optimization of Manufacturing Process and Costs : We plan to optimize production
processes, upgrade facilities and equipment, and utilize more automated production
to enhance production efficiency.
In addition, we do not expect significant growth in operating expenses going forward as
we work to improve the efficiency of our research and development and sales activities, and
optimize our organizational structure. Furthermore, as we continue to experience sales growth
and expand our business, we anticipate benefiting from greater economies of scale.
SUMMARY
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Improving Cash Flow and Ability to Raise Funds
 Increasing Revenue and Enhancing Operational Leverage : Through measures
such as (i) boosting revenue by improving product performance and expanding
product applications, and (ii) managing cost of sales and increasing operational
leverage, we anticipate improving our net operating cash position.
 Enhancing Collection Efforts : We will regularly follow up on overdue trade
receivables and maintain close communication with customers regarding
outstanding payments. With ongoing product improvements and increased brand
recognition, we plan to negotiate more favorable credit terms with customers, such
as shortening credit periods, and requiring customers to make a certain proportion
of prepayments before shipment.
 Prudent Credit Assessment : We will continue to undertake credit assessments for
both new and existing customers. Before entering into any sales contracts, we assess
the credit quality and associated risks of potential customers, including their
business operations and past financial performance. We collect background
information and establish customer profiles for new clients, evaluating their credit
risk as part of our customer engaging process.
 Strengthening Supply Management : We expect our purchases from suppliers to
further increase and we plan to negotiate more favorable terms with suppliers, such
as extending payment periods and negotiating flexible payment methods.
 Narrowing the Gap Between Trade Receivables and Payables Turnover Days :I n
2021, 2022 and 2023, our trade receivables turnover days were 909, 1,029, and 866
days, respectively, while trade and bills payables turnover days were considerably
shorter at 501, 435 and 325 days for the same years. We will implement cash flow
and liquidity management measures to manage the risk arising from the mismatch
between the turnover days of trade receivables and those of trade and bills payables.
We will prioritize projects with shorter payment cycles and stronger customers’
financial capabilities, and maintain ongoing communication with customers to
facilitate timely payments. Additionally, we seek to source quality raw materials
from local suppliers to benefit from shorter lead times and longer payment terms
compared to overseas suppliers. We will also explore supply chain finance options,
such as factoring, to improve our cash flow.
 Effective Inventory Management : We will optimize inventory control to improve
production planning and inventory turnover days. We believe that maintaining
appropriate inventory levels will help us to better plan our raw material purchases
and timely delivery of products without adding pressure on working capital.
SUMMARY
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 Available Financial Resources : We have obtained, and believe that we can continue
to obtain, credit facilities from banks for our utilization when needed. If necessary,
we may further raise funds through equity and debt financing.
For further information, see “Business — Business Sustainability” in this prospectus.
OUR CUSTOMERS AND SUPPLIERS
During the Track Record Period, our customers primarily consisted of commercial vehicle
manufacturers located in China. We generated revenue of RMB393.0 million, RMB433.6
million, RMB620.8 million and RMB7.3 million from our five largest customers in each
year/period during the Track Record Period, which accounted for 75.0%, 71.7%, 69.3% and
58.2% of our total revenue for the respective years/periods. We generated revenue of
RMB117.4 million, RMB134.2 million, RMB261.8 million and RMB4.9 million from the
largest customer in each year/period during the Track Record Period, which accounted for
22.4%, 22.2%, 29.2% and 38.9% of our total revenue for the respective years/periods. For more
information, see “Business — Customers, Sales and Pricing” in this prospectus.
We select and procure raw materials and key components from third-party suppliers.
Purchase from our five largest suppliers in each year/period during the Track Record Period
amounted to RMB268.4 million, RMB214.5 million, RMB220.5 million and RMB53.0 million,
which accounted for 29.5%, 27.5%, 23.3% and 20.3% of our total purchase for the respective
years/periods. Purchase from the largest supplier in each year/period during the Track Record
Period amounted to RMB82.5 million, RMB52.4 million, RMB65.3 million and RMB29.4
million, which accounted for 9.1%, 6.7%, 6.9% and 11.2% of our total purchase for the
respective years/periods.
During the Track Record Period, we did not experience any shortage of raw materials that
resulted in interruptions in our production. For more information, see “Business — Our
Suppliers” in this prospectus.
During the Track Record Period, Beijing Nowogen Technology Co., Ltd. (“Beijing
Nowogen”) was our major supplier and also our major customer. Beijing Nowogen is a PRC
company engaged in R&D and production of fuel cell stacks, graphite plate and water-cooled
fuel cell and the R&D of methanol hydrogen technologies. We primarily purchased fuel cell
stacks from Beijing Nowogen and its subsidiaries. During the Track Record Period, products
we supplied to Beijing Nowogen were primarily hydrogen fuel cell systems incorporating fuel
cell stacks sourced from Beijing Nowogen. This collaboration was driven by our robust R&D
capabilities, which enabled us to seamlessly integrate Beijing Nowogen’s fuel cell stacks into
the hydrogen fuel cell systems with optimized performances. Such transaction is generally
consistent with industry practice, according to Frost & Sullivan. Our Directors confirmed that
the transaction with the overlapping customer and supplier was conducted in the ordinary
course of business under normal commercial terms and on arm’s length basis. For details, see
“Business — Overlapping Customers and Suppliers” in this prospectus.
SUMMARY
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COMPETITIVE LANDSCAPE
Hydrogen energy is considered to be one of the cleanest, most efficient, and renewable
energy sources. As an energy medium, it has the advantages of being able to have zero
emissions during the energy conversion process, high efficiency, high energy density and
storable on large scale, and therefore has gained more and more attention and applications in
the energy field. Meanwhile, hydrogen energy is a high-quality energy source that is easy to
produce and widely used. The development of hydrogen energy is of great significance to
ensuring national energy security, optimizing the energy structure, promoting clean energy
transformation and achieving China’s goal of “carbon peaking by 2030 and carbon neutrality
by 2060” in the future.
To fully exploit the advantage of hydrogen energy and develop the hydrogen industry,
nations around the world have implemented favorable policies and regulations to standardize
and support the development of hydrogen industry.
According to Frost & Sullivan, except for certain FCEV manufacturers, a majority of the
market players, along the hydrogen value chain in China, whose main businesses are related
to hydrogen industry, are still loss-making. We ranked the first in the hydrogen fuel cell system
market in China, in terms of the sales power output of hydrogen fuel cell systems in 2023, with
a market share of 23.8%. We ranked the first in the hydrogen fuel cell system market in China,
in terms of the total sales power output of hydrogen fuel cell systems that have been used for
heavy-duty trucks in 2023, with a market share of 42.4%. For details, see “Industry Overview”
in this prospectus. As new market players are getting into the hydrogen fuel cell system market
in China, it is expected that the competition is getting increasingly intensive.
THE IMPACT OF COVID-19
The COVID-19 pandemic has had a significant negative impact on the global economy
since early 2020. In response, during the COVID-19 outbreak, governments around the world
implemented various measures to control the pandemic.
As a result of the COVID-19 outbreak and the anti-pandemic measures implemented in
places where our operation, the mobility of some employees was affected, and certain
employees had to work remotely. However, such impact on our overall production and R&D
processes was limited as we implemented various precautionary measures and flexibly adjusted
work arrangement of our employees. During the COVID-19 outbreak, the progress of some
R&D projects was delayed, with the delay generally within four weeks. Nonetheless, we
managed to catch up the progress very soon after our R&D employees resumed their normal
R&D activities.
SUMMARY
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During the Track Record Period and up to the Latest Practicable Date, we did not
experience temporary closure or shutdown of our offices or production facilities due to the
COVID-19 pandemic. During the COVID-19 outbreak, production activities of some raw
materials suppliers and the logistics in some regions were affected to various degrees, which
in turn resulted in the delay or failure to deliver raw materials we ordered to us. However, such
delay or failure to deliver raw materials to us did not materially affect our operation or
production activities, because we actively contacted with our suppliers and strategically
procured key raw materials in advance according to our production plan, and thus our
inventories were sufficient to support our normal production activities to fulfill orders from our
customers when abovementioned delay or failure to deliver raw materials occurred. In addition,
as the fuel cell industry in China typically has concentrated product deliveries in the third and
fourth quarters of the year, the impact of COVID-19 on our product deliveries was limited.
During the Track Record Period and up to the Latest Practicable Date, our production activities
have not encountered any material disruption, nor has our product delivery been materially
affected.
Accordingly, our Directors believe that the outbreak of COVID-19 has not had any
material adverse impact on the Group’s business, financial condition or results of operations.
However, there is no assurance that our operation or production activities will not be affected
in the future due to the COVID-19 pandemic and relevant restrictive measures. See “Risk
Factors — Risks Relating to Our Business — Our business, results of operations and financial
condition may be adversely affected by natural disasters, health epidemics and pandemics and
other outbreaks, such as the COVID-19 outbreak” in this prospectus.
RECENT DEVELOPMENT
Since the end of the Track Record Period, we have continued to grow our business.
During the period from June 1, 2024 to September 30, 2024, our revenue increased compared
to the same period in 2023, which was attributable to the increased revenue from sales of
components, provision of fuel cell engineering and technical services and others.
Specifically, the rise in revenue from sales of components was mainly driven by the
increased customer demand for hydrogen supply systems and energy storage systems. During
the period from June 1, 2024 to September 30, 2024, the sales volume of hydrogen supply
systems and energy storage systems reached 412 units and 100 units, respectively, reflecting
an increase from 64 units and nil units for the same period in 2023. However, this growth was
partially offset by a decline in revenue from sales of hydrogen fuel cell systems, which saw a
decrease in sales volume from 248 units for the same period in 2023 to 91 units from June 1,
2024 to September 30, 2024, primarily due to fluctuations in order delivery timing. Our main
customers, fuel cell vehicle manufacturers, generally place orders with us after assessing their
production and sales plans, which are influenced by various factors including the timing of
related government award projects. As a result, large-scale orders and deliveries of our fuel cell
systems are usually concentrated in the second half of the year, particularly in the fourth
quarter. For further information, see “Business — Seasonality” in this prospectus.
SUMMARY
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In June 2024, Hong Kong government announced the city’s Strategy of Hydrogen
Development (ഄଫ), and launched hydrogen-powered street-washing vehicles
jointly developed by us and Yutong Group, which will be put into operation in near future. In
June 2024, the Hong Kong V ocational Training Council and us signed a Memorandum of
Understanding to explore opportunities for cooperation in the field of hydrogen energy.
On July 4, 2024, the first hydrogen-powered bus demonstration line in Xinjiang Uygur
Autonomous Region officially commenced operations in Yiwu County, Hami City. Seven
hydrogen fuel cell buses jointly developed by Yutong Group and us were delivered and put into
service in Yiwu County, Hami City, Xinjiang Uygur Autonomous Region. They successfully
achieved direct transportation from Naomao Lake Town to Naomao Lake Industrial Park and
Baishi Lake Mining Area.
In August 2024, Hubei Chutian Smart Communication Co., Ltd. (΅
ʮ̡), Hydrogen Accumulation Electric Energy Technology (Shanghai) Co., Ltd. ( ૫ጐཥ
ঐ๕Ҧஔ(ɪऎ)ʮ̡) and us signed a tripartite strategic framework agreement for the
“High-speed Off-Grid Supercharging Station Operation” project in Wuhan. According to the
strategic framework agreement, the three parties will establish a long-term and in-depth
strategic relationship, leveraging their respective advantages in operations and technologies.
Together, they will deploy hydrogen supercharging equipment along expressways in Hubei to
provide supercharging services for electric vehicles.
We expect to record an increase in net losses for the year ending December 31, 2024,
primarily due to a significant rise in share-based payments resulting from the grant of options
under our employee incentive scheme in 2024, which will mainly be recognized as
administrative, research and development, and selling and marketing expenses.
NO MATERIAL ADVERSE CHANGE
Our Directors confirm that up to the date of this prospectus, there had been no material
adverse change in our financial, operational or prospects since May 31, 2024, being the date
of our latest reviewed financial statements, and there is no event since May 31, 2024 that would
materially affect the information as set out in the Accountants’ Report set out in Appendix I to
this prospectus.
DIVIDENDS
No dividend has been paid or declared by our Company during the Track Record Period.
We currently do not have any specific dividend policy nor any pre-determined dividend payout
ratio. The declaration and payment of any dividends in the future will be determined by our
Board and subject to our Articles of Association and the PRC Company Law, and will depend
on a number of factors, including our financial performance and business operation, capital
requirements and contractual restrictions. No dividend shall be declared or payable except out
of our profits and reserves lawfully available for distribution. As confirmed by our PRC Legal
Adviser, according to the PRC law, any future net profit that we make will have to be first
SUMMARY
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applied to make up for our historically accumulated losses, after which we will be obliged to
allocate at least 10% of our net profit to our statutory common reserve fund until the
cumulative amount of the reserve fund has reached more than 50% of our registered capital.
We will therefore only be able to declare dividends after (i) all our historically accumulated
losses from prior fiscal years have been made up for; and (ii) we have allocated sufficient net
profit to our statutory common reserve fund as described above. Based on the above, and
considering that we incurred accumulated losses as of May 31, 2024, we are not able to pay
any dividend before we have made up for such accumulated losses.
GLOBAL OFFERING STATISTICS
Based on the
Offer Price of
HK$145.00
Based on the
Offer Price of
HK$165.00
Market capitalization of our Shares /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118HK$12,490.20
million
HK$14,212.98
million
Unaudited pro forma adjusted net tangible assets
per Share /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118HK$26.62 HK$27.69
Notes:
(1) All statistics in this table are on the assumption that the Over-allotment Option is not exercised.
(2) The calculation of market capitalization is based on total 86,139,291 Shares in issue after the completion of
the Global Offering. If the Over-allotment Option is exercised in full, the additional Offer Shares to be issued
pursuant thereto are 724,180 H Shares and the total Offer Shares under the Global Offering are 5,552,100 H
Shares. Assuming the Over-allotment Option is fully exercised, the Company has 86,863,471 Shares in issue
after the completion of the Global Offering. The market capitalization of our Shares is expected to be between
HK$12,595.20 million (based on the Offer Price of HK$145.00 per Offer Share) and HK$14,332.47 million
(based on the Offer Price of HK$165.00 per Offer Share) (assuming the Over-allotment Option is fully
exercised).
(3) The unaudited pro forma adjusted net tangible assets per Share is calculated after making the adjustments
referred to in “Financial Information — Unaudited Pro Forma Statement of Adjusted Net Tangible Assets” in
this prospectus. The unaudited pro forma adjusted consolidated net tangible assets per Share is calculated
based on total 86,139,291 Shares in issue after the completion of the Global Offering, representing the
aggregate of the H Shares to be converted from Domestic Shares, the Domestic Shares in issue, and the
4,827,920 H Shares to be issued pursuant to the Global Offering, and does not take into account of any Shares
which may be issued upon the exercise of the Over-allotment Option.
USE OF PROCEEDS
We estimate that we will receive net proceeds from the Global Offering of approximately
HK$665.9 million, after deducting underwriting commissions, fees and estimated expenses
payable by us in connection with the Global Offering, and assuming the Over-allotment Option
being not exercised and an Offer Price of HK$155.00 per Share, which is the mid-point of the
indicative Offer Price range stated in this prospectus. If the Offer Price is set at HK$165.00 per
Share, which is the high end of the indicative Offer Price range, the net proceeds from the
Global Offering will increase by approximately HK$46.2 million. If the Offer Price is set at
SUMMARY
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HK$145.00 per Share, which is the low end of the indicative Offer Price range, the net
proceeds from the Global Offering will decrease by approximately HK$46.3 million. Assuming
an Offer Price at the mid-point of the indicative Offer Price range, we currently intend to apply
these net proceeds for the following purposes:
 74.5%, or approximately HK$495.9 million, will be allocated to fund our R&D
activities and production capacity expansion of our hydrogen fuel cell systems;
 15.3%, or approximately HK$101.9 million, will be allocated to fund our production
capacity expansion of our hydrogen production systems;
 7.7%, or approximately HK$51.3 million, will be used for the expansion of our
overseas market footprint; and
 2.5%, or approximately HK$16.9 million, will be used for our working capital and
general corporate purposes.
LISTING EXPENSES
Based on the mid-point of our indicative price range and assuming the Over-allotment
Option is not exercised, the listing expenses to be borne by us are estimated to be
approximately RMB76.1 million and are expected to represent approximately 11.0% of the
gross proceeds of the Global Offering, comprising of (i) underwriting-related expenses,
including underwriting commission and other expenses, of RMB31.1 million; and (ii)
non-underwriting-related expenses of RMB45.0 million, including (a) fees and expenses of
legal advisers and reporting accountant of RMB26.0 million; and (b) other fees and expenses
of RMB19.0 million.
During the Track Record Period, we incurred listing expenses of RMB33.0 million, of
which RMB28.1 million was charged to our consolidated income statements for the year ended
December 31, 2023, while the listing expenses directly attributable to the issue of shares of
RMB4.9 million was recognized in the consolidated statement of financial position as of
December 31, 2023 and is expected to be accounted for as a deduction in equity upon
completion of the Global Offering. We expect to incur additional listing expenses of RMB43.1
million (assuming the Over-allotment Option is not exercised and based on the mid-point of
our indicative Offer Price range) will be incurred by us, approximately RMB12.1 million of
which is expected to be charged to our consolidated statements of profit or loss, and
approximately RMB31.0 million of which is expected to be recognized as a deduction from
equity upon the Listing. The listing expenses above are the latest practicable estimate for
reference only, and the actual amount may differ from this estimate.
SUMMARY
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REGULATORY DEVELOPMENT RELATING TO OVERSEAS LISTING AND CSRC
FILING STATUS
On February 17, 2023, the CSRC promulgated the Overseas Listing Trial Measures and
five guidelines for the filing-based administration of overseas securities offerings and listings
by PRC companies, which have become effective since March 31, 2023 and require, among
others, that PRC domestic enterprises seeking to overseas listing and public offering securities
in overseas markets, either directly or indirectly, shall file the requisite documents with the
CSRC within three business days after their application for overseas listing is submitted. In
compliance with the aforementioned requirements, we had submitted our filing documents on
March 5, 2024, within three business days after the submission of our listing application and
the submission had been acknowledged by the CSRC on March 14, 2024. The CSRC issued a
notification on our completion of the PRC filing procedures for the listing of our H Shares on
the Stock Exchange and the Global Offering on October 18, 2024.
APPLICATION FOR LISTING ON THE STOCK EXCHANGE
We have applied to the Stock Exchange for the listing of, and permission to deal in, our
H Shares to be issued pursuant to Global Offering (including any H Shares which may be
issued pursuant to the exercise of the Over-allotment Option) and the H Shares to be converted
from Domestic Shares, on the basis that, among other things, we satisfy the market
capitalization/revenue test under Rule 8.05(3) of the Listing Rules with reference to (i) our
revenue in the financial year ended December 31, 2023, being approximately RMB895.28
million (equivalent to approximately HK$969.22 million), which is over HK$500 million, and
(ii) our expected market capitalization at the time of Listing, which, based on the Offer Price
of HK$145.00 per H Share (being the low-end of the indicative Offer Price range), exceeds
HK$4 billion.
SUMMARY
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In this prospectus, unless the context otherwise requires, the following terms and
expressions shall have the meanings set out below.
“Accountants’ Report” the accountants’ report of our Company from Ernst &
Young, the text of which is set out in Appendix I to this
prospectus
“affiliate(s)” with respect to any specified person, any other person,
directly or indirectly, controlling or controlled by or
under direct or indirect common control with such
specified person
“AFRC” the Accounting and Financial Reporting Council of Hong
Kong
“Articles” or “Articles of
Association”
the articles of association of our Company adopted on
January 21, 2024 with effect upon the Listing Date (as
amended from time to time), a summary of which is set
out in Appendix V to this prospectus
“associate(s)” has the meaning ascribed thereto under the Listing Rules
“Audit Committee” the audit committee of our Board
“award in lieu of subsidy policy” the “award in lieu of subsidy” policy as detailed in the
section headed “Regulatory Overview” in this prospectus
“Board” or “Board of Directors” the board of Directors
“business day” a day on which banks in Hong Kong are generally open
for normal business to the public and which is not a
Saturday, Sunday or public holiday in Hong Kong
“CAD” Canadian dollars, the lawful currency of Canada
“Canada ESOP Platform” REFIRE Group Employee Equity Limited Partnership,
one of our ESOP Platforms
“Capital Market Intermediaries” the capital market intermediaries as named in the section
headed “Directors, Supervisors and Parties Involved in
the Global Offering” in this prospectus
DEFINITIONS
–3 4–


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“CCASS” the Central Clearing and Settlement System established
and operated by HKSCC
“China” or “PRC” the People’s Republic of China, which only in the context
of describing PRC rules, laws, regulations, regulatory
authority, and any PRC entities or citizens under such
rules, laws and regulations and other legal or tax matters
in this prospectus, excludes Taiwan, Hong Kong and the
Macau Special Administrative Region of the People’s
Republic of China
“close associate(s)” has the meaning ascribed thereto under the Listing Rules
“Companies Ordinance” the Companies Ordinance (Chapter 622 of the Laws of
Hong Kong), as amended, supplemented or otherwise
modified from time to time
“Companies (Winding Up and
Miscellaneous Provisions)
Ordinance”
the Companies (Winding Up and Miscellaneous
Provisions) Ordinance (Chapter 32 of the Laws of Hong
Kong), as amended, supplemented or otherwise modified
from time to time
“Company” or “our Company” Shanghai REFIRE Group Limited (ٰ
ʮ̡), a joint stock company with limited liability
incorporated in the PRC, the predecessor of which was
Shanghai REFIRE Group Ltd. (ʮ
̡) (formerly known as Hangzhou REFIRE Technology
Co., Ltd. (Ҧ(ψ)ʮ̡)), a limited
liability company established in the PRC on September
18, 2015, and if the context requires, includes its
predecessor
“Components for Fuel Cell
System”
components self-developed and produced by our Group,
including fuel cell stacks, MEAs, bipolar plates,
hydrogen circulation systems, DC-to-DC boost
converters, etc.
“Components for Fuel Cell
Vehicles”
components sold to our customers for producing fuel cell
vehicles, including hydrogen supply systems, fuel cell
engine accessories, energy storage systems, etc.
“connected person(s)” has the meaning ascribed thereto under the Listing Rules
“core connected person(s)” has the meaning ascribed thereto under the Listing Rules
DEFINITIONS
–3 5–


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“COVID-19” a newly identified coronavirus known to cause
contagious respiratory illness
“CSRC” China Securities Regulatory Commission ( ʕ਷ᗇՎ္ຖ
ึ)
“Director(s)” the director(s) of our Company
“Domestic Share(s)” ordinary share(s) in the share capital of our Company,
with a nominal value of RMB1.00 each, which are
subscribed for in Renminbi
“EIT” enterprise income tax
“EIT Law” the PRC Enterprise Income Tax Law ( ʕശɛ͏΍ձ਷
‘)
“Employee Incentive Schemes” the employee incentive schemes of our Company which
were adopted or last amended on January 21, 2024, a
summary of the principal terms of which is set forth in
the paragraph headed “Further Information About Our
Directors, Supervisors and Substantial Shareholders — 5.
Employee Incentive Schemes” in Appendix VI to this
prospectus
“ESOP Platforms” Shanghai Weilan, Shanghai Weiqing, Shanghai Weijing,
Shanghai Weijun, Shanghai Yuanyiqing, Shanghai Weiyi
and Canada ESOP Platform, and an “ESOP Platform”
shall mean any one of them as the context may require
“EUR” Euro, the lawful currency of the European Union
“Extreme Conditions” extreme conditions as announced by the government of
Hong Kong
“FINI” Fast Interface for New Issuance, an online platform
operated by HKSCC that is mandatory for admission to
trading and, where applicable, the collection and
processing of specified information on subscription in
and settlement for all new listings
“Frost & Sullivan” Frost & Sullivan (Beijing) Inc., Shanghai Branch Co., our
industry consultant
DEFINITIONS
–3 6–


--- page 47 ---
“Frost & Sullivan Report” the industry report commissioned by our Company and
independently prepared by Frost & Sullivan, a summary
of which is set forth in the section headed “Industry
Overview” in this prospectus
“General Rules of HKSCC” General Rules of HKSCC published by the Stock
Exchange and as amended from time to time
“Global Offering” the Hong Kong Public Offering and the International
Offering
“Group”, “our Group”, “we”,
“us” or “our”
our Company and all of its subsidiaries, or any one of
them as the context may require
“Guide for New Listing
Applicants”
the Guide for New Listing Applicants published by the
Stock Exchange
“Hangcha (ɸ)” Hangcha Group Co., Ltd. (ʮ̡)
“H Share(s)” overseas listed ordinary share(s) in the share capital of
our Company with a nominal value of RMB1.00 each,
which are to be subscribed for and traded in Hong Kong
dollars and to be listed on the Hong Kong Stock
Exchange
“H Share Registrar” Computershare Hong Kong Investor Services Limited
“HKSCC” 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
DEFINITIONS
–3 7–


--- page 48 ---
“HKSCC Operational
Procedures”
the operational procedures of HKSCC, containing the
practices, procedures and administrative or other
requirements relating to HKSCC’s services and the
operations and functions of CCASS, FINI or any other
platform, facility or system established, operated and/or
otherwise provided by or through HKSCC, as from time
to time in force
“HKSCC Participant” a participant admitted to participate in CCASS as a direct
clearing participant, a general clearing participant or a
custodian participant
“Hong Kong” or “HK” the Hong Kong Special Administrative Region of the
PRC
“Hong Kong dollars” or “HK$” Hong Kong dollars and cents, respectively, the lawful
currency of Hong Kong
“Hong Kong Offer Shares” the 482,800 H Shares being initially offered by us for
subscription pursuant to the Hong Kong Public Offering
(subject to reallocation as described in the section headed
“Structure of the Global Offering” in this prospectus)
“Hong Kong Public Offering” the offer for subscription of the Hong Kong Offer Shares
to the public in Hong Kong, on and subject to the terms
and conditions described in the section headed “Structure
of the Global Offering” in this prospectus
“Hong Kong Stock Exchange” or
“Stock Exchange”
The Stock Exchange of Hong Kong Limited, a wholly
owned subsidiary of Hong Kong Exchanges and Clearing
Limited
“Hong Kong Underwriters” the underwriters of the Hong Kong Public Offering as
listed in the section headed “Underwriting” in this
prospectus
“Hong Kong Underwriting
Agreement”
the underwriting agreement dated November 27, 2024
relating to the Hong Kong Public Offering and entered
into among our Company, Mr. Lin, Shanghai Weilan,
Shanghai Weiqing, Shanghai Weijing, the Joint Overall
Coordinators and the Hong Kong Underwriters, as further
described in the section headed “Underwriting” in this
prospectus
“IFRSs” International Financial Reporting Standards
DEFINITIONS
–3 8–


--- page 49 ---
“Independent Third Party(ies)” any person(s) or entity(ies) who/which is not a connected
person of our Company within the meaning of the Listing
Rules
“International Offer Shares” the 4,345,120 H Shares being initially offered by us for
subscription under the International Offering (subject to
reallocation as described in the section headed “Structure
of the Global Offering” in this prospectus) together with
any additional Shares that may be allotted and issued
pursuant to the exercise of the Over-allotment Option
“International Offering” the conditional placing of the International Offer Shares
at the Offer Price outside the United States (including to
professional and institutional investors within Hong
Kong) in offshore transactions in reliance on Regulation
S, as further described in the section headed “Structure of
the Global Offering” in this prospectus
“International Underwriters” the underwriters of the International Offering listed in the
International Underwriting Agreement
“International Underwriting
Agreement”
the underwriting agreement relating to the International
Offering which is expected to be entered into among our
Company, Mr. Lin, Shanghai Weilan, Shanghai Weiqing,
Shanghai Weijing, the Joint Overall Coordinators and the
International Underwriters, as further described in the
section headed “Underwriting” in this prospectus
“Joint Bookrunners” the joint bookrunners as named in the section headed
“Directors, Supervisors and Parties Involved in the
Global Offering” in this prospectus
“Joint Global Coordinators” the joint global coordinators as named in the section
headed “Directors, Supervisors and Parties Involved in
the Global Offering” in this prospectus
“Joint Lead Managers” the joint lead managers as named in the section headed
“Directors, Supervisors and Parties Involved in the
Global Offering” in this prospectus
“Joint Overall Coordinators” the joint overall coordinators as named in the section
headed “Directors, Supervisors and Parties Involved in
the Global Offering” in this prospectus
DEFINITIONS
–3 9–


--- page 50 ---
“Latest Practicable Date” November 18, 2024, 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 Hong
Kong Stock Exchange
“Listing Date” the date, expected to be on or about December 6, 2024,
on which the H Shares are listed and dealings in the H
Shares are first permitted to commence on the Hong
Kong 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,
supplemented or otherwise modified from time to time)
“Main Board” the stock market (excluding the option market) operated
by the Hong Kong Stock Exchange which is independent
from and operated in parallel with the GEM of the Hong
Kong Stock Exchange
“MIIT” Ministry of Industry and Information Technology of the
PRC (ʷ௅)
“MOF” Ministry of Finance of the PRC (௅)
“Mr. Lin” Mr. LIN Qi (ೡ), our founder, executive Director,
chairperson of our Board and chief executive officer, and
a member of our Single Largest Group of Shareholders
“NDRC” the National Development and Reform Commission of
the PRC (ึ)
“Nomination Committee” the nomination committee of our Board
“NPC” the National People’s Congress of the PRC ( ʕശɛ͏΍
ɽึ)
DEFINITIONS
–4 0–


--- page 51 ---
“Offer Price” the final offer price per Offer Share (exclusive of
brokerage of 1.0%, SFC transaction levy of 0.0027%,
AFRC transaction levy of 0.00015% and Hong Kong
Stock Exchange trading fee of 0.00565%) at which the
Offer Shares are to be subscribed for and issued pursuant
to the Global Offering as described in the section headed
“Structure of the Global Offering” in this prospectus
“Offer Shares” the Hong Kong Offer Shares and the International Offer
Shares, together with, where relevant, any additional H
Shares which may be issued by our Company pursuant to
the exercise of the Over-allotment Option
“Over-allotment Option” the option expected to be granted by us to the
International Underwriters exercisable by the Stabilizing
Manager (for itself and on behalf of the International
Underwriters) under the International Underwriting
Agreement, to require our Company to allot and issue up
to an aggregate of 724,180 additional H Shares at the
Offer Price, representing approximately 15% of the total
number of Offer Shares initially available under the
Global Offering to cover over-allocations in the
International Offering, if any, further details of which are
described in the section headed “Structure of the Global
Offering” in this prospectus
“Overseas Listing Trial
Measures”
the Trial Administrative Measures of Overseas Securities
Offering and Listing by Domestic Companies ( ྤʫΆ
‘) promulgated by
the CSRC on February 17, 2023
“PBOC” the People’s Bank of China ( ʕ਷ɛ͏ვБ), the central
bank of the PRC
“PRC Company Law” the Company Law of the People’s Republic of China (ʕശ
‘), as amended, supplemented or
otherwise modified from time to time
“PRC Data Compliance Adviser” Tian Yuan Law Firm, the legal adviser of our Company as
to the PRC cybersecurity and data privacy protection
laws
DEFINITIONS
–4 1–


--- page 52 ---
“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 Adviser” Tian Yuan Law Firm, the legal adviser of our Company as
to the PRC laws
“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 capital increase 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 capital increase agreement(s), details of which are
set out in the section headed “History, Development and
Corporate Structure” in this prospectus
“Pre-IPO Share Option Scheme” the share option scheme adopted by our Company on
January 21, 2024, the principal terms of which are set out
in the paragraph headed “Further Information About Our
Directors, Supervisors and Substantial Shareholders — 6.
Pre-IPO Share Option Scheme” in Appendix VI to this
prospectus
“Price Determination Agreement” the agreement to be entered into between our Company
and the Joint Overall Coordinators (for themselves and
on behalf of the Underwriters) on the Price
Determination Date to record and fix the Offer Price
“Price Determination Date” the date on which the Offer Price is to be fixed
“REFIRE Technology” Shanghai REFIRE Technology Co., Ltd. (෧ঐ๕
ʮ̡), a limited liability company incorporated
in the PRC on December 17, 2014 and one of our
subsidiaries
DEFINITIONS
–4 2–


--- page 53 ---
“Regulation S” Regulation S under the U.S. Securities Act
“Remuneration and Appraisal
Committee”
the remuneration and appraisal committee of our Board
“Renminbi” or “RMB” Renminbi, the lawful currency of the PRC
“R&D” research and development
“SAFE” the State Administration of Foreign Exchange of the PRC
(ʕശɛ͏΍ձ਷̮ි၍ଣ҅)
“Securities and Futures
Commission” or “SFC”
the Securities and Futures Commission of Hong Kong
“SFO” the Securities and Futures Ordinance (Chapter 571 of the
Laws of Hong Kong), as amended, supplemented or
otherwise modified from time to time
“Shanghai Unilia” Unilia (Shanghai) Fuel Cells Inc. (Ҧ
ʮ̡), a limited liability company incorporated in
the PRC on May 23, 2017 and one of our subsidiaries
“Shanghai Weijing” Shanghai Weijing Management Consulting Partnership
(Limited Partnership) ( ɪऎᇲᗝ၍ଣፔ༔ΥྫΆุ(ࠢ
Υྫ)), one of our ESOP Platforms and a member of our
Single Largest Group of Shareholders
“Shanghai Weijun” Shanghai Weijun Management Consulting Partnership
(Limited Partnership) ( ɪऎᇲᒺ၍ଣፔ༔ΥྫΆุ(ࠢ
Υྫ)), one of our ESOP Platforms
“Shanghai Weilan” Shanghai Weilan Business Consulting Partnership
(Limited Partnership) ( ɪऎᇲᘜਠਕፔ༔ΥྫΆุ(ࠢ
Υྫ)), one of our ESOP Platforms and a member of our
Single Largest Group of Shareholders
“Shanghai Weiqing” Shanghai Weiqing Management Consulting Partnership
(Limited Partnership) ( ɪऎᇲ૶၍ଣፔ༔ΥྫΆุ(ࠢ
Υྫ)), one of our ESOP Platforms and a member of our
Single Largest Group of Shareholders
DEFINITIONS
–4 3–


--- page 54 ---
“Shanghai Weiyi” Shanghai Weiyi Management Consulting Partnership
(Limited Partnership) ( ɪऎᇲᄃ၍ଣፔ༔ΥྫΆุ(ࠢ
Υྫ)), one of our ESOP Platforms
“Shanghai Yuanyiqing” Shanghai Yuanyiqing Management Consulting
Partnership (Limited Partnership) ( ɪऎ๕͵૫၍ଣፔ༔
ΥྫΆุ(Υྫ)), one of our ESOP Platforms
“Share(s)” ordinary share(s) in the capital of our Company with a
nominal value of RMB1.00 each, including both
Domestic Shares and H Shares
“Shareholder(s)” holder(s) of our Share(s)
“Single Largest Group of
Shareholders”
the single largest group of Shareholders which comprise
Mr. Lin, Shanghai Weiqing, Shanghai Weilan and
Shanghai Weijing
“Sole Sponsor” and “Sponsor-
overall Coordinator”
the sole sponsor and the sponsor-overall coordinator of
the listing of the H Shares on the Hong Kong Stock
Exchange as named in the section headed “Directors,
Supervisors and Parties Involved in the Global Offering”
in this prospectus
“sq.m.” square meters
“Stabilizing Manager” China International Capital Corporation Hong Kong
Securities Limited
“State Council” the State Council of the PRC ( ʕശɛ͏΍ձ਷਷ਕ৫)
“Strategy Committee” the strategy committee of our Board
“subsidiary(ies)” has the meaning ascribed thereto under the Listing Rules
“substantial shareholder(s)” has the meaning ascribed thereto under the Listing Rules
“Supervisor(s)” member(s) of our Supervisory Committee
“Supervisory Committee” the supervisory committee of our Company
“Takeovers Code” the Code on Takeovers and Mergers and Share Buy-backs
published by the SFC (as amended, supplemented or
otherwise modified from time to time)
DEFINITIONS
–4 4–


--- page 55 ---
“Track Record Period” the three financial years ended December 31, 2021, 2022
and 2023 and the five months ended May 31, 2024
“Underwriters” the Hong Kong Underwriters and the International
Underwriters
“Underwriting Agreements” the Hong Kong Underwriting Agreement and the
International Underwriting Agreement
“United States” or “U.S.” the United States of America, its territories, its
possessions and all areas subject to its jurisdiction
“U.S. dollars”, “US$” or “USD” United States dollars, the lawful currency of the United
States
“U.S. Securities Act” the U.S. Securities Act of 1933, as amended,
supplemented or otherwise modified from time to time,
and the rules and regulations promulgated thereunder
“White Form eIPO ” the application for Hong Kong Offer Shares to be issued
in the applicant’s own name by submitting applications
online through the designated website of White Form
eIPO Service Provider at www.eipo.com.hk
“White Form eIPO Service
Provider”
Computershare Hong Kong Investor Services Limited
“Yutong Group” Zhengzhou Yutong Group Co., Ltd. (ࠢ
ʮ̡) and its subsidiaries
“%” per cent
DEFINITIONS
–4 5–


--- page 56 ---
This glossary of technical terms contains explanations of certain technical terms
used in this prospectus. As such, these terms and their meanings may not correspond to
standard industry meanings or usage of these terms and may not be comparable to similar
terms adopted by other companies.
“alkaline electrolysis cells” a device for the production of electrolytic hydrogen, by
which water is decomposed into hydrogen and oxygen in
an electrolytic cell
“anode” an electrode through which the conventional current
enters a polarized electrical device, which contrasts with
a cathode
“bipolar plates” a key component of a single hydrogen fuel cell system,
which connects and separates the individual hydrogen
fuel cells in series to form a fuel cell stack with required
voltage, aids uniform distribution of fuel gas and air over
the reaction area of the membrane electrode assemblies
“by-product hydrogen” hydrogen gas produced as a result of a process or
processes dedicated to producing other products
“CAGR” compound annual growth rate
“carbon neutrality” the state where emissions of carbon dioxide and other
greenhouse gases due to human activities and removals of
these gases are in balance over a given period
“carbon peaking” a point in time when carbon dioxide and other greenhouse
gases emissions stop growing and peak, and then
gradually fall back
“cathode” through which the conventional current enters a polarized
electrical device, which contrasts with an anode
“CCM” catalyst coated membrane, a component used in fuel
cells. The CCM consists of a thin membrane coated with
catalyst particles on both sides. The catalyst enables
electrochemical reactions, while the membrane allows
the passage of protons and prevents electron flow. The
CCM plays a crucial role in facilitating the conversion of
hydrogen and oxygen into electricity
GLOSSARY OF TECHNICAL TERMS
–4 6–


--- page 57 ---
“CHP” cogeneration or combined heat and power, the use of a
heat engine or power station to generate electricity and
useful heat at the same time
“current density” the amount of charge per unit time that flows through a
unit area of a chosen cross section
“DC-to-DC boost converters” an electronic circuit or electromechanical device that
converts a source of direct current from one voltage level
to another
“decarbonization” the process of reducing “carbon intensity”, lowering the
amount of greenhouse gas emissions
“demonstration city clusters” or
“fuel cell vehicle
demonstration city clusters”
the five fuel cell vehicle demonstration city clusters,
including Beijing-Tianjin-Hebei city cluster, Shanghai
city cluster, Guangdong City Cluster, Hebei city cluster
and Henan city cluster
“distributed power generation
system”
the installation and operation of small modular power-
generating units at or near the end user, which is used to
reduce transmission and distribution losses and to
improve reliability by combining energy management
and storage systems
“dual-carbon” or “dual carbon”
goal
a goal of reaching peak carbon emissions by 2030 and
carbon neutrality by 2060, which were officially set by
President Xi Jinping at the United Nations General
Assembly in September 2020
“electric vehicle” a type of vehicle that is powered by electricity, typically
stored in rechargeable batteries
“electrochemical reaction” reactions that occur at the interface of electronic
conductors and ionic conductors. These reactions involve
electron transfer and mass transport, influencing the
transformation of reactants or products. Characteristics
include spatially separated oxidation and reduction
reactions, unique heterogeneous catalysis, and
stoichiometric electron exchange
GLOSSARY OF TECHNICAL TERMS
–4 7–


--- page 58 ---
“electrolysis” the process of passing an electric current through an
electrolyte solution or molten electrolyte, inducing
oxidation-reduction reactions at the cathode and anode.
Electrolytic processes occur when an electrochemical cell
is subjected to an applied direct current voltage
“electromagnetic compatibility”
or “EMC”
the ability of electronic or electrical devices and systems
to operate in their intended electromagnetic environment
without experiencing performance degradation, loss of
function, or damage due to surrounding electromagnetic
influences. It also involves not emitting excessive
electromagnetic energy that could disrupt the normal
operation of nearby devices
“FCU” fuel cell controller unit
“freeze-start” the starting of a system or device at a temperature below
the freezing point
“fuel cell controller” a key component of fuel-cell electric vehicle drivetrain
subsystems and is responsible for the overall process
control of the entire fuel-cell system
“fuel cell electric vehicle” or
“FCEV”
vehicles that use propulsion systems similar to that of
electric vehicles, where energy stored as different forms
of hydrogen is converted to electricity by fuel cells
“fuel cell stack” a collection of single fuel cells, arranged in series or
parallel to achieve the required power and voltage output
“fuel cell” a power generator that converts the chemical energy
stored in fuel and oxidizer into electricity through redox
reactions
“gas diffusion layer” or “GDL” a component that plays a critical role in fuel cells by
providing support to the catalytic layer, collecting
current, facilitating gas conduction, and expelling
reaction product water
“graphite bipolar plate” a component made through composite and forming
processes using carbon-based conductive materials and
polymer materials that serves for material and energy
transfer in fuel cells
GLOSSARY OF TECHNICAL TERMS
–4 8–


--- page 59 ---
“GW” gigawatt, a unit equals to one billion watts
“hydrogen circulation system” a key component of the hydrogen supply system of the
fuel cell engine that can circulate the unreacted hydrogen
to the stack inlet. The cycle process can humidify the gas
at the anode inlet, streamlining the fuel cell system
“hydrogen fuel cell system” or
“fuel cell system”
a power system that converts the chemical energy of
hydrogen and an oxidizing agent (often oxygen) into
electricity through electrochemical reactions. In a fuel
cell, hydrogen and oxygen are combined to generate
electricity, heat, and water
“hydrogen production system” a system for the production of hydrogen by various
means
“hydrogen storage” methods for storing hydrogen that include mechanical
approaches such as using high pressures and low
temperatures, or chemical methods such as metal oxides
and organic compounds
“hydrogen” a colorless, odorless gaseous chemical substance that can
be produced from a variety of resources and has versatile
application areas such as in transportation, whereas
hydrogen is used as a clean fuel to power fuel cell
vehicles. Depending on production methods, hydrogen
can be classified into hydrogen produced from fossil
fuels without capturing the greenhouse gases emitted,
hydrogen generated from fossil fuels while the carbon
dioxide is captured and then stored or reused, and
hydrogen produced from renewable energy resources
with no carbon dioxide emission
“hydrogenation” the reaction process of hydrogen interacting with other
compounds typically occurs in the presence of a catalyst
“hydrogen-rich tail gas” industrial exhaust gas containing abundant hydrogen
“hydrothermal management” the collective term for all internal transfer processes in a
fuel cell, encompassing the management of three fluid
paths within a fuel cell stack or system (hydrogen, air,
and cooling paths) and the associated engine cooling
system
GLOSSARY OF TECHNICAL TERMS
–4 9–


--- page 60 ---
“kilowatts” or “kW” a unit equals to one thousand watts
“LOHC” a method of hydrogen storage utilizing a catalytic device
to store hydrogen in organic liquid compounds such as
benzene, toluene, and methylcyclohexane. Hydrogen can
be safely stored and transported in these organic liquid
compounds
“low-carbon hydrogen” hydrogen produced from renewable energy sources and
hydrogen processed by CCUS (Carbon Capture,
Utilization, and Storage) technology
“membrane-electrode assemblies”
or “MEAs”
a crucial site for electrochemical reactions in proton
exchange membrane fuel cells that primarily consists of a
proton exchange membrane, catalyst layers, and gas
diffusion layers. MEA serves as the core component of a
fuel cell stack
“MEFA” membrane electrode framed assembly. A membrane
assembly comprises a frame, and the frame is formed by
bonding two opposing polymeric thin-film layers that
encompasses the edge of a MEA
“MJ” megajoules, a unit of calorific value equals to one million
joules
“MPa” megapascal pressure per unit, a unit of pressure
measurement equals to 1,000,000 pascals
“MW” megawatt, a unit of power equals to one million watts
“peak cut” a measure to adjust electrical loads. It involves
strategically organizing and planning the electricity
usage of various users according to their consumption
patterns, aiming to reduce peak loads and fill in load
valleys. It helps to minimize the disparity between peak
and off-peak loads, achieving a balance between
electricity generation and consumption
“PEN” polyethylene naphthalate. A type of frame material
bonded to the edge of MEA, which is capable of handling
high stresses and temperatures and offers stability in the
corrosive environment
GLOSSARY OF TECHNICAL TERMS
–5 0–


--- page 61 ---
“perfluorinated sulfonic acid” or
“PFSA”
a fully fluorinated high-molecular-weight copolymer
containing sulfonic acid groups. It exhibits excellent heat
resistance and high chemical stability, making it suitable
for hydrogen ion exchange and catalyst binding in fuel
cells
“power density” it is a measurement of power output per unit
mass/volume; and for a fuel cell system it refers to its
rated power divided by mass and is usually presented in
kW/kg, and for a fuel cell stack it refers to its rated power
divided by volume and is usually presented in kW/L
“proton-exchange membrane” or
“PEM”
proton-exchange membrane, a component of membrane
electrode assembly, serving as a thin film that conducts
protons, prevents the transfer of electrons between
internal cathode and anode, and separates the gases
involved in the cathodic and anodic reactions in fuel cells
“rated power” the continuous electrical power level that a fuel cell stack
or system can deliver under the manufacturer’s specified
standard operating conditions. The unit of measurement
for rated power is kW
“RDW” Netherlands Vehicle Authority. The authority provides
information about the rules and regulations concerning
motor
“renewable energies” energy sources that naturally regenerate over time and do
not run out
“stationary power generation” applications for fuel cells that are either connected to the
electric grid (distributed generation) to provide
supplemental power and as emergency power system for
critical areas, or installed as a grid-independent generator
for on-site service
“voltage” a representation of the electric potential energy per unit
charge
GLOSSARY OF TECHNICAL TERMS
–5 1–


--- page 62 ---
This prospectus contains certain forward-looking statements relating to our plans,
objectives, beliefs, expectations, predictions and intentions, which are not historical facts and
may not represent our overall performance for the periods of time to which such statements
relate. Such statements reflect the current views of our management with respect to future
events, operations, liquidity and capital resources, some of which may not materialize or may
change. These statements are subject to certain risks, uncertainties and assumptions, including
the other risk factors as described in this prospectus. You are strongly cautioned that reliance
on any forward-looking statements involves known and unknown risks and uncertainties. The
risks, uncertainties and other factors facing our Company which could affect the accuracy of
forward-looking statements include, but are not limited to, the following:
 our business strategies and plans to achieve these strategies;
 our future debt levels and capital needs;
 changes to the economic, political and regulatory environment in the industry and
markets in which we operate;
 our expectations with respect to our ability to acquire and maintain regulatory
licenses or permits;
 changes in competitive conditions and our ability to compete under these conditions;
 future developments, trends and conditions in the industry and markets in which we
operate;
 effects of the global financial markets and economic crisis;
 our financial conditions and performance;
 our dividend policy; and
 change or volatility in interest rates, foreign exchange rates, equity prices, volumes,
operations, margins, risk management and overall market trends.
In some cases, we use the words “aim”, “anticipate”, “believe”, “can”, “continue”,
“could”, “estimate”, “expect”, “going forward”, “intend”, “ought to”, “may”, “might”, “plan”,
“potential”, “predict”, “project”, “seek”, “should”, “will”, “would” and similar expressions to
identify forward-looking statements. In particular, we use these forward-looking statements in
the sections headed “Business” and “Financial Information” in this prospectus in relation to
future events, our future financial, business or other performance and development, the future
development of our industry and the future development of the general economy of our key
markets.
FORW ARD-LOOKING STATEMENTS
–5 2–


--- page 63 ---
The forward-looking statements are based on our current plans and estimates and speak
only as of the date they were made. We undertake no obligation to update or revise any
forward-looking statements in light of new information, future events or otherwise. Forward-
looking statements involve inherent risks and uncertainties and are subject to assumptions,
some of which are beyond our control. We caution you that a number of important factors could
cause actual outcomes to differ, or to differ materially, from those expressed in any
forward-looking statements.
Our Directors confirm that the forward-looking statements are made after reasonable care
and due consideration. Nonetheless, due to the risks, uncertainties and assumptions, the
forward-looking events and circumstances discussed in this prospectus might not occur in the
way we expect, or at all.
Accordingly, you should not place undue reliance on any forward-looking statements in
this prospectus. All forward-looking statements contained in this prospectus are qualified by
reference to this cautionary statement.
FORW ARD-LOOKING STATEMENTS
–5 3–


--- page 64 ---
An investment in our H Shares involves various risks. You should carefully consider
the following information about risks, together with the other information contained in
this prospectus, including our consolidated financial statements and related notes, before
you decide to purchase our H Shares. If any of the circumstances or events described in
this section actually arises or occurs, our business, results of operations, financial
position and prospects would likely suffer . In any such case, the market price of our
Shares could decline, and you may lose all or part of your investment.
The following is a description of what we consider to be our material risks, some
of which are beyond our control. Additional risks and uncertainties that are not presently
known to us or that we currently deem immaterial may develop and become material and
could also harm our business, financial position and results of operations.
RISKS RELATING TO OUR INDUSTRY
Our business depends on the PRC government policies and regulatory framework
supporting the hydrogen industry, which the PRC government could change or eliminate.
The PRC hydrogen industry is still at its early stage of development. In recent years, the
PRC government has adopted favourable policies and development plans, such as granting
subsidies and other economic incentives, to encourage the development, sale, and adoption of
new energies, including hydrogen. For example, in March 2020, the National Development and
Reform Commission and the Ministry of Justice issued the Opinions on Accelerating the
Establishment of Green Production and Consumption Laws and Policies (ͭၠЍ
จԈ‘), stating that the promotion of clean energy development
requires the study and formulation of standards and supporting policies for new technologies,
including hydrogen. In September 2020, the Ministry of Finance, together with several other
PRC government departments, jointly issued the Notice on Starting the Pilot Adoption of Fuel
Cell Vehicles (‘) to carry out the pilot adoption
of fuel cell vehicles in order to promote the sustained and orderly development of fuel cell
vehicle industry in China. This notice also changed the government subsidy model for fuel cell
vehicles from granting subsidy to qualified fuel cell vehicles manufacturers to awarding
eligible city clusters for the commercialization of key technologies used in the fuel cell
vehicles and the pilot adoption of fuel cell vehicles within the city cluster. Since August 2021,
the PRC government has approved five fuel cell vehicle demonstration city clusters, led by
Beijing, Shanghai, Foshan, Zhengzhou and Zhangjiakou, where most of our major customers
are located. In addition, in March 2022, the National Development and Reform Commission
issued the Medium- and Long-term Development Plan for Hydrogen Industry (2021-2035)
(ಂ஝ྌ(2021-2035 ϋ)‘), setting the goal of systematically promoting
the development of hydrogen industry chain and expanding low-carbon hydrogen supply.
Furthermore, on December 27, 2023, the National Development and Reform Commission of
the PRC released the “Industrial Structure Adjustment Guidance Catalogue (2024 Edition,
Draft for Comment)” (ኬͦ፽(2024 ϋ͉)), which listed the hydrogen fuel cell
technology as an encouraged technology.
RISK FACTORS
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As the regulatory framework and government policies in China for fuel cell vehicles are
relatively new and still evolving, these government policies may be subject to restrictions and
uncertainties beyond our control. In addition, the PRC government may also continuously
adjust and change these policies. Also, the implementation and enforcement of such regulations
may differ from region to region in China. See “Regulatory Overview — Regulations Relating
to Our Industry and Products” in this prospectus.
If there is a reduction or cancellation of favorable government policies, such as subsidies
and economic incentives, due to policy changes, fiscal tightening, or any other reason, or if
government guidance diminishes the demand for fuel cell vehicles or hydrogen, it could
undermine the competitiveness of the hydrogen industry as a whole. In such a scenario, there
may be a material and adverse impact on our business, financial condition, and results of
operations.
The demand for our products depends on the future trend and development of the PRC
fuel cell vehicle industry and the availability of other types of new energy vehicle. There
are uncertainties in future market demand and we cannot assure that we will continue to
obtain sufficient purchase orders in the future.
The demand for our products depends on the general market demand for fuel cell vehicles
in China, especially in the commercial vehicle market. The PRC fuel cell vehicle industry is
still at an early stage of development, characterized by changing technologies, immature
infrastructure, intense competition, evolving government regulation and industry standards,
and changing market demands. In particular, the availability of hydrogen refueling stations and
the development of related infrastructure in China is still lagging compared to the charging
infrastructures of the electric vehicle industry. Some commercial vehicle manufacturers may
even change their business focus to the development of electric vehicles other than the fuel cell
vehicle market in the future. In addition, the rapidly evolving market and the availability of the
alternative products or technologies, such as battery electric vehicle and hybrid electric
vehicle, may adversely affect our business and prospects in ways we do not currently
anticipate. Other factors that may affect the development of the fuel cell vehicle industry and
the adoption of fuel cell vehicles include:
 the continuous availability of government subsidies and incentives to buy, use and
operate fuel cell vehicles, or future regulation requiring the increase in the use of
pollution-free vehicles;
 perceptions about the quality, safety, design, performance and cost of fuel cell
vehicles, especially if there are adverse events or accidents related to the quality or
safety of fuel cell systems, regardless of whether relevant products are produced by
us or by other manufacturers;
 the number and location of hydrogen refueling stations, the cost of hydrogen and the
continuous availability of government subsidies for the use of hydrogen;
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 the availability and convenience of after-sales services for fuel cell vehicles and fuel
cell systems;
 the improvement in fuel cell vehicles and fuel cell systems;
 the environmental consciousness of consumers; and
 macroeconomic factors.
If there are major changes in the future development trends in the fuel cell vehicle
industry, or the market demand does not grow as we expected, our business, financial
condition, results of operations, and prospects will be materially and adversely affected.
We are in a new industry where emerging technologies used in fuel cell systems or
hydrogen production system may not be mature. Any major product defects, malfunctions
or negative news concerning the hydrogen industry may damage our reputation and
adversely affect our business, financial condition and results of operations.
At present, the hydrogen industry in China is still in the early stage of commercialization,
where emerging technologies in hydrogen production and hydrogen application may be
immature. We cannot assure that there will be no errors, defects, or poor performance may arise
due to design flaws, defects in raw materials or components, or manufacturing difficulties, all
of which can impact the quality and performance of our products. New generation of products
or latest technologies that are newly developed or first launched may contain potential
technical errors or safety issues. Any actual or perceived errors, defects, or poor performance
in our products could result in the replacement, repairment or rejection of our products,
shipment delays, lost revenue, diversion of our engineering personnel from its product
development efforts, increases in customer service costs and support costs and damage to our
reputation, all of which could have a material adverse effect on our business. In addition,
product liability claims, injuries, defects, or other problems experienced by other companies in
the hydrogen industry, any negative news or incidents about the hydrogen production, fuel cell
systems, hydrogen transportation, hydrogen storage, and hydrogen refueling stations could lead
to unfavorable market reputation for the industry as a whole and may have an adverse effect
on the market demands and our ability to attract new customers, thus harming our business
growth and financial performance.
RISK FACTORS
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We face intense market competition and the industry may undergo unforeseen changes
under a rapid development. If we fail to compete successfully, our business and results of
operations may be materially and adversely affected.
We currently face, and will continue to face, significant competition from domestic and
overseas manufacturers of similar products. We believe that our ability to compete effectively
against other market participants depends upon many factors, some of which are beyond our
control, including:
 the performance, reliability and technology advancement of our products compared
to those of our competitors, which are highly dependent on the research and
development and technological capabilities of our product, and our insights into
customer needs and preferences as compared to our competitors;
 our ability to identify and capture new market opportunities in advance of our
competitors;
 our reputation and brand strength relative to our competitors;
 regulations or government policies in the industry where we operate;
 our ability to attract, retain, and motivate talented employees, in particular highly
qualified research and development personnel; and
 our ability to manage and grow our operations in a cost effective manner.
As the favourable government policies in developing fuel cell industry and hydrogen
production industry led to an increasing number of market players in the fuel cell industry and
hydrogen production industry, the competition has intensified. Under such circumstances, we
cannot assure you that our revenue will continue to grow in the future while maintaining
cost-effective operations.
Our competitors, including market players in fuel cell industry and hydrogen production
industry, may have substantially more financial and other resources, R&D capabilities, longer
operating histories, as well as broader product applications and larger market share. We may
be unable to compete successfully against these competitors or new market entrants, which
may adversely affect our business and financial performance. Any failure by us to successfully
react to changes in alternative technologies and competitive market conditions could materially
harm our competitive position and growth prospects.
RISK FACTORS
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The industry we operate in is characterized by rapid technological changes and
advancements. We may not be able to maintain our revenue growth and any delay by us
in bringing new and competitive products to the market could adversely affect our
financial performance.
Both fuel cell industry and hydrogen production industry evolves rapidly and
technologies relating to bipolar plates, membrane electrodes, fuel cell stacks, hydrogen fuel
cell systems and water electrolysis hydrogen production systems are subject to rapid changes
and developments. The corresponding technological developments enable the hydrogen fuel
cell systems and hydrogen production systems to progressively improve in terms of their
operational performance and/or power output. Accordingly, the market is seeing more
cost-effective and efficient hydrogen fuel cell systems and water electrolysis hydrogen
production systems from time to time.
To maintain our market position, we are and will be required, on a timely and consistent
basis, to design, develop and introduce new, improved or more cost-effective products.
However, we cannot assure you that our research and development efforts can be completed in
the anticipated time frame or may lead to new products that are commercially successful. If we
encounter delays in production development and technology integration, fail to meet changing
market demands, fail to keep up with the latest technological developments, or fail to
successfully introduce new and competitive products to the market, and if our competitors
respond more promptly than we do, our business, financial condition and results of operations
may be materially and adversely affected.
RISKS RELATING TO OUR BUSINESS
We recorded net losses in the past and had negative cash flows from operating activities,
and our trade receivables turnover days remained at a relatively high level, all of which
may continue if we may not be able to implement our business plans successfully in the
future.
We recorded net losses of RMB654.3 million, RMB546.1 million, RMB577.5 million and
RMB409.4 million in 2021, 2022, 2023 and the five months ended May 31, 2024, respectively.
We had net cash flows used in operating activities of RMB768.2 million, RMB728.1 million,
RMB718.4 million and RMB144.1 million in 2021, 2022, 2023 and the five months ended
May 31, 2024, respectively. Such loss making position is expected to continue in the near
future. The pressure on us to generate positive cash flow from operating activities may be
further exacerbated if we fail to collect our trade receivables in time.
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We typically grant credit terms to our customers, which are negotiated based on various
factors such as years of relationship. However, we may not be able to receive payment for our
products on time. As of December 31, 2021, 2022, 2023 and May 31, 2024, we recorded trade
and bills receivables and contract assets (net of impairment) of RMB1.2 billion, RMB1.5
billion, RMB2.0 billion and RMB1.9 billion, respectively, representing 47.8%, 36.7%, 50.0%
and 51.4% of our total assets as of the same dates, respectively. Due to the policy-driven nature
of China’s hydrogen fuel cell industry, our receivables turnover days remained at a relatively
high level during the Track Record Period. Specifically, In 2021, 2022 and 2023, our trade
receivables turnover days were 909 days, 1,029 days and 866 days, respectively.
In contrast, our trade and bills payables turnover days were 501 days, 435 days and 325
days in 2021, 2022 and 2023, respectively. With our business grows, the mismatch between
trade receivables turnover days and trade and bills payables turnover days would raise our
liquidity risk. We cannot assure you that our customers will pay us in full for their purchases
in a timely manner pursuant to the payment schedules listed in our agreements or at all in the
future. If we fail to receive such outstanding amounts from our customers in full or in a timely
manner, or at all, our liquidity might be adversely affected, and our business and financial
condition will be materially and adversely affected.
We cannot assure you that we will successfully execute our business strategies hence we
may not generate sufficient income from our business operations, profits or positive cash flow
from operating activities in the future for a number of reasons, including lack of demand for
our products and services, changes in the government policies toward the hydrogen industry,
increasing market competition, failure of collecting our trade receivables in time or at all, as
well as other risks discussed herein. If we fail to effectively and efficiently implement our
business plans, we may not be successful in achieving profitable results. Our financial
condition, results of operations and growth prospects may be materially and adversely affected
if our future business plans fail to achieve positive results. In addition, our ability to become
profitable in the future will not only depend on our efforts to sell our products but also to
control our costs. If we are unable to adequately control the costs associated with our
operations, we may continue to experience losses and negative cash flows from operating
activities in the future.
In addition, we may need additional capital resources in the future to further improve our
research and development capability, enhance supply chains, expand our production capacity
and sales network, pursue opportunities for investments, acquisitions, capital expenditures or
similar actions, or if we experience change in business condition or other unanticipated
developments. During the Track Record Period, we incurred significant amount of cash
outflows for investing activities. Since we have not continuously recorded net profit or positive
cash flows from operating activities during the Track Record Period, we may continue to rely
on equity or debt financing to meet our working capital and capital expenditure requirements.
If we were unable to acquire sufficient additional capital in a timely manner or on terms that
are acceptable, or at all, we may fail to implement our business plans or experience disruptions
in our operating activities, and our business, financial condition and results of operations
would be materially and adversely affected.
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The large-scale commercialization of hydrogen related products may fall short of our
expectation, which may lead to unsatisfactory market development and affect our
business operation.
The commercialization of hydrogen related products, such as hydrogen fuel cell systems
and hydrogen production systems in China is still at an early stage. In 2021, 2022 and 2023 and
the five months ended May 31, 2024, the sales volume of fuel cell systems equipped with fuel
cell stacks provided by our Group were 639, 790, 1,234 and 11 units, respectively. At the
moment, our industry is in the critical period of technology research and development, pilot
adoption and core technology commercialization. However, we may face difficulties and
obstacles in the process of exploring the large-scale commercialization of our products,
including weak supply chains, insufficient batch production progress, inefficient and
inadequate production equipment and quality controls, and other unexpected risks which may
occur during the large-scale commercialization of fuel cell systems.
The large-scale commercialization process and capabilities of our core products and
technologies may not be as smooth as we expected, which may lead to unfavorable market
position and less competitiveness in the future and affect our business and results of operations.
In addition, the production of our certain products may be curtailed or suspended if it is no
longer economically viable for us to produce them in a cost-effective manner.
Most of our products are sold to commercial vehicle manufacturers, whose development
capabilities, financial condition, and commercial success will directly affect our results of
operations.
Our major customers are commercial vehicle manufacturers in China, many of whom
operate in markets that are subject to cyclical fluctuations resulting from market uncertainty,
government policies, costs of goods sold, market competition, labor shortages, and other
factors beyond our control. The market demand for our customers’ products may also be
affected by the price fluctuations due to the changes in the government’s subsidy policy. In
addition, any financial or economic crisis, perceived threat of such crisis or deterioration of
PRC and global macroeconomic environment may make it difficult for our customers to
accurately plan their future business activities. Any of these factors could affect our customers’
sales volume, profit margin and working capital and cause them to idle or close facilities, delay
purchases, reduce production levels, or experience reductions in the demand for their own
products or services. Any of these events could affect the business operation of our customers
and also reduce the volume of products these customers purchase from us, impair the ability
of our customers to make full and timely payments and could cause increased pressure on our
selling prices and terms of sale or even cause them to terminate their relationships with us. For
example, commercial vehicle manufacturers may face working capital constraints and some of
them may even face operation pressure due to continuous losses. If their financial situations are
not improved due to a long period for collecting government subsidy and other factors, this
may result in our slower collection of these trade receivables. See ‘‘— Risks Relating to Our
RISK FACTORS
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Business — We recorded net losses in the past and had negative cash flows from operating
activities, and our trade receivables turnover days remained at a relatively high level, all of
which may continue if we may not be able to implement our business plans successfully in the
future” in this section.
We depend on a concentration of major customers and we do not enter into long-term
sales agreements with them. Any loss of these customers or future purchase order from
them would adversely affect our business, financial condition, results of operations and
cash flows.
According to Frost & Sullivan, since both fuel cell industry and hydrogen production
industry in China are still at an early stage of development, their market sizes are relatively
small and major customers are highly concentrated. During the Track Record Period, most of
our revenue was generated from a limited number of customers. Our sale to our top five
customers accounted for approximately 75.0%, 71.7%, 69.3% and 58.2% of our total revenue
in 2021, 2022 and 2023 and the five months ended May 31, 2024, respectively. Our results of
operations and financial condition will continue to depend on (i) our ability to continue to
obtain orders from these major customers; (ii) the financial condition and commercial success
of these customers; and (iii) factors that affect the development of the fuel cell industry and
hydrogen production industry. We cannot assure you that we will be able to retain any of our
largest customers or any other key customers. Any material delay, cancelation or reduction of
orders from our major customers could cause our sales volume to decline significantly, and in
any such event, our results of operations may be materially and adversely affected.
In addition, due to the industry practice and our business operating model, we do not enter
into long-term agreement or commitment with any of our major customers, except for yearly
framework agreements, and they are not obligated to purchase any minimum amount of our
products or to provide us with binding order forecasts for any period. Instead, we primarily sell
our products when customers place orders, and these orders may not occur regularly. We cannot
assure you that these customers will place orders with us in the future at the same levels as in
prior periods, or that any of these or future customers will not terminate their procurement or
service agreements with us or significantly change, reduce, delay or cancel the products and
services ordered from us. In particular, if there is a significant fluctuation of prices of the
products we produce, our customers may be unwilling to renew their contract with us. If any
of the foregoing events occurs, especially with respect to our major customers, there would be
a material adverse effect on our business, financial condition, results of operations and cash
flows.
RISK FACTORS
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If we are unable to manage our inventory risks efficiently or the proportions and amount
of our provision for inventories further increase, our financial condition and results of
operations may be adversely affected.
We had inventories of RMB336.4 million as of May 31, 2024. Our inventories mainly
consist of raw materials, work in progress and finished goods. We cannot assure you that our
inventories will not be damaged or impaired, as our storage may encounter unforeseeable
events. As such, failure to manage our inventories effectively may adversely affect our
financial condition and results of operations. The demand for our fuel cell systems depends on
their market conditions as well as the performance of downstream commercial vehicle
manufacturers, which are beyond our control. We maintain an adequate stock of various models
of fuel cell systems. Therefore, any unexpected change in the economic condition or the
performance of our customers may render our inventory obsolete. Our impairment losses on
inventories increased by 72.2% from RMB47.7 million in 2021 to RMB82.1 million in 2022,
primarily attributable to the rapid product iterations towards high-output fuel cell systems and
the decline in market prices, and decreased by 61.3% to RMB31.8 million in 2023. Our
impairment losses on inventories decreased from RMB16.5 million for the five months ended
May 31, 2023 to RMB8.5 million for the same period in 2024. We may continue to record
impairment of inventories arising from the decline in market prices of hydrogen fuel cell
systems and the rapid product iterations toward high-output fuel cell systems in the future.
During the Track Record Period, provision for impairment of inventories is made when the net
realizable value of inventories falls below the cost or any of the inventories is identified as
obsolete. As of December 31, 2021, 2022, 2023 and May 31, 2024, our provision for
impairment of inventories were RMB73.6 million, RMB125.4 million, RMB115.6 million and
RMB102.4 million, respectively. With the development of fuel cell system market and
according to our business scale expansion, aging of inventory balance, adjustment of subsidy
policy and upgrading and iteration of our products, the amount and proportion of our provision
of the inventories may further increase, which may have an adverse impact on our financial and
results of operations.
Our research and development efforts may not yield the results as expected to maintain
our market share and competitiveness in China’s fuel cell market.
Research and development and technological development is critical to the improvement
of our product quality and performance, and we compete on the basis of our products’
reliability, fuel efficiency, environmental considerations and cost. We have been making
substantial investments in our research and development endeavors. In 2021, 2022, 2023 and
the five months ended May 31, 2024, we incurred research and development expenses of
RMB230.9 million, RMB198.7 million, RMB220.9 million and RMB90.3 million,
respectively, accounting for 44.1%, 32.9%, 24.7% and 721.0% of our total revenue during the
respective periods.
RISK FACTORS
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The hydrogen industry is experiencing rapid technological changes, and we need to
continuously invest significant resources in research and development to lead technological
advances and remain competitive in the market. Therefore, we expect that our research and
development expenses will continue to be significant and greater than previous years to
execute our strategies. However, research and development activities are inherently uncertain,
and we cannot assure that we will continue to achieve technological breakthroughs and
successfully commercialize such breakthroughs. Our significant expenditures on research and
development may not generate corresponding benefits. If our research and development efforts
fail to keep up with the latest technological developments or we fail to meet customer or
industry standards in a timely manner or at all after product testing and certification, we would
suffer from a decline in our competitive position. Any delay or setbacks in our efforts to
upgrade and improve our products and their functionality could materially and adversely affect
our business, market share, results of operations and product development efforts. We cannot
assure you that we will be able to successfully develop our future products with advanced
technologies in time or at all. Even if we can keep pace with changes in technologies and
develop new products, our prior products could become obsolete more quickly than expected,
potentially reducing our return on investment.
If we fail to obtain sufficient amounts of raw materials or components in time or that meet
our quality standards and/or at commercially acceptable prices, our business, financial
condition and results of operations would be materially and adversely affected.
We require various types of raw materials and key components for the manufacture of our
products and only have a limited number of suppliers meeting our quality standards for some
of the key components, including components of fuel cell stacks and membrane electrode
assemblies. Any of our major supplier’s failure to develop and supply components in a timely
manner or to supply components that meet our quality, quantity or cost requirements or
technical specifications or our inability to obtain alternative sources of these components on
a timely basis or on terms acceptable to us could harm our ability to manufacture our products.
We cannot assure you that there will not be any in the future.
Our product sales are mainly concentrated in the second half of the year, especially in the
fourth quarter, which resulted in a material seasonal fluctuation in our results of
operations.
According to Frost & Sullivan, the production and sales of fuel cell vehicles in China are
seasonal, and our business is also affected by such seasonality. We generally deliver our
products to our customers in the second half of a year.
RISK FACTORS
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As advised by Frost & Sullivan, the fuel cell vehicle industry experiences seasonality
which is mainly influenced by the periodical issuance or updates of related governmental
policies in the hydrogen fuel cell industry and the kick-off of related government award
projects, which generally occurs in the second half of the year. Our main customers, i.e., the
fuel cell vehicle manufacturers, generally determine and place orders accordingly only after
their assessment of such newly issued or updated award policies. We generally commence
production in the second half of the year after negotiating with our customers regarding the
purchase orders. Therefore, our final production completion and delivery time will usually be
in the second half of the year, especially in the forth quarter of a year. Hence, a substantial
portion of our revenue is usually recognized in the latter half of the year, especially in the
fourth quarter. In 2021, 2022 and 2023, we recorded a significant portion of revenue in the
second half of the respective years, and our revenue recorded in the fourth quarter amounted
to RMB501.0 million, RMB489.2 million and RMB675.8 million, representing 95.6%, 80.9%
and 75.5% of our total revenue for the same years, respectively.
Considering the ongoing developmental of China’s fuel cell vehicle industry and the
anticipated continued influence of government subsidy policies and annual periodicity of
vehicle production, we expect the seasonal nature of product manufacturing, sales, and revenue
recognition to persist.
We may be subject to risks relating to strategic investments.
One of the key components of our strategy is to pursue the vertical integration of our
supply chains and business development and expansion through cooperation, and investments,
and ultimately reduce raw material costs and maintain stable gross profit margin of our
products, or reduce the product development cycle. For more information, see “Business —
Our Strategies — Actively venture into supply chains of the industry and enhance industry-
wide synergies” in this prospectus. We may grow through investments and other strategic
alliances on a selective basis, depending on our internal resources. Any future strategic
investments may expose us to operational, regulatory and market risks. Before the completion
of potential investment or alliance, we face the risk that we may not be able to identify suitable
investment candidates or alliance partners or complete an acquisition or alliance on
commercially acceptable terms in the future. If we fail to identify appropriate candidates or
complete desired investment, we may not be able to implement our growth strategies
effectively. After the completion of potential investment or alliance, we are subject to the risk
that the companies in which we invest may make business, financial or management decisions
which we do not agree, and over which we do not have control, or that the controlling
shareholders, or the management, of the companies may act in a manner that does not serve our
interests. Furthermore, if any of the strategic investee companies suffers any negative publicity
as a result of its business operations, our reputation may be negatively affected by virtue of our
investment in such party. We cannot assure you that our future strategic investments could yield
the results as expected.
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Our financial condition, results of operations and business may be adversely affected if we
are unable to enhance our production capacity as expected or if there are any problems
or delays in the production expansion plan.
We believe that our future success, in part, depends on our ability to enhance our
production capacity, which includes increasing our production utilization rate, improving our
production efficiency, acquiring and upgrading equipment and production facilities and
upgrading our existing production processes. Any government policy change affecting
investments in fuel cell industry in general may also have an impact on our expansion plan. If
we experience any issues or delays in meeting our projected timelines, maintaining sufficient
funding and capital efficiency, increasing production capacity or generating sufficient demand
for our increased production capacity, our business, prospects, results of operations and
financial condition could be adversely impacted.
Furthermore, our efforts to enhance our production capacity may not achieve the expected
benefits. We cannot assure you that the demand for our products will continue to increase, or
remain at the current levels, which is affected by various factors beyond our control, including
underlying economic conditions and market competitiveness. In the event that the demand for
our products falls below expectations, we could encounter challenges related to overcapacity
and underutilization of manpower and other resources. This in turn may adversely impact our
financial condition, results of operations, and overall business.
Our production capacity may not be fully utilized due to insufficient or unstable demand
of our products and may not achieve the intended economic results or commercial
viability.
If our products face insufficient or unstable demand, our utilization of production
capacity will be affected. In 2021, 2022, 2023 and the five months ended May 31, 2024, the
utilization rates for (i) our hydrogen fuel cell systems were 27.2%, 26.5%, 35.1% and 0.1%,
respectively; (ii) our fuel cell stacks were 29.6%, 26.2%, 43.8% and 7.3%; (iii) our graphite
bipolar plates were nil, nil, 92.5% and 53.2%; and (iv) our MEAs were 89.7%, 49.4%, 59.1%
and 10.7%, respectively. Due to the seasonality of our business, our utilization rates are higher
in the second half of the year. See “Business — Seasonality” in this prospectus.
We planned to increase production capacity at our existing production facilities and
construct additional production facilities in multiple regions for our existing products and new
product portfolio. There is no assurance that the level of demand for our products during the
Track Record Period will maintain in the future. As such, there may be an insufficient demand
for our products, resulting in low utilization rate of our production facilities. Our actual
production volume may vary depending on the demand for our products, which in turn may be
affected by market trend, customers’ preferences or other factors beyond our control. If the
orders from our existing customers are not sufficient to fully utilize our production capacity
and there is a lack of new customers, our production facilities might be operated at a utilization
rate lower than our desired rate, which may adversely affect our business, financial condition
and results of operations.
RISK FACTORS
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We may not be able to adequately protect our intellectual property, which could cause us
to be less competitive. Intellectual property infringement claims or other allegations by
third parties and third-party infringements of our intellectual property rights may
adversely affect our business.
We rely on a combination of invention patent, utility model, design patent, trademark and
trade secret laws and restrictions and confidentiality agreements on disclosure to protect our
intellectual property rights. As of the Latest Practicable Date, we had (i) 339 registered patents
in China, including 120 invention patents, 206 utility model patents and 13 design patents, (ii)
108 registered trademarks in China, two registered trademarks in Hong Kong, five registered
trademarks in Japan, seven registered trademarks in European Union, eight registered
trademarks in United States, and one registered trademark in Canada, (iii) 37 registered
software copyrights and six registered work copyrights in China, as well as (iv) seven
registered domain names in China. Despite our efforts to protect our proprietary intellectual
property rights, third parties may attempt to copy or otherwise obtain or use our intellectual
property, including seeking court declarations that they do not infringe upon our intellectual
property rights. Monitoring unauthorized use of our intellectual property is difficult and costly,
and the steps we have taken may not be able to fully prevent misappropriation of our
intellectual property. From time to time, we may have to resort to litigation to enforce our
intellectual property rights, which could result in substantial costs and inversion of our
resources, and thus may adversely affect our business.
Furthermore, companies in the manufacturing and technology industries are frequently
involved in litigation related to allegations of infringement of intellectual property rights,
unfair competition and other violations of other parties’ rights, especially during the
application for the registration with competent government authorities of intellectual property
rights and trademarks. While we have not been subject to any intellectual property
infringement claims in the past, we may in the future be subject to intellectual property claims
or other allegations by third parties for the products and services we provide. We may face
allegations that we have infringed the invention patents, utility models and other intellectual
property rights of third parties, including our competitors, or allegations that we are involved
in unfair trade practices. Any resulting liability or expenses occurred from the intellectual
property claims, or changes required to our products to reduce the risk of future liability, may
have a material adverse effect on our business, results of operations and prospects.
In addition, as our patents may expire and may not be extended and our patent rights may
be contested, circumvented, invalidated or limited in scope, our patent rights may not protect
us effectively. In particular, as the fuel cell industry develops and fuel cell products become
more popular and common in the market, we may not be able to prevent others from developing
competing technologies, adopting technological advancements, or exploiting our competitive
fuel cell technologies derived from our research and development, which could adversely affect
our R&D position in the industry and make our products less competitive, and therefore our
business operations, financial condition and results of operations could be materially and
negatively affected.
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We have a limited operating history, making it difficult to evaluate our business prospects.
We were established in 2015. Our limited operating history makes it difficult to evaluate
our business prospects, and to plan for our future. We have relatively limited historical data for
making judgements on the demand for our products, our ability to develop, manufacture and
deliver products, or our profitability in the future. We may not always be accurate in predicting
industry trends that may emerge and our business. We experience revenue growth during the
Track Record Period. See “Financial Information — Description of Selected Components of
Consolidated Statements of Profit or Loss — Revenue” in this prospectus. However, our
historical revenue growth should not be considered as an indicator of our future performance.
Investors should comprehensively consider our business and prospects in light of the risks and
challenges we face in our industry as a new entrant.
Hydrogen produced by traditional methods is commonly used in China to operate
hydrogen fuel cell vehicles, which causes certain environmental impact and may in turn,
adversely affect business, results of operations, financial condition, and prospects of our
Company.
During the Track Record Period, hydrogen fuel cell vehicle manufacturers constituted our
primary group of customers. As advised by Frost & Sullivan, the types of hydrogen available
in the market for the operation of hydrogen fuel cell vehicles manufactured by their
manufacturers include (i) hydrogen produced from traditional sources (such as fossil fuels or
industrial by-products), (ii) hydrogen produced by combining traditional sources with CCUS
(Carbon Capture, Utilization, and Storage) technology, and (iii) hydrogen produced from
renewable energy sources. Hydrogen produced through traditional methods currently
constitutes the predominant form of hydrogen globally, accounting for approximately 86.9% of
the total, measured by the sales volume of hydrogen in the global market in 2023. While
traditional methods are mature and easily accessible in hydrogen production, they poses
environmental concerns and regulatory compliance risks. The production process of traditional
methods releases large amount of carbon dioxide, resulting in significant carbon emissions into
the atmosphere. In response to the growing emphasis on reducing greenhouse gas emissions,
governments in China, other countries, and international bodies may introduce regulatory and
policy restrictions regarding the use of hydrogen produced by traditional methods. These
restrictions could have a negative impact on the hydrogen fuel cell vehicle industry.
If hydrogen produced by traditional methods is restricted or limited, the availability of
hydrogen supplies may be constrained, leading to potential fluctuations in hydrogen prices or
supplies. As a result, the hydrogen fuel cell vehicle industry could be adversely affected.
Though supply limitation can be mitigated by hydrogen production using renewable energy
sources, and the carbon emissions from hydrogen through traditional methods are not directly
related to our company’s fuel cell systems, the hydrogen fuel cell vehicle manufacturers, our
primary group of customers, may still face risks related to the environmental and potential
policy changes, which may in turn, adversely affect business, results of operations, financial
condition, and prospects of our Company.
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Fluctuations in our share of results of associates may affect our overall financial
performance, and there are liquidity risks associated with our investments in associates.
For the years ended December 31, 2021, 2022, 2023 and the five months ended May 31,
2024, we recorded share of losses of associates of RMB2.5 million, RMB2.7 million, RMB3.9
million and RMB5.7 million, respectively. If the share of results of our associates continue to
decrease, our results of operations and financial condition may be adversely affected.
In addition, we are subject to liquidity risk associated with investments in associates,
especially when no dividend is declared by such parties and investment in these vehicles is not
as liquid as other investment products. Large investment in associate would require significant
financial resources, resulting in significant cash outflow, increased debt financing, or both.
Dividends from associates are an integral part of our cash flow without which may adversely
affect our results of operations and financial condition. Even when our associates become
profitable and we recognize profits through share of results of associates under equity
accounting in future, we may not receive any cash flow from the associates until and unless we
receive dividends from them, the decision of which is not within our control. We can neither
assure you that our associates will be profitable, nor that they will declare dividends if they are
profitable. As such, we may not be able to readily generate any cash flow from our investment
in associates to fund our operations from time to time, or at all.
Share-based compensation expenses may increase our operating expenses and have a
material and adverse effect on our financial performance.
During the Track Record Period, we incurred share-based payment expenses of RMB31.3
million, RMB27.1 million, RMB87.1 million and RMB117.5 million in 2021, 2022, 2023 and
the five months ended May 31, 2024, respectively.
The share-based payment expenses are primarily resulted from our employee incentive
schemes. For details, see note 34 to the Accountants’ Report in Appendix I to this prospectus.
To further incentivize our employees to contribute to us, we may grant additional share-based
payment compensations in the future. Issuance of additional Shares with respect to such
share-based payment may dilute the shareholding percentage of our existing shareholders.
Expenses incurred with respect to such share-based payment may also increase our operating
expenses and therefore have a material and adverse effect on our financial performance.
We may need additional capital and may not be able to obtain it in a timely manner or
under commercially acceptable terms, or at all.
We believe that our current cash and cash equivalents and the net proceeds from the
Global Offering and the financial resources available to us will be sufficient to meet our
anticipated cash needs, including our cash needs for working capital and capital expenditures,
for at least the next 12 months from the date of this prospectus. We may, however, require
additional cash resources to finance our continued growth or other future developments, such
as business expansion or investments we may decide to pursue. However, no assurance can be
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given that we will be able to generate sufficient cash from our operations or obtain the
necessary financing or that such financing will be at interest rates and on other terms that are
commercially reasonable to us or consistent with our expectations. To the extent we cannot
finance our expansion or acquisitions at reasonable rates or at all in the future, our business
may be harmed. In addition, if we raise additional financing by issuance of additional equity
securities, our Shareholders may experience dilution. To the extent we engage in debt
financing, the incurrence of indebtedness would result in increased debt servicing obligations
and could result in operating and financing covenants that may, among other things, restrict our
operational flexibility or our ability to pay dividends. Servicing such debt obligations could
also be burdensome to our operations. If we fail to service the debt obligations or are unable
to comply with such debt covenants, we could be in default under the relevant debt obligations
and our liquidity and financial conditions may be materially and adversely affected.
Our ability to obtain additional capital on commercially acceptable terms is subject to a
variety of uncertainties, some of which are beyond our control, including general economic and
capital market conditions, credit availability of financial institutions, receipt of necessary
government approvals, investors’ confidence in us, the performance of the hydrogen fuel cell
industry in general, and our operating and financial performance in particular. We cannot
assure you that future financing will be available in amounts or on terms commercially
acceptable to us, if at all. In the event that financing is not available or is not available on terms
commercially acceptable to us, our business, results of operations and growth prospects may
be adversely affected.
We may not be able to retain our senior management and key research and development
personnel or attract qualified and experienced employees to join us.
Our business success depends on the continued contributions of our senior management.
The loss of the services of any such executives, senior management and other key employees
could hurt our business and the ability to implement our business strategy. In addition, our
research and development also depend on our ability to attract and retain qualified personnel.
Excellent technical talents in the industry are scarce and are in high demand, and we face fierce
competition to attract such talents from other competitors in China or even around the world.
Our competitors may offer better compensation packages to recruit the professional and
technical people that we want. As a result, we may not be able to attract and retain the qualified
people needed to sustain the growth of our current or planned business, or our employee
expenses may increase significantly. We may also need to offer higher salaries and other
benefits to attract and retain future talent, which may lead to increased human resource costs
and decreased profitability. Our failure to attract and retain talented and qualified senior
management and other key technological personnel could have a negative impact on our ability
to effectively manage and grow our business and maintain a competitive position. If any of the
above events occurs, our business, financial condition and results of operations could be
adversely affected.
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Any labor shortages, increased labor cost or other factors affecting our labor force may
adversely affect our business, profitability and reputation.
The overall economy and the average wage in China have increased in recent years and
are expected to grow. The average wage level for our employees has also increased in recent
years. To sustain the growth of our business, we may need to increase our workforce of
experienced management and skilled personnel to implement our expansion plans, and conduct
our R&D projects to facilitate our future strategies. Any labor shortage, suspension or
slowdowns at our production bases may significantly disrupt our business operations or delay
our expansion plan. We may have difficulties in hiring or retaining sufficient and qualified
employees. Given the recent economic growth in China, competition for qualified personnel,
such as research and development experts and engineers, is substantial and labor costs have
been increasing generally, and we anticipate there will be an upward pressure on our labor costs
and employees’ salaries and benefits in the foreseeable future. We cannot assure you that we
can retain and attract sufficient qualified employees on commercially reasonable terms, or at
all. Any failure to attract qualified personnel at reasonable cost and in a timely manner could
reduce our competitive advantages relative to our competitors, undermining our ability to
expand our growth in revenue and profits. Increases in our labor costs and future disputes with
our workers could adversely affect our business, financial condition or results of operations.
Any unexpected disruption at our production facilities could materially and adversely
affect our business, financial condition and results of operations.
Our ability to meet the demand of our customers and grow our business relies on the
efficient, proper and uninterrupted operation of our production plan and a constant and
sufficient supply of utilities. Although we have not experienced any material disruption in our
production, or damage to our production equipment and facilities during the Track Record
Period, in the event of earthquake, fire, drought, flood or other natural disaster, political
instability, riot or civil unrest, extended outage of critical utilities or transportation systems,
terrorist attack or other events that limit or disrupt our ability to operate our production
facilities, we may experience substantial losses, including loss of revenue from disrupted
production. We may also need to incur substantial additional expenses, exceeding our
insurance coverage to repair or replace any damaged equipment or facility. In addition, our
ability to manufacture and supply products and our ability to meet our delivery obligations to
our customers would be significantly disrupted and our relationships with our customers could
be damaged, which could have a material and adverse effect on our business, financial
condition and results of operations.
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We are uncertain about the recoverability of our deferred tax assets, which may affect our
financial condition in the future.
Deferred tax assets arise from the deductible temporary differences between the carrying
amounts of assets and liabilities from financial reporting purposes and their tax base, as well
as unused tax losses and unused tax credits. Deferred tax assets are recognized for all
deductible temporary differences, and the carry forward of unused tax credits and any unused
tax losses. This requires significant judgment on the tax treatment of certain transactions and
also assessment on the probability that adequate future taxable profits will be available for the
deferred tax assets to be recovered. In this context, we cannot guarantee that the recoverability
of our deferred tax assets, and to what extent they may affect our financial condition in the
future.
We may be subject to impairment losses risks in relation to prepayments, other
receivables and other assets.
Our prepayments, other receivables and other assets primarily consist of prepayments to
suppliers, other tax recoverable, prepaid expenses, and other long term assets. Our
prepayments, other receivables and other assets balances as of December 31, 2021, 2022 and
2023 and May 31, 2024 were RMB120.3 million, RMB165.7 million, RMB364.2 million and
RMB268.8 million. We had impairment allowance of RMB1.5 million, RMB2.0 million,
RMB4.9 million and RMB4.5 million as of December 31, 2021, 2022, 2023 and May 31, 2024.
If a significant increase in credit risk of a receivable has occurred since initial recognition, then
impairment is measured as lifetime expected credit losses. The assessment of impairment
losses involves a significant degree of management judgments as well as estimates in
determining the key assumptions. Therefore, there is uncertainty on the prediction of the
movement of impairment of prepayments, deposits and other receivables. Significant
impairment losses on prepayments, deposits and other receivables may have a material adverse
effect on our financial condition and results of operations.
We may face exposure to fair value change for financial assets at FVPL and valuation
uncertainty due to the use of unobservable inputs.
As of December 31, 2021, 2022, 2023 and May 31, 2024, our financial assets at FVPL
was RMB6.4 million, RMB342.3 million, RMB44.4 million and RMB52.2 million,
respectively. We may continue to record financial assets and therefore may face exposure to
fair value change for the financial assets at FVPL. We cannot assure you that we can recognize
comparable fair value gains in the future, and we may, on the contrary, recognize fair value
losses, which would affect the results of our operations for future periods. In addition, the
valuation of fair value changes of financial assets at FVPL is subject to uncertainties in
estimations. Such estimated changes in fair values involve the exercise of professional
judgment and the use of certain bases, assumptions and unobservable inputs, which, by their
nature, are subjective and uncertain. As such, the financial assets at FVPL valuation has been,
and will continue to be, subject to uncertainties in estimations, which may not reflect the actual
fair value of these financial assets and result in significant fluctuations in profit or loss from
period to period.
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Our business strategies require a significant amount of capital. If we fail to obtain
sufficient financing to support our business development, our business operation,
financial condition, and prospects may be materially and adversely affected.
Our business and future strategy are capital intensive and require substantial investments
in, among other things, research and development, increasing the production capability and
products promotion and marketing. As we increase our production capacity and operations, we
may also require significant capital to maintain our property, plant and equipment and such
costs may be greater than anticipated. We expect that our level of capital expenditures will be
significantly affected by user demand for our products. Our future capital requirements may be
uncertain and actual capital requirements may be different from those we currently anticipate.
We may seek equity or debt financing to finance a portion of our capital expenditures. If we
fail to obtain sufficient capital in a timely manner or on acceptable terms, or at all, we may be
required to significantly reduce our spending, delay or cancel our planned activities, or
substantially change our corporate strategy, which may materially and adversely affect our
business, financial condition, and prospects.
In addition, our future capital needs and other business reasons could require us to issue
additional equity or debt securities or obtain a credit facility. The issuance of additional equity
or equity-linked securities could dilute our shareholders. In addition, a tightening of available
credit may make it more difficult for us to obtain, or may increase our financing costs for our
business. The incurrence of indebtedness would result in an increase in debt service obligations
and could result in operating and financing covenants that would restrict our operations or our
ability to pay dividends to our shareholders.
The production and operational processes of our products, along with the fuel cell vehicles
that utilize hydrogen may, on rare occasions, pose safety risks and public concerns.
Fuel cell vehicles use hydrogen as fuel, which is a flammable fuel that could leak or
combust if ignited by fire. Our product production and business operation processes involve
hydrogen fueling and storage. On rare occasions, a fuel cell vehicle or hydrogen tank may catch
fire or explode by accident. We cannot assure you that the fuel cell vehicles will always
function safely. If any safety accident occurs to fuel cell vehicles produced by any of our
customers or during our business operation, we could be subject to reputational damage, claims
or even lawsuits, all of which would be time consuming and expensive. Also, public concerns
regarding the suitability of fuel cells applications for automotive or any future negative
incidents involving fuel cell vehicles, such as fire or explosion of hydrogen refueling stations,
even if our products are not involved in such incident, could seriously harm customers’
confidence and future demand in our products. In addition, due to the advantages of low
production cost and mature technology, hydrogen produced from fossil fuels or industrial
by-products is currently still the most common hydrogen in China. Market players in the
hydrogen industry, including our customers, face risks related to the environmental and
potential policy changes, which in turn, may raise public concerns and adversely affect our
business.
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Our product warranties provisions may not be sufficient to fully cover future warranty
claims, which could materially and adversely affect our business, prospects, financial
condition, results of operations, and cash flows.
Our major product, fuel cell systems, is made up of a large number of engineered parts
and components, and its quality warranties are mainly for repairing or replacing faulty parts.
We have been maintaining warranty provisions to cover warranty-related claims. Our product
warranties provisions were RMB53.7 million, RMB38.8 million, RMB42.3 million and
RMB42.4 million as of December 31, 2021, 2022, 2023 and May 31, 2024, respectively. If our
product warranties provisions are inadequate to cover future warranty claims on our products,
our financial condition, results of operations, and cash flows could be materially and adversely
affected. We expect to record and adjust warranty provisions based on changes in estimated
costs and actual warranty costs. However, since the fuel cell industry in China is at its early
stage, and there is a general lack of historical data and experience for the return rate of the
defective components, we have limited operating experience with warranty claims for our
products or with estimating warranty provisions. In the future, we may be subject to significant
and unexpected warranty expenses. We cannot assure you that the then-existing warranty
provisions will be sufficient to cover all claims.
We cannot assure you that we will continue to receive preferential tax treatment by the
PRC government in the future.
We enjoy certain preferential tax treatment under relevant preferential tax policies,
allowing us to have a lower tax rate. Certain of our subsidiaries had been subject to PRC
enterprise income tax at a preferential tax rate of 15% given their accreditations as “High and
New Technology Enterprise” during the relevant period. Additionally, certain of our
subsidiaries are qualified as small and micro enterprises under the relevant tax rules and
regulations of the PRC, and accordingly, the part of their taxable income not exceeding RMB3
million was subject to a reduced enterprise income tax rate of 20% during the relevant period.
For more information, see note 10 to the Accountants’ Report in Appendix I to this prospectus
and “Financial Information — Description of Selected Components of Consolidated
Statements of Profit or Loss — Income Tax Credit/(Expense)” in this prospectus. We plan to
apply for the extension of such preferential tax treatment before expiration. However, there
cannot be any assurance that we will be granted such extension, and, if we are not, it would
result in an increase of our effective income tax rate. To the extent that there are any changes
in, or withdrawals of, any preferential tax treatment applicable to us, or increases in the tax
rate, our tax liability would increase correspondingly. In addition, the PRC government may
from time to time adjusts or changes its policies on value-added tax, business tax and other
taxes. Such adjustments or changes could have an adverse effect on our results of operations.
RISK FACTORS
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The unavailability, reduction or elimination of government grants and subsidies which we
are currently entitled to could have an adverse effect on our business, financial condition,
results of operations and prospects and we are subject to the risk of delayed collection of
trade receivables as affected by government subsidy policies.
In 2021, 2022, 2023 and the five months ended May 31, 2024, we accrued government
grants and subsidies of RMB32.2 million, RMB34.3 million, RMB39.4 million and RMB14.5
million, respectively, which were intended to support our business and reward our efforts in
technological development.
The industry-specific subsidies are mainly non-recurring subsidies provided by local
governments supporting various industry-related research and development activities. Such
government grants may be discretionary and are subject to certain selection criteria and
procedures stipulated by the local governments, which we may not be qualified for in the
future. In addition, local governments may switch the focus of their support of research and
development activities and fixed assets investments to other industries over time. These
factors, such as government’s focus on industries and criteria for government grants, are
beyond our control. We can neither assure you that any changes would be favorable to our
business, nor that we will be able to receive any such government grants in the future. If we
do not receive government grants in subsequent periods after the Track Record Period or if the
amount of government grants we are entitled to decreases, our financial condition for such
periods may be adversely affected.
In addition, according to Frost & Sullivan, China’s fuel cell vehicle industry is still in the
early stages of development and is highly affected by government subsidy policies. Under
certain circumstances, we applied on behalf of certain customers, who are manufacturers of
hydrogen fuel cell vehicles (i.e. downstream customers), for subsidies with the local
government, and then distribute such subsidies to them, in line with relevant policies and
implementation rules. However, even if we transfer the full amount of government subsidies
to our downstream customers in a timely manner, we could still be subject to the risk of delayed
collection of our trade receivables due from them. For details, see “Business — Customers,
Sales and Pricing — Involvement in Application Projects For ‘Award in Lieu of Subsidy’ ”,
“Financial Information — Discussion of Certain Selected Items From the Consolidated
Statements of Financial Position — Trade and Bills Receivables and Contract Assets” and
“Financial Information — Discussion of Certain Selected Items From the Consolidated
Statements of Financial Position – Prepayments, Other Receivables and Other Assets” in this
prospectus.
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We have limited insurance coverage, and any claims beyond our insurance coverage may
result in us incurring substantial costs.
Insurance companies in China currently offer limited business-related insurance products.
We maintain certain insurance policies to cover potential property loss, physical injuries or
medical expenses involving third parties that occur on our premises. We consider our insurance
coverage to be in line with what we believe to be customary in our industry. However, we
cannot assure you that our insurance coverage in terms of amount, scope and benefit is
sufficient. Any uninsured risks and liabilities such as damages to or loss of properties may
result in substantial costs and the diversion of resources, which could adversely affect our
results of operations and financial condition. Such risks include, among others, loss of key
management and personnel, business interruption, litigation or legal proceedings, natural
disasters such as epidemics, pandemics or earthquakes, terrorist attacks and social instability
or any other events beyond our control. Our business, financial condition and results of
operations may be materially and adversely affected as a result.
We are subject to potential adverse consequences due to our lack of valid certificates and
permits in respect of certain properties we leased in China.
We leased a number of properties for our factories, warehouse and offices across China
during the Track Record Period. We may need to find alternative premises if these properties
are subject to demolition due to ownership defects, default by the lessor or adjustment of the
government provisions in the future. As such, our usage of such leased properties may be
disrupted therefore we may need to relocate the relevant functions somewhere else and
additional relocation costs will be incurred.
In addition, 23 of our lease agreements have not been registered with the relevant PRC
government authorities as of the Latest Practicable Date. Our PRC Legal Adviser is of the view
that the non-registration and filing of the relevant property lease will not affect the validity of
the lease contracts and the legal use of the leased properties, but relevant local housing
authorities may require us to complete the filing within the prescribed period and we may be
subject to penalties of RMB1,000 to RMB10,000 for each of such properties if we fail to file
within the prescribed period. In the event that we are required by the competent authorities to
register the property lease agreements, we may be subject to a maximum penalty of around
RMB0.2 million for the failure to register the property lease agreements. Even if certain
properties we leased have property titleship and the lease agreements are properly registered,
we cannot assure you that we would be able to renew the relevant lease agreements without
substantial additional cost or increase in the rental cost payable by us. If a lease agreement is
renewed at a rent substantially higher than the current rate, or currently existing favorable
terms granted by the lessor are not extended, our business and results of operations may be
adversely affected.
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Shortage of utilities supplies could affect our business.
Our production and operations depend on a continuous and adequate supply of utilities,
such as electricity and water, the use of which will further increase substantially as we expand
our production capacity. For example, the production of hydrogen using renewable methods
requires abundant water resources, while China’s economic centers with high demand for
hydrogen consumption suffer from water scarcity. Any disruption in the supply of electricity
and water or other utilities at our production plants may disrupt our production. This may
adversely affect our ability to fulfill our sales orders and consequently may have an adverse
effect on our business, results of operations and financial condition. As a result of the shortage
of coal supply combined with high electricity demand from manufacturers, since September
2021, the PRC government has restricted electricity consumption of companies in industries
with high energy consumption in China concerning balance of environment protection and
industry requirement, including imposing power restrictions on factories in more than 20
provinces to deal with an imbalance in energy supply and demand. While we did not face any
shortages of raw materials, water, and electricity at our production facilities in China that
significantly impacted our operations during the Track Record Period, we cannot assure you
that we will not encounter shortages of utilities supplies or utility suspensions in the future. If
such shortages or suspensions of utilities happen for a significant period of time, our business,
results of operations and financial results may be materially and adversely affected.
If we fail to obtain or renew certain approvals, licenses, permits or certificates required
for our operations, our business and results of operations may be adversely affected.
We are subject to certain laws and regulations that require us to obtain and maintain
various approvals, licenses, permits and certificates from different authorities to operate our
business. We may face sanctions or other enforcement actions if we fail to obtain approvals,
licenses, permits or certificates as might be necessary for our operations. We could be ordered
by the relevant regulatory authorities to cease operation or may be required to undertake
corrective measures requiring capital expenditure or other remedial actions, which could
materially and adversely affect our business, financial condition and results of operations.
In addition, some of these approvals, permits, licenses and certificates may be subject to
periodic renewal and/or reassessment by the relevant authorities, and the standards of such
renewal and/or reassessment may change from time to time. Any failure by us to obtain the
necessary renewals and/or reassessment or otherwise maintain all approvals, licenses, permits
and certificates necessary to carry out our business at any time could cause severe disruption
to our business and prevent us from continuing to carry out our business, which could have a
material adverse effect on our business, financial condition and results of operations. We may
also be required to obtain additional approvals, permits, licenses or certificates that were
previously not required to operate our existing business as a result of new regulations coming
into effect, changes to interpretation or implementation of existing laws and regulations. Any
failure to obtain the additional approvals, permits, licenses or certificates may adversely affect
our business, financial condition and results of operations.
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Our efforts in developing and expanding our business require marketing and selling our
products internationally, which pose inherent risks.
We started to sell our products to overseas counties since 2019, including United States,
Germany, Japan, Italy and other countries. In 2021, 2022, and 2023 and the five months ended
May 31, 2024, we generated 1.1%, 1.7%, 2.6% and 11.4%, respectively, of our total revenue
from sales outside China. In addition to sales offices in 20 cities in China, we also have one
subsidiary in Stuttgart, Germany. We have built a research and development team of fuel cell
stacks and key components in Vancouver, Canada.
The marketing, distribution and sale of our products internationally, as well as the
operation of our sales office and our R&D activities outside China may expose us to a number
of risks, including those associated with:
 fluctuations in currency exchange rates;
 costs associated with understanding local markets and trends;
 marketing and distribution costs;
 customer services and support costs;
 risk management and internal control structures for our overseas operations;
 compliance with the different commercial, operational, environmental and legal
requirements;
 obtaining or maintaining certifications for marketing, distribution and sales of our
products;
 maintaining our reputation as an environmentally friendly enterprise for our
products;
 obtaining, maintaining or enforcing intellectual property rights;
 changes in prevailing economic conditions and regulatory requirements;
 transportation and freight costs;
 employing and retaining technology, sales and other personnel who are
knowledgeable about, and can function effectively in, overseas markets;
 trade barriers such as trade remedies, which could increase the prices of the raw
materials for our products, and export requirements, tariffs, taxes, anti-dumping and
countervailing duty orders or safeguard measures and other restrictions and
expenses, which could increase the prices of our products and make us less
competitive in some countries;
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 challenges due to our unfamiliarity with local laws, regulation and policies, our
absence of significant operating experience in local market, increased cost
associated with establishment of overseas operations and maintaining a
multinational organizational structure; and
 other various risks that are beyond our control.
Due to our limited experience in doing business in the overseas markets, we are yet to
familiarize ourselves with local laws, regulation and policies. Our failure to obtain the required
approvals, permits, licenses, filings or to comply with the conditions associated therewith
could result in fines, sanctions, suspension, revocation or non-renewal of approvals, permits or
licenses, or even criminal penalties, which could have a material adverse effect on our
business, financial condition and results of operations.
Changes in the international trade policies may affect our business operations.
Governments around the world may make changes in their trade policies and/or take
certain actions that may materially impact international trade. Any unfavorable government
policies on international trade, such as export requirements, tariffs, taxes, anti-dumping and
countervailing duty orders or safeguard measures and other restrictions and expenses, might
result in the increased price of our products, making our products more expensive to procure,
which would in turn affect the demand for our products and the competitive position of our
products, or may prevent us from selling our products in certain countries. If any new tariffs,
legislation and regulations are implemented, or if existing trade agreements are renegotiated,
such changes could have an adverse effect on our business, financial condition and results of
operations.
We engage third parties for certain services in connection with our business.
During the Track Record Period, we engaged third-party service providers for services in
connection with our business, such as third-party logistics service providers. We endeavor to
obtain services from third-party service providers who we believe are able to meet our
specifications and requirements. However, the third-party service providers may not have
sufficient resources and they may not provide their services in a timely manner or with
satisfactory quality. If a third-party service provider fails to meet our requirements, we may
need to replace such third-party service provider or take other remedial actions which could
increase our costs of operations. In addition, as we do not have direct control over the
third-party service providers, if they become involved in any unauthorized provision of
services which are incompliant with our requirements or that of our customers, our reputation
in the industry will be affected. Our reputation in the industry will also be adversely affected
if the third-party service providers do not comply with applicable laws and regulations. This,
in turn, may materially and adversely affect our business, financial condition and results of
operations.
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The failure of financial institutions or transactional counterparties could adversely affect
our current and projected business operations and our financial condition and results of
operations.
In March 2023, Silicon Valley Bank was closed by the California Department of Financial
Protection and Innovation, which appointed the Federal Deposit Insurance Corporation, or
FDIC, as receiver. In the same month, Signature Bank was swept into receivership. Although
we do not have any funds deposited with Silicon Valley Bank and Signature Bank as of the
Latest Practicable Date, any failure of a financial or depository institution that we have
deposits with to return deposits to us could materially and adversely impact our cash and cash
equivalents, operating liquidity and financial condition. In addition, the failure of banks or
financial institutions can have a significant impact on the financial ecosystem, leading to
systemic risks such as a loss of confidence in the financial system, lack of liquidity,
fluctuations in capital markets, and potential economic downturns, which would adversely
impact our current and projected business operations and our financial condition and results of
operations.
Our business, results of operations and financial condition may be adversely affected by
natural disasters, health epidemics and pandemics and other outbreaks, such as the
COVID-19 outbreak.
Our operations and workforce are mainly based in China. The world has in the past
experienced natural disasters such as earthquakes, floods and droughts, as well as public health
issues, including epidemics, pandemics, and other outbreaks, such as the COVID-19 outbreak.
Any future occurrence of severe natural disasters or public health issues in China may
materially and adversely affect our business. In the event of a major disruption caused by a
natural disaster, we may be unable to continue our operations and may endure reputational
harm, lengthy delays in our development activities and product deliveries, any of which could
adversely affect our business, results of operations and financial condition. In addition, our
business could be affected by public health epidemics and pandemics, such as the outbreak of
avian influenza, severe acute respiratory syndrome, or SARS, Zika virus, Ebola virus,
COVID-19 virus or other diseases. Even if we are not directly affected, such a disaster or
disruption could affect the operations or financial condition of our customers, which could
harm our results of operations. If any of our employees are suspected of having contracted a
contagious disease, the mobility of our employees may be affected and we may have to adjust
or even suspend our operations. Furthermore, any future outbreak may restrict economic
activities in affected regions, resulting in reduced business volume, temporary closure of our
offices or otherwise disrupt our business operations and adversely affect our financial
condition and results of operations.
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RISKS RELATING TO GOVERNMENT REGULATIONS
We may be subject to claims, especially of product liability, disputes, lawsuits and other
legal and administrative proceedings, which may result in significant direct or indirect
costs and adversely affect our results of operations, financial condition and development
prospects.
Although we implement full-cycle quality control over design, procurement, production,
sales and after-sales services, we cannot assure you that our quality control measures will be
as effective as we expect. We may face the risk of significant monetary exposure to claims if
we fail to implement and maintain our quality control steps and our products do not perform
as expected or contain design, manufacturing, or warning defects, or are in connection with
malfunctions. Our risks in this area are particularly pronounced given the limited field
experience of our products and fuel cell vehicles. A successful product liability claim against
us could require us to pay a substantial monetary award. Certain product liability claims may
be the result of defects from components for hydrogen vehicles purchased from our suppliers.
Such suppliers may not be able to indemnify us for the losses resulting from such defects and
product liability claims in full or at all. Moreover, a product liability claim could generate
substantial negative publicity about our products and business and inhibit or prevent
commercialization of other future new products, which would have a material adverse effect
on our brand, business, prospects, financial condition, results of operations, and cash flows.
Any lawsuit seeking significant monetary damages either in excess of our insurance coverage,
or outside of our insurance scope, may have a material adverse effect on our reputation and
business, prospects, financial condition, results of operations, and cash flows.
In addition, we may from time to time be involved in contractual disputes or legal and
administrative proceedings and claims arising out of the ordinary course of business or
pursuant to governmental or regulatory enforcement activity. In light of the nature of our
business, we and our management are susceptible to potential claims or disputes. During the
Track Record Period and up to the Latest Practicable Date, we have not been subject to or
involved in any claims, disputes, lawsuits and other legal and administrative proceedings of
material importance, but we cannot assure there will not be any in the future. Lawsuits and
litigations may cause us to incur defense costs, utilize a significant portion of our resources and
divert management’s attention from our day-to-day operations, any of which could harm our
business. Claims arising out of actual or alleged violations of law, breach of contract or torts
could be asserted against us by customers, business partners, suppliers, competitors, employees
or governmental entities in investigations and legal proceedings. Our insurance might not cover
claims brought against us. See “— Risks Relating to Our Business — We have limited
insurance coverage, and any claims beyond our insurance coverage may result in us incurring
substantial costs” in this section. A claim brought against us that is uninsured or underinsured
could result in unanticipated costs and could have an adverse effect on our business, financial
condition and results of operations.
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Non-compliance with various environmental and safety related laws and regulations in
China may increase our operating costs and cause delays in the construction of our
manufacturing facilities, resulting in monetary damages, fines and other liabilities as well
as negative publicity and damage to our brand name and reputation.
We are subject to national and local environmental protection and safety related laws and
regulations applicable to us in China. In the event of our non-compliance with present or future
environmental and safety related laws and regulations, we may be subject to governmental
inspections or penalties, civil liabilities or business interruptions, and our management might
be subject to relevant liabilities as well. Our operations generate waste gas, waste water, noise
and solid waste, which could potentially be harmful to the environment and health of local
residents as well as our employees in case of improper handling. We have set environmental
targets for our manufacturing facility with indicators including pollutant discharge standards
for waste gas, waste water, noise and solid waste disposals. See “Business — Environmental,
Social and Governance (“ESG”)” in this prospectus.
In addition, from time to time, the PRC government issues new regulations, which may
require additional actions on our part to comply with. If we fail to comply with environmental
protection and health and safety laws and regulations, we may be subject to various
consequences, including substantial fines, potentially monetary damages or suspensions of our
business operations. As a result, any failure by us to control the discharge of hazardous
substances could have an adverse impact on our business, financial condition and results of
operations.
Failure to make adequate contributions to employee benefit plans as required by PRC
regulations may subject us to penalties.
Companies operating in China are required to participate in various government
sponsored employee benefit plans, including certain social insurance, housing funds and other
welfare-oriented payment obligations, and contribute to the plans in amounts equal to certain
percentages of salaries, including bonuses and allowances, of its employees up to a maximum
amount specified by the relevant local government from time to time.
During the Track Record Period, we failed to make full contributions to social insurance
and housing provident fund for certain of our employees in accordance with the relevant PRC
laws and regulations. In 2021, 2022, 2023 and the five months ended May 31, 2024, the
shortfall amounts were approximately RMB0.1 million, RMB0.1 million, RMB17,000 and
RMB56,610, respectively. See “Business — Legal Proceedings and Compliance — Social
Insurance and Housing Provident Funds” in this prospectus. Although as of the Latest
Practicable Date, we had not received any notification from the relevant PRC authorities
requiring us to pay shortfalls or the penalties with respect to social insurance and housing
provident funds from the competent regulatory authorities, we cannot assure you that we will
not be required by competent authorities to make up for any underpaid employee benefits, or
to pay any late fees or fines in relation thereof. Pursuant to relevant PRC laws and regulations,
the relevant PRC authorities may (i) demand us to pay the outstanding social insurance
RISK FACTORS
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contributions within a prescribed period and we may be liable to a late payment fee equal to
0.05% of the outstanding amount for each day of delay. If we fail to make such payments, we
may be liable to a penalty of one to three times the amount of the outstanding contributions;
and (ii) order us to pay the outstanding housing provident fund contributions within a
prescribed time period, failing which the relevant PRC authorities may apply to the People’s
Court for compulsory enforcement. If we are required to make up for any underpaid employee
benefits, or any late fees or fines in relation thereof, our business operations or financial
condition could be adversely affected.
We are subject to the currency exchange regulatory system.
We are subject to the currency exchange regulatory system on the convertibility of
Renminbi into foreign currencies and, in certain cases, the remittance of currency out of China.
We may convert a portion of our revenue into other currencies to meet our foreign currency
obligations, such as payments to certain suppliers, if any. Shortages in the availability of
foreign currency may restrict our ability to remit sufficient foreign currency, or otherwise
satisfy our foreign currency denominated obligations.
Under the existing PRC foreign exchange regulations, payments of current account items,
including profit distributions, interest payments and trade and service-related foreign exchange
transactions, can be made in foreign currencies without prior SAFE approval by complying
with certain procedural requirements. However, approval from or registration with competent
government authorities is required where Renminbi is to be converted into foreign currency
and remitted out of China to pay capital expenses such as the repayment of loans denominated
in foreign currencies. The PRC government may at its discretion restrict access to foreign
currencies for current account transactions in the future. If the foreign exchange control system
prevents us from obtaining sufficient foreign currencies to satisfy our foreign currency
demands, we may not be able to pay dividends in foreign currencies to our Shareholders.
Further, we cannot assure you that new regulations will not be promulgated in the future that
would have the effect of further restricting the remittance of Renminbi into or out of China.
Any actual or alleged failure to comply with the cybersecurity and data privacy laws and
regulations in China may result in penalties that could damage our reputation and brand,
and harm our business and results of operations.
We are subject to various regulatory requirements relating to cybersecurity and data
privacy, including the PRC Data Security Law (‘), the
Cybersecurity Law of PRC (‘) and the Personal Information
Protection Law of the PRC (‘). See “Regulatory Overview
— Regulations on Internet Information Security and Privacy Protection” in this prospectus.
Should our data processing activities be subject to these laws and regulations, we are required
to ensure that our data processing activities are carried out in a lawful, legitimate, specific and
clear manner, and be directly related to the design, production, sales, use, operation and
maintenance, among others, of the vehicles.
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Pursuant to the Personal Information Protection Law of the PRC, a service provider shall
obtain the consent of the persons whose data is gathered when collecting and using personal
information and shall comply with other circumstances as prescribed by laws and regulations.
Except for a limited number of scenarios where it is necessary to provide services and there
is a lawful basis (such as when customers provide us with driver contact information for the
purpose of vehicle maintenance), our data processing activities do not involve collecting or
tracing any personal information of vehicle users and as advised by the Data Security Counsel,
according to Regulation on Protecting the Security of Critical Information Infrastructure ( ᗫ
ᚐૢԷ‘), we are not a critical information infrastructure operator.
However, regulatory requirements on cybersecurity and data privacy are constantly evolving
and can be subject to varying interpretations or significant changes, resulting in uncertainties
about the scope of our responsibilities in that regard. We cannot assure you that relevant
government authorities will not interpret or implement the laws or regulations in ways that
negatively affect us. We may also be subject to additional or new laws and regulations
regarding the protection of personal information and important data or privacy-related matters
in connection with our methods for data collection, analysis, storage and use. If we are unable
to comply with the applicable laws and regulations or effectively address data privacy and
protection concerns, such actual or alleged failure could damage our reputation, discourage
customers from purchasing our products and subject us to significant legal liabilities.
It may be difficult to effect service of legal process and enforcing judgments against us or
our Directors, Supervisors and senior management or to enforce judgments of non-PRC
courts against them.
We are a company incorporated under the laws of the PRC and a significant portion of our
assets and subsidiaries are located in China. In addition, the majority of our Directors,
Supervisors and senior management reside within China. The assets of these Directors,
Supervisors and senior management also may be located within China. As a result, it may not
be possible to effect service of process upon most of our Directors, Supervisors and senior
management outside China. In addition, Hong Kong has no arrangement for the reciprocal
enforcement of judgments with the U.S. As a result, in the PRC or Hong Kong, recognition and
enforcement of court judgments from other jurisdictions may be uncertain.
On July 14, 2006, the Supreme People’s Court of the PRC and the Government of the
Hong Kong Special Administrative Region signed an Arrangement on Reciprocal Recognition
and Enforcement of Judgments in Civil and Commercial Matters (݁
τર‘) (the “2006 Arrangement”).
Under the 2006 Arrangement, where any designated People’s Court of the PRC or Hong Kong
court has made an enforceable final judgment requiring payment of money in a civil and
commercial case pursuant to a choice of court agreement, any party concerned may apply to
the relevant People’s Court of the PRC or Hong Kong court for recognition and enforcement
of the judgment. Therefore, it is not possible to enforce a judgment rendered by a Hong Kong
court in the PRC if the parties in dispute have not agreed to enter into such a choice of court
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agreement in writing. Therefore, it may not be possible to enforce a judgment rendered by a
Hong Kong court in the PRC if the parties in dispute have not entered into a jurisdiction
agreement in writing under the 2006 Arrangement.
On January 18, 2019, 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 (ʝႩ̙ձੂБ͏ਠԫ
τર) (the “2019 Arrangement”) was signed between the Supreme People’s Court
of China and Hong Kong government.
Comparing with the 2006 Arrangement, the 2019 Arrangement establishes a bilateral legal
mechanism with greater clarity and certainty for reciprocal recognition and enforcement of
judgments between Hong Kong and China in civil and commercial matters under both Hong
Kong and PRC law. The 2019 Arrangement will apply to judgments made by the courts of Hong
Kong and China on or after its commencement date, which will be announced by Hong Kong
and China after necessary procedures of both places have been completed. The 2006
Arrangement will be superseded upon the effective date of the 2019 Arrangement, being
January 29, 2024. However, the 2006 Arrangement will remain applicable to a “jurisdiction
agreement in writing” as defined in the 2006 Arrangement which is entered into before the
2019 Arrangement taking effect. However, since the 2019 Arrangement is newly effected and
promulgated, the interpretation, application and enforcement remains uncertain.
We are a PRC enterprise and we are subject to PRC tax on our global income and any
gains on the sales of H Shares and dividends on the H Shares may be subject to PRC
income taxes.
Non-PRC-resident individuals are required to pay PRC individual income tax at a 20%
rate for the income derived in China under the ITT Law and its implementation guidelines.
Accordingly, we are required to withhold such tax from dividend payments, unless applicable
tax treaties between China and the jurisdiction in which the non-PRC-resident 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 (࢕
‘) (Cai Shui [1994] No. 20) issued by the MOF
and the SAT on May 13, 1994, the income gained by foreign individuals from dividends and
bonuses of foreign-invested enterprise are exempted from individual income tax for the time
being. On February 8, 2013, the General Office of the State Council promulgated the Circular
Concerning Allocation of Key Works to Deepen the Reform of System of Income Distribution
(‘) pursuant to which the
PRC government is planning to cease foreign individuals’ tax exemption for dividends obtained
from foreign invested enterprises, and the MOF and the SAT should be responsible for making
and implementing details of such plan. However, relevant implementation rules or regulations
have not been promulgated by the MOF and the SAT. Considering these uncertainties,
non-resident individual holders of our H Shares should be aware that they may be obligated to
pay PRC income tax on the dividends and bonus realized from the H Shares.
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Pursuant to Circular of Declaring that Individual Income Tax Continues to be Exempted
over Income of Individuals from the Transfer of Shares (੻ᘱᚃᅲеᅄ
‘) (Cai Shui Zi [1998] No. 61) issued by the MOF and the SAT on March
30, 1998, from January 1, 1997, gains realized by individuals from transfer of the shares of
listed enterprises continues to be exempted from individual income tax. As of the Latest
Practicable Date, no aforesaid provisions have expressly provided that whether individual
income tax shall be levied from non-PRC-resident individual holders on the transfer of shares
in PRC resident enterprises listed on overseas stock exchanges, and to our knowledge, no such
individual income tax was levied by PRC tax authorities in practice. However, we cannot
assure you that the PRC tax authorities will not change these practices which could result in
levying income tax on non-PRC-resident individual holders on gains from the sale of H Shares.
For non-PRC-resident enterprises that do not have establishments or premises in China, and for
those have establishments or premises in China but whose income is not related to such
establishments or premises, under the PRC Enterprise Income Tax Law and its implementation
regulations, dividends paid by us (including payments via the Central Clearing and Settlement
System) and gains realized by such foreign enterprises upon the sale or other disposition of H
Shares are subject to PRC enterprise income tax at a 10% rate unless otherwise reduced or
exempted by relevant tax treaties or similar arrangement. In accordance with the Circular on
Issues Relating to Withholding of Enterprise Income Tax by PRC Resident Enterprises on
Dividends Paid to Overseas Non-PRC-resident Enterprise Shareholders of H Shares (ʕ
͏ΆุΣྤ̮H‘) (Guo
Shui Han [2008] No. 897) issued by SAT on November 6, 2008, the withholding tax rate for
dividends of the year of 2008 and onwards payable to non-PRC-resident enterprise holders of
H Shares will be 10%. Non-PRC-resident enterprises that are entitled to be taxed at a reduced
rate under an applicable income tax treaty or arrangement will be required to apply to the PRC
tax authorities for a refund of any amount withheld in excess of the applicable treaty rate, and
payment of such refund will be subject to the PRC tax authorities’ approval. Despite the
arrangements mentioned above, there remain significant uncertainties as to the interpretation
and application of applicable PRC tax laws and regulations by the competent tax authorities
and the PRC tax laws and regulations may also change, which may adversely affect the value
of your investment in our H Shares.
Any catastrophe and extraordinary events could severely disrupt our business operations.
Our operations are vulnerable to interruption and damage from natural and other types of
catastrophes, including earthquakes, tsunami, fire, floods, hail, windstorms, severe winter
weather (including snow, freezing water, ice storms and blizzards), health pandemics,
environmental accidents, power loss, communications failures, explosions, man-made events
and other similar events. Due to their nature, we cannot predict the incidence, timing and
severity of catastrophes. In addition, changing climate conditions, primarily rising global
temperatures, may be increasing, or may in the future increase, the frequency and severity of
natural catastrophes. If any such catastrophe or extraordinary event were to occur in the future,
our ability to operate our business could be seriously impaired. Such events could make it
difficult or impossible for us to deliver our products to our customers and could decrease
demand for our products.
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RISKS RELATING TO THE GLOBAL OFFERING
There has been no prior public market for our H Shares, and their liquidity and market
price following the Global Offering 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 will develop and be
sustained following the completion of Global Offering. The initial Offer Price for our H Shares
to the public will be the result of negotiations between us and the Joint Overall Coordinators
(for themselves and on behalf of the Underwriters), and the Offer Price may differ significantly
from the market price of the H Shares following the Global Offering.
We have applied to the Hong Kong Stock Exchange for the listing of, and permission to
deal in, the H Shares (including any H Shares which may be issued pursuant to the exercise of
the Over-allotment Option and the H Shares to be converted from Domestic Shares). A listing
on the Hong Kong Stock Exchange, however, does not guarantee that an active and liquid
trading market for the H Shares will develop, or if it does develop, that it will be sustained
following the Global Offering, or that the market price of the H Shares will not decline
following the Global Offering. If an active public market for our H Shares does not develop
following the completion of the Global Offering, the market price and liquidity of our H Shares
could be materially and adversely affected.
Y ou will incur immediate and significant dilution and may experience further dilution if
we issue additional Shares in the future.
The Offer Price of the Offer Shares is higher than the net tangible asset value per Share
immediately prior to the Global Offering. Therefore, purchasers of the Offer Shares in the
Global Offering will experience an immediate dilution in pro forma consolidated net tangible
asset value. There can be no assurance that if we were to immediately liquidate after the Global
Offering, any assets will be distributed to 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 which is lower than the net tangible
asset value per Share at that time.
Future sales or perceived sales of substantial amounts of our H Shares in the public
market could have a material adverse effect on the price of our H Shares and our ability
to raise additional capital in the future.
The market price of our H Shares could decline as a result of future sales of a substantial
number of our H Shares or other securities relating to our H Shares in the public market, or the
issuance of new shares or other securities, or the perception that such sales or issuances may
occur. Future sales, or anticipated sales, of substantial amounts of our securities, including any
future offerings, could also materially and adversely affect our ability to raise capital at a
RISK FACTORS
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specific time and on terms favorable to us. In addition, our Shareholders may experience
dilution in their holdings if we issue more securities in the future. New shares or shares-linked
securities issued by us may also confer rights and privileges that take priority over those
conferred by the H Shares.
Fluctuations in exchange rates may result in foreign currency exchange losses and may
have a material adverse effect on your investment.
During the Track Record Period, a vast majority of our expenditures were denominated
in Renminbi, and a vast majority of our financial assets are also denominated in Renminbi. Any
significant change in the exchange rates of the Hong Kong dollar against Renminbi may
materially and adversely affect our cash flows, earnings and financial position, and the value
of, and any dividends payable on, our H Shares in Hong Kong dollars. For example, a further
appreciation of Renminbi against the Hong Kong dollar would make any new Renminbi
denominated investments or expenditures more costly to us, to the extent that we need to
convert Hong Kong dollars into Renminbi for such purposes. An appreciation of Renminbi
against the Hong Kong dollar would also result in foreign currency translation losses for
financial reporting purposes when we translate our Hong Kong dollar denominated financial
assets into Renminbi, including proceeds from the Global Offering, as Renminbi is the
functional currency of our Company and our subsidiaries inside China. Conversely, if we
decide to convert our Renminbi into Hong Kong dollars for the purpose of making payments
for dividends on our H Shares or for other business purposes, appreciation of the Hong Kong
dollar against Renminbi would have a negative effect on the Hong Kong dollar amount
available to us.
Payment of dividends shall be complied under the PRC law and we cannot assure you
whether and when we will pay dividends.
Under PRC law and regulations, we may only pay dividends out of distributable profits.
Distributable profits are our after-tax profits, less any recovery of accumulated losses and
appropriations to statutory and other reserves that we are required to make. As a result, we may
not have sufficient or any distributable profit to enable us to make dividend distributions to our
Shareholders, including in periods for which our financial statements indicate we are
profitable. Any distributable profit not distributed in a given year is retained and available for
distribution in subsequent years. Moreover, our operating subsidiaries in China may not have
distributable profit as determined under the PRC GAAP. Accordingly, we may not receive
sufficient distributions from our subsidiaries for us to pay dividends. Failure by our operating
subsidiaries to pay us dividends could adversely impact our ability to make dividend
distributions to our Shareholders and our cash flow, including periods in which we are
profitable.
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Our Single Largest Group of Shareholders has significant influence over our Company
and their interests may not be aligned with the interests of our other Shareholders.
Immediately following the Global Offering, our Single Largest Group of Shareholders
will control approximately 20.73% voting rights in our Company, assuming the Over-allotment
Option is not exercised and the options granted under the Pre-IPO Share Option Scheme are
not exercised. Our Single Largest Group of Shareholders will, through their voting power at the
Shareholders’ meetings, have significant influence over our business and affairs, including
decisions for 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 Single Largest Group of Shareholders may not act in the
best interests of our minority Shareholders.
Facts, forecasts and statistics in this prospectus relating to the PRC and the global
economy may not be fully reliable.
Facts, forecasts and statistics in this prospectus relating to the PRC and the global
economy are obtained from various sources that we believe are reliable, including official
government publications that we commissioned. However, we cannot assure you the quality or
reliability of these sources. We believe that the sources of this information are appropriate and
have taken reasonable care in extracting and reproducing such information. We have no reason
to believe that such information is false or misleading or that any fact has been omitted that
would render such information false or misleading. The information from official government
sources has not been independently verified by us, the Sole Sponsor, the Joint Overall
Coordinators, or any other party involved in the Global Offering and no representation is given
as to its accuracy. Due to possibly flawed or ineffective collection methods or discrepancies
between published information and factual information and other problems, the statistics in this
prospectus relating to the PRC and the global economy in China and oversea markets may be
inaccurate and you should not place undue reliance on it.
Investors should read the entire prospectus carefully and should not consider any
statements in this prospectus or in published media reports without carefully considering
the risks and other information contained in this prospectus.
There had been, prior to the publication of this prospectus, and there may be, after the
date of this prospectus but prior to the completion of the Global Offering, press and media
coverage regarding us and the Global Offering. We have not authorized the disclosure of any
information concerning the Global Offering in the press or media and do not accept
responsibility for the accuracy or completeness of such press articles or other media coverage.
We make no representation as to the appropriateness, accuracy, completeness, or reliability of
any of the projections, valuations or other forward-looking information about us. To the extent
such statements are inconsistent with, or in conflict with, the information contained in this
prospectus, we disclaim responsibility for them. Accordingly, prospective investors are
cautioned to make their decisions on the basis of the information contained in this prospectus
only and should not rely on any other information.
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In preparation for the Global Offering, our Company has sought and has been granted the
following waivers from strict compliance with the relevant provisions of the Listing Rules and
the following exemption from strict compliance with the Companies (Winding Up and
Miscellaneous Provisions) Ordinance:
W AIVER IN RESPECT OF MANAGEMENT PRESENCE IN HONG KONG
Pursuant to Rules 8.12 and 19A.15 of the Listing Rules, we must have a sufficient
management presence in Hong Kong. This normally means that at least two of our executive
Directors must be ordinarily resident in Hong Kong.
Our headquarters and most of our business operations are based, managed and conducted
in the PRC. As our executive Directors play very important roles in our business operation, it
is in our best interest for them to be based in the places where our Group has significant
operations. We consider it practicably difficult and commercially unreasonable for us to
arrange for two executive Directors to ordinarily reside in Hong Kong, either by means of
relocation of our executive Directors to Hong Kong or appointment of additional executive
Directors. Therefore, we do not have, and in the foreseeable future will not have, sufficient
management presence in Hong Kong for the purpose of satisfying the requirements under Rules
8.12 and 19A.15 of the Listing Rules.
Accordingly, we have applied to the Stock Exchange for, and the Stock Exchange has
granted us, a waiver from strict compliance with the requirements under Rules 8.12 and 19A.15
of the Listing Rules, provided that our Company implements the following arrangements:
(a) we have appointed Mr. LIN Qi (ೡ) and Mr. POON Ping Yeung (౮)a so u r
authorized representatives pursuant to Rule 3.05 of the Listing Rules. The
authorized representatives will act as our Company’s principal channel of
communication with the Stock Exchange. The authorized representatives will be
readily contactable by phone, facsimile and email to promptly deal with enquiries
from the Stock Exchange, and will also be available to meet with the Stock
Exchange to discuss any matter within a reasonable period of time upon request of
the Stock Exchange;
(b) when the Stock Exchange wishes to contact our Directors on any matter, each of the
authorized representatives will have all necessary means to contact all of our
Directors (including our independent non-executive Directors) promptly as and
when required, including means to communicate with our Directors when they are
travelling. Our Company will also inform the Stock Exchange as soon as practicable
in respect of any change in the authorized representatives in accordance with the
Listing Rules. We have provided the contact details of each Director (such as mobile
phone numbers, office phone numbers (if any), email addresses and fax numbers (if
any)) to each of the authorized representatives and the Stock Exchange;
W AIVERS FROM STRICT COMPLIANCE WITH LISTING RULES AND
EXEMPTION FROM STRICT COMPLIANCE WITH THE COMPANIES
(WINDING UP AND MISCELLANEOUS PROVISIONS) ORDINANCE
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(c) we confirm and will ensure that all Directors who do not ordinarily reside in Hong
Kong possess or can apply for valid travel documents to visit Hong Kong and can
meet with the Stock Exchange within a reasonable period upon the request of the
Stock Exchange;
(d) we have appointed Maxa Capital Limited as our compliance adviser upon Listing
pursuant to Rule 3A.19 of the Listing Rules for a period commencing on the Listing
Date and ending on the date on which we comply with Rule 13.46 of the Listing
Rules in respect of our financial results for the first full financial year commencing
after the Listing Date. Our compliance adviser will serve as the additional channel
of communication with the Stock Exchange when the authorized representatives are
not available and will have access at all times to our authorized representatives, our
Directors and our senior management as prescribed by Rule 3A.23 of the Listing
Rules; and
(e) meetings between the Stock Exchange and our Directors can be arranged through
our authorized representatives or our compliance adviser, or directly with our
Directors within a reasonable time frame.
W AIVER IN RESPECT OF APPOINTMENT OF JOINT COMPANY SECRETARY
Pursuant to Rules 3.28 and 8.17 of the Listing Rules, we must appoint a company
secretary who, by virtue of his/her academic or professional qualifications or relevant
experience, is, in the opinion of the Stock Exchange, capable of discharging the functions of
the company secretary. Note 1 to Rule 3.28 of the Listing Rules provides that 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).
Note 2 to Rule 3.28 of the Listing Rules further provides that the Stock Exchange
considers the following factors in assessing the “relevant experience” of the individual:
(a) length of employment with the issuer and other issuers and the roles he/she played;
(b) familiarity with the Listing Rules and other relevant laws and regulations including
the SFO, the Companies Ordinance, the Companies (Winding Up and Miscellaneous
Provisions) Ordinance and the Takeovers Code;
W AIVERS FROM STRICT COMPLIANCE WITH LISTING RULES AND
EXEMPTION FROM STRICT COMPLIANCE WITH THE COMPANIES
(WINDING UP AND MISCELLANEOUS PROVISIONS) ORDINANCE
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(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.
Pursuant to paragraph 13 of Chapter 3.10 of the Guide for New Listing Applicants, the
Stock Exchange will consider a waiver application by an issuer in relation to Rules 3.28 and
8.17 of the Listing Rules based on the specific facts and circumstances. Factors that will be
considered by the Stock Exchange include:
(a) whether the issuer has principal business activities primarily outside Hong Kong;
(b) whether the issuer was able to demonstrate the need to appoint a person who does
not have the Acceptable Qualification (as defined under paragraph 11 of Chapter
3.10 of the Guide for New Listing Applicants) nor Relevant Experience (as defined
under paragraph 11 of Chapter 3.10 of the Guide for New Listing Applicants) as a
company secretary; and
(c) why the directors consider the individual to be suitable to act as the issuer’s
company secretary.
Further, pursuant to paragraph 13 of Chapter 3.10 of the Guide for New Listing
Applicants, such waiver, if granted, will be for a fixed period of time (the “ Waiver Period ”)
and on the following conditions:
(a) the proposed company secretary must be assisted by a person who possesses the
qualifications or experience as required under Rule 3.28 of the Listing Rules and is
appointed as a joint company secretary throughout the Waiver Period; and
(b) the waiver will be revoked if there are material breaches of the Listing Rules by the
issuer.
Our Company has appointed Mr. ZHENG Zhong (ࠠ“() Mr. Zheng ”), our vice
president and Board secretary, as one of our joint company secretaries. He has considerable
experience in the legal profession but presently does not possess any of the qualifications under
Rules 3.28 and 8.17 of the Listing Rules, and may not be able to solely fulfill the requirements
of the Listing Rules. Therefore, we have appointed Mr. POON Ping Yeung (౮)( “ Mr.
Poon”), an associate member (a holder of practitioner’s endorsement) of The Hong Kong
Chartered Governance Institute (formerly known as The Hong Kong Institute of Chartered
Secretaries) and The Chartered Governance Institute (formerly known as The Institute of
Chartered Secretaries and Administrators) in the United Kingdom, who fully meets the
requirements stipulated under Rules 3.28 and 8.17 of the Listing Rules to act as the other joint
company secretary and to provide assistance to Mr. Zheng for an initial period of three years
W AIVERS FROM STRICT COMPLIANCE WITH LISTING RULES AND
EXEMPTION FROM STRICT COMPLIANCE WITH THE COMPANIES
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from the Listing Date to enable Mr. Zheng 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.
Given Mr. Poon’s professional qualification and experience, he will be able to explain to
both Mr. Zheng and us the relevant requirements under the Listing Rules and other applicable
Hong Kong laws and regulations. Mr. Poon will also assist Mr. Zheng in organizing Board
meetings and Shareholders’ meetings of our Company as well as other matters of our Company
which are incidental to the duties of a company secretary. Mr. Poon is expected to work closely
with Mr. Zheng and will maintain regular contact with Mr. Zheng, our Directors and the senior
management of our Company. In addition, Mr. Zheng will comply with the annual professional
training requirement under Rule 3.29 of the Listing Rules to enhance his knowledge of the
Listing Rules during the three-year period from the Listing Date. He will also be assisted by
our compliance adviser and our legal advisers as to the Hong Kong laws on matters in relation
to our ongoing compliance with the Listing Rules and the applicable laws and regulations.
Since Mr. Zheng does not possess the formal qualifications required of a company
secretary under Rule 3.28 of the Listing Rules, we have applied to the Stock Exchange for, and
the Stock Exchange has granted, a waiver from strict compliance with the requirements under
Rules 3.28 and 8.17 of the Listing Rules such that Mr. Zheng may be appointed as a joint
company secretary of our Company. The waiver is valid for an initial period of three years from
the Listing Date on the conditions that (a) Mr. Zheng must be assisted by Mr. Poon, who
possesses the qualifications and experience required under Rule 3.28 of the Listing Rules and
is appointed as a joint company secretary throughout the Waiver Period; and (b) the waiver
shall be valid for a period of three years from the Listing Date and will be revoked immediately
if and when Mr. Poon ceases to provide such assistance to Mr. Zheng as a joint company
secretary or if there are material breaches of the Listing Rules by our Company.
Before the expiration of the initial three-year period, the qualifications of Mr. Zheng will
be re-evaluated to determine whether the requirements as stipulated in Rules 3.28 and 8.17 of
the Listing Rules can be satisfied and whether the need for ongoing assistance will continue.
We will liaise with the Stock Exchange before the expiration of the three-year period to enable
it to assess whether Mr. Zheng, having benefited from the assistance of Mr. Poon for the
preceding three years, will have acquired the skills necessary to carry out the duties of a
company secretary and the relevant experience within the meaning of Note 2 to Rule 3.28 of
the Listing Rules so that a further waiver will not be necessary.
W AIVERS FROM STRICT COMPLIANCE WITH LISTING RULES AND
EXEMPTION FROM STRICT COMPLIANCE WITH THE COMPANIES
(WINDING UP AND MISCELLANEOUS PROVISIONS) ORDINANCE
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W AIVER AND EXEMPTION IN RELATION TO THE PRE-IPO SHARE OPTION
SCHEME
The Listing Rules and the Companies (Winding Up and Miscellaneous Provisions)
Ordinance prescribe certain disclosure requirements in relation to the share options granted by
our Company (the “ Share Option Disclosure Requirements ”):
(a) Rule 17.02(1)(b) of the Listing Rules stipulates that all material terms of a scheme
adopted by our Company prior to the Listing must be clearly set out in the
prospectus, and our Company is also required to disclose in the prospectus full
details of all outstanding options and awards and their potential dilution effect on
the shareholdings upon listing as well as the impact on the earnings per share arising
from the issue of shares in respect of such outstanding options or awards;
(b) Paragraph 27 of Appendix D1A to the Listing Rules requires our Company to set out
in the prospectus particulars of any capital of any member of our Group which is
under option, or agreed conditionally or unconditionally to be put under option,
including the consideration for which the option was or will be granted and the price
and duration of the option, and the name and address of the grantee; and
(c) Paragraph 10 of Part I of the Third Schedule to the Companies (Winding Up and
Miscellaneous Provisions) Ordinance requires our Company to set out in the
prospectus, among other things, details of the number, description and amount of
any shares in or debentures of our Company which any person has, or is entitled to
be given, an option to subscribe for, together with the certain particulars of the
option, namely the period during which it is exercisable, the price to be paid for
shares or debentures subscribed for under it, the consideration (if any) given or to
be given for it or for the right to it and the names and addresses of the persons to
whom it was given.
As of Latest Practicable Date, our Company has granted options under the Pre-IPO Share
Option Scheme to 128 grantees, including Directors, senior management of our Company and
other employees of our Group (who are not Directors, senior management or connected persons
of our Company), to subscribe for an aggregate of 4,828,750 Domestic Shares, representing
approximately 5.61% of the total issued share capital of our Company immediately upon
completion of the Global Offering (assuming the Over-allotment Option is not exercised and
the options granted under the Pre-IPO Share Option Scheme are not exercised), on the terms
as set out in the paragraph headed “Further Information about our Directors, Supervisors and
Substantial Shareholders — 6. Pre-IPO Share Option Scheme” in Appendix VI to this
prospectus.
W AIVERS FROM STRICT COMPLIANCE WITH LISTING RULES AND
EXEMPTION FROM STRICT COMPLIANCE WITH THE COMPANIES
(WINDING UP AND MISCELLANEOUS PROVISIONS) ORDINANCE
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Our Company has applied to (i) the Stock Exchange for a waiver from strict compliance
with the requirements under Rule 17.02(1)(b) of and paragraph 27 of Appendix D1A to the
Listing Rules, and (ii) the SFC for a certificate of exemption under section 342A of the
Companies (Winding Up and Miscellaneous Provisions) Ordinance exempting our Company
from strict compliance with paragraph 10(d) of Part I of the Third Schedule to the Companies
(Winding Up and Miscellaneous Provisions) Ordinance, on the ground that strict compliance
with the Share Option Disclosure Requirements would be unduly burdensome for our Company
and the waiver and the exemption would not prejudice the interest of the investing public for
the following reasons:
(a) given that 128 grantees are involved, strict compliance with the Share Option
Disclosure Requirements in setting out full details of all the grantees under the
Pre-IPO Share Option Scheme in this prospectus would be costly and unduly
burdensome for our Company in light of a significant increase in cost and time for
information compilation and prospectus preparation;
(b) as of the Latest Practicable Date, save for five grantees who are Directors and three
grantees who are senior management of our Company, the remaining 120 grantees
are employees of our Group, all of whom are not connected persons of our Company.
Strict compliance with the applicable Share Option Disclosure Requirements to
disclose names, addresses and entitlements on an individual basis in this prospectus
will require additional pages of disclosures that do not provide any material
information to the investing public;
(c) the grant and exercise in full of the options under the Pre-IPO Share Option Scheme
will not cause any material adverse impact on the financial position of our
Company;
(d) lack of full compliance with the above disclosure requirements would not prevent
our Company from providing its potential investors with information for them to
make an informed assessment of the activities, assets, liabilities, financial position,
management and prospects of our Company; and
(e) material information relating to the options under the Pre-IPO Share Option Scheme
will be disclosed in this prospectus, including the total number of Shares subject to
the Pre-IPO Share Option Scheme, the exercise price per Share, the potential
dilution effect on shareholding, and impact on earnings per Share upon full exercise
of the options granted under the Pre-IPO Share Option Scheme. Our Directors
consider that the information that is reasonably necessary for the potential investors
to make an informed assessment of our Company in their investment decision
making process has been included in this prospectus.
W AIVERS FROM STRICT COMPLIANCE WITH LISTING RULES AND
EXEMPTION FROM STRICT COMPLIANCE WITH THE COMPANIES
(WINDING UP AND MISCELLANEOUS PROVISIONS) ORDINANCE
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The Stock Exchange has granted us a waiver from strict compliance with the relevant
requirements under the Listing Rules on the conditions that:
(a) full details of the options under the Pre-IPO Share Option Scheme granted to each
of the Directors, members of senior management of our Company, connected
persons of our Company and grantees who have been granted options to subscribe
for 150,000 Shares or more will be disclosed in the paragraph headed “Further
Information about our Directors, Supervisors and Substantial Shareholders — 6.
Pre-IPO Share Option Scheme” in Appendix VI to this prospectus on an individual
basis as required under the applicable Share Option Disclosure Requirements;
(b) for the remaining grantees, disclosures will be made, on an aggregate basis,
categorized into lots based on the number of Shares underlying each individual
grant, being (1) one Share to 99,999 Shares and (2) 100,000 Shares to 149,999
Shares, of (i) the aggregate number of grantees and the number of Shares underlying
the options granted to them under the Pre-IPO Share Option Scheme, (ii) the
consideration paid for the grant of the options under the Pre-IPO Share Option
Scheme (if any), and (iii) the exercise period and the exercise price for the options
granted under the Pre-IPO Share Option Scheme;
(c) there will be disclosures in the paragraph head “Further Information about our
Directors, Supervisors and Substantial Shareholders — 6. Pre-IPO Share Option
Scheme” in Appendix VI to this prospectus for the aggregate number of Shares
underlying the options under the Pre-IPO Share Option Scheme and the percentage
of the total issued share capital of our Company represented by such number of
Shares;
(d) the dilutive effect and impact on earnings per Share upon full exercise of the options
under the Pre-IPO Share Option Scheme will be disclosed in the paragraph headed
“Further Information about our Directors, Supervisors and Substantial Shareholders
— 6. Pre-IPO Share Option Scheme” in Appendix VI to this prospectus;
(e) a summary of the principal terms of the Pre-IPO Share Option Scheme will be
disclosed in the paragraph headed “Further Information about our Directors,
Supervisors and Substantial Shareholders — 6. Pre-IPO Share Option Scheme” in
Appendix VI to this prospectus;
(f) the particulars of the waiver and the exemption will be disclosed in this prospectus;
(g) a full list of all the grantees under the Pre-IPO Share Option Scheme (including
those persons whose details have already been disclosed in this prospectus),
containing all the particulars as required under the applicable Share Option
Disclosure Requirements, will be made available for public inspection in accordance
with the paragraph headed “Document Available for Inspection” in Appendix VII to
this prospectus; and
W AIVERS FROM STRICT COMPLIANCE WITH LISTING RULES AND
EXEMPTION FROM STRICT COMPLIANCE WITH THE COMPANIES
(WINDING UP AND MISCELLANEOUS PROVISIONS) ORDINANCE
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(h) a certificate of exemption under the Companies (Winding Up and Miscellaneous
Provisions) Ordinance from the SFC exempting our Company from the disclosure
requirements under paragraph 10(d) of Part I of the Third Schedule to the
Companies (Winding Up and Miscellaneous Provisions) Ordinance will be granted.
The SFC has granted us a certificate of exemption under section 342A of the Companies
(Winding Up and Miscellaneous Provisions) Ordinance from strict compliance with paragraph
10(d) of Part I of the Third Schedule to the Companies (Winding Up and Miscellaneous
Provisions) Ordinance on the conditions that:
(a) full details of the options under the Pre-IPO Share Option Scheme granted to each
of the Directors, members of senior management of our Company, connected
persons of our Company and grantees who have been granted options to subscribe
for 150,000 Shares or more will be disclosed in the paragraph headed “Further
Information about our Directors, Supervisors and Substantial Shareholders — 6.
Pre-IPO Share Option Scheme” in Appendix VI to this prospectus on an individual
basis as required under paragraph 10 of Part I of the Third Schedule to the
Companies (Winding Up and Miscellaneous Provisions) Ordinance;
(b) for the remaining grantees, disclosures will be made, on an aggregate basis,
categorized into lots based on the number of Shares underlying each individual
grant, being (1) one Share to 99,999 Shares and (2) 100,000 Shares to 149,999
Shares, of (i) the aggregate number of grantees and the number of Shares underlying
the options granted to them under the Pre-IPO Share Option Scheme, (ii) the
consideration paid for the grant of the options under the Pre-IPO Share Option
Scheme (if any), and (iii) the exercise period and the exercise price for the options
granted under the Pre-IPO Share Option Scheme;
(c) a full list of all the grantees under the Pre-IPO Share Option Scheme (including
those persons whose details have already been disclosed in this prospectus),
containing all the particulars as required under paragraph 10 of Part I of the Third
Schedule to the Companies (Winding Up and Miscellaneous Provisions) Ordinance,
will be made available for public inspection in accordance with the paragraph
headed “Document Available for Inspection” in Appendix VII to this prospectus; and
(d) the particulars of the exemption will be disclosed in this prospectus and this
prospectus will be issued on or before November 28, 2024.
For further details of the Pre-IPO Share Option Scheme, see “Further Information about
our Directors, Supervisors and Substantial Shareholders — 6. Pre-IPO Share Option Scheme”
in Appendix VI to this prospectus.
W AIVERS FROM STRICT COMPLIANCE WITH LISTING RULES AND
EXEMPTION FROM STRICT COMPLIANCE WITH THE COMPANIES
(WINDING UP AND MISCELLANEOUS PROVISIONS) ORDINANCE
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DIRECTORS’ RESPONSIBILITY FOR THE CONTENTS OF THIS PROSPECTUS
This prospectus, for which all of our Directors (including proposed Directors named in
this prospectus) collectively and individually accept full responsibility, includes particulars
given in compliance with the Companies (Winding Up and Miscellaneous Provisions)
Ordinance, the Securities and Futures (Stock Market Listing) Rules (Chapter 571V of the Laws
of Hong Kong) and the Listing Rules for the purpose of giving information 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
On February 17, 2023, the CSRC released the Overseas Listing Trial Measures and five
guidelines for the filing-based administration of overseas securities offerings and listings by
PRC companies, which have become effective since March 31, 2023 and require, among
others, that PRC domestic enterprises seeking to overseas listing and public offering securities
in overseas markets, either directly or indirectly, shall file the requisite documents with the
CSRC within three business days after their application for overseas listing is submitted. In
compliance with the aforementioned requirements, we submitted a filing to the CSRC for
application for the Listing on March 5, 2024 within three business days after the submission
of our listing application and the submission had been acknowledged by the CSRC on March
14, 2024. The CSRC issued a notification on our completion of the PRC filing procedures for
the listing of our H Shares on the Stock Exchange and the Global Offering on October 18,
2024. No other approvals from the CSRC are required to be obtained for the Listing. For
further details, see “Regulatory Overview — Regulations relating to Overseas Offering and
Listing” in this prospectus.
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 482,800 Offer Shares and the
International Offering of initially 4,345,120 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 and, in case of the International Offering, any exercise of the Over-allotment
Option).
INFORMATION ABOUT THIS PROSPECTUS AND THE GLOBAL OFFERING
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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 Sole Sponsor, the Joint 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 and the arrangements relating to the Over-allotment
Option and stabilization.
UNDERWRITING
The Listing is sponsored by the Sole Sponsor. The Hong Kong Public Offering is fully
underwritten by the Hong Kong Underwriters under the terms of the Hong Kong Underwriting
Agreement and is subject to us and the Joint Overall Coordinators (for themselves and on
behalf of the Underwriters) agreeing on the Offer Price. The International Underwriting
Agreement relating to the International Offering is expected to be entered into on or around the
Price Determination Date, subject to the determination of the pricing of the Offer Shares. The
Global Offering is managed by the Joint Overall Coordinators.
If, for any reason, the Offer Price is not agreed among us and the Joint Overall
Coordinators (for themselves and on behalf of the Underwriters), the Global Offering will not
proceed and will lapse. 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) and the
arrangements relating to the Over-allotment Option and stabilization are set out in the sections
headed “Structure of the Global Offering” and “Underwriting” in this prospectus.
INFORMATION ABOUT THIS PROSPECTUS AND THE GLOBAL OFFERING
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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 (including any
H Shares which may be issued pursuant to the exercise of the Over-allotment Option) and the
H Shares to be converted from Domestic Shares.
Save as disclosed in the section headed “History, Development and Corporate Structure”
in this prospectus, 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.
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H SHARES WILL BE ELIGIBLE FOR ADMISSION INTO CCASS
Subject to the granting of the listing of, and permission to deal in, the H Shares 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 HKSCC Operational Procedures in
effect from time to time.
All necessary arrangements have been made enabling the H Shares to be admitted into
CCASS. Investors should seek the advice of their stockbrokers or other professional 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 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. Our principal register of members will be maintained by us at our headquarters
in the PRC.
Dealings in the H Shares registered on the H Share register of members of our Company
in Hong Kong will be subject to Hong Kong stamp duty.
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 Sole
Sponsor, the Joint Overall Coordinators, the Joint Global Coordinators, the Capital Market
Intermediaries, the Joint Bookrunners, the Joint Lead Managers, 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.
INFORMATION ABOUT THIS PROSPECTUS AND THE GLOBAL OFFERING
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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 RMB7.1907 to USD1.00; (ii) the translations between Hong Kong dollars
and Renminbi were made at the rate of RMB0.92371 to HK$1.00; and (iii) the translations
between U.S. dollars and Hong Kong dollars were made at the rate of HK$7.7753 to USD1.00.
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
certain of our 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
– 101 –


--- page 112 ---
DIRECTORS
Name Address Nationality
Executive Directors
Mr. LIN Qi (ೡ) Room 601
No. 188, Lane 99
Wanding Road
Minhang District
Shanghai
PRC
Chinese
Dr. HU Zhe (ࡪߡRoom 702
No. 2, Lane 388
Moyu Road, Anting Town
Jiading District
Shanghai
PRC
Chinese
Ms. MA Audrey Jing Nan
(৵౺฻)
Room 202
No. 22, Lane 18
Shenzheng Road
Minhang District
Shanghai
PRC
Canadian
Dr. ZHAI Shuang ( ၱᕐ) Room 605
No. 24, Lane 12
Minzhi Road
Yangpu District
Shanghai
PRC
Chinese
Mr. ZHAO Yongsheng
(͛)
Room 301
No. 111, Lane 2078
Anzhi Road
Jiading District
Shanghai
PRC
Chinese
Non-executive Director
Mr. LIU Huiyou ( ᄎึʾ) Room 1101
Block 2, Building 2, Court 5
Guangtai West Road
Chaoyang District
Beijing
PRC
Chinese
DIRECTORS, SUPERVISORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
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--- page 113 ---
Independent non-executive Directors
Mr. LI Wei ( ҽਃ) Room 12F
Block 3, Building 6
Yuandayuan
Haidian District
Beijing
PRC
Chinese
Dr. QIAN Meifen (ځߕRoom 1002
Block 1, Building 27
Zijinxiyuan
Xihu District
Hangzhou
Zhejiang
PRC
Chinese
Mr. CHEN Fei (࠭Flat F, 15/F, Tower 10
Park Avenue
18 Hoi Ting Road
Tai Kok Tsui
Kowloon
Hong Kong
Chinese
(Hong Kong)
SUPERVISORS
Name Address Nationality
Mr. WU Yang (ݱ؛No. 121, Zhongshan
Yi Road
West District
Zhongshan
Guangdong
PRC
Chinese
Mr. ZHANG Cheng ( ੵ೻) No. 63, Fuxing Road
Haidian District
Beijing
PRC
Chinese
DIRECTORS, SUPERVISORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
– 103 –


--- page 114 ---
Mr. JI Yizhi (ɓқ) Room 101, No. 30
Yangtze River International Garden
New District
Wuxi
Jiangsu
PRC
Chinese
Mr. WANG Chuqi ( ӓูಒ) Room 502
Building 1, No. 17
Diecaiyuan
Xiwang Road
Yuhang District
Hangzhou
Zhejiang
PRC
Chinese
Mr. SUN Bei (̏) Room 1301
No. 74, Lane 2250
Dongjing Road
Pudong New Area
Shanghai
PRC
Chinese
For details with respect to our Directors and Supervisors, see “Directors, Supervisors and
Senior Management” in this prospectus.
DIRECTORS, SUPERVISORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
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--- page 115 ---
PARTIES INVOLVED IN THE GLOBAL OFFERING
Sole Sponsor and Sponsor-overall
Coordinator
China International Capital Corporation
Hong Kong Securities Limited
29/F, One International Finance Centre
1 Harbor View Street
Central
Hong Kong
Joint Overall Coordinators China International Capital Corporation
Hong Kong Securities Limited
29/F, One International Finance Centre
1 Harbor View Street
Central
Hong Kong
CMB International Capital Limited
45/F, Champion Tower
3 Garden Road
Central
Hong Kong
BNP Paribas Securities (Asia) Limited
60/F. and 63/F., Two International Finance Centre
8 Finance Street
Central
Hong Kong
Joint Global Coordinators China International Capital Corporation
Hong Kong Securities Limited
29/F, One International Finance Centre
1 Harbor View Street
Central
Hong Kong
CMB International Capital Limited
45/F, Champion Tower
3 Garden Road
Central
Hong Kong
DIRECTORS, SUPERVISORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
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--- page 116 ---
BNP Paribas Securities (Asia) Limited
60/F. and 63/F., Two International Finance Centre
8 Finance Street
Central
Hong Kong
BOCI Asia Limited
26/F, Bank of China Tower
1 Garden Road
Central
Hong Kong
China Galaxy International Securities
(Hong Kong) Co., Limited
20/F Wing On Centre
111 Connaught Road Central
Hong Kong
Joint Bookrunners and
Capital Market Intermediaries
China International Capital Corporation
Hong Kong Securities Limited
29/F, One International Finance Centre
1 Harbor View Street
Central
Hong Kong
CMB International Capital Limited
45/F, Champion Tower
3 Garden Road
Central
Hong Kong
DIRECTORS, SUPERVISORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
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--- page 117 ---
BNP Paribas Securities (Asia) Limited
60/F. and 63/F., Two International Finance Centre
8 Finance Street
Central
Hong Kong
BOCI Asia Limited
26/F, Bank of China Tower
1 Garden Road
Central
Hong Kong
China Galaxy International Securities
(Hong Kong) Co., Limited
20/F Wing On Centre
111 Connaught Road Central
Hong Kong
ABCI Capital Limited
11/F, Agricultural Bank of China Tower
50 Connaught Road Central
Hong Kong
China Merchants Securities (HK) Co., Limited
48/F, One Exchange Square
8 Connaught Place
Central
Hong Kong
Livermore Holdings Limited
Unit 1214A, 12/F, Tower II Cheung Sha Wan Plaza
833 Cheung Sha Wan Road
Kowloon
Hong Kong
DIRECTORS, SUPERVISORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
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--- page 118 ---
Soochow Securities International
Brokerage Limited
17/F, Three Pacific Place
1 Queen’s Road East
Hong Kong
Tiger Brokers (HK) Global Limited
1/F, No. 308 Des V oeux Road Central
Sheung Wan
Hong Kong
Joint Lead Managers and
Capital Market Intermediaries
China International Capital Corporation
Hong Kong Securities Limited
29/F, One International Finance Centre
1 Harbor View Street
Central
Hong Kong
CMB International Capital Limited
45/F, Champion Tower
3 Garden Road
Central
Hong Kong
BNP Paribas Securities (Asia) Limited
60/F. and 63/F., Two International Finance Centre
8 Finance Street
Central
Hong Kong
BOCI Asia Limited
26/F, Bank of China Tower
1 Garden Road
Central
Hong Kong
China Galaxy International Securities
(Hong Kong) Co., Limited
20/F Wing On Centre
111 Connaught Road Central
Hong Kong
DIRECTORS, SUPERVISORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
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--- page 119 ---
ABCI Securities Company Limited
10/F, Agricultural Bank of China Tower
50 Connaught Road Central
Hong Kong
China Merchants Securities (HK) Co., Limited
48/F, One Exchange Square
8 Connaught Place
Central
Hong Kong
Livermore Holdings Limited
Unit 1214A, 12/F, Tower II Cheung Sha Wan Plaza
833 Cheung Sha Wan Road
Kowloon
Hong Kong
Soochow Securities International
Brokerage Limited
17/F, Three Pacific Place
1 Queen’s Road East
Hong Kong
Tiger Brokers (HK) Global Limited
1/F, No. 308 Des V oeux Road Central
Sheung Wan
Hong Kong
Financial Adviser to our
Company
(Note)
BNP Paribas Securities (Asia) Limited
60/F. and 63/F., Two International Finance Centre
8 Finance Street
Central
Hong Kong
Legal Advisers to our Company As to Hong Kong and U.S. laws:
O’Melveny & Myers
31/F, AIA Central
1 Connaught Road Central
Hong Kong
Note: For further details, see “Other Information — 13. Financial Adviser” in Appendix VI to this prospectus.
DIRECTORS, SUPERVISORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
– 109 –


--- page 120 ---
As to PRC laws:
Tian Yuan Law Firm
Suite 509, Tower A, Corporate Square
35 Financial Street
Xicheng District
Beijing
PRC
As to PRC cybersecurity and data privacy
protection laws:
Tian Yuan Law Firm
Suite 509, Tower A, Corporate Square
35 Financial Street
Xicheng District
Beijing
PRC
Legal Advisers to the Sole Sponsor
and Underwriters
As to Hong Kong and U.S. laws:
Baker & McKenzie
14/F, One Taikoo Place
979 King’s Road
Quarry Bay
Hong Kong
As to PRC laws:
Commerce & Finance Law Offices
12-14th Floor, China World Office 2
No. 1 Jianguomenwai Avenue
Chaoyang District
Beijing
PRC
DIRECTORS, SUPERVISORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
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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 Frost & Sullivan (Beijing) Inc.,
Shanghai Branch Co.
2504, Wheelock Square
1717 Nanjing West Road
Shanghai 200040
PRC
Compliance Adviser Maxa Capital Limited
Unit 2602, 26/F, Golden Centre
188 Des V oeux Road Central
Sheung Wan
Hong Kong
Receiving Bank Bank of China (Hong Kong) Limited
1 Garden Road
Hong Kong
DIRECTORS, SUPERVISORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
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--- page 122 ---
Registered Office, Headquarters and
Principal Place of Business in the PRC
Room 1004, 1/F, Unit 1
1555 Jingyuan Road
Jiading District
Shanghai
PRC
Principal Place of Business in Hong Kong 19/F, Golden Centre
188 Des V oeux Road Central
Hong Kong
Company’s Website www.refire.com
(Information contained on this website does
not form part of this prospectus)
Joint Company Secretaries Mr. ZHENG Zhong (ࠠ)
No. 97, Lane 651
Donghuan Road
Jiading District
Shanghai
PRC
Mr. POON Ping Y eung (౮)
19/F, Golden Centre
188 Des V oeux Road Central
Hong Kong
Authorized Representatives Mr. LIN Qi (ೡ)
Room 601
No. 188, Lane 99
Wanding Road
Minhang District
Shanghai
PRC
Mr. POON Ping Y eung (౮)
19/F, Golden Centre
188 Des V oeux Road Central
Hong Kong
CORPORATE INFORMATION
–1 1 2–


--- page 123 ---
Audit Committee Mr. CHEN Fei (࠭)Chairperson)
Dr. QIAN Meifen (ځߕ)
Mr. LI Wei ( ҽਃ)
Remuneration and Appraisal Committee Mr. LI Wei ( ҽਃ) (Chairperson)
Mr. LIU Huiyou ( ᄎึʾ)
Dr. QIAN Meifen (ځߕ)
Nomination Committee Dr. QIAN Meifen (ځߕ)Chairperson)
Mr. LI Wei ( ҽਃ)
Mr. LIN Qi (ೡ)
Strategy Committee Mr. LIN Qi (ೡ) (Chairperson)
Dr. HU Zhe (ࡪߡ)
Mr. ZHAO Yongsheng (͛)
Mr. LIU Huiyou ( ᄎึʾ)
Mr. CHEN Fei (࠭)
H Share Registrar Computershare Hong Kong Investor
Services Limited
Shops 1712-1716
17th Floor, Hopewell Centre
183 Queen’s Road East
Wanchai
Hong Kong
Principal Bankers China Construction Bank Corporation
Shanghai Jiangqiao Subbranch
No. 138, Jiayi Road
Jiangqiao Town
Jiading District
Shanghai
PRC
China Merchants Bank Co., Ltd.
Shanghai Branch
No. 161, Lujiazui East Road
Pudong New Area
Shanghai
PRC
Bank of Communications Co., Ltd.
Shanghai Y angpu Subbranch
No. 1317, Changyang Road
Yangpu District
Shanghai
PRC
CORPORATE INFORMATION
–1 1 3–


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The information and statistics set out in this section and other sections of this
prospectus were extracted from the Frost & Sullivan Report prepared by Frost &
Sullivan, which was commissioned by us, and from various official government
publications and other publicly available publications. We engaged Frost & Sullivan to
prepare the Frost & Sullivan Report, an independent industry report, in connection with
the Global Offering. The information from official government sources has not been
independently verified by us, the Sole Sponsor , the Joint Overall Coordinators, the Joint
Global Coordinators, the Joint Bookrunners, the Joint Lead Managers, the Underwriters,
any of their respective directors and advisers or any other persons or parties involved in
the Global Offering, and no representation is given as to its accuracy.
SOURCE OF INFORMATION
We have commissioned Frost & Sullivan, an independent market research and consulting
company, to conduct an analysis of, and to prepare a report on the global and China hydrogen
fuel cell industry. The report prepared by Frost & Sullivan for us is referred to in this
prospectus as the Frost & Sullivan Report. A total fee of RMB550,000 shall be paid to Frost
& Sullivan for the preparation of the report, which we believe reflects market rates for reports
of this type.
Frost & Sullivan is a global consulting company founded in 1961 in New York and has
over 40 global offices with more than 2,000 industry consultants, market research analysts,
technology analysts and economists.
RESEARCH METHODOLOGY
The Frost & Sullivan Report was prepared through both primary and secondary research
obtained from various sources using intelligence collection methodologies. Primary research
involved discussing the status of the industry with certain industry participants across the
industry value chain and conducting interviews with relevant parties to obtain objective,
factual data and prospective predictions. Secondary research involved information integration
of data and publication from publicly available sources, including official data and
announcements from government agencies, company reports, independent research reports and
data based on Frost & Sullivan’s own data base.
Basis and assumptions
In compiling and preparing the Frost & Sullivan Report, Frost & Sullivan has adopted the
following assumptions: (i) the social, economic and political environment in the world and
China is likely to remain stable in the forecast period; and (ii) industry key drivers are likely
to drive the growth of the Global and Chinese hydrogen fuel cell industry in the forecast period.
All statistics are based on the information available as at the date of the Frost & Sullivan
Report, with the potential impact of the COVID-19 pandemic taken into account.
INDUSTRY OVERVIEW
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OVERVIEW OF THE HYDROGEN INDUSTRY
Analysis of the Advantages and Disadvantages of Hydrogen Energy
Hydrogen energy is considered to be one of the cleanest, most efficient, and renewable
energy sources. As an energy medium, it has the advantages of being able to have zero
emissions during the energy conversion process, high efficiency, high energy density and
storable on large scale, and therefore has gained more and more attention and applications in
the energy field. Meanwhile, hydrogen energy is a high-quality energy source that is easy to
produce and widely used. The development of hydrogen energy is of great significance to
ensuring national energy security, optimizing the energy structure, promoting clean energy
transformation and achieving China’s goal of “carbon peaking by 2030 and carbon neutrality
by 2060” in the future.
Hydrogen energy boasts several advantages compared to other energy medium, including:
 Hydrogen is extremely abundant. This abundance provides us with a wide range of
possibilities and opportunities, making it possible to access hydrogen energy
resources without the need for geographic restrictions.
 The hydrogen production and utilization from renewable energy is eco-friendly.
Firstly, significant quantities of renewable energy sources, such as solar and wind
energy, can be effectively used for hydrogen production. The utilization of these
energy sources not only serves to mitigate greenhouse gas emissions but also plays
a significant role in preserving the integrity of the ecological environment.
 High energy density is also one of the advantages of hydrogen. Diesel has an energy
density of 45.5 megajoules per kilogram (MJ/kg), slightly lower than gasoline,
which has an energy density of 45.8 MJ/kg. By contrast, hydrogen has an energy
density of approximately 120 MJ/kg, almost three times of diesel or gasoline. 1 kg
of hydrogen, used in a fuel cell to power an electric motor, contains approximately
the same energy as a gallon of diesel.
 Hydrogen can be used in a wide range of applications. In the field of transportation,
fuel cell electric vehicle (“ FCEV”) has great business potential. In industrial
production, hydrogen can be used in industries such as industrial gas, synthetic
ammonia and coke, which has a huge economic value. In the field of power
generation and storage, the nature of large-scale, long-period energy storage of
hydrogen provides a new path to address the imbalance between power supply and
demand. The fuel cell power generation solution has strong competitiveness in the
field of future stationary power supply. In addition, because hydrogen fuel cells can
be grid-independent, they also serve as an well-recognized option to offer secure
power supply for critical load functions such as data centers, telecommunications
towers, hospitals and emergency response systems.
INDUSTRY OVERVIEW
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 Storable on large scale of hydrogen energy is an intrinsic part of complete energy
chains, starting from energy generation to end-use. Hydrogen can be stored in
above-ground containments on a large scale. For example, hydrogen produced from
renewable energy can be stored for a long period and utilized or absorbed in remote
locations. The possibility of scalable storage for long periods of hydrogen power
provides opportunities for more convenient usage.
However, there are also a few disadvantages of hydrogen, including but not limited to (i)
producing hydrogen through electrolysis using renewable electricity can be costly and
energy-intensive; (ii) hydrogen is a highly reactive and low-density gas, which presents
challenges for distribution. Current infrastructure for hydrogen storage and transportation is
limited, requiring significant investments in infrastructure development; and (iii) most energy
systems were designed for fossil fuels, and while renewable energy like solar and wind energy
can be integrated with existing infrastructure, hydrogen energy requires special fuel cells for
storage, which could be challenging.
To fully exploit the advantage of hydrogen energy and develop the hydrogen industry,
nations around the world have implemented favorable policies and regulations to standardize
and support the development of hydrogen industry. Between 2016 and 2023, East Asian
countries such as China, Japan, and Korea, European countries including Germany and France,
Oceania countries, primarily Australia, North American countries, i.e., United States and
Canada, and Middle Eastern countries such as United Arab Emirates have respectively
implemented favorable policies to support the development of their hydrogen industry. In
particular, China has issued a series of policies for the development of hydrogen industry. In
March 2022, China issued the Medium and Long-term Plan for Hydrogen Industry
(2021-2035), analyzing the current development situation of China’s hydrogen industry and
clarifying the strategic positioning, overall requirements, and development goals of the
industry. In June 2022, China issued the 14th Five-Year Plan for the Development of
Renewable Energy, promoting hydrogen production from renewable energy and promoting
large-scale utilization of hydrogen produced from renewable sources. In June 2023, China
issued the Blue Book on the Development of New Power Systems, which stated that the
government encourages breakthroughs in key technologies applicable to renewable energy
electrolysis for hydrogen production, including proton exchange membrane (PEM) and
high-temperature solid oxide electrolysis. Efforts are underway to conduct research and
development on critical technologies in hydrogen storage, transportation, and refueling, as well
as in fuel cell equipment and system integration.
INDUSTRY OVERVIEW
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Industry Chain of the Hydrogen Market
The diagram below illustrates the industry chain of the hydrogen market:
Industry Chain of the Hydrogen Market
Midstream Downstream
Hydrogen Production Hydrogen Storage, Transportation, Refuel End-use Applications
Upstream
Directly use
Hydrogen
storage
Transportation
Industry Power
Distributed power generation
Off-grid power generation
Hydrogen energy storage
Heat supply
Steel
Chemical
Industry
Construction
CHP
Backup power
Rail transit
Hydrogen
transportation
Hydrogen
refueling
Using industrial by-product
Using fossil fuel
Fuel Cell System
Fuel
Cell
Stack
Bipolar plate
MEA
Balance
of Plant
(BOP)
Air compressor
Hydrogen circulation
system
FCU
Heavy truck
Construction
machinery
Omnibus
Ship
DC-to-DC converters
Medium and
light-duty truck
Using water electrolysis
(ALK, PEM, SOEC)
Notes:
1. the blue-colored text represents items which fall within the Group’s business scope.
2. the green-colored text represents downstream applications of the Group’s products.
Source: Frost & Sullivan
Upstream: hydrogen production
Based on preparation methods, hydrogen can be categorized as: (i) hydrogen produced
from traditional sources (such as natural gas or coal), (ii) hydrogen produced by combining
traditional sources with CCUS (Carbon Capture, Utilization, and Storage) technology, and (iii)
hydrogen produced from renewable energy sources, including wind power, solar power,
photovoltaic, etc. The hydrogen generated through our electrolysis-based hydrogen production
systems is classified as hydrogen produced from renewable energy sources.
INDUSTRY OVERVIEW
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Hydrogen produced through traditional methods currently constitutes the predominant
form of hydrogen globally, accounting for approximately 86.9% of the total, measured by the
sales volume of hydrogen in the global market in 2023. Nonetheless, hydrogen produced from
renewable energy sources presents numerous advantages, particularly in terms of low carbon
emissions and environmental sustainability. As technology progresses, the production costs of
hydrogen produced from renewable energy sources are expected to decrease in the future,
making it a promising growth area for the hydrogen market. For details, see “— Overview of
the Hydrogen Production Industry — Definition and Methods of Hydrogen Production” in this
section.
Midstream: hydrogen storage, transportation and refueling
 Storage: there are three main types of hydrogen storage methods: gas, solid, and liquid.
Currently, high-pressure compression is the predominant gas storage method, offering
advantages such as rapid filling and discharging, straightforward container structure, and
cost-effectiveness. Solid hydrogen storage is in the early stages of commercialization,
while liquid hydrogen storage has not gained widespread usage in China.
 Transportation: the transportation of hydrogen varies based on storage methods,
including the transportation in gas, solid, and liquid forms. Currently, the primary
methods of long-distance distribution for gas hydrogen involves using long-haul trailers
or pipelines. However, pipeline transportation demands significant upfront investment for
construction. Liquid hydrogen can be conveyed using specialized tanks installed in trucks
or ships. This method enhances transport efficiency and augments the supply capacity of
hydrogen refueling stations. Solid-state hydrogen storage involves using materials to
physically and chemically absorb hydrogen, storing it within solid substances. An
example is magnesium-based solid-state storage, where hydrogen is stored in the form of
magnesium alloy MgH
2 (magnesium hydride).
 Refueling: Among the emerging downstream applications of hydrogen, fuel cell vehicles
represent the largest segment with the great growth potential. Therefore, hydrogen
refueling stations have become crucial infrastructural facilities for promoting the
development of the hydrogen industry.
Midstream to downstream: hydrogen fuel cell system
The hydrogen fuel cell system serves as a significant medium for the large-scale adoption
of hydrogen, connecting the midstream and the downstream of the hydrogen market. For
details, see “— Overview of the Hydrogen Industry — Overview of the Hydrogen Fuel Cell
Industry” in this section.
INDUSTRY OVERVIEW
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Downstream: end-use applications
The end-use applications of hydrogen can be divided into two approaches. One involves
applications of hydrogen through fuel cell systems in various industries, such as transportation,
power generation, iron and steel, chemical and construction industries. The other category
involves the direct use of hydrogen as an industrial raw material without going through
hydrogen fuel cell systems. In particular, with application of hydrogen-powered fuel cell
systems to undertake end-use applications, which emits only water (H
2O) and warm air,
without any of harmful substances emitted from gasoline and diesel vehicles, relevant
industries may effectively reduce their carbon emission footprint associated therein.
Preferential Policies and Regulations
Overseas policies
Region Released date Policies Comments
East Asia /H1118/H1118Jun. 2023 Japan:
Hydrogen Basic
Strategy
The government of Japan plans to
contribute upfront investments worth 20
trillion yen in order to attract the public
and private sectors to Green
Transformation initiatives-related
investments and achieve combined
investments of 150 trillion yen or more
over the next decade. Japan plans to
reduce hydrogen supply cost, to 30
yen/Nm
3 by 2030 and to 20 yen/Nm 3 by
2050; and expand the number of water
electrolysis equipment with Japan-made
parts in them, to approximately 15GW
globally by 2030.
Nov. 2021 Korea:
Basic Plan for the
Implementation of
Hydrogen Economy
The Korean government sets a goal to
produce 27.9 million tons of low-carbon
hydrogen by 2050. Hydrogen is expected
to be the largest source of energy in
Korea in 2050 supplying 33% of energy
consumption and 24% of electricity
generation in Korea.
INDUSTRY OVERVIEW
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Region Released date Policies Comments
Oceania /H1118/H1118/H1118Jul. 2023 Australia:
Hydrogen Headstart
The objective of this plan is to expedite the
growth of Australia’s hydrogen industry,
spur the development of clean energy
sectors, and facilitate Australia’s
integration into emerging global
hydrogen supply chains. This initiative
aims to harness the substantial
employment and investment opportunities
presented by the hydrogen sector.
North
America /H1118/H1118
Jun. 2023 United States:
U.S. National Clean
Hydrogen Strategy
and Roadmap
This policy explores opportunities for low-
carbon hydrogen to contribute to national
decarbonization goals across multiple
sectors of the U.S. economy. It provides
a snapshot of hydrogen production,
transport, storage, and use in the U.S.
and presents a strategic framework for
achieving large-scale production and use
of clean hydrogen, examining scenarios
for 2030, 2040, and 2050.
Europe /H1118/H1118/H1118/H1118Dec. 2023 France:
National Hydrogen
Strategy
By 2030, France plans to achieve 6.5GW of
low-carbon hydrogen capacity, reaching
10GW by 2035. This target will be
accomplished through the country’s low-
carbon power mix, including nuclear or
renewable power, while adhering to the
principle of technological neutrality of
hydrogen energy sources.
From January 2023, renewable hydrogen is
eligible for this program. Starting
January 2024, low-carbon hydrogen is
also eligible, with a subsidy of up to 4.7
euros per kilogram.
Jul. 2023 Germany:
the National
Hydrogen Strategy
Germany has revised its 2030 capacity goal
for domestic hydrogen production
through water electrolysis, increasing it
from 5GW to 10GW. The country
anticipates that hydrogen imports will
constitute 50-70% of the total hydrogen
supply by 2030. Furthermore, Germany
plans to enhance international
collaboration and implement a dedicated
strategy for hydrogen imports.
INDUSTRY OVERVIEW
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Region Released date Policies Comments
Middle
East /H1118/H1118/H1118/H1118
Nov. 2023 United Arab
Emirates (UAE):
National Hydrogen
Strategy
The UAE hydrogen production capacity is
targeted to reach 1.4 million tons/year by
2031, including 1 million tons of
hydrogen produced from renewable
sources and 400,000 tons of hydrogen
possessed with CCUS. The UAE
government plans to set up Hydrogen
Oasis to promote the development of the
UAE’s hydrogen industry chain in terms
of policies, platforms and talents.
Hong Kong /H1118Jun. 2024 Strategy of Hydrogen
Development
The government formulated the strategy to
address the technical challenges in the
six major areas of safety, suitable
technologies, infrastructure, cost
effectiveness, capacity building and
public acceptance, as well as the unique
situation of Hong Kong. The strategy
sets out the four major strategies of
improving legislations, establishing
standards, aligning with the market, and
advancing with prudence to create an
environment conducive to the
development of hydrogen energy in Hong
Kong in a prudent and orderly manner,
so that Hong Kong would be able to
capitalize on the environmental and
economic opportunities brought about by
the recent developments of hydrogen
energy in different parts of the world, the
country in particular.
INDUSTRY OVERVIEW
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China national-level policies
Release Date Issued by Policies Comments
Mar. 2024 /H1118/H1118National Energy
Administration
Guiding Opinions on
Energy Work (2024)
The government encourages the release of
new policies that accelerate the
development of the hydrogen energy
industry, promote hydrogen technology
innovation and industrial development in
an orderly manner, carry out hydrogen
energy demonstrations projects, focus on
hydrogen production from renewable
energy sources, and expand the
application scenarios of hydrogen energy
Apr. 2024 /H1118/H1118The Standing
Committee of the
National People’s
Congress
The Energy Law of
the People’s
Republic of China
(Draft)
This is the foundational and overarching
legal draft in the field of energy in
China, which clarifies that hydrogen
energy is included as a part of the energy
sector. The law stipulates provisions for
improving the energy planning system,
perfecting the systems for energy
development and utilization,
strengthening the construction of the
energy market system, enhancing the
energy reserve system and emergency
mechanisms, promoting energy
technology innovation, and intensifying
supervision and management
Jul. 2024 /H1118/H1118/H1118The State Council The Guidance on
Accelerating the
Comprehensive
Green
Transformation of
Economic and
Social Development
The guidance proposes that, by 2030, the
scale of the energy-saving and
environmental protection industry will
reach about 15 trillion yuan; the
proportion of non-fossil energy
consumption will be raised to about 25%;
the carbon emission intensity per unit of
transported volume of operational
transport vehicles will decrease by about
9.5% compared to the year 2020; and the
annual utilization volume of bulk solid
waste will reach about 4.5 billion tons,
etc.
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Release Date Issued by Policies Comments
Dec. 2023 /H1118/H1118National Development
and Reform
Commission
Guiding Catalogue for
Industrial Structure
Adjustment (2024)
This catalogue is an important guide for all
levels of government in China to allocate
resources and guide investment. This
catalogue is divided into three categories:
encouragement, restriction and
elimination.
Under this catalogue, various operations or
items in relation to the hydrogen
industry, including hydrogen storage,
applications of hydrogen technology,
hydrogen production through renewable
methods, hydrogen fuel engines, etc., are
categorized under the encouraged
category of industries.
Jun. 2023 /H1118/H1118National Energy
Administration
The Blue Book on the
Development of
New Power
Systems
The government encourages breakthroughs
in key technologies applicable to
renewable energy electrolysis for
hydrogen production, including proton
exchange membrane (PEM) and high
temperature solid oxide electrolysis.
Efforts are underway to conduct research
and development on critical technologies
in hydrogen storage, transportation, and
refueling, as well as in fuel cell
equipment and system integration. By the
year of 2030 the proportion of non-fossil
energy consumption is targeted to reach
25%.
Mar. 2022 /H1118/H1118National Development
and Reform
Commission
The Medium and
Long-term Plan for
Hydrogen Industry
(2021-2035)
This plan analyses the current development
situation of China’s hydrogen industry
and clarifies the strategic positioning,
overall requirements, and development
goals of the industry.
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Release Date Issued by Policies Comments
This plan proposes that by 2025 (i) the
fleet of fuel cell vehicles is expected to
reach approximately 50,000, with the
deployment and construction of a number
of hydrogen refueling stations; and (ii)
the target of hydrogen production from
renewable energy will reach 100,000 to
200,000 tons per year, becoming a
significant component of the newly
added hydrogen consumption, reducing
carbon dioxide emissions by 1 to 2
million tons per year.
Jan. 2022 /H1118/H1118National Development
and Reform
Commission,
National Energy
Administration
The 14th Five-Year
Plan for Modern
Energy System
Throughout the 14th Five-Year Plan period,
there is a specific focus on achieving an
annual average growth in R&D funding
for energy of over 7%. It is anticipated
that there will be approximately 50
breakthroughs in key technology areas,
aligning with the overarching objective
of reaching a non-fossil energy
consumption share of 25% by 2030.
Nov. 2021 /H1118/H1118National Energy
Administration,
Ministry of Science
and Technology
The 14th Five-Year
Plan (FYP) on
Scientific and
Technological
Innovation in the
Energy Sector
This plan includes targets such as (i)
conduct research on critical technologies
for integrating, structurally designing,
and precision manufacturing high-
performance, long-lasting proton
exchange membrane fuel cell (PEMFC)
stacks, (ii) achieve breakthroughs in key
solid oxide fuel cell (SOFC)
technologies, master system integration
optimization design, and understand
operational characteristics and load
response patterns, (iii) enhance critical
technologies such as stack stacking and
power amplification for molten carbonate
fuel cells (MCFC) and acquire expertise
in integrated design for molten carbonate
fuel cells ranging from hundred-kilowatt
to megawatt levels, and (iv) demonstrate
the application of stationary fuel cell
power generation and distributed energy
supply in various scenarios.
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Release Date Issued by Policies Comments
Oct. 2021 /H1118/H1118State Council Action Plan for
Upgrading Carbon
Dioxide Peaking
Before 2030
This action plan focuses on the research
and development of technical standards
for hydrogen production, storage,
transportation, refueling, and diversified
applications of hydrogen energy, to
support the development of the entire
industrial chain.
This action plan proposes that (i) the
proportion of renewable energy in newly
constructed channels shall, in principle,
not be less than 50%; (ii) by 2030, the
proportion of newly added vehicles
powered by new energy and clean energy
is expected to reach around 40%; (iii) the
carbon emission intensity per unit of
turnover for operational vehicles is
targeted to decrease by approximately
9.5% compared to the levels in 2020;
and (iv) the comprehensive energy
consumption per unit of turnover for the
national railway is aimed to decrease by
around 10% from the levels in 2020.
Oct. 2021 /H1118/H1118National Development
and Reform
Commission,
National Energy
Administration,
MOF, Ministry of
Natural Resources,
Ministry of Ecology
and Environment,
Ministry of Housing
and Urban-Rural
Development,
Ministry of
Agriculture and
Rural Affairs, China
Meteorological
Administration,
National Forestry
and Grassland
Administration
The 14th Five-Year
Plan for the
Development of
Renewable Energy
This plan (i) promotes hydrogen production
from renewable energy and promotes
large-scale utilization of hydrogen, and
(ii) aims to achieve a proportion of new
energy-electricity consumption exceeding
70%.
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China local level policies
Regional governments across China have introduced various policies to facilitate the
implementation of national-level policies aimed at developing the hydrogen industry. In 2023,
more than 30 provinces, autonomous regions and municipalities in China issued over 200 local
policies related to hydrogen energy. For example, in June 2023, Hebei Province issued the
Measures of Hydrogen Industry Safety Management in Hebei Province, establishing
regulations for the safe management of hydrogen production, transportation, refueling, and
utilization within the province. In September 2023, Shandong Province implemented the
Notice on the Pilot Demonstration and Construction of Energy Green and Low Carbon
Transition, encouraging the growth of wind power, photovoltaic power generation, and nuclear
energy for hydrogen production.
Market Size of Global and China Hydrogen Consumption
The market size of global hydrogen consumption is substantial, and increased from 43.0
million tons in 2018 to 67.8 million tons in 2023. The market size of global hydrogen
consumption is expected to reach 99.7 million tons in 2028. From the supply side, as
technology advances, the cost of hydrogen production, storage, and transportation will reduce
in the future. From the downstream demand side, the production, storage, and transportation
costs for hydrogen are decreasing with technological advancements, stimulating the demand
for hydrogen. Therefore, hydrogen will remain in strong demand in the future. In particular,
low-carbon hydrogen will be the trend in the context of carbon reduction. The penetration of
low-carbon hydrogen will experience a great increase and the low-carbon hydrogen
consumption volume will increase from 8.9 million tons in 2023 to 36.4 million tons in 2028,
with a CAGR of 32.5%.
The market size of global hydrogen consumption measured by value is also substantial,
increased from USD113.4 billion in 2018 to USD137.3 billion in 2023. The market size of
global hydrogen consumption measured by value is expected to reach USD203.1 billion in
2028. The low-carbon hydrogen consumption measured by value will increase from USD27.8
billion in 2023 to USD88.0 billion in 2028, with a CAGR of 25.9%.
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Market Size of Global Hydrogen Consumption, by Volume
Million Tons, 2018-2028E
11.1% 13.2% 16.4% 20.4%
25.6%
32.2% 36.5%
2018 2019 2020 2021 2022 2023 2024E 2025E 2026E 2027E 2028E
CAGR 2018-2023 2023-2028E
Total 9.5% 8.0%
Low carbon hydrogen* 24.3% 32.5%
penetration rate of low carbon hydrogen
hydrogen produced by traditional methods
low carbon hydrogen
6.1 7.3 8.9 11.8 15.7 21.3 29.2 36.4
40.0 42.1 48.6 55.6 58.2 58.9 60.1 61.2
61.8
61.4
63.3
3.0
7.8%
3.6
8.8%
4.7
9.8%6.9%
43.0 45.7
53.3
61.7 65.5 67.8 71.9 76.9
83.1
90.6
99.7
Note:
* The low-carbon hydrogen refers to hydrogen produced from renewable energy sources and hydrogen processed
by CCUS technology.
Source: IEA, Hydrogen Council, Frost & Sullivan
Market Size of Global Low Carbon Hydrogen Consumption, by Volume
Million Tons, 2018-2028E
2.01.51.2 2.7 3.5
2018 2019 2020 2021 2022 2023 2024E 2025E 2026E 2027E 2028E
CAGR 2018-2023 2023-2028E
Hydrogen produced from renewable energy sources 23.1% 38.8%
Hydrogen processed by CCUS technology 27.9% 23.3%
hydrogen produced from renewable energy sources
hydrogen processed by CCUS technology
1.8 2.1 4.1 5.0 6.2 7.7 9.7 11.7
2.7 3.4 3.8 4.8
6.8
9.5
13.6
19.5
24.7
3.0 3.6 4.7 6.1 7.3 8.9
11.8
15.7
21.3
29.2
36.4
Source: IEA, Hydrogen Council, Frost & Sullivan
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Market Size of Global Hydrogen Consumption, by Value (1)
USD Billion, 2018-2028E
12.5% 15.3% 17.2% 20.2% 24.3%
28.8%
34.5%
41.0%
43.3%
103.8 106.4 109.3 111.4 109.5
105.6
109.6
108.9
107.8
115.1
109.3
CAGR 2018-2023 2023-2028E
Total 3.9% 8.1%
Low carbon hydrogen(2) 23.7% 25.9%
penetration rate of low carbon hydrogen
hydrogen produced by traditional methods
low carbon hydrogen
2018 2019 2020 2021 2022 2023 2024E 2025E 2026E 2027E 2028E
11.6 15.2 19.7 23.1 27.8 35.0 44.3 57.5 74.8 88.0
9.6
9.9%
113.4 117.2 121.6 129.0 134.5 137.3 144.3
153.9
166.4
182.6
203.1
8.4%
Notes:
(1) The market size of global hydrogen consumption, by value, refers to the corresponding output value in various
fields of global hydrogen consumption.
(2) The low-carbon hydrogen refers to hydrogen produced from renewable energy sources and hydrogen processed
by CCUS technology.
Source: IEA, Hydrogen Council, Frost & Sullivan
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Market Size of Global Low Carbon Hydrogen Consumption, by Value
USD Billion, 2018-2028E
2018 2019 2020 2021 2022 2023 2024E 2025E 2026E 2027E 2028E
9.6 11.6
15.2
19.7 23.1
27.8
35.0
44.3
57.5
88.0
74.8
7.0 8.4 10.9 13.6 14.4 18.0
23.1
11.9
29.7
39.4
52.1
60.6
6.1 8.7 9.8 14.6 18.1 22.7 27.4
3.22.6 4.3
CAGR 2018-2023 2023-2028E
Hydrogen produced from renewable energy sources 20.8% 27.5%
Hydrogen processed by CCUS technology 30.4% 22.8%
hydrogen produced from renewable energy sources
hydrogen processed by CCUS technology
Note:
* The low-carbon hydrogen refers to hydrogen produced from renewable energy sources and hydrogen processed
by CCUS technology.
Source: IEA, Hydrogen Council, Frost & Sullivan
The market size of China’s hydrogen consumption measured by volume is substantial. In
2023, China holds approximately a 54.0% share of the global hydrogen consumption market in
terms of consumption volume. The market size of China’s hydrogen consumption measured by
volume increased from 21.8 million tons in 2018 to 36.6 million tons in 2023 with a CAGR
of 10.9%. Since 2018, China’s hydrogen consumption has been driven by technological
developments in the downstream petrochemical and metallurgical industries. The utilization of
hydrogen as the reducing agent in the metallurgical industry has gradually become more
prevalent. It is expected that the hydrogen market measured by consumption volume in China
will reach 52.8 million tons in 2028 with a CAGR of 7.6% from 2023. In the future, low carbon
hydrogen will be the trend and experience fast growth, with the consumption volume of which
increasing from 2.9 million tons in 2023 to 13.5 million tons in 2028 with a CAGR of 36.0%.
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The market size of China’s hydrogen consumption measured by value is also substantial.
In 2023, China holds approximately a 36.9% share of the global hydrogen consumption market
in terms of consumption value. The market size of China’s hydrogen consumption measured by
value increased from RMB244.3 billion in 2018 to RMB355.2 billion in 2023. The market size
of China’s hydrogen consumption measured by value is expected to reach RMB578.1 billion
in 2028. The low-carbon hydrogen consumption in China measured by value will increase from
RMB78.0 billion in 2023 to RMB267.7 billion in 2028, with a CAGR of 28.0% from 2023.
Market Size of China’s Hydrogen Consumption, by Volume
Million Tons, 2018-2028E
0
10
20
30
40
50
60
2018 2019 2020 2021 2022 2023 2024E 2025E 2026E 2027E
21.8 22.5
28.0
34.0 35.1 36.3 38.9 41.5 44.3 47.2
0.00.00.00.0 0.1 0.3 0.6 1.1 1.5 2.1
21.8 22.5
28.0
34.0 35.2 36.6
39.5
42.6
45.8
49.3
50.1
2.7
52.8
hydrogen used indirectly
hydrogen used directly
CAGR 2018-2023 2023-2028E
Hydrogen used directly 10.7% 6.6%
Hydrogen used indirectly 126.8% 59.9%
2028E
Note:
* Hydrogen could be directly used in the chemical industry, iron industry, and so on; hydrogen can be indirectly
used in the transportation industry, electricity generation, construction industry, etc., through fuel cell systems.
Source: China Hydrogen Alliance, Frost & Sullivan
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Market Size of China’s Hydrogen Consumption, by Value
RMB Billion, 2018-2028E
hydrogen used indirectly
hydrogen used directly
2018 2019 2020 2021 2022 2023 2024E 2025E 2026E 2028E
244.3 234.8 249.6
313.2 332.2 353.4 390.2 429.3 471.6
549.5
0.30.00.00.0 0.7 1.8 3.1 5.3 7.5
244.3 234.8 249.6
313.5 332.9 355.2
393.3
434.6
479.1
578.1
2027E
512.0
14.9
526.9
CAGR 2018-2023 2023-2028E
Hydrogen used directly 7.7% 9.2%
Hydrogen used indirectly / 74.4%
28.6
Note:
* Hydrogen could be directly used in the chemical industry, iron industry, and so on; hydrogen can be indirectly
used through fuel cell systems in the transportation industry, electricity generation, construction industry, etc.
Source: China Hydrogen Alliance, Frost & Sullivan
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Market Size of China’s Hydrogen Consumption, by Volume
Million Tons, 2018-2028E (1)
2018 2019 2020 2021 2022 2023 2024E 2025E 2026E 2028E
3.5% 4.2% 4.9% 5.6% 6.4% 8.0%
21.8 22.5
28.0
34.0 35.2 36.6
39.5
42.6
45.8
49.3
21.0 21.6
26.6
32.1 32.9 33.7
35.5
37.1
38.2
38.7
2.9 4.0 5.5 7.6 10.6
CAGR 2018-2023 2023-2028E
Total 10.9% 7.6%
Low carbon hydrogen 29.4% 36.0%
penetration rate of low carbon hydrogen
hydrogen produced by traditional methods
low carbon hydrogen
1.4 1.9 2.30.90.8
52.8
39.3
13.510.2% 13.0%
16.7%
21.4%
25.5%
2027E
Notes:
(1) The market size of China’s hydrogen consumption, by volume, refers to the apparent consumption volume of
hydrogen in China. (apparent consumption = current year imports - current year exports + current year
production)
(2) The low-carbon hydrogen refers to hydrogen produced from renewable energy sources and hydrogen processed
by CCUS technology.
Source: China National Coal Association (CNCA), National Alliance of Hydrogen and Fuel Cell (CHA), Frost &
Sullivan
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Market Size of China Low Carbon Hydrogen Consumption, by Volume
Million Tons, 2018-2028E
2018 2019 2020 2021 2022 2023 2024E 2025E 2026E 2028E
0.8 0.9 1.4 1.9 2.3
2.9
4.0
5.5
7.6
10.6
0.8 0.9 1.2 1.4 1.4 1.9 2.8
4.0
5.8
8.3
0.9 1.0 1.2 1.5 1.8 2.3
0.20.00.0
CAGR 2018-2023 2023-2028E
Hydrogen produced from renewable energy sources 18.9% 41.3%
Hydrogen processed by CCUS technology / 22.9%
13.5
2.8
10.7
2027E
0.5
hydrogen produced from renewable energy sources
hydrogen processed by CCUS technology
Source: IEA, Hydrogen Council, Frost & Sullivan
Market Size of China’s Hydrogen Consumption, by Value
RMB Billion, 2018-2028E (1)
CAGR 2018-2023 2023-2028E
Total 7.8% 10.2%
Low carbon hydrogen 30.3% 28.0%
penetration rate of low carbon hydrogen
hydrogen produced by traditional methods
low carbon hydrogen
20.8
223.5 209.9 217.0
267.1
277.2
287.8
295.1
273.2
297.2
310.4
298.5
46.3%
2018 2019 2020 2021 2022 2023 2024E 2025E 2026E 2027E 2028E
32.6 46.4 59.7 78.010.6%
24.9
13.0% 14.8% 17.9% 21.9%
26.8%
32.1%
37.7%
43.6%244.3 234.8 249.6
313.5 332.9 355.2
393.3
434.6
479.1
526.9
578.1
8.5% 105.5 139.5 180.6
229.7 267.7
Notes:
(1) The market size of China’s hydrogen consumption, by value, refers to the corresponding output value in
various fields of hydrogen consumption in China.
(2) The low-carbon hydrogen refers to hydrogen produced from renewable energy sources and hydrogen processed
by CCUS technology.
Source: China National Coal Association (CNCA), National Alliance of Hydrogen and Fuel Cell (CHA), Frost &
Sullivan
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Market Size of China Low Carbon Hydrogen Consumption, by Value
RMB Billion, 2018-2028E
2018 2019 2020 2021 2022 2023 2024E 2025E 2026E 2027E 2028E
20.8 24.9 32.6
46.4
59.7
78.0
105.5
139.5
180.6
229.7
267.7
20.8 24.9 31.0 40.4
43.3 57.3
79.7
110.3
149.9
194.8
228.2
20.716.4 25.8 29.2 30.7 34.9 39.5
1.60.00.0 6.0
CAGR 2018-2023 2023-2028E
Hydrogen produced from renewable energy sources 22.5% 31.8%
Hydrogen processed by CCUS technology / 13.8%
hydrogen produced from renewable energy sources
hydrogen processed by CCUS technology
Note:
* The low-carbon hydrogen refers to hydrogen produced from renewable energy sources and hydrogen processed
by CCUS technology.
Source: IEA, Hydrogen Council, Frost & Sullivan
Market Driver of China’s Hydrogen Industry
The development of the hydrogen industry is a crucial pathway to ensure China’s energy
security
Energy is vital to a nation’s economy. From the perspective of energy structure, China has
a high external dependence on energy sources such as crude oil and natural gas, making energy
transition imperative. In addition, China is a high carbon emission country. In the context of
China’s commitment to achieving peaking carbon emissions by 2030 and achieving carbon
neutrality by 2060, hydrogen energy, as a green energy source, holds strategic significance in
China’s development. Hydrogen can replace some traditional energy sources in industries,
construction, transportation, and other sectors, promoting the overall development and
transformation of high carbon-emitting industries towards low-carbon paths. Therefore,
accelerating the development of the hydrogen industry is a crucial pathway to achieve carbon
peaking and carbon neutrality goals, as well as to ensure China’s energy security.
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The sustainable development of renewable energy generation stimulates the demand for the
hydrogen industry
Driven by the combined forces of dual carbon targets and technological advancements,
the costs associated with renewable energy generation are consistently decreasing, highlighting
its economic viability. Consequently, in recent years, the installed capacity of renewable
energy has been steadily increasing. Due to the fluctuating and intermittent nature of renewable
energy sources such as wind and solar power, as well as factors like the distance between
generation and consumption locations, power grids face a series of technical and economic
challenges in accommodating these energy sources. The rapid development of renewable
energy generation has stimulated the demand for grid integration. Hydrogen energy, being a
relatively scarce form of long-duration energy storage, can assist in the large-scale integration
of such renewable energy sources, enabling grid-scale peak shaving and cross-seasonal,
cross-regional energy storage. For example, during periods of low electricity demand,
abundant wind and solar power can be utilized for electrolysis to produce hydrogen, storing the
energy in the form of hydrogen. During peak demand, the stored hydrogen can be used for
power generation through hydrogen fuel cells, achieving peak load balancing through the
“electricity-hydrogen-electricity” conversion. Therefore, with the continuous development of
renewable energy generation, hydrogen energy, as an effective grid integration solution, is
poised for rapid growth.
More favorable policies to support the growth of the industry
In response to the escalating challenge of the climate crisis, China is actively pursuing its
commitment to carbon neutrality. Hydrogen energy stands as a vital element in the prospective
national energy system, representing a strategic emerging industry and a key tool for China to
realize its carbon neutrality objectives. In recent years, a comprehensive array of support
policies for the hydrogen industry has been implemented at the national, provincial, and
municipal levels, forming a well-rounded policy support system. For details, see “— Overview
of the Hydrogen Industry — Preferential Policies and Regulations” in this section.
Hydrogen production, storage and transportation costs are decreasing with the development
of technology
A significant impediment to the development of a hydrogen industry was the high
production and utilization cost of hydrogen produced from renewable energy sources.
However, as various technologies continue to advance in the future, corresponding costs are
expected to decrease. As the costs of producing hydrogen from renewable energy sources
decrease, the hydrogen industry will see efficient growth.
In addition, there is a geological mismatch between the supply and demand of hydrogen
energy in China. While the demand of hydrogen resources is much higher in the eastern and
southern area of China, the supply of China’s hydrogen resources is mostly located in the
western and northern region in China. Therefore, efficient and low-price hydrogen storage and
transportation technology is the necessary guarantee for the development of the hydrogen
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industry. Currently, ambient temperature high pressure hydrogen gas storage is China’s most
mature hydrogen storage technology. In the future, low temperature liquid hydrogen storage,
organic liquid hydrogen storage, and solid hydrogen storage will continue to develop, aiming
to achieve low-cost and efficient hydrogen storage. In terms of transportation, the currently
technically mature and economically feasible transportation method is primarily gaseous
hydrogen transport. With the expansion of the hydrogen industry, the cost of hydrogen
transport will keep reducing.
Future Trends of China’s Hydrogen Industry
Transition from policy-driven to market-driven
The hydrogen industry in China is transitioning from being primarily influenced by
policies to being more market-driven. Recent technological advancements along the industry
chain have led to a gradual reduction in the cost of hydrogen production. The hydrogen
industry’s reliance on policies is expected to decrease as technological progress and market
competition become the driving forces behind its development. On the production side, the
decreasing cost of hydrogen production is influenced by the lower cost of industrial by-product
hydrogen and the downward trend in wind and solar electricity prices. Breakthroughs in
pipeline and liquid hydrogen transport have addressed large-scale transportation challenges,
reducing the overall transportation cost of hydrogen. Additionally, the localization and scale
production of core equipment are contributing to a decrease in refueling costs. As the different
segments of the industry chain progress together, the economic viability of hydrogen is
becoming increasingly apparent, marking a shift from policy-driven to market-driven
development.
The cost of producing hydrogen from renewable energy sources is expected to decline while
its penetration rate will increase
The main costs of producing hydrogen from renewable energy sources are electricity and
equipment depreciation. Therefore, reducing electricity prices and electrolysis equipment costs
are the two key factors for achieving the industrialization and scalable production of such
hydrogen. In recent years, the cost of renewable energy generation has further decreased, and
the large-scale and modular development of electrolysis cells has lowered their prices,
contributing to the overall reduction of costs of producing hydrogen from renewable energy
sources. Specifically, according to data from the National Energy Administration, from 2013
to 2023, the costs of electricity generation from wind power and photovoltaic (PV) power have
decreased by approximately 60% and 80%, respectively. With the continuous improvement of
related infrastructure construction, the installed capacity of wind power grew from over 76
million kilowatts to around 440 million kilowatts; the installed capacity of photovoltaic power
increased from around 19 million kilowatts to around 600 million kilowatts. The economies of
scale in installed capacity of such power sources will further drive down the cost of generating
such renewable power, which in turn drive down cost of electricity generation from such power
sources. The cost of hydrogen production equipment is also continuously decreasing.
Currently, ALK and PEM are still the mainstream methods for water electrolysis hydrogen
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production, with ALK being the most commonly used method. As confirmed by Frost &
Sullivan, the selling price of ALK equipment has shown a significant downward trend in recent
years, dropping from about RMB1,998.5/kW in 2018 to about RMB1,194.3/kW in 2023, with
a CAGR of -11.4%. It is expected that there is still room for further reduction in the future.
With additional requirements for carbon reduction, the proportion of hydrogen produced from
traditional methods is expected to decline continuously, and the penetration rate of hydrogen
produced from renewable sources will continue to increase.
The integrated projects of “generating electricity through renewable energy sources –
electrolysis – downstream consumption with hydrogen fuel cells” will be involved in the
future trend
The future trend is also expected to involve integrated projects that combine renewable
energy generation, electrolysis for hydrogen production, and downstream consumption in fuel
cells. Common hydrogen application areas include regions with abundant renewable energy
resources and high local demand for hydrogen. In such areas, hydrogen is produced through
electrolysis using renewable energy, and the produced hydrogen is used for fuel cells in
vehicles, providing a solution for local hydrogen-powered transportation. Alternatively, in
areas with significant demand for large-scale, long-term flexible grid adjustments, hydrogen
can be produced through electrolysis using renewable energy. When electricity is needed,
hydrogen fuel cells can be used for distributed power generation. Leveraging the conversion
technology of power-hydrogen-power, the advantages of hydrogen as a long-term and
large-capacity energy storage can be harnessed. In addition, in the case of excess electrical
energy, the surplus portion can be converted into hydrogen, and hydrogen can be further
processed into ammonia and alcohol, providing expanded capacity for hydrogen consumption.
In the future, the development of the “electricity-hydrogen-ammonia alcohol” is also expected
to be involved in the future trend.
Overview of the Hydrogen Fuel Cell Industry
Definition and the structure of Proton-exchange Membrane Fuel Cells (PEMFC)
A hydrogen fuel cell is a power generation device that directly converts its chemical
energy into electrical energy through the reaction of hydrogen and oxygen. Because hydrogen
energy has the advantages of high heating value and zero carbon emission, hydrogen fuel cells
can be used as an ideal power generation device. Based on the different internal electrolytes
of the membrane electrode assembly, there are various types of hydrogen fuel cells. Here we
will focus on PEMFC and the hydrogen fuel cells mentioned in this section refers to PEMFC
only.
A PEMFC mainly comprises fuel cell stack and balance of plant (BOP). The fuel cell
stack is the key component of the hydrogen fuel cell system, responsible for the managing and
controlling the reaction site of converting chemical energy into electrical energy. It comprises
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bipolar plates, membrane electrode assemblies (MEAs) and other components, such as gasket.
BOP, referring to the modules and components of a fuel cell system excluding the fuel cell
stack, mainly includes the air compressor and hydrogen circulation system.
The Industrial Chain Analysis
Hydrogen fuel cell industry players can be categorized into following three sectors based
on their business operations within the industry value chain:
 Upstream. The upstream of the fuel cell industry are manufacturers of key
components of the fuel cell system. The key components mainly include MEA,
bipolar plates, proton exchange membranes (PEM), catalyst and gas diffusion layers.
 Midstream. The midstream players are system integrators, responsible for the
research, development and integration of the key components and systems and
selling fuel cell systems to the downstream enterprises.
 Downstream. The downstream application mainly focuses on the fields of FCEV ,
ships, aviation, and stationary power.
Fuel Cell
System
Fuel Cell Stack
Balance of Plant
(BOP)
Membrane
Electrode
Assemblies (MEA)
Bipolar Plates
Other
Components
Proton Exchange
Membranes
Catalysts
Gas Diffusion
Layers
Upstream Midstream
Industrial Chain Analysis
Downstream
Distributed power generation
Off-grid power generation
Hydrogen energy storage
…
Industry power
…
Passenger vehicle
Commercial vehicle
Construction machineries power system
Transportation
CHP
Backup power
…
Construction
Note: products circled in red are those produced by our Group.
Source: Frost & Sullivan
Upstream Analysis
The key components of the fuel cell industry mainly include MEA, bipolar plates, PEM,
catalysts and gas diffusion layers.
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 MEA /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Membrane electrode assemblies (MEAs) are the core site
responsible for providing the conversion reaction of fuel
chemical energy to electrical energy, which determines the power
density, and service life of the overall hydrogen fuel cell.
For its proper functioning, MEA depends on key components,
including PEM, catalyst, and gas diffusion layer (GDL). PEM
serves as the core material in the MEA, functioning to supply ion
channels for protons and isolate the reacting gases at the cathode
and anode. The catalyst functions by decomposing hydrogen and
oxygen in the electrochemical reaction, thereby generating an
electric current. GDL supports the membrane electrode
assemblies, collects electric current, conducting gas, and
manages the reaction water (gas) and heat.
 Bipolar Plate /H1118/H1118/H1118Bipolar plate is a key component of the fuel cell. The main role
is to support the MEA, uniformly distribute hydrogen, oxygen,
and coolant fluid. It also helps separate hydrogen and oxygen,
collect electrons, and conduct heat. Categorized by material
types, bipolar plates are classified into three categories: graphite
bipolar plates, metal bipolar plates, and composite bipolar plates.
The performance of the bipolar plate significantly influences the
dimensions, power output, and lifespan of the fuel cell stack.
Under the same conditions, the service life of metal bipolar plates
is less than half of graphite bipolar plates. In addition, graphite
bipolar plates have long service life, stable performance, and
good performance, but the cost is higher and the size is larger.
Midstream Analysis
The midstream players are system integrators, which can be categorized into following
two groups:
 Companies that have their origins in the fuel cell system, including us. These
companies have been focusing on system integration technology in the early stage
of their business, purchasing key components from upstream suppliers and
assembling them into fuel cell systems for sale to downstream market players.
Driven by the rapid development of the market, midstream traditional integration
players have begun to lay out the hydrogen fuel cell as the core technology, and
extend to the upstream manufacturing of key components, and downstream
operation and service. Some of the top players, such as us, have already possessed
the ability to independently produce core modules, such as fuel cell stacks, by
actively developing their own fuel cell stack technology. Among such top players,
we have obtained the ability to independently produce key components of fuel cell
stacks including MEA, bipolar plates, and hydrogen recycling system.
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 Cross-industry players, such as some of the large domestic automotive enterprises
are actively engaged in research and development, achieving localization of the fuel
cell system engine and the entire fuel cell vehicles.
Downstream Analysis
As a completely clean and non-polluting energy solution, hydrogen fuel cell has abundant
downstream application scenarios in the context of carbon neutrality. The primary application
of hydrogen fuel cells in China is currently in the field of FCEV . FCEVs are extensively
utilized in large commercial vehicles, including freight-heavy trucks and buses, being
significant sources of carbon emissions in today’s society. Additionally, fuel cells are
progressively finding applications in other transportation sectors such as ships, rail vehicles,
and aviation.
Hydrogen fuel cell applications cover a wide range of transportation vehicles, providing
a powerful carbon reduction and zero-carbon solution for the world. In addition, in view of the
excellent power storage performance of hydrogen fuel cells, stationary power supply, and
portable power supply are also highly potential application scenarios in the future.
The scenarios below are listed in accordance with the level of commercialization.
 Commercial Vehicle /H1118/H1118The main application scenario of domestic fuel cell systems
is commercial vehicles. FCEV boasts powerful
performance, with significantly longer operational time and
mileage compared to electric cars, along with enhanced
safety features. Currently, the main demonstration
applications of fuel cell commercial vehicles are
concentrated in the fields of logistics, buses, etc. Benefiting
from industrial subsidies and national support policies,
China has taken a leading position in the implementation of
hydrogen fuel cells within commercial vehicles, notably in
buses and logistics, outpacing other application scenarios.
Furthermore, in regions with low-price hydrogen, the
scalability of hydrogen-heavy trucks has increased. It is
expected that by 2027, heavy-duty trucks integrating
hydrogen fuel cells will reach cost parity.
 Stationary Power /H1118/H1118/H1118/H1118Stationary power includes all fuel cells operating in a fixed
position as the main power source (power station), standby
power source or cogeneration, such as distributed power
generation and waste heat supply, etc. They are mainly used
for commercial, industrial and residential power generation.
With growing emphasis on hydrogen energy from both the
government and the market, stationary power demonstration
projects based on hydrogen fuel cell technology will
continue to grow.
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 Construction
Machinery /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Construction machinery, such as forklifts, cranes, mining
trucks, and concrete mixers, also serve as important
downstream applications for fuel cell systems. For example,
hydrogen fuel cell forklifts is primarily utilized in
efficiently handling materials over short distances in both
indoor and outdoor fixed locations, typically within a
1-kilometer radius. Positioned within the framework of the
“dual carbon” initiative, hydrogen fuel cell forklifts emerge
as an attractive alternative to internal combustion forklifts.
They offer compelling advantages, including zero pollution
emissions, environmental sustainability, swift refueling,
resilience in low temperatures, robust power, and consistent
output. As technology matures and costs decline, such
applications become a preferable choice, particularly in
demanding operational scenarios involving heavy loads, low
temperatures, and extended durations.
 Passenger Vehicle /H1118/H1118/H1118/H1118Given their advantageous position in driving technological
advancements and a larger user base, passenger vehicles are
able to provide sustained and robust momentum for the
long-term development of fuel cell vehicles. The early
demonstration and operation of commercial vehicles will
catalyze a pioneering effect, fostering collaborative
progress across the entire fuel cell industry chain and
yielding favorable factors such as cost reduction. In recent
years, propelled by policy initiatives and other favorable
conditions, China’s market for fuel cell passenger cars has
begun to take shape.
 Ship /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Utilizing hydrogen fuel cell technology in ships not only
achieves high energy efficiency and zero emissions but also
enhances the overall comfort of vessels, presenting an ideal
green propulsion system for maritime transport. As of
October 2023, China’s first hydrogen fuel cell-powered
demonstration ship, the “Three Gorges Hydrogen Boat 1”
completed its maiden voyage.
 Rail Transit /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118The hydrogen fuel cell power system enables trains to
operate independently of the overhead line traction power
system, reducing infrastructure investments. Additionally, it
offers advantages such as low noise, minimal pollution, and
a long lifespan.
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 Aviation /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118The application of fuel cells in aviation primarily
concentrates on drones and aviation vehicles. Hydrogen,
used as a fuel, enhances the net thrust output of the engine
and reduces the fuel consumption rates. The integration of a
fuel radiator enhances engine performance, highlighting
substantial potential for hydrogen fuel cells in the aviation
industry.
Global and China’s Market Size of Hydrogen Fuel Cell Systems
Market Size of Global Hydrogen Fuel Cell Industry, by Sales Power Output, by Type
MW, 2018-2028E
784.8 1,173.1 1,311.6 2,281.8 3,194.0 2,978.7 5,149.6
9,757.5
19,902.8
44,144.6
81,956.1
CAGR 2018-2023 2023-2028E
Total 30.6% 94.0%
Passenger vehicle 15.5% 83.0%
Commercial vehicle 43.5% 108.8%
Others in transportation 87.6% 68.7%
Stationary power 35.3% 98.6%
Construction machinery 60.0% 51.5%
2018
784.8
36.0
1,173.1
38.3
673.7
1,311.6
51.5
765.9
2,281.8
237.6
1,285.8
3,194.0
255.7
1,542.1
2,978.7
376.9
841.8
5,149.6
562.1
1,067.8
9,757.5
848.6
2,178.0
19,902.8
1,296.4
4,576.7
44,144.6
2,004.4
8,810.4 17,261.6
2019 2020 2021 2022 2023 2024E 2025E 2026E 2027E 2028E
410.3
Total
Others in transportation
Commercial vehicle
Passenger vehicle
213.5 201.3 444.8 613.9 847.5 1,573.2 2,788.3 5,976.1 16,836.3139.2
Stationary power 247.5 292.5 313.2 778.5 903.2 1,933.0 3,920.1 8,012.8 16,420.5198.9
Construction Machinery
81,956.1
27,914.8
33,646.0
0.4 0.1 0.4 0.5 3.8 9.3 13.5 22.5 40.8 73.0 127.1
3,006.6
Notes:
(1) Stationary power refers to distributed generation, combined heat and power (CHP), and other stationary power;
others in transportation involves fuel cell-powered aircraft, hydrogen-powered ship, fuel cell train, and etc.
(2) Sales power output refers the aggregate of the power supplied by the fuel cell system manufacturers.
(3) The historical data for total sales power output is derived by multiplying the sales volume of each type of
downstream applications globally (such as commercial vehicles, passenger vehicles, others in transportation,
stationary power, construction machinery) by the average power output per unit of each type of downstream
applications, and then adding up the power outputs of all such types of downstream applications. The
underlying assumptions for the expected future growth rate mainly include three aspects: (1) as the cost of
producing hydrogen fuel cell systems is driving down. Taking two major markets globally as examples, in
China, the cost of producing hydrogen fuel cell systems had decreased significantly from RMB9,600/kW in
2018 to RMB2,400/kW in 2023, and is expected to further decrease to RMB1,100/kW in 2028. In Japan, the
cost of producing hydrogen fuel cell systems is expected to decrease from JPY20,000/kW in 2019 to
JPY5,000/kW in 2025; (2) the infrastructure of the hydrogen industry has reached a relatively advanced level,
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and will be continuously improved. Specifically, the number of hydrogen refueling stations globally increased
from 597 in 2019 to 1,362 in 2023, and is expected to increase significantly to 4,761 in 2028. The market’s
acceptance of hydrogen fuel cell systems will gradually increase, thereby promoting a rapid growth trend in
downstream applications. In addition, in the future, as the production, storage, transportation, refueling, and
utilization of hydrogen are streamlined, hydrogen fuel cell systems will also be promoted on a larger scale; and
(3) as the cost of producing hydrogen globally continues to decrease, the hydrogen price will therefore
continue to decrease, the demand for FCEVs will correspondingly increase, thereby further expanding the
market size of fuel cell systems. The traditional sources are major sources for hydrogen production globally.
Hydrogen produced from traditional sources accounts for more than 85% of the total hydrogen consumption,
while hydrogen produced from renewable energy sources accounts for about 7%. The production cost of
hydrogen produced from traditional sources globally is expected to decrease from the range of USD1.0/kg to
USD2.0/kg in 2021 to the range of USD0.9/kg to USD1.8/kg in 2030. The production cost of hydrogen
produced from renewable energy sources globally is expected to decrease from the range of USD2.5/kg to
USD8.0/kg in 2021 to the range of USD1.3/kg to USD5.0/kg in 2030. FCEV users pay attention to hydrogen
retail prices, regardless of the hydrogen production sources. The retail price of hydrogen is influenced by
hydrogen production costs, storage costs and refueling costs. Regardless of whether hydrogen is derived from
traditional or renewable energy sources, production costs are on a downward trend. While shifts in the mix of
production sources can marginally impact retail prices, it is primarily technological advancements that are
reducing hydrogen production costs, not the proportion of production sources. Taking two major markets
globally as examples, in China, the hydrogen retail price is expected to decrease from the range of RMB50/kg
to RMB60/kg in 2023 to the range of RMB30/kg to RMB40/kg in 2030. In Japan, the hydrogen retail price
is expected to decrease from around JPY100/Nm
3 in 2017 to around JPY30/Nm 3 in 2030.
Source: E4tech, Hydrogen and Fuel Cell Strategy Council of Japan, Frost & Sullivan
Market Size of Global Hydrogen Fuel Cell Industry, by Sales Value, by Type
USD100 Million, 2018-2028E
Others in transportation 74.0% 38.0%
Stationary power 57.7% 88.7%
Construction machinery 60.3% 51.1%
16.2 34.3 43.6 40.0 57.9 59.9
112.8
209.8
399.4
806.3
1,167.6
CAGR 2018-2023 2023-2028E
Total 29.9% 81.1%
Passenger vehicle 5.5% 75.7%
Commercial vehicle 21.1% 76.7%
2018
16.2
5.5
7.3
34.3
8.1
10.0
0.0
43.6
8.2
11.4
0.0
40.0
12.3
10.1
0.0
57.9
13.2
15.3
0.0
59.9
7.2
19.0
0.1
112.8
9.2
31.8
0.1
209.8
17.7
50.8
0.2
399.4
35.4
81.6
0.3
806.3
64.7
172.4
0.4
2019 2020 2021 2022 2023 2024E 2025E 2026E 2027E
0.0
Total
Passenger vehicle
Commercial vehicle
Others in transportation
15.6 23.2 14.1 25.7 28.3 63.8 129.3 264.3 541.62.9Stationary power
0.6 0.8 3.4 3.7 5.3 7.9 11.8 17.8 27.20.5Construction Machinery
1,167.6
120.5
327.3
0.5
2028E
677.6
41.7
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Notes:
(1) Stationary power refers to distributed generation, combined heat and power (CHP), and other stationary power;
others in transportation involves fuel cell-powered aircraft, hydrogen-powered ship, fuel cell train, and etc.
(2) Sales value refers to the total value of products delivered by fuel cell system manufacturers.
(3) The historical data for total sales value is derived by multiplying the total sales output of each type of
downstream applications globally by the average selling price per kW of each type of downstream applications,
and then adding up the sales value of all such types of downstream applications. The underlying assumptions
for the expected future growth rate mainly include three aspects: (1) as the cost of producing hydrogen fuel
cell systems is driving down. Taking two major markets globally as examples, in China, the cost of producing
hydrogen fuel cell systems had decreased significantly from RMB9,600/kW in 2018 to RMB2,400/kW in 2023,
and is expected to further decrease to RMB1,100/kW in 2028. In Japan, the cost of producing hydrogen fuel
cell systems is expected to decrease from JPY20,000/kW in 2019 to JPY5,000/kW in 2025; (2) the
infrastructure of the hydrogen industry has reached a relatively advanced level, and will be continuously
improved. Specifically, the number of hydrogen refueling stations globally increased from 597 in 2019 to
1,362 in 2023, and is expected to increase significantly to 4,761 in 2028. The market’s acceptance of hydrogen
fuel cell systems will gradually increase, thereby promoting a rapid growth trend in downstream applications.
In addition, in the future, as the production, storage, transportation, refueling, and utilization of hydrogen are
streamlined, hydrogen fuel cell systems will also be promoted on a larger scale; and (3) as the cost of
producing hydrogen globally continues to decrease, the hydrogen price will therefore continue to decrease, the
demand for FCEVs will correspondingly increase, thereby further expanding the market size of fuel cell
systems. The traditional sources are major sources for hydrogen production globally. Hydrogen produced from
traditional sources accounts for more than 85% of the total hydrogen consumption, while hydrogen produced
from renewable energy sources accounts for about 7%. The production cost of hydrogen produced from
traditional sources globally is expected to decrease from the range of USD1.0/kg to USD2.0/kg in 2021 to the
range of USD0.9/kg to USD1.8/kg in 2030. The production cost of hydrogen produced from renewable energy
sources globally is expected to decrease from the range of USD2.5/kg to USD8.0/kg in 2021 to the range of
USD1.3/kg to USD5.0/kg in 2030. FCEV users pay attention to hydrogen retail prices, regardless of the
hydrogen production sources. The retail price of hydrogen is influenced by hydrogen production costs, storage
costs and refueling costs. Regardless of whether hydrogen is derived from traditional or renewable energy
sources, production costs are on a downward trend. While shifts in the mix of production sources can
marginally impact retail prices, it is primarily technological advancements that are reducing hydrogen
production costs, not the proportion of production sources. Taking two major markets globally as examples,
in China, the hydrogen retail price is expected to decrease from the range of RMB50/kg to RMB60/kg in 2023
to the range of RMB30/kg to RMB40/kg in 2030. In Japan, the hydrogen retail price is expected to decrease
from around JPY100/Nm
3 in 2017 to around JPY30/Nm 3 in 2030.
Source: E4tech, Hydrogen and Fuel Cell Strategy Council of Japan, Frost & Sullivan
Globally, the hydrogen fuel cell sales power output has increased from 784.8MW in 2018
to 2,978.7 MW in 2023, growing at a CAGR of 30.6%. Now transportation and stationary
power are the two largest segments in the downstream application scenarios of hydrogen fuel
cell systems globally, accounting for 56.7% and 30.3% respectively in 2023. FCEV is the main
driver, but as the hydrogen fuel cell market continues to develop, stationary power and other
transportation sectors will gradually commercialize. According to forecasts, the global
hydrogen fuel cell market will reach 81,956.1MW by 2028, with an expected CAGR of 94.0%
from 2023 to 2028.
The market size of global hydrogen fuel cell industry measured by sales value has reached
USD6.0 billion in 2023, growing at a CAGR of 29.9% since 2018. In 2023, transportation and
stationary power are the two largest segments in the downstream applications of the hydrogen
fuel cells globally, accounting for 43.9% and 47.2% respectively. It is expected that the global
hydrogen fuel cell market will reach USD116.8 billion by 2028, with a CAGR of 81.1% from
2023 to 2028.
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Market Size of China Hydrogen Fuel Cell Industry, by Sales Power Output, by Type
MW, 2018-2028E
155.758.6 179.9 421.0 603.0 1,016.5 1,707.1
3,502.0
7,238.0
15,162.6
27,189.9
CAGR 2018-2023 2023-2028E
Total 76.9% 93.0%
Passenger vehicle / 150.2%
Commercial vehicle 75.1% 91.8%
Others in transportation 74.1% 65.2%
Stationary power / 97.2%
Construction machinery / 86.7%
2018
0.0
58.6
0.0
0.0
155.7
0.0
155.6
0.0
179.9
0.0
179.6
0.0
421.0
1.1
412.4
8.2
603.0
2.7
585.3
28.8
1,016.5
10.6
963.0
53.9
1,707.1
30.2
1,590.2
107.4
3,502.0
95.6
3,222.1
227.6
7,238.0
218.6
6,654.6
496.0
15,162.6
499.8
13,948.9
2019 2020 2021 2022 2023 2024E 2025E 2026E 2027E
58.5
Total
Others in transportation
Commercial vehicle
Passenger vehicle
0.0 0.0 7.1 6.0 12.5 30.2 72.5 129.7 205.20.0
Stationary power
0.1 0.3 0.4 0.8 1.6 2.6 4.4 7.5 12.7
858.0
27,189.9
1,039.9
24,988.8
2028E
283.5
19.70.1
Construction Machinery
Notes:
(1) Stationary power refers to distributed generation, combined heat and power (CHP), and other stationary power;
others in transportation involves fuel cell-powered aircraft, hydrogen-powered ship, fuel cell train, and etc.
(2) Sales power output refers the aggregate of the power supplied by the fuel cell system manufacturers.
(3) The historical data for total sales power output is derived by multiplying the sales volume of each type of
downstream applications in China (such as commercial vehicles, passenger vehicles, others in transportation,
stationary power, construction machinery) by the average power output per unit of each type of downstream
applications, and then adding up the power outputs of all such types of downstream applications. The
underlying assumptions for the expected future growth rate mainly include three aspects: (1) as the cost of
producing hydrogen fuel cell systems is driving down. Specifically, the cost of producing hydrogen fuel cell
systems in China had decreased significantly from RMB9,600/kW in 2018 to RMB2,400/kW in 2023, and is
expected to further decrease to RMB1,100/kW in 2028, help making the hydrogen fuel cell systems cost
efficient in downstream applications; (2) the infrastructure of the hydrogen industry has reached a relatively
advanced level, and will be continuously improved. Specifically, the number of hydrogen refueling stations in
China increased significantly from 56 in 2019 to 428 in 2023, and is expected to increase significantly to 2,766
in 2028. The market’s acceptance of hydrogen fuel cell systems will gradually increase, thereby promoting a
rapid growth trend in downstream applications. In addition, in the future, as the production, storage,
transportation, refueling, and utilization of hydrogen are streamlined, hydrogen fuel cell systems will also be
promoted on a larger scale; and (3) as the cost of producing hydrogen in China continues to decrease, the
hydrogen price will therefore continue to decrease, the demand for FCEVs will correspondingly increase,
thereby further expanding the market size of fuel cell systems in China. The traditional sources are major
sources for hydrogen production in China. Hydrogen produced from traditional sources accounts for more than
90% of the total hydrogen consumption, while hydrogen produced from renewable energy sources accounts for
about 5%. The production cost of hydrogen produced from traditional sources in China is expected to decrease
from the range of RMB6.0/kg to RMB10.0/kg in 2023 to the range of RMB5.0/kg to RMB9.0/kg in 2030. The
production cost of hydrogen produced from renewable energy sources in China is expected to decrease from
the range of RMB15.0/kg to RMB45.0/kg in 2023 to the range of RMB5.0/kg to RMB15.0/kg in 2030. FCEV
users pay attention to hydrogen retail prices, regardless of the hydrogen production sources. The retail price
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of hydrogen is influenced by hydrogen production costs, storage costs and refueling costs. Regardless of
whether hydrogen is derived from traditional or renewable energy sources, production costs are on a downward
trend. While shifts in the mix of production sources can marginally impact retail prices, it is primarily
technological advancements that are reducing hydrogen production costs, not the proportion of production
sources. The hydrogen retail price in China is expected to decrease from the range of RMB50/kg to RMB60/kg
in 2023 to the range of RMB30/kg to RMB40/kg in 2030.
Source: GGII, E4tech, Ministry of Industry and Information Technology of the People’s Republic of China (MIIT),
Frost & Sullivan
Market Size of China Hydrogen Fuel Cell Industry, by Sales Value, by Type
RMB100 Million, 2018-2028E
16.37.2 15.0 20.8 29.2 39.3 59.9
110.8
184.5
309.5
498.2
CAGR 2018-2023 2023-2028E
Total 40.4% 66.2%
Passenger vehicle / 121.0%
Commercial vehicle 38.4% 64.7%
Others in transportation / 32.0%
Stationary power / 79.6%
Construction machinery / 70.5%
2018
0.0
7.2
0.0
0.0
16.3
0.0
16.3
0.0
15.0
0.0
15.0
0.7
20.8
0.0
20.1
0.6
29.2
0.1
28.1
1.2
39.3
0.3
36.5
2.9
59.9
0.8
54.3
6.5
110.8
2.2
99.0
10.9
184.5
4.4
163.6
16.2
309.5
8.7
274.3
2019 2020 2021 2022 2023 2024E 2025E 2026E 2027E
7.2
Total
Others in transportation
Commercial vehicle
Passenger vehicle
0.0 0.0 0.0 0.4 1.2 1.8 3.0 5.4 10.00.0
Stationary power
0.0 0.0 0.0 0.0 0.1 0.1 0.1 0.2 0.3
22.4
498.2
15.8
442.3
2028E
17.3
0.40.0
Construction Machinery
Notes:
(1) Stationary power refers to distributed generation, combined heat and power (CHP), and other stationary power;
others in transportation involves fuel cell-powered aircraft, hydrogen-powered ship, fuel cell train, and etc.
(2) Sales value refers to the total value of products delivered by fuel cell system manufacturers.
(3) The historical data for total sales value is derived by multiplying the total sales output of each type of
downstream applications in China by the average selling price per kW of each type of downstream
applications, and then adding up the sales value of all such types of downstream applications. The underlying
assumptions for the expected future growth rate mainly include three aspects: (1) as the cost of producing
hydrogen fuel cell systems is driving down. Specifically, the cost of producing hydrogen fuel cell systems in
China had decreased significantly from RMB9,600/kW in 2018 to RMB2,400/kW in 2023, and is expected to
further decrease to RMB1,100/kW in 2028, help making the hydrogen fuel cell systems cost efficient in
downstream applications; (2) the infrastructure of the hydrogen industry has reached a relatively advanced
level, and will be continuously improved. Specifically, the number of hydrogen refueling stations in China
increased significantly from 56 in 2019 to 428 in 2023, and is expected to increase significantly to 2,766 in
2028. The market’s acceptance of hydrogen fuel cell systems will gradually increase, thereby promoting a
rapid growth trend in downstream applications. In addition, in the future, as the production, storage,
transportation, refueling, and utilization of hydrogen are streamlined, hydrogen fuel cell systems will also be
promoted on a larger scale; and (3) as the cost of producing hydrogen in China continues to decrease, the
hydrogen price will therefore continue to decrease, the demand for FCEVs will correspondingly increase,
INDUSTRY OVERVIEW
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thereby further expanding the market size of fuel cell systems in China. The traditional sources are major
sources for hydrogen production in China. Hydrogen produced from traditional sources accounts for more than
90% of the total hydrogen consumption, while hydrogen produced from renewable energy sources accounts for
about 5%. The production cost of hydrogen produced from traditional sources in China is expected to decrease
from the range of RMB6.0/kg to RMB10.0/kg in 2023 to the range of RMB5.0/kg to RMB9.0/kg in 2030. The
production cost of hydrogen produced from renewable energy sources in China is expected to decrease from
the range of RMB15.0/kg to RMB45.0/kg in 2023 to the range of RMB5.0/kg to RMB15.0/kg in 2030. FCEV
users pay attention to hydrogen retail prices, regardless of the hydrogen production sources. The retail price
of hydrogen is influenced by hydrogen production costs, storage costs and refueling costs. Regardless of
whether hydrogen is derived from traditional or renewable energy sources, production costs are on a downward
trend. While shifts in the mix of production sources can marginally impact retail prices, it is primarily
technological advancements that are reducing hydrogen production costs, not the proportion of production
sources. The hydrogen retail price in China is expected to decrease from the range of RMB50/kg to RMB60/kg
in 2023 to the range of RMB30/kg to RMB40/kg in 2030.
Source: GGII, E4tech, MIIT, Frost & Sullivan
In 2023, the market size of hydrogen fuel cell industry in China accounted for 34.1% of
the global hydrogen fuel cell market in terms of sales power output. In the same year, the sales
power output of China hydrogen fuel cell system has reached 1,016.5MW, with a CAGR of
76.9% from 2018 to 2023. As China’s strategic approach to decarbonization is gradually
landing, investment in hydrogen industry is increasing, and the hydrogen industry is moving
towards commercialization. With the technology development and the scale effect, the cost of
fuel cell systems will be reduced in the future, stimulating downstream demand. It is expected
that the sales power output of the hydrogen fuel cell systems will reach 27,189.9 MW in 2028
in China.
The market size of China’s hydrogen fuel cell industry measured by sales value grew from
RMB0.7 billion in 2018 to RMB3.9 billion in 2023, with a CAGR of 40.4%. It is expected that
China’s hydrogen fuel cell industry measured by sales value will reach RMB49.8 billion in
2028.
Market Size of Hydrogen Fuel Cell Systems Used For Heavy-duty Trucks in China,
by Sales Value, RMB100 Million, 2018-2028E
0.1 0.2 3.7 11.0
18.7
27.0
53.1
93.2
2022
47.6%
2023
45.2%
2024E
0.0%
2018 2025E
50.5%
0.6%
2026E
55.4%
2027E
58.1%
2028E
0.0
171.3
289.2
2019
1.1%
2020
17.8%
2021
37.5%
47.9%
proportion of the sales value of hydrogen fuel cell systems that have been used for heavy-duty trucks in China
sales value of hydrogen fuel cell systems that have been used for heavy-duty trucks in China
Heavy-duty trucks / 72.9%
CAGR 2018-2023 2023-2028E
Source: Frost & Sullivan
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The sales value of hydrogen fuel cell systems used for heavy-duty trucks in China is
RMB1.9 billion in 2023, accounting for around 47.6% of the total sales value of hydrogen fuel
cell systems in China in 2023, representing the largest application segment of hydrogen fuel
cell systems in 2023. The market size of hydrogen fuel cell systems used for heavy-duty trucks
is expected to continue to grow to RMB28.9 billion by 2028, with a CAGR of 72.9% from 2023
to 2028.
There are multiple factors contributing to the significant anticipated growth trajectory of
the China’s hydrogen fuel cell industry. Firstly, government support for the hydrogen fuel cell
industry in China has been and will continue to be significant. According to the Medium and
Long-Term Plan for Hydrogen Industry (2021-2035) issued by China, by 2025, companies in
China are expected to master core technologies and manufacturing processes, and the total fleet
of fuel cell vehicles is projected to reach approximately 50,000 units. Additionally, significant
efforts are being made to deploy a network of hydrogen refueling stations and increase the
production of hydrogen from renewable sources to 100,000 to 200,000 tons per year. Moreover,
various provinces and cities in China have issued supportive policies to promote the
development of the hydrogen fuel cell industry. For example, Lvliang City, Shanxi Province,
Ordos, Inner Mongolia, Shaanxi Province, Jilin Province, Sichuan Province, and Shandong
Province have implemented a policy exempting hydrogen-powered vehicles from toll fees on
highways equipped with ETC devices. This policy, aims to promote the adoption of
hydrogen-powered vehicles and drive demand growth in the hydrogen fuel cell industry.
Furthermore, Shanghai aims to achieve the deployment of over 10,000 fuel cell vehicles by
2025, while Foshan plans to promote the adoption of at least 3,000 fuel cell vehicles and
establish 60 hydrogen refueling stations by the same year. These policy initiatives provide a
strong basis for the anticipated growth of the hydrogen fuel cell industry.
In addition, the significant cost reductions and the resulting decrease in the total cost of
ownership (TCO) for fuel cell electric vehicles (FCEVs) will also drive the future growth of
the hydrogen fuel cell market. Technological advancements, particularly in fuel-cell
technology, are continuously driving down the purchase price of FCEVs and lowering the
terminal price of hydrogen. One significant factor is the continuous reduction in the cost of
hydrogen fuel cell systems themselves. Advancements in technology, such as the optimization
of system design and the localization of critical components, have contributed to substantial
reductions in the production costs of fuel cell systems. Additionally, economies of scale in
production have further mitigated costs, making hydrogen fuel cell systems more economically
viable. The decreasing TCO of FCEVs, in comparison to traditional energy vehicles,
underscores their growing competitiveness in the market. For instance, heavy-duty trucks,
which constitute a substantial market segment within the hydrogen fuel cell industry, exhibit
significant growth potential. Sales of heavy-duty fuel cell electric trucks are projected to
increase rapidly, with a compound annual growth rate (CAGR) of 92.5% from 2023 to 2028,
reaching 96,676 units by 2028.
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Furthermore, the competitive advantages of FCEVs, particularly heavy-duty trucks, over
traditional diesel combustion engine vehicles and electric heavy trucks in terms of range,
overall vehicle load capacity, and performance in long-distance heavy-load scenarios, position
them favorably in the market. As the TCO of hydrogen fuel cell heavy trucks continues to
decrease due to advancements in technology and economies of scale, they are expected to
surpass both traditional energy heavy trucks and electric heavy trucks in terms of cost-
effectiveness. Ultimately, the combination of government support, cost reduction efforts,
technological innovation, and market expansion initiatives will drive the rapid growth of the
hydrogen fuel cell market in the foreseeable future.
Price Analysis of Hydrogen Fuel Cell Systems in China
Price Analysis of Hydrogen Fuel Cell Systems
The price of hydrogen fuel cell systems decreased from RMB12.3 thousand/kW in 2018
to RMB3.5 thousand/kW in 2023, with a CAGR of -22.2%. This decline was primarily driven
by the advancement of material technology and manufacturing process, the localization of key
components and the emergence of economies of scale.
Average Price of Hydrogen Fuel Cell Systems in China
RMB Thousand/KW, 2018-2028E
2018 2019 2020 2021 2022 2023 2024E 2025E 2026E 2027E 2028E
0
1
2
3
4
5
6
7
8
9
10
11
12
13
CAGR 2018-2023 2023-2028E
Market -22.2% -15.6%
12.3
10.5
9.3
5.1 4.8
3.5
2.8 2.4 2.0 1.7 1.5
Source: China Society of Automotive Engineers (China-SAE), Frost & Sullivan
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Cost Structure and Analysis of Hydrogen Fuel Cell Cost Reduction Paths
Cost Structure of Hydrogen Fuel Cell System’s Key Components
27.5%
10.6%
61.8%
26.3%
25.8%
39.8%
8.2%37.0%
63.0%
Other
Fuel cell stacks
BOP
Membrane electrode assemblies
Bipolar plate
Catalyst layer
Proton exchange membrane
Gas diffusion layer
Other
Source: Frost & Sullivan
Taking the single stack assembly of a single hydrogen fuel cell system as an example, the
fuel cell stack occupies about 63.0% of the cost of the fuel cell system and is the key
component of the fuel cell system. Within the fuel cell stack, the bipolar plate accounts for
about 27.5% of cost of the fuel cell stack, and the membrane electrode assemblies account for
about 61.8% of cost of the fuel cell stack. In the structure of membrane electrode assemblies,
the catalyst is the largest cost item, accounting for about 39.8% of the overall cost of membrane
electrode assemblies.
Cost Analysis of Fuel Cell System and Stacks in China
RMB Thousand/kW, 2018-2028E
2018 2019 2020 2021 2022 2023 2024E 2025E 2026E 2027E 2028E
9.6
8.1
7.0
3.9
3.2
2.4 2.0 1.7 1.4 1.2 1.1 0.6
6.5
4.6
3.5
2.0 1.7 1.5 1.2 1.0 0.8 0.7
Fuel cell systems
Fuel cell stacks
Source: China-SAE, Frost & Sullivan
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The cost of fuel cell system has decreased from RMB9.6 thousand/kW to RMB2.4
thousand/kW from 2018 to 2023. It is expected that the cost of the fuel cell system will
decrease to RMB1.1 thousand/kW by 2028. The cost reduction of fuel cell systems primarily
stems from technological advancement, economies of scale, and the localization of key
components.
The cost of the fuel cell stack has decreased from RMB6.5 thousand/kW to RMB1.5
thousand/kW from 2018 to 2023. It is expected that the cost of the fuel cell stack will decrease
to RMB0.6 thousand/kW by 2028. The cost reduction stems from technological advancements,
process innovations, and the domestication of critical components, such as MEA and bipolar
plates. With the cost reduction of fuel cell system and fuel cell stack, the cost of hydrogen
vehicles is expected to significantly decrease, thereby enhancing the commercialization rate of
downstream applications for hydrogen energy.
Cost Analysis of Membrane Electrode Assemblies and Bipolar Plates in China
RMB Thousand/kW, 2018-2028E
2018 2019 2020 2021 2022 2023 2024E 2025E 2026E 2027E 2028E
Membrane electrodes
Bipolar Plates
3.0
2.2
1.3 1.1 0.9 0.7 0.6 0.5 0.4 0.4 0.2
4.2
1.8
1.3
1.0
0.6 0.5 0.4 0.3 0.3 0.2 0.2
Source: China-SAE, Frost & Sullivan
The cost of membrane electrode assemblies has decreased from RMB4.2 thousand/kW to
RMB0.9 thousand/kW from 2018 to 2023. It is expected that the cost of membrane electrode
assemblies will decrease to RMB0.4 thousand/kW by 2027. The membrane electrode assembly
consists of PEM, catalyst, gas diffusion layer, and other important components.
The cost of bipolar plate has decreased from RMB1.8 thousand/kW to RMB0.4
thousand/kW from 2018 to 2023. It is expected that the cost of bipolar plates will decrease to
RMB0.2 thousand/kW by 2026. At present, domestic bipolar plate enterprises are expanding
their production in graphite bipolar plate, and the cost reduction brought by the scale effect will
directly drive down the overall cost.
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Analysis of Fuel Cell Cost Reduction Paths
 Technological Progress
Two primary approaches may be pursued to achieve cost reduction. Firstly, companies
could undertake a systematic optimization of system design to identify opportunities for cost
reduction. This entails streamlining the system and reactor structure through the exploration of
component reduction, with a specific focus on elements like diffusion layers. Secondly, cost
reduction can be achieved by enhancing technical capabilities in critical materials and
components. This involves advancing the localization of proton exchange membranes,
reducing platinum loading in catalysts, and innovating catalyst structures to enhance catalytic
activity. The concerted efforts in both of these directions have the potential to significantly
decrease the overall costs associated with fuel cell systems.
 Localization
With the formulation of China’s policy on independent research and development of all
fuel cell components, China’s hydrogen fuel cell market has progressively attained full
localization of crucial components, including membrane electrode assemblies and bipolar
plates. Currently, the PEM, gas diffusion layer, and catalyst layer have undergone preliminary
commercialization attempts. Further localization efforts will contribute to reducing the overall
production costs.
 Scale Effect
The cost of hydrogen fuel cell components can be mitigated through the large-scale
production of various parts. In the initial development stages, companies experienced
relatively high production costs. However, as these companies expanded their production
volumes by commercializing their products over the years, the overall production costs have
decreased. This scale production effect is particularly pronounced in critical components like
membranes, bipolar plates, catalysts, and others.
Future Trends of China’s Hydrogen Fuel Cell Industry
 As the power output meets the requirements of application scenarios such as heavy
trucks, hydrogen fuel cell technology is directed towards achieving improved reliability,
extended lifespan and reduced costs
As heavy-duty trucks emerge as the future trend in the commercialization of FCEV , there
is a notable shift towards prioritizing high-power hydrogen fuel cells in hydrogen fuel cell
development. Since 2022, various hydrogen fuel cell companies have successively introduced
hydrogen fuel cells with power outputs exceeding 200 kW. Technological advancements,
process innovations, and the domestication of critical components are paving the way for cost
reduction in hydrogen fuel cell production. Moreover, the utilization of advanced materials and
improved production methods is anticipated to contribute to longer life and heightened
reliability of hydrogen fuel cells.
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 The application of hydrogen fuel cell systems in the stationary power generation will
experience rapid growth
In the future, transportation and stationary power generation will continue to be the two
main applications for hydrogen fuel cell systems. As transportation undergoes widespread
promotion, the technological maturity of hydrogen fuel cells is expected to experience
significant advancement. Concurrently, hydrogen fuel cell stationary power generation is
anticipated to find application in various scenarios based on distinct needs. Fields such as
off-grid power generation, CHP, backup power, and others are experiencing rapid growth.
 Optimized costs drive the growth in demand
With the advancement of material technology, manufacturing process, localization of key
components, and scale effect, the cost of fuel cell systems will continue to show a downward
trend in the future, and the procurement cost of fuel cell commercial vehicle manufacturers will
be significantly reduced. Lower costs will accelerate the overall life cycle cost parity of
downstream applications. Profit-driven hydrogen fuel vehicle operators will have a stronger
willingness to purchase, and the demand side of hydrogen fuel cells will continue to grow.
Market Drivers of China’s Hydrogen Fuel Cell Industry
 Significant Government Support . According to the Medium and Long-Term Plan for
Hydrogen Industry (2021-2035) issued by China, by 2025, companies in China are
expected to master core technologies and manufacturing processes, and the total fleet of
fuel cell vehicles is projected to reach approximately 50,000 units. Furthermore,
significant efforts are being made to deploy a network of hydrogen refueling stations and
increase the production of hydrogen from renewable sources to 100,000 to 200,000 tons
per year. These policy initiatives are expected to continue to drive the growth of the
hydrogen fuel cell industry.
 Continuous growth in downstream application markets . The future growth of the
Chinese fuel cell vehicle market will drive an increase in demand for hydrogen fuel cells.
The market size of fuel cell vehicles in China was RMB7.0 billion in 2023, and is
expected to reach a total market size of RMB102.3 billion by 2028, with a compound
annual growth rate of up to 71.2%. Benefiting from the rapid development of fuel cell
vehicles in major downstream scenarios, global demand for hydrogen fuel cells will
continue to increase. On the other hand, the emergence of the “abandonment of wind and
light” problem brought about by the grid connection of new energy generation provides
opportunities for the development of the hydrogen storage market. As China continues to
attach importance to environmental governance and energy crises caused by other
geopolitical crises, new energy generation is gradually becoming one of the focuses of
attention. At present, new energy generation such as photovoltaics and wind energy
generation suffer from many pain points such as poor regulation flexibility, intermittency,
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and strong volatility. Hydrogen storage, as an emerging energy storage technology, will
effectively solve these pain points. Future grid connection of new energy generation will
drive the development of the hydrogen fuel cell market on the demand side.
 Continued Improvement of Infrastructure . As the hydrogen fuel cell industry advances,
there is a growing emphasis on infrastructure development. This includes the expansion
of hydrogen refueling stations, hydrogen supply centers, and hydrogen pipelines, among
other components. The ongoing enhancement of infrastructure is crucial for supporting
the growth of the hydrogen fuel cell industry. It ensures adequate accessibility to
refueling stations and hydrogen supply points, facilitating the widespread adoption of fuel
cell vehicles and other hydrogen-based applications. Moreover, a well-established
infrastructure network contributes to the overall efficiency and reliability of hydrogen
fuel cell systems, thereby boosting confidence among industry stakeholders and
consumers. Therefore, the sustained improvement of infrastructure serves as a significant
driver for the growth and development of the hydrogen fuel cell industry.
Entry Barriers of China’s Hydrogen Fuel Cell Industry
 Difficulty in R&D of Core Components. Fuel cell systems comprise various components,
including stacks, hydrogen supply systems, and air supply systems. Among these, the
development of core components, such as proton exchange membranes and electrode
materials, presents significant challenges. The intricate nature of electrochemical
materials and membrane electrodes, crucial for efficient fuel cell operation, amplifies the
complexity of research and development efforts. These components are predominantly led
by overseas companies, heightening the barriers to entry for new market players.
 Rapid Iteration Speed of Fuel Cell Systems. With the acceleration of the deployment of
fuel cell commercial vehicles and other downstream applications, there is an increasing
demand for enhanced performance, cost-effectiveness, and durability of fuel cells.
Leading manufacturers are actively engaged in research and development to meet these
evolving market demands. This rapid iteration of fuel cell technology aims to transition
from meeting policy requirements to addressing market-driven needs for improved
performance, cost-efficiency, and durability. However, the swift pace of iteration also
presents challenges and serves as a barrier for new entrants, who must contend with the
complexities of meeting these dynamic market demands while navigating the competitive
landscape.
Challenges of China’s Hydrogen Fuel Cell Industry
 Gradual reduction of future government subsidies. Currently, the government’s
subsidies for the application of fuel cells in the transportation sector are relatively large,
aimed at promoting the increase of fuel cell applications. However, government subsidies
will gradually decrease in the future, and this impact will also be transmitted to fuel cell
manufacturers. Automotive companies will squeeze the cost of fuel cells, so reducing the
cost of fuel cells is a major challenge in the future.
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Competitive Landscape of China’s Hydrogen Fuel Cell Industry
In 2023, the market size of hydrogen fuel cell market in terms of sales power output was
approximately 1,016.5MW, of which the top five companies accounted for approximately
70.7% of the total market size. As of December 31, 2023, there were nearly 57 fuel cell system
companies in the China’s hydrogen fuel cell market, excluding their holding subsidiaries. The
number of hydrogen fuel cell manufacturers increased in 2023, indicating potential expansion
of market players within the hydrogen energy industry chain entering the fuel cell market. In
2023, the total sales power output of hydrogen fuel cell systems sold by us was 242.3MW. We
ranked the first in the hydrogen fuel cell market in China in 2023, in terms of total sales power
output of fuel cell systems, with a market share of 23.8%.
In addition, we ranked the first in the hydrogen fuel cell market in China, in terms of the
total sales power output of hydrogen fuel cell systems that have been used for heavy-duty
trucks in 2023, with a market share of 42.4%. According to Frost & Sullivan, heavy-duty truck
represents the largest application segment of hydrogen fuel cell systems in 2023. To be
specific, the sales value of hydrogen fuel cell used for heavy-duty trucks is RMB1.9 billion in
2023, accounting for around 47.6% of the total sales value of hydrogen fuel cell in China in
2023. The sales value of hydrogen fuel cell systems used for heavy-duty trucks is expected to
grow to RMB28.9 billion by 2028, with a CAGR of 72.9% from 2023 to 2028.
Ranking of top five fuel cell system providers in terms of total sales power output
of hydrogen fuel cell systems in China
MW, 2023
Ranking Company Sales Power Output Market Share
1 Our Group 242.3 23.8%
2 SinoHytec 189.4 18.6%
3 Sino-Synergy 148.6 14.6%
4 SHPT ~100 ~9.8%
5 SFCC ~40 ~3.9%
Notes:
(1) Beijing SinoHytec Co., Ltd. (ʮ̡), a high-tech enterprise established in Beijing in
2012, integrating research and industrialization of hydrogen energy and fuel cells. It is currently listed on the
Hong Kong Stock Exchange.
(2) Sino-Synergy Hydrogen Energy Technology (Jiaxing) Co., Ltd. (Ҧ(ྗጳ)ʮ̡), an
enterprise established in 2015, headquartered in Jiaxing, Zhejiang Province, specializing in the development
of fuel cells. It is currently listed on the Hong Kong Stock Exchange.
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(3) Shanghai Hydrogen Propulsion Technology Co. Ltd. (ʮ̡), a high-tech enterprise
established in 2018, headquartered in Shanghai, specializing in the research and development, design,
manufacturing, sales, and engineering technology services of hydrogen fuel cell stacks, systems, and core
components.
(4) State Fuel Cell Technology Corporation (ʮ̡), an enterprise founded in 2016 in
Shenzhen. Its main business includes fuel cell power system solutions related to leading fuel cell power system
and core components R&D and manufacturing, and fuel cell application development; and fuel cell industry
ecological closed-loop solutions related to hydrogen refuelling station energy foundation R&D, production,
design, construction and operation of core equipment of the facility, operation and management of new energy
vehicles.
Source: Frost & Sullivan
Ranking of top five fuel cell system providers in terms of total sales power output of
hydrogen fuel cell systems that have been used for heavy-duty trucks in China
MW, 2023
Ranking Company Sales Power Output
1 Our Group 209.2
2 99.8
3 Sino-Synergy 86.7
4 SHPT 23.1
5 Weichai Group(1) 14.3
SinoHytec
Market Share
42.4%
20.2%
17.6%
4.7%
2.9%
Note:
(1) Weihai Power Co., Ltd. (ʮ̡), an equipment manufacturing enterprise established in 2002,
headquartered in Weifang.
Source: Frost & Sullivan
Ranking of top five fuel cell system providers in terms of sales value of
hydrogen fuel cell systems that have been used for heavy-duty trucks in China
RMB100 Million, 2023
Ranking Company Sales Value
1 Our Group 5.5
2 3.2
3 SinoHytec 3.0
4 0.9
5 Weichai Group 0.6
Market Share
29.4%
17.2%
16.0%
4.8%
3.2%
Sino-Synergy
SHPT
Source: Frost & Sullivan
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Ranking of top five fuel cell system providers in terms of sales value of
hydrogen fuel cell systems in China
RMB100 Million, 2023
Ranking Company Sales Value
1 SinoHytec 7.2
2 6.8
3 Our Group 6.4
4 ~4.0
5 SFCC ~2.4
Market Share
18.2%
17.3%
16.2%
~10.2%
~6.4%
Sino-Synergy
SHPT
Source: Frost & Sullivan
Favorable Policies for Hydrogen Fuel Cell Industry in China
The table below outlines the policies implemented by five fuel cell vehicle demonstration
city clusters:
Demonstration
city-clusters Leading city Cities involved
Policies and
Launch time Main points
Shanghai
Demonstration
City Cluster
Shanghai  Jiangsu: Suzhou
and Nantong
 Zhejiang: Jiaxing
 Shandong: Zibo
 Ningxia: Ningdong
Chemical Base
 Inner Mongolia:
Ordos
Notice on Carrying out
Fuel Cell Vehicle
Demonstration
Applications
<Dec. 2021>
 The price of hydrogen energy for
automobiles is expected to undergo a
substantial reduction, with the final
selling price not surpassing
RMB35/kg. The promotion scale for
vehicles meeting the technical
specifications is targeted to exceed
1,000 vehicles. Additionally, the plan
includes the construction and
operation of more than 15 hydrogen
refueling stations.
Beijing-Tianjin-
Hebei
Demonstration
City Cluster
Beijing  Tianjin: Binhai
New Area
 Hebei: Tangshan
and Baoding
 Shandong: Binzhou
and Zibo
Notice on Conducting
Applications for the
Beijing Fuel Cell
Vehicle
Demonstration and
Application Project
2021-2022
<Apr. 2022>
 Hydrogen-powered vehicles need to
achieve a mileage of over 7,500
kilometers in the first year and exceed
12,500 kilometers annually for the
following three years. Additionally,
the proportion of hydrogen-driven
mileage within the demonstration city
cluster should be above 80%.
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Demonstration
city-clusters Leading city Cities involved
Policies and
Launch time Main points
Guangdong
Demonstration
City Cluster
Foshan  Guangdong:
Guangzhou,
Shenzhen, Zhuhai,
Dongguan,
Zhongshan,
Yangjiang, Yunfu
 Inner Mongolia:
Baotou
 Anhui: Lu’an
 Shandong: Zibo
 Fujian: Fuzhou
Action Plan for
Accelerating the
Construction of Fuel
Cell Vehicle
Demonstration City
Clusters (2022-2025)
<Aug. 2022>
 Support production of main
components such as fuel cell stack,
MEA, bipolar plates, PEM, catalyst,
carbon paper, air compressor, and
hydrogen circulation system. At the
end of the demonstration period, the
eight main components should be
ranked in top five in China.
 Realize the goal of promoting over
10,000 fuel cell vehicles, with an
annual hydrogen supply capacity
exceeding 100,000 tons. Establish
more than 200 hydrogen refueling
stations, and reduce the retail price of
automotive hydrogen to below 30
RMB/kg.
Henan
Demonstration
City Cluster
Zhengzhou  Henan: Xinxiang,
Kaifeng, Anyang,
Luoyang, Jiaozuo
 Ningxia
 Hebei:
Zhangjiakou,
Baoding, Xinji
 Shandong: Yantai,
Zibo, Weifang
 Guangdong:
Foshan
 Shanghai: Jiading
District, Fengxian
District, Lingang
section of
Shanghai Pilot
Free Trade Zone
Medium- and Long-
Term Plan for the
Development of
Hydrogen Industry
in Henan Province
(2022-2035)
<Aug. 2022>
 The application fields of hydrogen
energy are expected to expand. By
2025, the promotion of more than
5,000 various types of FCEVs is
anticipated, with the automotive
hydrogen supply capacity expected to
reach 30,000 tons/year. The terminal
selling price of hydrogen is expected
to be reduced to less than RMB30/kg,
and the proportion of low-carbon
hydrogen is expected to increase.
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Demonstration
city-clusters Leading city Cities involved
Policies and
Launch time Main points
Hebei
Demonstration
City Cluster
Zhangjiakou  Hebei: Tangshan,
Baoding, Handan,
Qinhuangdao,
Dingzhou, Xinji,
Xiong’an New
Area
 Hubei: Wuhan
 Shanghai: Fengxian
District
 Henan: Zhengzhou
 Shandong: Zibo,
Liaocheng
Several Measures of
Zhangjiakou to
Support the
Construction of Fuel
Cell Vehicle
Demonstration City
<Jul. 2022>
 Support production of main
components such as fuel cell stack,
MEA, bipolar plates, PEM, catalyst,
carbon paper, air compressor, and
hydrogen circulation system.
 Supporting enterprises engaging in
transportation services with fuel cell
vehicles, incentives will be provided
for vehicles meeting the average
hydrogen mileage condition per
vehicle ( /H113507,500 kilometers per year,
exceeding 30,000 kilometers in 4
years). For hydrogen fuel cell-powered
small and large passenger vehicles,
light and medium-duty trucks, and
heavy-duty trucks, each vehicle will
be eligible for an annual incentive of
RMB20,000, RMB30,000,
RMB30,000, and RMB50,000,
respectively. A municipal financial
allocation of RMB10 million will be
coordinated to establish a
comprehensive supervision platform
for fuel cell vehicles in urban clusters.
In addition to the above policies implemented in the demonstration application city
clusters, many other provinces and cities have implemented incentive policies for hydrogen
fuel cell industry in China. In 2023, nearly a hundred relevant policies were introduced in
non-demonstration cities in China.
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Comparative Analysis of Key Features of Fuel Cell Systems and Fuel Cell Stacks Among
Competitors
Please see below for a comparative analysis of the features, average selling prices, and
technologies of hydrogen fuel cell systems offered by the Group and two leading competitors:
The Group SinoHytec Sino-Synergy
Proprietary core
components /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Fuel cell stacks, MEAs,
bipolar plates,
hydrogen circulation
system
Fuel cell stacks, bipolar
plates
Fuel cell stacks, bipolar
plates
Application scenarios /H1118/H1118/H1118/H1118/H1118Vehicle scenarios:
commercial vehicles;
Non-vehicle scenarios:
power generation
applications,
construction machinery,
rail transit
Vehicle scenarios:
commercial vehicles;
Non-vehicle scenarios:
power generation
applications
Vehicle scenarios:
commercial vehicles;
Non-vehicle scenarios:
power generation
applications,
construction machinery,
rail transit
Range of rated power /H1118/H1118/H1118/H111863kW-220kW 80.5kW-240kW 65kW-240kW
Range of power density /H1118/H1118/H1118400W/kg-815W/kg 494W/kg-820W/kg 402W/kg-906W/kg
Life-span /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111830,000 hours for majority
of the products
5,000 hours and 20,000
hours for majority of
the products
20,000 hours for majority
of the products, only
one model reaches
30,000 hours
Freeze-start temperature /H1118/H1118/H1118-30°C without auxiliary
heat nor damage to
system
-35°C/-30°C -30°C
High-temperature operating
capability /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
95°C 95°C 95°C
Hydrogen consumption /H1118/H1118/H11189.0kg/100km-
10.0kg/100km
10.0kg/100km-
12.0kg/100km
~10.0kg/100km
Average selling prices /H1118/H1118/H1118/H1118~3,720 RMB/kW ~4,238 RMB/kW ~4,079 RMB/kW
Synergies with in-house
developed hydrogen
production products /H1118/H1118/H1118/H1118
Yes N/A N/A
Notes :
(1) The average selling price of fuel cell systems listed here refers to price in 2022; the average selling price
of the Company’s fuel cell systems refer to price of those incorporating its own fuel cell stacks.
(2) Hydrogen consumption listed above refers to related figures for hydrogen fuel cell systems empowering
49T heavy-duty trucks.
Hydrogen consumption is an indicator influenced by multiple factors, for instance, vehicle types,
vehicle weight, power output of the hydrogen fuel cell systems, etc. To assess performance of hydrogen
fuel cell systems, it is reasonable and meaningful to compare hydrogen consumption of same vehicle
type and weight incorporating hydrogen fuel cell systems provided by different companies, than to
compare hydrogen consumption of different vehicle types and weight.
As confirmed by Frost & Sullivan, heavy-duty truck is the largest application segment of hydrogen fuel
cell systems in 2023. Among heavy-duty trucks in different weights, 49T heavy-duty truck is the most
commonly used type, accounted for approximately 40% of all heavy-duty trucks as of the end of 2023.
INDUSTRY OVERVIEW
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The table above demonstrates that the Group is the only one out of the three that is
capable of developing and producing MEAs independently. MEA is a crucial component of the
fuel cell system and fuel cell stack, that plays a dominant role in determining the overall
performance of the fuel cell system and fuel cell stack, including factors such as, reliability,
lifespan, cost-effectiveness, etc. In terms of cost structure, MEAs accounts for approximately
40.0% of the total cost of a fuel cell system. Therefore, since the Group can independently
develop and produce MEAs, it has more flexibility and autonomy in controlling the overall
performance and cost of the hydrogen fuel cell system, enabling better cost reduction and
efficiency improvement. In contrast, the other two shall rely on third-party developed MEAs,
therefore are harder to control costs, and are also constrained by the development strategy and
development progress of the third parties.
In terms of application scenarios, rated power and power density, the Group’s products
exhibit a wider or comparable range of application scenarios, extending beyond various
commercial vehicle types; and also exhibit similar ranges of rated power and power density.
While the Group may not have a distinct advantage over the competitors listed above in terms
of application scenarios, power and power density, it is crucial to look into the lifespan of the
fuel cell systems and their adaptability to different temperature conditions, when evaluating the
durability and cost-effectiveness of the FCEVs in specific application contexts, which holds
greater value for end-users of FCEVs.
Specifically, in terms of product lifespan, the majority of the Group’s products can reach
lifespan of 30,000 hours. In contrast, for SinoHytec, the lifespan ranges between 5,000 hours
and 20,000 hours for majority of its products. For Sino-Synergy, majority of its products can
only reach lifespan over 20,000 hours, only one model can reach lifespan of 30,000 hours.
Moreover, the Group’s products exhibit enhanced adaptability to extreme temperature
conditions. While freeze-start generally requires auxiliary heat assistance or otherwise may
cause material fatigue, degradation or failure of the fuel cell system, the Group’s fuel cell
system can initiate a freeze-start without requiring auxiliary heat (thereby reducing energy
consumption) and without causing any damage to the fuel cell system (thereby extending
lifespan). Moreover, these products have high-temperature operation capability to withstand
high reaction temperature in the fuel cell stacks, thereby reducing the amount of heat dissipated
into the environment. Such increased resilience renders the Group’s products more reliable and
capable of performing optimally in diverse environments over an extended period.
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The hydrogen consumption is a crucial metric for evaluating the commercial viability of
hydrogen fuel cell systems. It indicates how efficiently the system utilizes hydrogen to
generate power. Similar to how fuel efficiency is important for conventional diesel-powered
vehicles, hydrogen consumption plays a vital role in the overall cost-effectiveness and
practicality of FCEVs. In the case of 49T heavy-duty trucks, the Group’s hydrogen fuel cell
systems have demonstrated an advantage in achieving lower hydrogen consumption as
compared to those of the two competitors as listed above. This means that while offering
similar load-carrying capacity and transportation capabilities, the Group’s hydrogen fuel cell
systems can effectively help end-users reduce their daily operational costs associated with
using FCEVs in the long term, which contributes to the market-driven transformation, and
widespread adoption of hydrogen fuel cell systems without subsidies going forward.
Furthermore, despite possessing key features that are equally good or better than those of
its main competitors, the Group’s products have lower average selling prices (measured in
RMB/kW). This cost efficiency makes the Group’s products more appealing to customers in
terms of affordability while maintaining their qualities as described above.
With the Group’s continuous development, it not only focuses on hydrogen fuel cell
systems but also gradually expands into hydrogen production systems. Such expansion is not
only built upon the Group’s mature network in the hydrogen industry and solid collaborations
with other relevant stakeholders in hydrogen market, but more importantly, built upon the
Group’s existing technologies and know-hows in MEAs. PEM fuel cell systems and PEM water
electrolysis hydrogen production systems have a reciprocal relationship in terms of chemical
reactions. As the Group has core technologies in developing and producing MEAs, its research
and development capabilities and technological foundation provide a solid basis for the
development of hydrogen production systems, which provide robust support for development
of hydrogen production systems. Conversely, without the core technologies of MEAs, it would
be difficult to develop PEM water electrolysis hydrogen production products. Unlike
SinoHytec and Sino-Synergy, the Group can provide comprehensive hydrogen energy solutions
that encompass both hydrogen fuel cell systems and hydrogen production systems, which
enables the Group to better meet customer needs and offer integrated solutions, further driving
the development of the hydrogen industry.
OVERVIEW OF THE FUEL CELL ELECTRIC VEHICLE INDUSTRY
Definition and Importance of Fuel Cell Electric Vehicle
FCEV is a non-polluting vehicle that generates electric power through the reaction
between high pressure hydrogen stored in onboard hydrogen tanks and oxygen extracted from
ambient air in a fuel cell system. Since the electric power required for FCEVs comes from the
electrochemical reaction between hydrogen and oxygen, the by product of the energy
generation process is only pure water, and ultra fine dust can be removed from the environment
during operation, FCEVs are gaining significant attention as an ecologically friendly mode of
transportation for the future.
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Industry Chain of the FCEV Industry
Upstream Downstream
MEA
Bipolar plate
Air compressor
Hydrogen
circulation system
Fuel Cell Stack
FCU
Fuel Cell
System
High-pressure hydrogen tank
Pipeline
Valve
Pressure reducer
On-board
Hydrogen
Supply
System
Midstream
DC/DC
Components R&D/Production System R&D/
Production
BOP
FCEV Production
FCEV Sales
FCEV Operation
Hydrogen Production
Hydrogen Storage
and Transportation
Hydrogen Refueling
Source: Frost & Sullivan
Analysis of the Advantages of Fuel Cell Electric Vehicle
Metric Fuel cell electric vehicle Electric vehicle Fuel-driven vehicle
Mechanical
system /H1118/H1118/H1118/H1118/H1118/H1118/H1118
Fuel cell systems Lithium battery Internal combustion engine
Filling material /H1118/H1118Hydrogen Electricity Gasoline or diesel
Safety /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Risks arise mainly from
hydrogen storage and
hydrogenation processes
Risks mainly come from the
battery system, where it is
difficult to balance high-
quality power density with
safety
Not applicable
Low-temperature
performance /H1118/H1118/H1118
-30°C low ambient
temperature self-activation
-40°C low-temperature
storage
Conventional lithium batteries
cannot be recharged in low
ambient temperatures below
-20°C and can lose up to
approximately 30% of their
range
Below -18°C require high-
performance engine
lubricants, inlet cryogenic
preheaters, and high-energy
auxiliary machinery
Environmental
protection /H1118/H1118/H1118/H1118/H1118
Reduce or zero carbon
emissions
Pollution partially transferred
upstream
Emissions of greenhouse
gases such as CO
2, CO,
SO2, etc.
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Metric Fuel cell electric vehicle Electric vehicle Fuel-driven vehicle
Mileage /H1118/H1118/H1118/H1118/H1118/H1118/H1118Relatively long, 400-800
kilometers
Limited, 200-400 kilometers Relatively long,
approximately 500 km
Energy conversion
rate /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
40-60% Not applicable 30-40%
Infrastructure for
refilling/charging
services /H1118/H1118/H1118/H1118/H1118/H1118
Hydrogen station, filling
time: 3-15min
Charging port, filling time:
30 min to 8 hours on
average
The gas station, filling time:
5-10min
Field of
application /H1118/H1118/H1118/H1118
Medium and long-distance,
heavy transportation
Short- and medium-distance
transportation
Universally applicable
Fuel energy
density /H1118/H1118/H1118/H1118/H1118/H1118
~12kWh/kg ~0.2Wh/kg Not applicable
Load Capacity /H1118/H1118/H1118Lightweight, small battery to
vehicle weight, high cargo
capacity per unit
Heavy, batteries account for a
large portion of the
vehicle’s weight, low cargo
capacity per unit
Not applicable
Noise generation /H1118/H1118Generate noise, but less than
conventional fuel-driven
vehicles
Generate noise, but less than
conventional fuel-driven
vehicles
Loud noise
Advantages of Fuel Cell Heavy Truck
Total Cost of Ownership of China Heavy Truck, by Value, by Type
RMB Million, 2023, 2027E, 2030E, 2040E, 2050E
0.0
3.0
3.5
4.0
4.5
5.0
2023 2030E 2040E 2050E
Cost of diesel combustion engine heavy truck
Cost of fuel cell heavy truck
Cost of fuel cell heavy truck (after subsidy)
Cost of electric heavy truck
Cost of electric heavy truck (after subsidy)
2027E
Since 2027, hydrogen fuel cell heavy trucks are expected to have
lower TCO (excluding subsidies) than diesel combustion engine
heavy trucks
2028E
Since 2028, hydrogen fuel cell heavy trucks are expected to have
lower TCO (excluding subsidies) than electric heavy trucks
Source: Frost & Sullivan
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Both fuel cell heavy trucks and electric heavy trucks are alternatives to diesel combustion
engine heavy truck. However, when compared, electric heavy trucks face distinct challenges,
particularly in crucial areas such as payload capacity and cargo volume. As heavy-duty
vehicles used for transporting goods, payload capacity and cargo volume are essential metrics,
influencing their value as productive assets. Electric heavy trucks often lag behind in these
aspects, despite potentially comparable Total Cost of Ownership (TCO). This disparity can be
likened to renting a property with shared amenities, where the actual utility value diminishes
due to increased shared usage. This inherent limitation significantly impacts the ability of
electric heavy trucks to create value, particularly in scenarios requiring long-distance
heavy-load freight transport. Therefore, it is imperative to underscore this point when
contrasting electric heavy trucks with other alternatives.
As for comparison between fuel cell heavy trucks and diesel combustion heavy trucks, if
fuel cell heavy trucks demonstrate a favorable TCO, it becomes feasible to replace diesel
combustion engine-heavy trucks on a scalable basis with fuel cell heavy trucks.
In 2023, the total cost of ownership of hydrogen fuel cell heavy trucks was lower than that
of traditional energy heavy trucks after government subsidy, and since 2027, the cost of
ownership of fuel cell heavy trucks without government subsidy is expected to be lower than
that of diesel combustion engine heavy trucks. Since 2028, cost of ownership of fuel cell heavy
trucks is expected to be lower than that of electric heavy truck. In 2050, the cost of ownership
of hydrogen fuel cell heavy trucks will decrease significantly due to the scale effect and the
enhancement of the technology of hydrogen fuel cell system, and the cost of the life cycle will
be reduced to RMB2.52 million, which is lower than that of electric heavy truck.
Market Size of Fuel Cell Electric Vehicles
Market Size of Global Fuel Cell Electric Vehicle, by Sales Volume,
by Country Unit, 2018-2028E
5,471 9,981 9,726 16,327 20,027 14,172 23,728
44,815
94,170
217,539
426,214
2023-2028ECAGR 2018-2023
Total 21.0% 97.5%
Japan -5.5% 151.6%
America 4.2% 93.8%
China 30.8% 91.6%
46.8% 99.2%
0.2% 84.3%
Korea
Germany
2018
5,471
680
1,527
9,981
4,174
2,737
634
9,726
5,793
1,177
1,445
16,327
8,412
1,586
2,464
20,027
10,164
3,397
2,784
14,172
4,635
5,843
422
23,728
7,184
9,678
1,477
44,815
13,111
19,742
3,249
94,170
29,336
40,534
7,539
426,214
145,410
150,889
42,515
2019 2020 2021 2022 2023 2024E 2025E 2026E 2028E
560
2,083 937 3,341 2,707 2,978 4,467 7,371 14,557 81,4202,429
303 304 424 835 263 736 1,119 1,936 5,594
217,539
76,531
84,425
18,485
2027E
34,427
3,350260
Total
Korea
China
Japan
America
Germany
Source: IEA, The Orange Group, Frost & Sullivan
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Market Size of Global Fuel Cell Electric Vehicle, by Sales Value,
by Type USD Billion, 2018-2028E
0.70.4 0.3 0.8
2018 2019 2020 2021 2022 2023 2024E 2025E 2026E 2027E 2028E
Total
Passenger vehicle
Commercial vehicle
14.9%
26.6%
57.7%
21.3% 74.9%
82.9%
CAGR 2018-2023 2023-2028E
Passenger vehicle
Commercial vehicle
1.3 3.0 4.6
7.7
17.0
26.6
0.5 0.7 0.9
1.6
2.3
4.0
7.8
1.4 1.2 2.1 2.5 2.1 0.8
3.8
6.2
10.0
21.0
34.4
0.9 0.81.71.6
0.5
Source: IEA, The Orange Group, Frost & Sullivan
Global fuel cell vehicle sales reached 14,172 units in 2023. From 5,471 units in 2018 to
2023 scale, the industry as a whole has grown rapidly, with a CAGR of 21.0%. In addition, with
the further increase in investment in the hydrogen fuel vehicle industry in various countries,
the overall global fuel cell vehicle market size is expected to reach 426,214 units by 2028, with
a CAGR of 97.5% from 2023, forming a trend of gradually replacing fossil fuel vehicles.
The global fuel cell vehicle market size reached USD2.1 billion in 2023, and the global
fuel cell vehicle market has grown at a CAGR of 21.3% since it developed at USD0.9 billion
in 2018. With the active deployment of countries for the clean energy vehicle market, the fuel
cell vehicle market is expected to reach a size of USD34.4 billion by 2028, with an overall
CAGR of up to 74.9% from 2023.
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Market Size of China Hydrogen Fuel Cell Electric Vehicle, by Sales Volume,
by Type Unit, 2018-2028E
1,527 2,737 1,177 1,586 3,397 5,843 9,678
19,742
40,534
84,425
150,889
CAGR 2018-2023 2023-2028E
Total 30.8% 91.6%
Heavy trucks / 92.5%
Medium and Light-duty
trucks 21.2% 92.4%
Omnibus -1.9% 78.5%
/ 142.8%Passenger vehicle
2018
1,527
0
402
2,737
10
2,015
638
1,177
20
128
947
1,586
690
51
723
3,397
1,829
762
737
5,843
3,653
1,052
935
9,678
5,589
1,914
1,543
19,742
11,625
3,828
2,854
40,534
24,413
7,925
5,365
84,425
53,709
15,849
10,086
2019 2020 2021 2022 2023 2024E 2025E 2026E 2027E
1,031
00 12 29 111 306 941 2,088 4,6360
74 82 110 40 92 326 494 743 145
150,889
96,676
27,736
16,945
2028E
9,365
16794
Total
Heavy trucks
Medium and Light-duty trucks
Omnibus
Passenger vehicle
Others
Source: GGII, China Association of Automobile Manufacturers, CPCA, Frost & Sullivan
Market Size of China Hydrogen Fuel Cell Electric Vehicle, by Sales Value,
by Type, RMB100 Million, 2018-2028E
1.516.5 23.641.123.7 3.8 17.6 35.67.9
2018 2019 2020 2021 2022 2023 2024E 2025E 2026E 2028E2027E
0.1 45.5
23.7 41.1 16.5 23.7 45.7 69.5 99.9
173.0
296.2
574.1
68.8 98.4 169.2
288.3
556.5
1,022.7
987.1
Total
Commercial vehicle
Passenger vehicle
23.8%
/
70.4%
24.0% 71.2%
119.4%
CAGR 2018-2023 2023-2028E
0.2
Passenger vehicles
Commercial vehicles
0.7
Source: GGII, China Association of Automobile Manufacturers, CPCA, Frost & Sullivan
INDUSTRY OVERVIEW
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In 2023, China holds approximately a 41.2% share of the global fuel cell electric vehicles
market in terms of sales volume. From 2018 to 2023, the overall fuel cell vehicle market in
China grew from 1,527 units in 2018 to 5,843 units in 2023, representing a CAGR of 30.8%.
The government has vigorously promoted establishing hydrogen energy demonstration zones
and cities since 2021. Therefore, driven by strong policy support, continuous breakthroughs in
core tech, improved infrastructure, and a further reduction in production costs, with further
acceleration of market development and the gradual popularization of passenger cars, the
production of fuel cell vehicles will gradually form a scale effect. It is expected that China’s
fuel cell vehicle sales will increase to 150,889 units in 2028, with a CAGR of 91.6% from
2023.
In 2023, China holds approximately a 47.3% share of the global fuel cell electric vehicle
market in terms of sales value. China’s fuel cell vehicle market size grew from RMB2.4 billion
in 2018 to RMB7.0 billion in 2023, with a CAGR of 24.0%. The fuel cell vehicle market is
expected to reach a size of RMB102.3 billion by 2028, with a CAGR of 71.2% from 2023.
Market Size of China Hydrogen Fuel Cell Heavy Truck, by Sales Volume
Unit, 2019-2028E
2019 2020 2021 2022 2023 2024E 2025E 2026E 2028E2027E
10 20 690 1,829 3,653 5,589
11,625
24,413
53,709
96,676Heavy truck 337.2% 92.5%
CAGR 2019-2023 2023-2028E
Source: Frost & Sullivan
China’s fuel cell heavy truck sales volume is 3,653 units in 2023 and is expected to be
96,676 units in 2028, with a CAGR as high as 92.5%. Combined with its rising penetration rate
in the overall domestic automobile market, the fuel cell heavy truck market is growing rapidly,
and the development strategy of fuel cells mainly applied to heavy-duty trucks is promising in
the future, with good prospects.
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Future Trends of China’s Fuel Cell Electric Vehicle Industry
 The Promotion of Fuel Cell Electric V ehicle is Transitioning from Policy-driven to
Market-driven
In the short term, incentive policies play a crucial role in propelling the development of
the fuel cell electric vehicle industry. However, in the medium to long term, the widespread
adoption of fuel cell electric vehicles will gradually shift away from dependence on policy
subsidies and expand from demonstration city clusters to non-demonstration cities. The
extensive adoption of fuel cell electric vehicles depends largely on the Total Cost of Ownership
(TCO). When the TCO of fuel cell electric vehicles becomes lower than that of traditional fuel
vehicles, they become a viable alternative.
The TCO of fuel cell electric vehicles is primarily composed of purchase costs and energy
usage costs. Advancements in fuel cell technology are continuously reducing the purchase
price of fuel cell electric vehicles. In addition, progress in upstream production, storage,
transportation and refueling, and technology is lowering the terminal price of hydrogen,
consequently reducing the energy usage costs of these vehicles. Given these cost reduction
factors, the current industry trend is to promote fuel cell electric vehicles in regions abundant
in low-price hydrogen resources, with a primary focus on areas with rich industrial by-product
hydrogen resources. Taking into account the current status of technological development,
industrial by-product hydrogen represents a low-cost method of hydrogen production.
Promoting fuel cell electric vehicles in these regions translates to lower energy consumption
costs and a reduced TCO, making them more economically competitive compared to traditional
fuel vehicles. For instance, in Shanxi province, where chemical enterprises such as coke plants,
steel mills, and chlor-alkali plants are concentrated, there exists a robust industrial foundation
for industrial by-product hydrogen. From the supply side, fuel cell electric vehicles in these
regions provide businesses with lower transportation costs, and from the demand side,
industries in low-price hydrogen regions, particularly chemical enterprises, exhibit a demand
for long-distance transportation, precisely the downstream application area where fuel cell
electric vehicles targeted to. In China, as of 2023, there are over one million heavy trucks
utilized in bulk cargo transportation scenarios. Consequently, the future market for fuel cell
electric vehicles will gradually expand into regions with low-price hydrogen, eventually
replacing traditional fuel vehicles. Even in scenarios where future policy subsidies diminish,
fuel cell electric vehicles continue to possess extensive application scenarios and can maintain
a high growth rate.
 Diversification is expected to continue in FCEV application
Following the commercial application in omnibuses and logistics, the future utilization of
FCEV is anticipated to broaden into various fields. With ongoing technological advancements
and cost reductions in hydrogen energy and fuel cell systems, the expansion is expected to
encompass rail transportation and passenger vehicles on specific routes, intercity logistics,
intercity passenger transportation, and other sectors. Taking into account the variations in the
energy structure across different regions, FCEVs and electric vehicles are poised for long-term
coexistence, complementing each other’s market applications.
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Since fuel cell electric vehicles and pure electric vehicles can form complementary
energy sources between them, utilize their respective advantages in different scenarios, and
avoid their shortcomings, it is expected that the coexistence mode will be maintained for a long
period in the future.
OVERVIEW OF THE HYDROGEN FUEL CELL COMPONENT INDUSTRY
Market Size of The Hydrogen Fuel Cell Component Industry
In 2023, system sales amounted to RMB3.9 billion, with membrane electrodes and bipolar
plate sales reaching RMB1.0 billion and RMB0.5 billion, respectively. As the domestication of
components deepens, sales value for various components will continue to rise. By 2028, fuel
cell system sales are estimated to reach RMB49.8 billion, with a compound annual growth rate
of 65.9%. Within the fuel cell stack, the bipolar plate accounts for about 27.5% of cost of the
fuel cell stack; the membrane electrode accounts for about 61.8% of cost of the fuel cell stack;
in the membrane electrode structure, the catalyst is the largest cost item, accounting for about
39.8% of the overall membrane electrode cost, followed by the gas diffusion layer, which
accounts for about 26.3% of the overall membrane electrode cost, and the proton exchange
membrane cost accounts for about 25.8% of the overall membrane electrode cost.
Market Size of China Hydrogen Fuel Cell Component Industry, by Sales Value
RMB100 Million, 2018-2028E
7.2 16.3 15.0
39.3
59.9
110.8
184.5
309.5
CAGR
Membrane electrode*
Bipolar plate*
2018-2023
37.4%
36.3%
2023-2028E
69.5%
70.3%
Other components in stack* 27.5% 53.4%
Membrane electrode
Bipolar plate
Other components in stacks
BOP 49.5% 66.5%
BOP
2.0 7.8 8.4 11.1 17.0 19.4 29.6 54.8 91.5
153.8
248.0
2.6 3.0 2.3 3.6
2.0
4.3
4.5 5.4 7.7
14.0
20.3
31.3
45.9
1.6 1.8 1.4 29.220.9
5.2
2.4 4.7 7.4
13.2 23.8
40.9
67.3
1.0 3.8 2.9 9.8 15.3
28.8
48.9
83.6
137.0
498.2
2018 2019 2020 2021 2022 2023 2027E 2028E 2025E 2026E2024E
Note:
* The sales value of fuel cell stack comprises the sales value of membrane electrodes, bipolar plates and other
components in stacks.
Source: GGII, E4tech, MIIT, Frost & Sullivan
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OVERVIEW OF THE HYDROGEN PRODUCTION INDUSTRY
Definition and Methods of Hydrogen Production
Based on preparation methods, hydrogen can be categorized as: (i) hydrogen produced
from traditional sources (such as natural gas or coal), (ii) hydrogen produced by combining
traditional sources with CCUS (Carbon Capture, Utilization, and Storage) technology, and (iii)
hydrogen produced from renewable energy sources, such as water decomposition by
electrolysis.
According to Frost & Sullivan, China has the world’s highest hydrogen production, with
more than 35 million tons of hydrogen production in 2023, representing 38% of the global
hydrogen production volume in the same year. However, hydrogen preparation is still
dominated by non-renewable hydrogen production methods from raw materials such as coal.
Hydrogen produced from renewable energy sources presents numerous advantages, particularly
in terms of low carbon emissions and its capacity for large-scale, long-term storage. In the
future, as China’s hydrogen production technology advances, the cost of producing hydrogen
through renewable energy sources will continue to decrease, and the price of hydrogen energy
is expected to be further optimized, accelerating the consumer penetration of hydrogen energy
and improving China’s energy structure. Hydrogen produced from renewable energy sources is
primarily produced through the method of water electrolysis. As per the Hydrogen Energy
Alliance’s forecast, hydrogen produced from renewable sources will take about 15% of the
total hydrogen produced in China by 2030.
Industry Chain Analysis of the Water Electrolysis Industry
Industry Chain of the Water Electrolysis Industry
Upstream Midstream Downstream
Platinum
Equipment Manufacturer Electrolytic Tank Manufacturer Clients
Resources and
raw materials
Component
suppliers Equipment suppliers Hydrogen Production Company
Perfluorosulfonic
acid membrane
Polyphenylene
sulfide-based
membranes
Iridium
Nickel
ALK
…
Polar plate
Electrode
Membrane
PEM
MEA
Bipolar plate
…
…
Hydrogen processing
Cooling system
Power supply
Electrolytic stack assembly
BOP
Electrolyzed water system
System integration
Industrial clients
Ammonia production
Methanol synthesis
Oil refining
Steelmaking
Owners and developers of
electricity generation from
renewable energy projects
Hydrogen refueling station
operators
Source: Frost & Sullivan
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The main principle of hydrogen production by water electrolysis is that water molecules
are dissociated under the action of direct current to produce oxygen and hydrogen, which are
precipitated from the anode and cathode of the electrolyze respectively. Depending on the
diaphragm material of the electrolyze, it can be categorized into Alkaline Water Electrolysis
(ALK), Proton Exchange Membrane (PEM) Water Electrolysis, High Temperature Solid Oxide
Electrolysis (SOEC) and anion exchange membranes (AEM).
Currently, ALK and PEM are the primary methods for producing hydrogen through water
electrolysis. ALK’s materials and components involve relatively lower research and
development complexities, leading to cost-effective manufacturing and early commercial
adoption. On the other hand, PEM, while posing greater technical challenges, offers faster
response times and adaptability to fluctuating power sources. Given the increasing use of
renewable energy, PEM has become a mainstream choice for electrolytic hydrogen production.
Other technologies, such as SOEC and AEM, face higher technical complexities and are in the
early stages of commercialization. In the future, as technology advances, SOEC and AEM may
gain a larger market share in the hydrogen production industry.
Operating Principle of ALK
ALK is the most mature water electrolysis technology. The basic principle: KoH and other
alkaline aqueous solution works as the electrolyte, and non-woven fabrics (fluorine-containing
or fluorine-chlorine polymers) works as a diaphragm. Under the action of direct current, the
water electrolysis generates hydrogen and oxygen, which is precipitated in the cathode and
anode of the electrolytic cell. The system of ALK equipment is relatively complex, mainly
including an electrolysis tank, pressure regulating valve, lye filter, lye circulating pump, lye
preparation and storage device, hydrogen purification device, gas detection device, and other
modules. ALK hydrogen production technology is mature, but problems such as lye loss,
corrosion, high energy consumption, taking more floor space, and so on exist.
Structure of an ALK Electrolyser
Source: Frost & Sullivan
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Main Components of an ALK Electrolyser
Below are the main components of an ALK electrolyser:
 Electrodes
Electrodes act as the most important part in an ALK electrolyser, primarily because
they determine current density and decides the ability of hydrogen production. The use of
better materials in electrode production results in higher electric density, leading to
increased hydrogen production volume. To ensure optimal performance, alkali-resistant
and high-temperature-resistant materials with a large surface area are required.
 Membrane
Membrane prevents the mixture of hydrogen and oxygen in an ALK electrolyser.
The stability of the membrane determines the service life of the ALK electrolyser. To
ensure the performance of a membrane, it is required to prevent hydrogen and oxygen
molecules from passing through the membrane but allow electrolyte ions to pass through.
Therefore, the membrane should be made from materials resistant to corrosion in high
concentrations of lye, possess good mechanical strength, and have high membrane
porosity.
 Gasket seal
Gasket seal is designed for the purpose of realization of insulation between plates
in an ALK electrolyser. Its performance impacts gas yield, stability and the service life
of the plates and membrane.
 Polar plates and stage frame
Polar plates and stage frame supports electrodes and membrane, ensuring
conductivity in an ALK electrolyser. Its performance depends on its resistance to
corrosion in lye.
In addition, the hydrogen generation power supply in the hydrogen generation module
changes the voltage level of the input electrical energy. Then the electric energy is transferred
to the subsequent electrolyser to produce hydrogen. It is required to ensure the stable operation
of the electrolyser. Therefore, the stable operation of the hydrogen production power supply is
the key factor to ensure the high purity and high efficiency of hydrogen produced.
Other components involve control system, gas-liquid separation system, purification
system, lye system, water supply system, cooling and drying system, affiliate system. Among
fuel cell players, only a few have the ability to develop main components for ALK electrolyser,
including but not limited to us.
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Operating Principle of PEM
PEM is currently in the early stages of marketization, and its main components include
a membrane with proton exchange capability and cathode and anode catalytic layers tightly
connected to each side of the membrane. In contrast to ALK, PEM electrolysis uses a proton
exchange membrane as the solid electrolyte instead of the diaphragm and alkaline electrolyte.
Moreover, it utilizes pure water as the feedstock for hydrogen production, avoiding potential
alkali contamination and corrosion issues. Fuel cell companies that expand their business scope
to PEM electrolysers have certain advantages, because PEM electrolyser and fuel cell have
similar structure, their main components such as membrane and catalyst have resemblance.
Structure of a PEM Electrolyser
Source: Frost & Sullivan
Main Components of PEM Electrolyser
The main components of a PEM electrolyser include membrane electrode assembly,
bipolar plate, end plate, and power supplier. End plate stations components, guide electricity
transformation and distributes water and air. Power suppliers convert AC power to a stable DC
power source.
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 Membrane
Electrode
Assembly /H1118/H1118
A membrane electrode assembly (MEA) is an assembled stack of PEM,
catalyst, and flat plate electrode used in fuel cells and electrolysers.
(i) Diffusion layer : facilitate the transfer of gas and liquid;
(ii) Catalyst layer : the three-phase interface consisting of catalyst,
the electron-conducting medium, and the proton-conducting
medium. Catalyst is the core of the electrochemical reaction; and
(iii) Proton-exchange membrane : as a solid electrolyte,
perfluorosulfonic acid (PFSA) membranes are generally used to
isolate the cathode and anode gases, prevent the transfer of
electrons, and transfer protons. It is crucial to electrolyser since
it could enhance current density.
 Bipolar
plates /H1118/H1118/H1118/H1118/H1118
A bipolar plate is a key component of proton exchange membrane with
multifunction character. Serving as an integral component, it plays a
crucial role in supporting both the membrane electrode assembly and
the gas diffusion layer. Bipolar plates, positioned at the anode and
cathode sides, converge hydrogen and oxygen, subsequently
channeling both gases for output. Critical attributes for bipolar plates
encompass high mechanical stability, chemical resilience, low
hydrogen permeability, and heightened conductivity.
Global and China’s Market Size of Electrolyser
Market Size of Global Electrolyser Industry, by Volume, by Type
MW, 2018-2028E
PEM ALK
2018 2019 2020 2021 2022 2023 2024E 2025E 2026E 2027E 2028E
25.2 32.0 50.0 101.2 244.8140.0 160.0 250.0 460.0
1,020.0 1,908.2
6,859.0
19,900.8
35,191.6
58,721.6
81,026.4
CAGR
PEM
ALK
2018-2023
81.5%
65.2%
2023-2028E
122.0%
107.5%
54,287.7
26,738.7
19,378.1
11,261.3
39,343.5
23,930.3
13,930.64,938.5
1,920.5
5,970.2
496.1
Total 68.6% 111.6%
775.2128.0114.8 200.0 358.8 1,412.1
Source: IEA, Policies by different governments, Frost & Sullivan
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Market Size of Global Electrolyser Industry, by Shipment Value, by Type
USD Million, 2018-2028E
2018
26.7
2019 2020 2021 2022 2023 2024E 2025E 2026E 2028E2027E
479.7230.7 1,827.371.9 82.0 124.3 227.7 502.1 986.8 3,572.5
10,806.5
17,054.4
38,723.5
29,517.7
1,745.245.2 49.0 74.3 129.4
CAGR
PEM
ALK
2018-2023
78.2%
62.2%
2023-2028E
115.4%
100.6%
33.0 50.0 98.3
271.4 507.1
22,266.0
16,827.7
9,531.4
16,457.512,690.05,789.2
5,017.3 7,523.0
Total 68.8% 108.3%
PEM ALK
Source: IEA, Policies by different governments, Frost & Sullivan
Market Size of Global Electrolyser Industry, by Sales Revenue
USD Billion, 2018-2028E
2018 2019 2020 2021 2022 2023 2024E 2025E 2026E 2027E 2028E
0.1 0.1 0.1 0.2 0.4 1.0
3.8
11.3
17.6
30.1
39.5
Market 70.2% 108.6%
CAGR 2018-2023 2023-2028E
Source: IEA, Frost & Sullivan
Benefiting from the significant expansion of downstream application scenarios of
hydrogen, the hydrogen production industry kept growing. To achieve the carbon peaking and
carbon neutrality goal, electrolysis hydrogen production will become the mainstream trend in
the future. In 2023, the global electrolyser shipment volume has reached 1,908.2 MW with a
CAGR of 68.6% from 2018 to 2023. In the future, as technology advances and supportive
policies are landing, it is expected that the shipment volume will reach 81,026.4 MW, with a
CAGR of 111.6% from 2023 to 2028.
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PEM and ALK are two major hydrogen production methods. Each method has its own
advantages. In 2023, ALK shipment volume reaches 1,412.1 MW while PEM shipment volume
reaches 496.1 MW. Due to the technology complexity and the high cost, PEM shipment volume
is lower than ALK. However, considering that PEM has the advantages of over current density
and hydrogen purity, the market share of PEM will increase in the future. Meanwhile, PEM
responds swiftly with a wide adjustment range, making it compatible with the passive
characteristics of renewable energy electricity. It is expected that the shipment volume of PEM
will increase from 496.1 MW to 26.7 GW at a CAGR of 122.0%, and the shipment of ALK will
increase from 1,412.1 MW to 54.3 GW at a CAGR of 107.5% from 2023 to 2028.
The global electrolyser market value in terms of shipment value has increased from
USD71.9 million in 2018 to USD986.8 million in 2023 with a CAGR of 68.8%. In the future,
as the hydrogen production industry develops and technology in relation to the producing
hydrogen from renewable energy sources matures, the penetration rate of water electrolysis
will increase. Therefore, in the future, the electrolyser market will keep growing. It is expected
that the market value will reach USD38.7 billion in 2028.
Due to the scarcity of the raw material, PEM electrolyser is more expensive than ALK
electrolyser. This is primarily attributed to PEM’s dependence on precious metals such as
iridium, platinum, titanium, etc., for electrodes and catalysts. The market size of PEM has
increased from USD26.7 million in 2018 to USD479.7 million in 2023 with a CAGR of 78.2%.
The market size of ALK has increased from USD45.2 million to USD507.1 million with a
CAGR of 62.2%. Given that PEM has competitive advantages over ALK, the penetration rate
of PEM will increase in the future. It is expected that the value of PEM will increase from
USD479.7 million in 2023 to USD22.3 billion at a CAGR of 115.4% in 2028. The shipment
value of ALK will increase from USD507.1 million to USD16.5 billion in 2028 at a CAGR of
100.6%.
Driven by surging demand for hydrogen and advancements in water electrolysis
technology, the market size of the global electrolysis industry in terms of sales revenue has
witnessed a consistent uptick and is expected to continue the growing trend in the coming
years. The market size of sales revenue of global electrolyser has increased from USD0.1
billion to USD1.0 billion from 2018 to 2023 with a CAGR of 70.2%. Additionally according
to the green hydrogen strategy announced by different governments, investments in
electrolysers are projected to soar, further fueling the expansion of the global electrolyser
market.
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Market Size of China Electrolyser Industry, by Shipment Volume, by Type
MW, 2018-2028E
2018 2019 2020 2021 2022 2023 2024E 2025E 2026E 2027E 2028E
2,129.0
4,511.3
8,155.5
63.0 800.0
1,196.4
3,968.1
10,009.9
19,860.2
29,640.8
39,899.9
680.7 17,731.2
9,329.2
25,129.5
31,744.4
62.2
PEM
ALK
Total
114.0%
79.5%
80.2%
196.0%
CAGR 2018-2023 2023-2028E
93.8%
101.7%
PEM ALK
0.8 90.0
88.6
1.4 175.0
172.0
3.0 350.0
343.0
7.0
768.0 1,160.5 3,801.4
32.0
35.9 166.7
Source: GGII, Frost & Sullivan
Market Size of China Electrolyser Industry, by Shipment Value, by Type
RMB Billion, 2018-2028E
2018 2019 2020 2021 2022 2023 2024E 2025E 2026E 2027E 2028E
14.1
24.0
31.4
0.1 1.7 1.9
6.1
15.5
31.7
49.2
64.1
6.3
17.6
9.2
25.2
32.7
0.1
PEM
ALK
Total
122.5%
69.5%
77.1%
128.9%
87.8%
102.1%
CAGR 2018-2023 2023-2028E
PEM ALK
0.0 0.2
0.2 0.0 0.4
0.4
0.0 0.7
0.6
0.1 1.4 1.4 3.90.3 0.5
2.2
Source: GGII, Frost & Sullivan
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Market Size of China Electrolyser Industry, by Sales
Revenue RMB Billion, 2018-2028E
2018 2019 2020 2021 2022 2023 2024E 2025E 2026E 2027E 2028E
CAGR 2018-2023 2023-2028E
Market 80.2% 100.8%
0.1 0.2 0.3 0.8 1.6 1.9
5.9
15.0
30.8
47.7
62.1
Source: IEA, Frost & Sullivan
In 2023, China holds approximately a 62.7% share of the global electrolyser market in
terms of shipment volume. In China, ALK is far more popular than PEM, because the
technology of ALK is more mature than PEM. There are quite a few players in China dedicated
to the ALK industry. In 2023, ALK shipment volume reaches 1,160.5 MW while PEM shipment
volume reaches 35.9 MW. It is expected that in the future, domestic PEM technology will break
through the technical bottleneck and thus, the shipment volume will experience an increase.
Based on the forecast, the shipment volume of PEM will increase from 35.9 MW to 8.2 GW
at a CAGR of 196.0% from 2023 to 2028. The shipment volume of ALK will increase from
1,160.5 MW to 31.7 GW at a CAGR of 93.8% from 2023 to 2028.
Due to the immaturity of the technology and the scarcity of raw material, such as iridium,
platinum, titanium, PEM Electrolyser made in China is more expensive than in foreign
countries. The shipment value of PEM has increased from RMB10 million to RMB0.5 billion
from 2018 to 2023. The shipment value of ALK has increased from RMB0.1 billion to RMB1.4
billion with a CAGR of 69.5% from 2018 to 2023.
In 2023, China holds approximately a 27.5% share of the global electrolyser market in
terms of shipment value. It is expected that the shipment value of PEM will increase from
RMB0.5 billion to RMB31.4 billion at a CAGR of 128.9% from 2023 to 2028. The shipment
value of ALK will increase from RMB1.4 billion to RMB32.7 billion at a CAGR of 87.8% from
2023 to 2028.
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Future Trends of China’s Hydrogen Production Industry
 Emergence of Water Electrolysis Technology as the Long-Term Mainstream
Water electrolysis hydrogen production technology has unparalleled superiority for
several reasons. Firstly, it refrains from using fossil fuels and avoids the production of harmful
gases. Secondly, the purity of the product gas is consistently high, typically exceeding 99.7%.
Additionally, the technology has reached a mature stage, and both the process and equipment
involved are simple. Moreover, there is a high level of automation, adopting micro-computer
control to ensure stable and reliable operations. With the maturation of water electrolysis
technology and its economic feasibility, it is expected to develop into the mainstream of
hydrogen production technology in the long term. Furthermore, the utilization of small-size
hydrogen production machines for domestic use, scientific research and healthcare areas is
emerging as a new trend in hydrogen production industry.
 Development of Hydrogen Produced from Renewable Energy Sources
Hydrogen produced from renewable energy sources represents the most favorable form of
hydrogen production, especially considering its low-carbon footprint. However, it currently
faces constraints posed by technological barriers and relatively high costs, and the realization
of large-scale applications will require time. While the production of hydrogen from renewable
energy sources demands relatively higher water resources, it’s essential to note that hydrogen
production from traditional methods also relies on water supplies. Technological advancements
are expected to enhance the cost efficiency and resource conservation of such production,
thereby making such hydrogen’s advantages more apparent. The future of hydrogen production
through renewable energy sources is anticipated to be one of the most effective approaches to
increase the proportion of renewable energy applications and construct a clean, low-carbon,
secure, and efficient energy system.
 Addressing Curtailment in Hydro, Wind, and PV Power Generation through Hydrogen
Production using Renewable Energy
China’s hydropower, wind power, and photovoltaic power generation have characteristics
such as randomness, volatility, and intermittency. Due to the difficulty in accurately predicting
power generation, it can lead to a certain degree of energy waste. Hydrogen storage can enable
the smooth operation of the power system through the mutual conversion between hydrogen
energy and electrical energy. When there is surplus electricity, excess energy can be stored
through hydrogen production using water electrolysis technology. When electricity output is
insufficient, the stored hydrogen can be utilized in fuel cells to generate power and feed back
into the grid system. This effectively addresses the challenges of renewable energy integration
and grid stability, enhancing the efficiency of the transmission network and energy utilization.
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Market Drivers of China’s Hydrogen Production Industry
 Cost Reduction. With technological advancements, the energy conversion efficiency of
electrolytic cells has been improved, which could reduce energy consumption. Rational
utilization of waste electricity generated by wind and photovoltaic power generation can
also lower electricity prices. From the perspective of equipment investment, the
expansion of installed capacity will lead to a significant reduction in equipment costs.
With technological advancements, the amount of precious metal catalyst used will
decrease, bipolar plates will be replaced with cheaper materials for their precious metal
coating, and proton exchange membranes will be replaced with domestically produced
alternatives, all of which will lead to a reduction in equipment prices. The reduction in
equipment prices will contribute to the increased commercialization of the hydrogen
production industry.
 Support from favorable policies. Policy measures are strengthened to clarify the
development direction of the hydrogen industry. Since hydrogen energy was first included
in the government work report in 2019, the government has implemented a series of
policies to support the development of the hydrogen industry. In November 2020, the
“Development Plan for New Energy Vehicle Industry (2021-2035)” proposed adapting
renewable energy production of hydrogen technology according to local conditions; in
June 2022, the 14th Five Year Plan” Renewable Energy Development Plan” promotes the
large-scale production and application of hydrogen from renewable energy. According to
the Medium- and Long-term Plan for the Development of the Hydrogen Energy Industry
(2021-35) published in March 2022, in 2025, the number of fuel cell vehicles will be
about 50,000 and a number of hydrogen refueling stations will be deployed. The amount
of renewable energy hydrogen production reaches 100,000-200,000 tons/year. By 2030,
a more complete hydrogen energy industry technology innovation system, clean energy
hydrogen production and supply system will be formed. By 2035, a hydrogen energy
industry system will be formed, and a multi-dimensional hydrogen energy application
ecology will be constructed to cover the fields of transportation, energy storage, industry
and so on. The proportion of hydrogen production from renewable energy sources in
end-use energy consumption will be significantly increased. With policy support, the
hydrogen production industry will develop further.
Entry Barriers of China’s Hydrogen Production Industry
 Iteration risks of technological development. Since low-carbon hydrogen produced in
the future almost does not generate carbon emissions during production, it is expected to
become the mainstream of the market in the future. However, this type of technology
currently has a low maturity and high cost, and the technology needs to be promoted,
posing challenges to the R&D direction of new entrants.
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 Differences in location of renewable energy resources. Different regions in China have
different capabilities for supplying renewable energy. Currently, photovoltaic, solar
thermal, wind power, and other renewable energy are concentrated in the northwest and
northeast regions, forming natural barriers to entry for players in the industry.
Additionally, entry into the hydrogen production industry requires expertise in the
development of core components and know-how for hydrogen production equipment, and
strong market development and scenario development capabilities are essential,
particularly for integrated projects combining hydrogen production with renewable
energy sources in the northwest. These projects demand not only hydrogen production
capabilities but also the ability to address downstream green hydrogen consumption, a
combination that is rare among market players. As a result, barriers to entry remain
significant in this sector.
Challenges of China’s Hydrogen Production Industry
 Relatively high cost of electrolytic water hydrogen production technology. Although
electrolytic water hydrogen production has less environmental pollution compared to
traditional hydrogen production methods, it is still limited by the level of electricity
prices and initial investment costs. At the present stage, the cost of electrolytic water
hydrogen production is still relatively high. In the future, large-scale use of hydrogen
means that the price of hydrogen will be more sensitive, so suppressing costs will become
a challenge for the development of electrolytic water hydrogen production.
Competitive Landscape of China’s Hydrogen Production Industry
Currently, ALK and PEM are the primary methods for producing hydrogen through water
electrolysis. In China, ALK is far more popular than PEM, because the technology of ALK is
more mature than PEM. In 2023, ALK shipment volume reaches 1,160.5 MW while PEM
shipment volume reaches 35.9 MW in China. In 2023, there are more than 30 major
participants in China’s ALK water electrolysis hydrogen production equipment industry. In
2023, the top five ALK water electrolysis equipment suppliers accounted for over 50% of the
market share by revenue. Additionally, more than 15 well-known companies are engaged in
PEM water electrolysis technology in 2023. However, the PEM market in China is in the early
stages of commercialization, and each company’s business scale is quite small. Therefore,
reliable market share data for PEM companies is currently unavailable.
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This section sets out a summary of the most significant aspects of laws and regulations
in the PRC which are material to our business operations.
REGULATIONS RELATING TO FOREIGN INVESTMENT
The establishment, operation and management of our PRC companies are governed by the
PRC Company Law, which was promulgated on December 29, 1993 and latest amended on
December 29, 2023. Pursuant to the last amended PRC Company Law which came into effect
on July 1, 2024, foreign-invested companies are also regulated by the PRC Company Law,
unless foreign-investment related laws are provided otherwise.
The Foreign Investment Law of the PRC (‘), which was
promulgated on March 15, 2019 and came into effect on January 1, 2020, sets out the
regulatory framework for foreign investments and pursuant to which (i) foreign natural
persons, enterprises or other organizations (collectively, the “ foreign investors ”) shall not
invest in any sector forbidden by the negative list for access of foreign investment, (ii) for any
sector restricted by the negative list, foreign investors shall conform to the investment
conditions provided in the negative list, and (iii) sectors not included in the negative list shall
be managed under the principle of treating domestic investments and foreign investments
equally. It, together with its implementation rules, also sets forth necessary mechanisms to
facilitate, protect and manage foreign investments and proposes to establish a foreign
investment information report system where foreign investors or foreign-funded enterprises
shall submit investment information to the competent departments of commerce through the
enterprise registration system and the enterprise credit information publicity system.
The Measures for Foreign Investment Information Reporting (జѓ፬
‘), which was promulgated on December 30, 2019 and came into effect on January 1, 2020,
sets out the details of the foreign investment information report system. Since January 1, 2020,
with respect to foreign investors carrying out investment activities directly or indirectly in the
PRC, the foreign investors or foreign-funded enterprises shall submit investment information
to the commerce authorities in accordance with these measures.
According to the Special Administrative Measures for Access of Foreign Investment
(Negative List) (2024 Edition) (݄(૶ఊ)(2024و)‘)
promulgated on September 6, 2024 and effected on November 1, 2024, our business does not
fall under such categories where foreign investment is restricted or prohibited.
According to the Catalog of Encouraged Industries for Foreign Investment (Edition 2022)
(ོᎸ̮ਠҳ༟ପุͦ፽(2022و)‘), which was promulgated on October 26, 2022 and
came into effect on January 1, 2023, manufacturing of hi-tech green batteries is listed as
encouraged industry for foreign investment in China.
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REGULATIONS RELATING TO OUR INDUSTRY AND PRODUCTS
According to the Energy Conservation Law of the PRC (‘)
promulgated by the Standing Committee of the National People’s Congress (ɽ
ึ) (the “ SCNPC ”) on November 1, 1997 and latest amended on October 26, 2018,
the State encourages the development, production and use of energy saving and
environmentally friendly cars, motorbikes, railway locomotives, ships and other transport
vehicles, and implements the elimination and upgrading system to old transport vehicles. In
addition, the State encourages the development, expansion and use of clean fuels and
petroleum alternative fuels by transport vehicles.
According to Energy Development in China’s New Era (‘)
released by State Council Information Office in December 2020, China has picked up its pace
in developing industry chains in the production, storage, transport and application of green
hydrogen, hydrogen-fuel cells, and hydrogen-powered vehicles.
According to the Development Plan for the New Energy Vehicle Industry (2021-2035)
(஝ྌ(2021-2035 ϋ)‘), which became effective on October 20, 2020,
the PRC government will focus on building up the hydrogen fuel supply chain and promote the
pilot programs of commercial application of fuel cell in vehicles.
According to the Action Plan for Carbon Dioxide Peaking Before 2030 ( 2030၁༺
‘) promulgated on October 24, 2021, the State Council proposes to actively
expand the application of new and clean energy in transportation, such as hydrogen power, and
to boost construction of infrastructure such as hydrogen refueling station through an orderly
approach, and to promote the low-carbon transformation of transport vehicles and equipments,
such as the use of heavy cargo trucks fueled by electricity, hydrogen fuel and liquefied natural
gas.
On March 23, 2022, the NDRC and the National Energy Administration issued the
Medium and Long-term Development Plan for Hydrogen Industry (2021-2035) ( ૫ঐପุ೯
ಂ஝ྌ(2021-2035 ϋ)‘, the “ Plan”), which sets the goals for the development of
hydrogen industry in the next fifteen years, including (i) by 2025, the industry participants in
China will possess core technologies and master the manufacturing process, there will be
around 50,000 fuel cell vehicles on the road, a number of hydrogen refueling stations will be
constructed, and the hydrogen production from renewable energy will reach 100,000 – 200,000
tons/year to achieve carbon emission reduction of one million to two million tons/year, (ii) by
2030, China will have a relatively complete hydrogen industry with a technology innovation
support system and a hydrogen production from clean energy and supply system, and (iii) by
2035, an industrial ecology of hydrogen energy with diversified application scenarios will be
formed, and the proportion of hydrogen energy production from renewable energy in the total
energy consumption will increase significantly. In addition, the PRC government provided
several key measures to promote the development of the hydrogen industry in the Plan, which
includes (i) building technology innovation system for the hydrogen industry, including
focusing on building an industry-wide platform to support technology innovations,
continuously improving core technical capabilities, and building a team of professionals, (ii)
coordinating the construction of hydrogen energy infrastructure, including constructing
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hydrogen production facilities based on local conditions, and steadily building a storage and
transportation system and a hydrogen refueling network, (iii) orderly diversifying the
application scenarios of hydrogen energy, including transportation, industrial use and others,
and exploring a path for commercialization, and (iv) establishing and improving hydrogen
energy policies by upgrading the hydrogen industry standards and supervising the industry to
ensure safety.
On June 2, 2023, the National Energy Administration issued the Blue Book on the
Development of New Power System (‘), and announced the
“three-step” development path for the construction of new electronic power system, with 2030,
2045, and 2060 as important time nodes for the construction of new electronic power system,
namely the accelerated transformation period (present to 2030), the overall formation period
(2030 to 2045) and the consolidation and perfection period (2045 to 2060). Through the path,
new electric power system will be promoted and constructed in an organized way, step by step.
Due to the overall formation period, traditional energy vehicles will be replaced with new
energy and hydrogen fuel-cell vehicles in the field of transportation.
According to the Notice on Launching the Pilot Application of Fuel Cell Vehicles ( ᗫ
‘) jointly issued by the Ministry of Finance, the
Ministry of Industry and Information Technology, the Ministry of Science and Technology and
other departments on September 16, 2020, the government updates the policy of subsidizing
the purchase of fuel cell vehicles to pilot application of fuel cell vehicles, and then to reward
the eligible city clusters that engage in the industrialization of key and core technologies for
fuel cell vehicles and their pilot applications. The period of pilot application is tentatively set
to four years, during which these departments will reward the selected demonstration city
clusters according to the fulfillment of their targets in the form of rewards rather than
subsidies. The content of pilot application includes, among others, (i) the fuel cell vehicle
industry chain shall be built to promote the technological development and industrialization of
all links in the chain; (ii) the pilot application of new technologies and models for fuel cell
vehicles shall be launched to promote the establishment and improvement of related technical
indicator systems and testing and evaluation standards; and (iii) effective business operation
models shall be explored. With respect to the Notice, the government also further clarifies the
crucial application scenarios, focusing on the promotion of industrial use of fuel cell vehicles
in the commercial fields of vehicles for medium/long-distance and medium/heavy-weight
transportation purpose.
According to the Notice on Improving the Policies of Government Subsidies for
Promotion and Application of New Energy Vehicles (໾
‘) issued by Ministry of Finance, Ministry of Industry and Information
Technology, Ministry of Science and Technology, National Development and Reform
Commission of the PRC issued on April 23, 2020, the PRC government will adopt the “award
in lieu of subsidy” policy to give incentives to the demonstrative city clusters. The policy
reward eligible city clusters for the commercialization of key technologies used in the fuel cell
vehicles and the pilot adoption of fuel cell vehicles within the city clusters instead of directly
providing subsidies. The policy also proposed to establish relatively mature hydrogen energy
and fuel cell vehicle value chains in four years with breakthroughs in key core technologies.
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The Notice on Starting the Pilot Application of Fuel Cell Vehicles (ཥϫ
‘) issued on August 13, 2021 approves Beijing, Shanghai and
Guangdong province to start the implementation of the fuel cell vehicle pilot application for
a period of 4 years. Relevant expert committees and third-party institutions will guide and
assess the pilot application, and the assessment results will be the basis for arranging incentive
funds for the pilot cities.
The Notice on Launching of the Pilot Application of New Fuel Cell Vehicles (઼
‘) issued on December 28, 2021 approves Hebei
and Henan provinces to start the implementation of the fuel cell vehicle pilot application.
According to the Implementation Plan for the Development of the Hydrogen Energy
Industry in Beijing (2021-2025) (ࣩ2021-2025 ϋ)‘)
promulgated by the Beijing Municipal Bureau of Economy and Information Technology on
August 16, 2021, Beijing will explore business models for the construction of larger hydrogen
filling stations, and target to complete the construction of 37 new hydrogen filling stations and
realize the goal of the cumulative popularization of fuel cell vehicles of 10,000 or more.
According to the Implementation Plan of Shanghai for Accelerating the Development of New
Energy Automobile Industry (2021-2025) (ྌ
(2021–2025 ϋ)‘) issued by the General Office of Shanghai Municipal People’s Government
on February 4, 2021, by 2025, the total number of fuel cell vehicles to be applied in Shanghai
will exceed 10,000, and more than 70 hydrogen filling stations of various types to be built and
put into use, so as to achieve full coverage of key application areas. According to the Opinions
on Accelerating the Innovation and Development of Hydrogen Energy Industry in Guangdong
(จԈ‘) promulgated by Development and Reform
Commission of Guangdong on October 30, 2023, Guangdong will explore business models for
the construction of larger hydrogen industry scale, and target to complete the construction of
200 hydrogen filling stations and realize the goal of the cumulative popularization of fuel cell
vehicles of 10,000 or more due 2025. In addition, other regions where we conduct business
have also issued favorable policies for the hydrogen energy industry.
According to the Product Quality Law of the PRC (‘),
which was promulgated on February 22, 1993 and latest amended on December 29, 2018,
manufacturers are liable for the quality of the products they manufacture. Pursuant to the
Product Quality Law of the PRC, products offered for sale must satisfy the relevant quality and
safety standards. In the event that any person manufactures or sells products that do not comply
with the relevant national and industrial standards for the protection of the health and safety
of human and property, the relevant authority may order such person to suspend the production
or sales, confiscate the products illegally manufactured or sold, impose a fine of an amount
higher than the value of the products illegally manufactured or sold and less than three times
of the value of such products, confiscate illegal gains (if any), and revoke the business license
in severe cases. Where the activities constitute a crime, the offender may be prosecuted. Where
a defective product causes physical injury to a person or damage to another person’s property,
the victim may claim compensation from the manufacturer or the seller of the product. If the
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seller pays compensation and it is the manufacturer that should bear the liability, the seller has
a right of recourse against the manufacturer. Similarly, if the manufacturer pays compensation
and it is the seller that should bear the liability, the manufacturer has a right of recourse against
the seller.
According to the Notice on Issuing the Guidelines for the Development of the Standard
System for the Hydrogen Energy Industry (2023 Version) (Ι೯<ண
یܸ2023و>)‘) jointly issued on July 19, 2023 by six department including the
National Standardization Administration and NDRC, by 2025, more than 30 national and
industrial standards on hydrogen energy will have been formulated. In particular, priority will
be given to accelerating the formulation and revision of standards in respect of fuel cells and
fuel cell vehicles, and breaking through key links in the upstream and downstream of the
hydrogen industry chain.
REGULATIONS ON INTERNET INFORMATION SECURITY AND PRIV ACY
PROTECTION
On November 7, 2016, the SCNPC promulgated the Cybersecurity Law of PRC ( ʕശ
‘) (the “ Cybersecurity Law ”), effective as of June 1, 2017, which
applies to the construction, operation, maintenance and use of networks as well as the
supervision and administration of cybersecurity in the PRC. The Cybersecurity Law defines
“network” as a system comprising computers or other information terminals and relevant
facilities used for the purpose of collecting, storing, transmitting, exchanging and processing
information in accordance with specific rules and procedures. No individual or organization
may engage in activities that threaten cybersecurity such as unlawful intrusion into others’
networks, interfering with the normal functions of others’ network and stealing network data,
provide programs or tools for such intrusions, interference or stealing, or provide any
assistance such as technical support, advertisement, payment or settlement for any other person
if the individual or organization is fully aware that such person engages in an activity
endangering cybersecurity.
On June 10, 2021, the SCNPC promulgated the PRC Data Security Law ( ʕശɛ͏΍
‘) (the “ PRC Data Security Law ”), which took effect in September 2021.
The PRC Data Security Law introduces a data classification and hierarchical protection system
based on the materiality of data in economic and social development, as well as the degree of
harm it will cause to national security, public interests, or legitimate rights and interests of
persons or entities when such data is tampered with, destroyed, divulged, or illegally acquired
or used. It also provides for a security review procedure for the data activities which may affect
national security.
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On August 16, 2021, the Cyberspace Administration of China (܃)
the “ CAC”), the NDRC, the Ministry of Industry and Information Technology of the PRC ( ʕ
ʷ௅), the Ministry of Public Security and Ministry of Transport
issued the Several Provisions on Automobile Data Security Management (Trial
Implementation) (֛(༊Б)‘) (the “ Trial Regulation ”). This Trial
Regulation elaborates the principles and requirements for the safeguard of personal
information, national security and public interest in the PRC automotive industry and is
intended to regulate the data processing activities of any commercial vehicle manufacturer as
well as supplier of vehicle parts and components in China, among others. An automotive data
processor is required to comply with this Trial Regulation to collect, store and otherwise
process the personal information or critical data involved in the process of design, production,
sales, operation, maintenance, and service of vehicles.
On August 20, 2021, the SCNPC promulgated the Personal Information Protection Law
of the PRC (‘) (the “ Personal Information Protection
Law”), which took effect from November 1, 2021. The Personal Information Protection Law
stipulates, among other things, the circumstances under which a personal information
processor could process personal information, including: (i) with the consent of individual; (ii)
if necessary for the execution or performance of a contract to which the individual is a party,
or for the implementation of human resources management in accordance with the labor rules
and regulations formulated in accordance with the law and the collective contract concluded in
accordance with the law; (iii) if necessary to fulfill statutory duties and statutory obligations;
(iv) in order to respond to public health emergencies or protect natural persons’ life, health and
property safety under emergency circumstances; (v) such information that has been made
public is processed within a reasonable scope in accordance with this law; (vi) personal
information is processed within a reasonable scope to conduct news reporting, public
opinion-based supervision, and other activities in the public interest; or (vii) under any other
circumstance as provided by any law or regulation.
On December 28, 2021, the CAC and other twelve PRC regulatory authorities jointly
revised and promulgated the Measures for Cybersecurity Review (‘) (the
“Cybersecurity Review Measures ”), which has come into effect on February 15, 2022. The
Cybersecurity Review Measures provides that critical information infrastructure operators (the
“CIIOs ”) procuring network products or services, and the network platform operators (the
“Network Platform Operators ”) engaging in data processing activities, which affects or may
affect national security shall be subject to the cybersecurity review by the Cybersecurity
Review Office (܃the department which is responsible for the
implementation of cybersecurity review under the CAC. The Cybersecurity Review Measures
also provides that the Network Platform Operators with personal information data of more than
one million users that seek for listing in a foreign country are obliged to apply for a
cybersecurity review by the Cybersecurity Review Office.
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On September 30, 2024, the State Council promulgated the Regulations on the
Administration of Cyber Data Security ( ၣഖᅰኽτΌ၍ଣૢԷ‘) (the “ Regulation ”),
effective from January 1, 2025. The Regulation applies to, among others, data processing
activities within the territory of China, as well as the processing of personal information of
natural persons within the territory of China. It reiterates and refines the principles and
requirements of Cybersecurity Law, Data Security Law and Personal Information Protection
Law, with specific provisions including, but not limited to, the following: data processors must
strengthen network data security, establish and improve network data security management
system, and adopt technical measures such as encryption, backup and access control to protect
data from being tampered with, damaged, leaked, or illegally obtained or used; where personal
information and important data are provided to third parties, the data processor must agree on
the purpose, method, scope, and security protection obligations by contract or other means. In
addition, the officially promulgated version of the Regulations on Network Data Security
Management does not specifically include the requirement that network data processing
entities seeking a listing in Hong Kong that affects or may affect national security or the ones
conducting other data processing activities that affect or may affect national security should be
subject to the cybersecurity review, as the requirement originally set forth in the Regulations
on Network Data Security Management (Draft for Comments) published on November 14,
2021. It only provides that network data processors that engage in network data processing
activities that affect or may affect national security shall be subject to national security review
in accordance with relevant government regulations.
REGULATIONS RELATING TO ENVIRONMENTAL PROTECTION
According to the Environmental Protection Law of the PRC (ᚐ
‘), which was promulgated on December 26, 1989 and latest amended on April 24, 2014,
all entities and individuals have the obligation to protect the environment. Enterprises and
operators that implement the pollution discharge license management shall discharge pollutants
according to the requirement of the pollution discharge license, and those who fail to obtain
the pollution discharge license shall not discharge pollutants. If any person or enterprise fails
to comply with the laws and regulations of environmental protection, the relevant authority
may impose a fine, order such person or enterprise to take measures such as restricting
production and suspending production to make recovery, or even order to shut down the entity
in severe cases.
REGULATIONS RELATING TO WORK SAFETY
According to the Work Safety Law of the PRC (‘), which
was promulgated on June 29, 2002 and latest amended on June 10, 2021, entities that engage
in production and business operation activities in China shall set up and perfect the
responsibility system for work safety, improve the conditions for work safety, strengthen the
education and training on work safety for employees, provide articles of labor protection that
meet the national standards or industrial standards for their employees, and perform the
obligations related to work safety as stipulated by the Work Safety Law of the PRC and other
laws and regulations.
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REGULATIONS RELATING TO LABOR PROTECTION
Labor Law
The Labor Law of the PRC (‘), which was promulgated on
July 5, 1994 and latest amended on December 29, 2018, provides that employees are entitled
to gain equal opportunities in employment, choose occupations, receive labor remuneration,
and acquire protection of work safety and healthcare, social insurance and welfare, etc..
Employers shall establish and improve the system for work safety and healthcare, provide
training on work safety and healthcare to employees, comply with national regulations on work
safety and healthcare conditions, and provide necessary labor protective supplies to employees.
Labor Contract Law
The Labor Contract Law of the PRC (‘), which was
promulgated on June 29, 2007 and amended on December 28, 2012, together with its
implementation rules, provides that the labor contracts shall be concluded in order to establish
the labor relationship between employers and employees. The employer and employee shall
fully perform their respective obligations as set out in the labor contract. An employer shall
truthfully inform the employees regarding the scope of work, working conditions, workplace,
occupational hazards, work safety conditions, labor remuneration and other information
requested by the employees. Employers failing to comply with these regulations may be subject
to rectification order or compensation.
Social Insurance and Housing Provident Fund
According to Social Security Law of the PRC (‘), which
was promulgated on October 28, 2010 and amended on December 29, 2018, an employer is
required to make contributions to social insurance schemes for its employees, including basic
pension insurance, basic medical insurance, unemployment insurance, maternity insurance and
work-related injury insurance. If the employer fails to make social insurance contributions in
full and on time, the social insurance authorities may demand the employer to make payments
or supplementary payments for the unpaid social insurance premium within a prescribed time
limit together with a 0.05% surcharge of the unpaid social insurance premium from the due
date. If the payment is not made within such time limit, the relevant administrative authorities
will impose a fine ranging from one to three times the total outstanding amount.
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According to the Reform Plan of the State Tax and Local Tax Collection Administration
System (‘), which was promulgated on July 20, 2018,
commencing from January 1, 2019, all the social insurance premiums including the premiums
of the basic pension insurance, unemployment insurance, maternity insurance, work injury
insurance and basic medical insurance shall be collected by the tax authorities. According to
the Notice on Conducting the Relevant Work Concerning the Administration of Collection of
Social Insurance Premiums in a Steady, Orderly and Effective Manner (ᖢѼϞҏਂλ
‘) promulgated by the General Office of the State
Administration of Taxation on September 13, 2018 and the Urgent Notice on Implementing the
Spirit of the Executive Meeting of the State Council in Stabilizing the Collection of Social
Security Contributions (ٙ
‘) promulgated by the General Office of the Ministry of Human Resources and
Social Security on September 21, 2018, all the local authorities responsible for the collection
of social insurance are strictly forbidden to conduct self-collection of historical unpaid social
insurance contributions from enterprises. The Notice on Implementing Measures to Further
Support and Serve the Development of Private Economy (ਕ͏ᐄ
‘), promulgated by the State Taxation Administration on November
16, 2018, repeats that tax authorities at all levels may not organize self-collection of arrears of
taxpayers including private enterprises from the previous years. The Notice of General Office
of the State Council on Promulgation of the Comprehensive Plan for the Reduction of Social
Insurance Premium Rate (‘),
promulgated on April 1, 2019, requires steady advancement of the reform of the system of
social security collection. In principle, the basic pension insurance for enterprise employees
and other insurance types for enterprise employees shall be collected temporarily according to
the existing collection system to stabilize the payment method. It also emphasizes that the
historical unpaid arrears of the enterprise shall be properly treated. In the process of
reformation of the collection system, it is not allowed to conduct self-collection of historical
unpaid arrears from enterprises, and it is not allowed to adopt any method of increasing the
actual payment burden of small and micro enterprises to avoid causing difficulties in the
production and operation of the enterprises.
According to the Administrative Regulations on Housing Provident Funds (ږ
၍ଣૢԷ‘), which was promulgated on April 3, 1999 and latest amended on March 24, 2019,
employers are required to make contribution to housing provident funds for their employees.
Where an employer fails to pay up housing provident funds, the housing provident fund
administration center may order it to make payment within a prescribed time limit. If the
employer still fails to do so, the housing provident fund administration center may apply to the
court for compulsory enforcement of the unpaid amount.
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REGULATIONS RELATING TO INTELLECTUAL PROPERTY
Trademark
According to the Trademark Law of the PRC (‘), which was
promulgated on August 23, 1982 and latest amended on April 23, 2019, registered trademarks
are trademarks approved and registered by the trademark bureau, including commodity
trademarks, service trademarks, collective trademarks, and certification marks. A trademark
registrant enjoys exclusive rights to use a registered trademark, which is protected by the law.
A trademark registration applicant shall, according to the prescribed classification of goods,
enter the class and designation of goods on which the trademark is to be used, and file an
application for registration.
Patent
According to the Patent Law of the PRC (‘), promulgated on
March 12, 1984 and latest amended on October 17, 2020 and its implementation rules, the term
“invention-creations” refers to inventions, utility models and designs. The duration of a patent
right for inventions, utility models and designs shall be 20 years, 10 years and 15 years,
respectively, all commencing from the application date.
Copyright
The Copyright Law of the PRC (‘), promulgated on
September 7, 1990 and latest amended on November 11, 2020, specifies that works of Chinese
citizens, legal persons or other organizations, namely ingenious intellectual achievements in
the fields of literature, art and science that can be presented in a certain form, whether
published or not, shall enjoy the copyright. The copyright holder can enjoy multiple rights,
including the right of publication, the right of authorship, and the right of reproduction.
The Measures for the Registration of Computer Software Copyright (ၑዚழ΁ഹЪ
‘), promulgated on February 20, 2002, regulates the registration of software
copyright, the exclusive licensing contract and transfer contracts of software copyright. The
National Copyright Administration is mainly responsible for the registration and management
of national software copyright and recognizes the China Copyright Protection Center as the
software registration organization. The China Copyright Protection Center grants certificates
of registration to the applicants of computer software copyright in compliance with the
regulations of the Measures for the Registration of Computer Software Copyright and the
Regulations on Protection of Computers Software (ᚐૢԷ‘) which was latest
amended on January 30, 2013.
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Domain Name
According to the Administrative Measures for Internet Domain Names ( ʝᑌၣਹΤ၍
‘), promulgated on August 24, 2017, the principle of “first to file” is adopted for
domain name services. The applicant of domain name registration shall provide the agency of
domain name registration with true, accurate and complete information about the domain name
holder’s identity for registration purpose. Upon the completion of the registration process, the
applicant will become the holder of the relevant domain name.
REGULATIONS RELATING TO TAXATION
EIT
According to the EIT Law, which was promulgated on March 16, 2007 and amended from
time to time, together with its implementation rules, enterprises are classified into resident
enterprises and non-resident enterprises. Enterprises, which are incorporated in the PRC or
incorporated pursuant to the foreign laws with their “de facto management bodies” located in
the PRC, are deemed as “resident enterprise” and subject to an enterprise income tax rate of
25% on their global income. Non-resident enterprises are subject to (i) an enterprise income tax
rate of 25% on their income generated by their establishments or places of business in the PRC
and their income derived outside the PRC which is effectively connected with their
establishments or places of business in the PRC; and (ii) an enterprise income tax rate of 10%
on their income derived from the PRC but not connected with their establishments or places
of business located in the PRC. Non-resident enterprises without establishment or place of
business in the PRC are subject to an enterprise income tax of 10% on their income derived
from the PRC. The enterprise income tax on important high and new-tech enterprises that are
necessary to be supported by the State may be levied at the reduced tax rate of 15%.
Withholding Income Tax
Pursuant to the EIT Law and its implementation rules, dividends generated after January
1, 2008 and payable by a foreign-invested enterprise in the PRC to its foreign investors are
subject to a 10% withholding income tax rate, unless otherwise provided in the tax treaty
concluded between the PRC and such foreign investor’s jurisdiction of incorporation.
Pursuant to the Measures for the Administration of Non-Resident Taxpayers’ Enjoyment
of Treaty Benefits (‘) effective from January 1, 2020,
any non-resident taxpayer meeting conditions for enjoying the treaty benefits may be entitled
to the treaty benefits itself when filing a tax return or making a withholding declaration through
a withholding agent, subject to the subsequent administration by the tax authorities. If a
competent tax authority, during subsequent administration, finds out that a non-resident
taxpayer enjoys treaty benefits without meeting the conditions thereof and underpays or fails
to pay them at all, it may instruct the non-resident taxpayer to pay the overdue taxes within a
prescribed time period.
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Value-Added Tax
According to the Interim Regulations on Value-Added Tax of the PRC ( ʕശɛ͏΍ձ
೼ᅲБૢԷ‘), which was promulgated on December 13, 1993 and latest amended on
November 19, 2017, together with its implementation rules, entities and individuals engaged
in selling goods or labor services of processing, repair or maintenance, selling services,
intangible assets or immovables within the PRC or importing goods to the PRC are subject to
the payment of value-added tax. Pursuant to the Notice of the Ministry of Finance of the PRC
and State Taxation Administration of the PRC on Adjusting Value-Added Tax Rates (݁
‘) effective on May 1, 2018, a taxpayer who is
previously subject to 17% on value-added tax-taxable sales activities shall have the applicable
tax rate adjusted to 16%. According to the Announcement on Relevant Policies for Deepening
Value-Added Tax Reform (ʮѓ‘), which came into effect
on April 1, 2019, for value-added tax-taxable sales or imported goods of a value-added tax
general taxpayer where the value-added tax rate of 16% and 10% applies currently, it shall be
adjusted to 13% and 9% respectively.
REGULATIONS RELATING TO FOREIGN EXCHANGE
According to the PRC Foreign Currency Administration Rules ( ʕശɛ͏΍ձ਷̮ි၍
ଣૢԷ‘) promulgated on January 29, 1996 and amended from time to time, RMB is generally
freely convertible for current account items, including the distribution of dividends, trade and
service related foreign exchange transactions, but not for capital account items, such as direct
investment, loan, repatriation of investment and investment in securities outside the PRC,
unless the prior approval of the SAFE or its designated banks is obtained.
According to the SAFE Notice on Reforming and Regulating Policies on the Control over
Foreign Exchange Settlement of Capital Accounts (ձ஝ᇍ༟͉ධ
‘) promulgated on June 9, 2016, the settlement of foreign exchange
receipts under the capital account (including but not limited to the repatriation of capital raised
from overseas listing) may convert from foreign currency into RMB on self-discretionary
basis. The ratio of the discretionary exchange rate of foreign exchange receipts under the
domestic capital account is tentatively set at 100%. The SAFE may adjust the above ratio in
due course according to the balance of payment status.
According to the SAFE Circular on Further Promoting Cross-border Trade and
Investment Facilitation (‘)
which was promulgated on October 23, 2019, which amended by the SAFE Circular on Further
Promoting and reforming Cross-border Trade and Investment Facilitation (̮ි၍ଣ҅
‘) promulgated on December 4, 2023,
foreign-invested enterprises engaged in non-investment business are permitted to settle foreign
exchange capital in RMB and make domestic equity investments with such RMB funds
according to the law on the condition that the current Special Administrative Measures for
Access of Foreign Investment (Negative List) are not violated and the relevant domestic
investment projects are genuine and in compliance with laws.
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REGULATIONS RELATING TO OVERSEAS OFFERING AND LISTING
On February 17, 2023, the CSRC released the Overseas Listing Trial Measures and five
guidelines for the filing-based administration of overseas securities offerings and listings by
PRC companies (collectively, the “ New Filing Rules ”), which came into effect on March 31,
2023. The New Filing Rules apply to (i) PRC companies that seek to directly offer or list
securities on overseas markets; and (ii) PRC companies that seek to indirectly offer or list
securities on overseas markets. PRC companies that seek to offer or list securities on overseas
markets, both directly and indirectly, shall fulfill the filing procedure and report relevant
information to the CSRC. Subject to specific circumstances, the New Filing Rules require that,
among other things, (i) initial public offerings or listings on overseas markets shall be filed
with the CSRC within three working days after the relevant application is submitted overseas,
(ii) subsequent securities offerings of an issuer on the same overseas market where it has
previously offered and listed securities shall be filed with the CSRC within three working days
after the offering is completed, and (iii) subsequent securities offerings or listings of an issuer
on other overseas markets other than where it has offered and listed securities shall be filed
with the CSRC within three working days after the relevant application is submitted overseas.
If a PRC company fails to complete the filing procedure or the filing documents submitted by
a PRC company contain misrepresentation, misleading statement or material omission, such
PRC company may be subject to order to rectify, warnings and fines, and its controlling
shareholders, actual controllers, the person directly in charge and other directly responsible
persons may also be subject to fines.
In addition, pursuant to the New Filing Rules, no overseas offering or listing shall be
made under any of the following circumstances: (i) such securities offering or listing is
explicitly prohibited by PRC laws, administrative regulations and relevant rules; (ii) the
proposed securities offering or listing may endanger national security as reviewed and
determined by relevant departments of the State Council in accordance with PRC laws; (iii) the
domestic company intending to make the securities offering or listing, or its controlling
shareholders or actual controller, have committed crimes of corruption, bribery, embezzlement,
misappropriation of property or undermining the order of the socialist market economy during
the latest three years; (iv) the domestic company intending to make the securities offering or
listing, being suspected of committing crimes or material violations of laws and regulations, is
under investigation according to law and no conclusion has yet been made thereof; or (v) there
are material ownership disputes over equity interests in the domestic company held by its
controlling shareholder or other shareholders that are controlled by the controlling shareholder
and/or actual controller.
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OVERVIEW
We are a leading hydrogen technology company in China. We have proven track record
in policy-driven projects, as well as noteworthy achievements in market-driven projects. Our
established presence in the domestic hydrogen market is complemented by our successful and
constant expansion into overseas markets, with a growing revenue contribution in overseas
markets. Our Company was established in the PRC on September 18, 2015. Mr. Lin, our
executive Director, chairperson of our Board and chief executive officer, has led the overall
operations and management of our Group since he founded our Group in September 2015. For
more details of the experience and qualifications of Mr. Lin, see “Directors, Supervisors and
Senior Management” in this prospectus.
BUSINESS DEVELOPMENT MILESTONES
The following table summarizes the key milestones in our business development:
Y ear Milestone
2015 /H1118/H1118/H1118/H1118/H1118We were established as a limited liability company under the name of
Hangzhou REFIRE Technology Co., Ltd. (Ҧ(ψ)ʮ̡)
2017 /H1118/H1118/H1118/H1118/H1118We launched and mass-produced Caven Series
Our R&D base in Vancouver, Canada was established
We completed Series Pre-A Financing and Series A Financing, and raised
RMB220 million
2018 /H1118/H1118/H1118/H1118/H1118We established the first after-sales service center for fuel cell vehicles in
the PRC
We joined the International Hydrogen Council
We changed our name to Shanghai REFIRE Group Ltd. (෧ঐ๕ණ
ʮ̡)
2019 /H1118/H1118/H1118/H1118/H1118Our products were applied to buses in Malaysia
We became the supporting institution for the Hydrogen Fuel Cell
Subcenter of the National Power Battery Innovation Center (ਗɢཥϫ
ཥϫʱʕː) under the leadership of the MIIT
We completed Series B Financing and Series B+ Financing with strategic
investors such as Sinopec Capital, and raised approximately RMB791.77
million
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
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Y ear Milestone
2020 /H1118/H1118/H1118/H1118/H1118We launched Prisma Series, whose hydrogen fuel cell systems are equipped
with proprietary fuel cell stacks
Our first industrialized production base for fuel cells, ASTRAWORKS (݋
ʈᅀ), commenced operation in Changshu, Jiangsu
The project named “Key Technologies and Industrialization of Long-Life
Fuel Cell Systems for Commercial Vehicles” (ཥϫӻ୕
ᗫᒟҦஔʿପุʷ) led by our Company won the first prize of the 2020
Science and Technology Award of the China Automotive Industry (2020 ϋ
ኪҦஔᆤ)
We were accredited as one of “The Specialized and New ‘Little Giant’
Enterprises” ( ਖ਼ၚतอ“ʃ̶ɛ”Άุ)
We were converted into a joint stock limited company under the laws of the
PRC and was renamed as Shanghai REFIRE Group Limited (෧ঐ
ʮ̡)
We completed Series C Financing and Series D Financing, and raised
RMB748.25 million
2021 /H1118/H1118/H1118/H1118/H1118We completed self-development and commenced commercialization of
MEA
We obtained performance assessment certificates issued by TÜV
Rheinland for our the fuel cell systems and fuel cell stacks
We entered into a memorandum of cooperation with Toyota to jointly
develop a new generation of fuel cell systems for commercial vehicles
We were accredited as a “Manufacturing Individual Champion Enterprise”
(ࠏڿby the MIIT
We obtained the laboratory accreditation certificate from China National
Accreditation Service for Conformity Assessment (Ⴉ̙
ึ) for our fuel cell testing center
2022 /H1118/H1118/H1118/H1118/H1118We completed Series E-1 Financing and Series E-2 Financing with industry
investors such as National Manufacturing Fund, FAW Jiefang and Yutong
Group, and raised approximately RMB2,178.91 million
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
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--- page 208 ---
Y ear Milestone
2023 /H1118/H1118/H1118/H1118/H1118We obtained the approval for the R&D project on the world’s first carbon
emission reduction certification methodology for fuel cell vehicles under
the Clean Development Mechanism of the Kyoto Protocol to the United
Nations Framework Convention on Climate Change
We were accredited as a “National Enterprise Technology Center” (Ά
ุҦஔʕː)
The Global Technical Regulation on the Safety of Fuel Cell Electric
Vehicles, in respect of which our Company participated, was promulgated
by the United Nations
We established an overseas subsidiary in Stuttgart, Germany
We enhanced our strategic layout and expanded our product offerings to
include hydrogen production systems and related components
2024 /H1118/H1118/H1118/H1118/H1118Two hydrogen-powered heavy-duty trucks of Sinopec ( ʕ਷ͩʷ), which
were equipped with our 180kW fuel cell systems, completed a 1,500-
kilometer test run from Beijing to Shanghai
The XC series hydrogen fuel cell forklifts which were manufactured by
Hangcha (ɸ) and equipped with our hydrogen fuel cell systems, were
awarded the “BICES 2023 Gold Award for Technological Innovation
Products” (ʕ਷(̏ԯ)ᚎ
ᆤ) at the 21st China Construction
Machinery Development Summit Forum (৷
ᄴሞእ)
Our Prisma Series were applied to the first hydrogen-powered locomotive
exported to Chile
The hydrogen-powered street-washing vehicles, which were jointly
developed by Yutong Group and us, were launched by the government of
Hong Kong under its Strategy of Hydrogen Development (ഄ
ଫ)
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
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OUR PRINCIPAL SUBSIDIARIES
As of the Latest Practicable Date, we had the following eight subsidiaries which made a
material contribution to our results of operation during the Track Record Period or are regarded
of strategic importance to us:
Subsidiaries
Date and place
of incorporation
Registered
capital/issued
share capital
Principal
business activities
REFIRE Technology /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118December 17, 2014;
PRC
RMB3,000,000,000 R&D, manufacturing
and sales of fuel cell
systems
Jiangsu REFIRE Technology Co.,
Ltd. (ʮ
̡)/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
November 23, 2018;
PRC
RMB350,000,000 Manufacturing and
sales of fuel cell
systems
Zhejiang Unilia Hydrogen
Technology Ltd. ( एϪᗲඎ૫
ʮ̡) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
March 31, 2022; PRC RMB50,000,000 Technology
development and
manufacturing of
bipolar plates (a type
of key components of
fuel cell systems)
Shanghai Unilia /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118May 23, 2017; PRC RMB100,000,000 R&D, manufacturing
and sales of key
components for fuel
cells, including fuel
cell stacks
Shanghai REFIRE Prismatic
Hydrogen Technology Co.,
Ltd. (ҦϞ
ʮ̡) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
June 26, 2023; PRC RMB10,000,000 R&D, manufacturing
and sales of hydrogen
energy equipment,
including PEM
hydrogen production
systems and hydrogen
power sources
Changde REFIRE Surge New
Materials Technology Co., Ltd.
(ࠢ
ʮ̡) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
April 1, 2023; PRC RMB12,500,000 R&D, manufacturing
and sales of alkaline
electrode materials
Unilia (Canada) Fuel Cells Inc.
(formerly known as Overdrive
Fuel Cell Engineering
Incorporated) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
September 8, 2017;
Canada
CAD9,759,268 R&D of key
components for fuel
cells
REFIRE Europe GmbH /H1118/H1118/H1118/H1118/H1118/H1118June 23, 2023;
Germany
EUR25,000 R&D and sales of
products and the
provision of services in
the field of fuel cells
and hydrogen
technology in Europe
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ESTABLISHMENT AND DEVELOPMENT OF OUR COMPANY
(1) Establishment of Our Company
On September 18, 2015, our Company was established as a limited liability company
under the laws of the PRC, with an initial registered capital of RMB25,000,000. The
shareholding structure of our Company upon establishment is set forth in the table below:
Shareholders
Registered
capital
subscribed for
Investment
amount
Corresponding
equity interest
in our
Company
(RMB) (RMB) (%)
Mr. Lin /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111813,000,000 13,000,000 52.00
Mr. LI Cong ( ҽᑋ)(1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187,000,000 124,688,000 28.00
Guangdong Hongyun Hydrogen Energy
Technology Co., Ltd. (ᒿ༶૫ঐ
ʮ̡)( “ Hongyun
Hydrogen Energy ”)(2) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,000,000 150,000,000 20.00
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/H111825,000,000 287,688,000 100.00
Notes:
(1) Mr. LI Cong served as a Director from July 2017 to September 2020. On December 22, 2023, Mr. LI
Cong transferred his entire equity interest in our Company (being 3,863,800 Shares, representing
approximately 4.75% equity interest in our Company at the time of transfer) to Ms. ZHANG Xiuying
(ߵthe mother of Mr. LI Cong) at a consideration of RMB6,877,600, and ceased to be our
Shareholder in December 2023.
(2) Hongyun Hydrogen Energy disposed of its entire equity interest in our Company and ceased to be our
Shareholder in April 2017. For further details, see “— (2) Major Shareholding Changes of Our Company
Before Conversion into Joint Stock Limited Company — (b) Equity Transfers in April 2017” in this
section.
(2) Major Shareholding Changes of Our Company Before Conversion into Joint Stock
Limited Company
(a) Equity Transfer in July 2016
On July 14, 2016, Mr. LI Cong ( ҽᑋ) entered into an equity transfer agreement with Mr.
SHEN Xianglong ( ӏୂᎲ), pursuant to which Mr. Li agreed to transfer registered capital of our
Company of RMB250,000 (representing 1.00% equity interest in our Company) to Mr. Shen,
who, to the best knowledge of our Directors, is an Independent Third Party, at a consideration
of RMB250,000. The equity transfer was completed on July 25, 2016.
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(b) Equity Transfers in April 2017
On March 27, 2017, the following parties entered into equity transfer agreements,
respectively, pursuant to which the following transfers of equity interest in our Company were
agreed:
Transferors Transferees
Registered
capital
transferred Consideration
Corresponding
equity interest in
our Company
(RMB) (RMB) (%)
Hongyun
Hydrogen
Energy /H1118/H1118/H1118/H1118
Guangdong Baohui
Chuangneng Enterprise
Management
Partnership (Limited
Partnership) (ᘒි
௴ঐΆุ၍ଣΥྫΆุ
(Υྫ)) (“ Baohui
Chuangneng ”)
(1)
2,500,000 8,500,000 10.00
Mr. MA Dongsheng
(͛)(2)
2,500,000 8,500,000 10.00
Mr. LI Cong
(ҽᑋ) /H1118/H1118/H1118/H1118
Shanghai Weilan (3) 1,200,000 1,200,000 4.80
Notes:
(1) On March 23, 2018, Baohui Chuangneng (formerly known as Guizhou Baohui Chuangneng Enterprise
Management Partnership (Limited Partnership) ( ൮ψᘒි௴ঐΆุ၍ଣΥྫΆุ(Υྫ)),
Guangzhou Huahong Yineng Investment Partnership (Limited Partnership) ( ᄿψ̹ശᒿᄂঐҳ༟ΥྫΆ
ุ(Υྫ)) and Guangzhou Baohui Chuangneng Investment Partnership (Limited Partnership) ( ᄿψ
ᘒි௴ঐҳ༟ΥྫΆุ(Υྫ))) further acquired registered capital of our Company of RMB732,500
from Mr. MA Dongsheng (͛) (representing 2.50% equity interest in our Company at the time of
transfer) at a consideration of RMB10,000,000. Baohui Chuangneng disposed of its entire equity interest
in our Company and ceased to be our Shareholder in September 2019. For further details, see “— (2)
Major Shareholding Changes of Our Company Before Conversion into Joint Stock Limited Company —
(g) Equity Transfers in September 2019” in this section.
(2) Mr. MA Dongsheng (͛) was a shareholder of Hongyun Hydrogen Energy holding 50% equity
interest at the time of transfer. He is the father of Ms. MA Audrey Jing Nan ( ৵౺฻), our executive
Director and vice president. On December 22, 2023, Mr. Ma transferred his entire equity interest in our
Company (being 1,767,500 Shares, representing approximately 2.17% equity interest in our Company
at the time of transfer) to Ms. Ma at a consideration of RMB6,009,500, and ceased to be our Shareholder
in December 2023.
(3) Shanghai Weilan is one of our ESOP Platforms. For further details, see also “— Employee Incentive
Platforms — (1) Shanghai Weilan” in this section.
The aforementioned equity transfers were completed on April 18, 2017.
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
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--- page 212 ---
(c) Series Pre-A Financing and Series A Financing (First Tranche) in July 2017
Pursuant to the capital increase agreement dated June 26, 2016, Ningbo Meishan
Free Trade Port Zone Huifeng Hydrogen Energy Equity Investment Partnership (Limited
Partnership) (ᛆҳ༟ΥྫΆุ(Υྫ)) (“ Huifeng Hydrogen
Energy ”) agreed to subscribe for the increased registered capital of our Company of
RMB1,300,000 at a total consideration of RMB20,000,000 (“ Series Pre-A Financing ”).
Pursuant to the capital increase agreement dated March 12, 2017 (the “ Series A
Financing Agreement ”), Shenzhen Qianhai Chunyang Asset Management Co., Ltd. (ऎ
ʮ̡)( “ Chunyang Capital ”) and Huiyang Jingneng Investment
Management (Beijing) Co., Ltd. (ԯঐҳ༟၍ଣ(̏ԯ)ʮ̡)( “ Huiyang Capital ”)
agreed to subscribe for the increased registered capital of our Company of RMB6,575,000 at
a total consideration of RMB200,000,000 through their respective designated entities under
their respective management, which shall be completed in two tranches (“ Series A
Financing ”).
Pursuant to the shareholders’ resolutions dated July 15, 2017, the registered capital of our
Company increased from RMB25,000,000 to RMB29,300,000. Among the increased registered
share capital of RMB4,300,000, (i) the registered share capital of RMB3,000,000 (representing
approximately 10.24% equity interest in our Company upon completion of capital increase)
were subscribed by Ningbo Meishan Free Trade Port Zone Pengfan Zhibin Investment
Partnership (Limited Partnership) (೼ಥਜᘄɭʘᏵҳ༟ΥྫΆุ(Υྫ))
(“Pengfan Zhibin ”) as designated by Chunyang Capital at a consideration of RMB50,000,000
pursuant to the Series A Financing Agreement; and (ii) the registered share capital of
RMB1,300,000 (representing approximately 4.44% equity interest in our Company upon
completion of the capital increase) were subscribed by Huifeng Hydrogen Energy at a
consideration of RMB20,000,000 pursuant to the capital increase agreement dated June 26,
2016. The aforementioned capital increase was completed on July 27, 2017.
Huifeng Hydrogen Energy disposed of its entire equity interest in our Company and
ceased to be our Shareholder in September 2019. For further details, see “— (2) Major
Shareholding Changes of Our Company Before Conversion into Joint Stock Limited Company
— (g) Equity Transfers in September 2019” in this section.
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--- page 213 ---
(d) Series A Financing (Second Tranche) in July 2018
In connection with the Series A Financing Agreement as disclosed above and pursuant to
the shareholders’ resolution dated June 27, 2018, the registered capital of our Company
increased from RMB29,300,000 to RMB32,875,000, and the relevant subscribers agreed to
subscribe for the increased registered capital of RMB3,575,000 of our Company (representing
approximately 10.87% equity interest in our Company upon completion of the capital increase)
at a total consideration of RMB150,000,000. The respective subscription amounts and
consideration paid by the relevant subscribers were as follows:
Subscribers
Registered capital
subscribed for Consideration
Approximate
corresponding
equity interest in
our Company
(upon completion of
the capital increase)
(RMB) (RMB) (%)
Ningbo Huiqing Jingnuo Venture
Capital Partnership (Limited
Partnership) (౉૶ԯፕ௴
ุҳ༟ΥྫΆุ(Υྫ))
(formerly known as Ningbo
Meishan Free Trade Port Zone
Huiqing Jingnuo Investment
Partnership (Limited
Partnership) (೼ಥ
ਜ౉૶ԯፕҳ༟ΥྫΆุ(ࠢ
Υྫ)) and Qingdao Huiqing
Jingnuo Investment
Partnership (Limited
Partnership) (౉૶ԯፕҳ
༟ΥྫΆุ(Υྫ)))
(“Huiqing Jingnuo ”)
(1) /H1118/H1118/H1118/H1118/H1118/H11181,430,000 60,000,000 4.35
Ningbo Luping Jingneng Venture
Capital Partnership (Limited
Partnership) (ኁ̻ԯঐ௴
ุҳ༟ΥྫΆุ(Υྫ))
(formerly known as Ningbo
Meishan Free Trade Port Zone
Luping Jingneng Investment
Partnership (Limited
Partnership) (೼ಥ
ਜኁ̻ԯঐҳ༟ΥྫΆุ(ࠢ
Υྫ)) and Qingdao Luping
Jingneng Investment
Partnership (Limited
Partnership) (ኁ̻ԯঐҳ
༟ΥྫΆุ(Υྫ)))
(“Luping Jingneng ”)
(1) /H1118/H1118/H1118/H1118/H1118/H11181,144,000 48,000,000 3.48
Ningbo Meishan Free Trade Port
Zone Jinglong Baoluo
Investment Partnership
(Limited Partnership) (ૠ
೼ಥਜԯඤᘒᖯҳ༟Υྫ
Άุ(Υྫ)) (“ Jinglong
Baoluo ”)
(2) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,001,000 42,000,000 3.04
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
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--- page 214 ---
Notes:
(1) Huiqing Jingnuo and Luping Jingneng subscribed for the increased registered capital of our Company
as designated by Huiyang Capital.
(2) Jinglong Baoluo subscribed for the increased registered capital of our Company as designated by
Chunyang Capital.
The aforementioned capital increase was completed on July 2, 2018.
(e) Capital Increase and Series B Financing in June 2019
Pursuant to the capital increase agreement dated August 10, 2018 and the supplemental
capital increase agreement dated June 3, 2019, the relevant subscribers agreed to subscribe for
the increased registered capital of RMB10,958,400 of our Company (representing
approximately 25.00% equity interest in our Company upon completion of the capital increase)
at a total consideration of RMB333,333,300 (other than the subscription by Shanghai Weiqing
(one of our ESOP Platforms), the subscriptions are collectively referred to as “ Series B
Financing ”). The respective subscription amounts and consideration paid by the relevant
subscribers were as follows:
Subscribers
Registered capital
subscribed for Consideration
Approximate
corresponding
equity interest in
our Company
(upon completion of
the capital increase)
(RMB) (RMB) (%)
Shanghai Weiqing /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,652,700 33,333,300 8.33
Ningbo Trustbridge II Equity
Investment Partnership
(Limited Partnership) (ᅚ
ᛆҳ༟ΥྫΆุ(ࠢ
Υྫ)) (“ Trustbridge II ”) /H1118/H1118/H1118/H11182,191,700 90,000,000 5.00
Ningbo Trustbridge New
Economy II Equity Investment
Partnership (Limited
Partnership) (อ຾᏶
ᛆҳ༟ΥྫΆุ(Υ
ྫ)) (“ Trustbridge New
Economy ”) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118730,600 30,000,000 1.67
Zhuhai Legend Bingde Equity
Investment Enterprise (Limited
Partnership) (ٰ
ᛆҳ༟Άุ(Υྫ))
(“Legend Bingde ”) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118730,600 30,000,000 1.67
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
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--- page 215 ---
Subscribers
Registered capital
subscribed for Consideration
Approximate
corresponding
equity interest in
our Company
(upon completion of
the capital increase)
(RMB) (RMB) (%)
Ningbo Meishan Free Trade Port
Zone Jiazhan Equity
Investment Partnership
(Limited Partnership) (ૠ
ᛆҳ༟Υྫ
Άุ(Υྫ)) (“ Ningbo
Jiazhan ”) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118487,000 20,000,000 1.11
Zhangjiagang Bohua Venture
Capital Partnership (Limited
Partnership) (ಥ௹ശ௴ุ
ҳ༟ΥྫΆุ(Υྫ))
(formerly known as Ningbo
Meishan Free Trade Port Zone
Bohua Guangcheng Venture
Capital Partnership (Limited
Partnership) (೼ಥ
ਜ௹ശΈ༐௴ุҳ༟ΥྫΆุ
(Υྫ))) (“ Zhangjiagang
Bohua ”) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,217,600 50,000,000 2.78
Suzhou Sanxing Zhiqi Venture
Capital Partnership (Limited
Partnership) ( ᘽψɧБ౽ຩ௴
ุҳ༟ΥྫΆุ(Υྫ))
(formerly known as Xianning
Sanxing Zhiqi Equity
Investment Partnership
(Limited Partnership) (ྐྵɧ
ᛆҳ༟ΥྫΆุ(ࠢ
Υྫ)) and Suzhou Sanxing
Zhiqi Equity Investment
Partnership (Limited
Partnership) (ٰ
ᛆҳ༟ΥྫΆุ(Υྫ)))
(“Sanxing Zhiqi ”)/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118730,600 30,000,000 1.67
Beijing Legend Chengye Equity
Investment Partnership
(Limited Partnership) ( ̏ԯё
ᛆҳ༟ΥྫΆุ(ࠢ
Υྫ)) (“ Legend Chengye ”) /H1118/H1118 1,217,600 50,000,000 2.78
The aforementioned capital increase was completed on June 6, 2019.
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
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--- page 216 ---
(f) Series B+ Financing in August 2019
Pursuant to the capital increase agreement dated July 12, 2019, Sinopec Capital Co., Ltd.
(ʮ̡)( “ Sinopec Capital ”) agreed to subscribe for the increased
registered capital of RMB11,651,900 of our Company (representing approximately 21.00%
equity interest in our Company upon completion of the capital increase) at a total consideration
of RMB491,772,200 (“ Series B+ Financing ”). The capital increase was completed on August
8, 2019.
(g) Equity Transfers in September 2019
On September 19, 2019, Huifeng Hydrogen Energy entered into an equity transfer
agreement with each of (i) Ningbo Qianshi Guoxin Equity Investment Partnership (Limited
Partnership) (ᛆҳ༟ΥྫΆุ(Υྫ)) (“ Qianshi Guoxin ”) and (ii)
Ningbo Qianshi Fenghe Investment Partnership (Limited Partnership) (ᑹͩ㋘ͫҳ༟Υྫ
Άุ(Υྫ)) (“ Qianshi Fenghe ”), pursuant to which Huifeng Hydrogen Energy agreed to
transfer (i) the registered capital of RMB995,600 of our Company (representing approximately
1.79% equity interest in our Company) to Qianshi Guoxin at a consideration of
RMB39,574,500, and (ii) the registered capital of RMB304,400 of our Company (representing
approximately 0.55% equity interest in our Company) to Qianshi Fenghe at a consideration of
RMB12,500,000.
On the same date, Baohui Chuangneng entered into an equity transfer agreement with
each of (i) Ms. FENG Yan ( ඹዲ), (ii) Ningbo Qianshi Shengxin Investment Partnership
(Limited Partnership) (ᑹͩ᳅อҳ༟ΥྫΆุ(Υྫ)) (“Qianshi Shengxin ”) and (iii)
Ningbo Qianshi Zhengxin Investment Partnership (Limited Partnership) (ᑹ͍ͩอҳ༟Υ
ྫΆุ(Υྫ)) (“ Qianshi Zhengxin ”), pursuant to which Baohui Chuangneng agreed to
transfer (i) the registered capital of RMB161,600 of our Company (representing approximately
0.29% equity interest in our Company) to Ms. Feng (a limited partner with approximately
5.00% partnership interest in Baohui Chuangneng at the time of transfer) at a consideration of
RMB1,000,000, (ii) the registered capital of RMB2,084,600 of our Company (representing
approximately 3.76% equity interest in our Company) to Qianshi Shengxin at a consideration
of RMB97,018,800, and (iii) the registered capital of RMB986,300 of our Company
(representing approximately 1.78% equity interest in our Company) to Qianshi Zhengxin at a
consideration of RMB45,900,000.
The aforementioned equity transfers were completed on September 20, 2019.
(h) Series C Financing and Equity Transfers in June 2020
Pursuant to the capital increase agreement dated June 3, 2020, Toyota Tsusho (Shanghai)
Co., Ltd. ( ᔮ͞ஷਠ(ɪऎ)ʮ̡)( “ Toyota Tsusho ”) agreed to subscribe for the increased
registered capital of RMB578,000 of our Company (representing approximately 1.03% equity
interest in our Company upon completion of the capital increase) at a total consideration of
RMB31,250,000 (“ Series C Financing ”). Toyota Tsusho had also been one of our five largest
suppliers of bipolar plates, graphite plates and optical plates during the Track Record Period.
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
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--- page 217 ---
Further, on June 5, 2020, Mr. LI Cong ( ҽᑋ) entered into an equity transfer agreement
with each of (i) Nanjing Jingxiang Capital Partnership (Limited Partnership) (ԯᗝ྅༟͉Υ
ྫΆุ(Υྫ)) (“Jingxiang Capital ”), (ii) Global Holding Group Co., Ltd. (ණྠ
ʮ̡)( “Global Holding ”), and (iii) Tianjin Chongmin Enterprise Management Consulting
Partnership (Limited Partnership) (ᶲᦩΆุ၍ଣፔ༔ΥྫΆุ(Υྫ)) (“ Tianjin
Chongmin ”), pursuant to which Mr. Li agreed to transfer (i) the registered capital of
RMB776,800 of our Company (representing approximately 1.39% equity interest in our
Company) to Jingxiang Capital at a consideration of RMB40,000,000, (ii) the registered capital
of RMB41,000 of our Company (representing approximately 0.07% equity interest in our
Company) to Global Holding at a consideration of RMB2,000,000, and (iii) the registered
capital of RMB181,600 of our Company (representing approximately 0.32% equity interest in
our Company) to Tianjin Chongmin at a consideration of RMB9,000,000.
The aforementioned capital increase and equity transfers were completed on June 9, 2020.
(i) Equity Transfers in August 2020
On July 25, 2020, Mr. LI Cong ( ҽᑋ) entered into an equity transfer agreement with each
of (i) Hainan Yongheng Management Consulting Partnership (Limited Partnership) (͑ፅ
၍ଣፔ༔ΥྫΆุ(Υྫ)) (“ Hainan Y ongheng ”) and (ii) Suqian Yuanguan Enterprise
Management Partnership (Limited Partnership) ( ੖ቋʩ஫Άุ၍ଣΥྫΆุ(Υྫ))
(formerly known as Ningbo Yuanguan Enterprise Management Partnership (Limited
Partnership) (ʩ஫Άุ၍ଣΥྫΆุ(Υྫ))) (“ Suqian Yuanguan ”), pursuant to
which Mr. Li agreed to transfer (i) registered capital of our Company of RMB410,000
(representing approximately 0.73% equity interest in our Company) to Hainan Yongheng at a
consideration of RMB20,000,000, and (ii) registered capital of our Company of RMB276,800
(representing approximately 0.49% equity interest in our Company) to Suqian Yuanguan at a
consideration of RMB13,500,000. The equity transfers were completed on August 19, 2020.
(3) Conversion into Joint Stock Limited Company and Major Shareholding Changes of
Our Company After Conversion
(a) Conversion into Joint Stock Limited Company
Pursuant to the promoters’ agreement dated August 20, 2020 entered into by all the then
Shareholders and the shareholders’ resolutions dated August 20, 2020, all promoters (being all
the then Shareholders) agreed to convert our Company from a limited liability company into
a joint stock limited company. Upon completion of the conversion, the share capital of our
Company was RMB56,063,300 divided into 56,063,300 Shares with a nominal value of
RMB1.00 each, which were subscribed by all the then Shareholders in proportion to their
respective equity interests in our Company before the conversion. The conversion was
completed on September 11, 2020 when our Company obtained a new business license and was
renamed as Shanghai REFIRE Group Limited (ʮ̡).
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(b) Series D Financing in September 2020
Pursuant to the share subscription agreement dated September 22, 2020, the relevant
subscribers agreed to subscribe for 8,932,751 Shares (representing approximately 13.74%
equity interest in our Company upon completion of the capital increase) at a total consideration
of RMB717,000,000 (“ Series D Financing ”). As such, the share capital of our Company
increased from RMB56,063,300 to RMB64,996,051 pursuant to the shareholders’ resolutions
of the same date. The respective subscription amounts and consideration paid by the relevant
subscribers were as follows:
Subscribers
Number of Shares
subscribed for Consideration
Approximate
corresponding
equity interest in
our Company
(upon completion
of the capital
increase)
(RMB) (%)
Zhengzhou Spruce Automotive
Industry Equity Investment Fund
(Limited Partnership) ( ቍψථӄӛԓ
ږ(Υྫ))
(“Zhengzhou Spruce ”) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,363,798 270,000,000 5.18
Shenzhen Chunyang Songteng Venture
Capital Partnership (Limited
Partnership) (ජ཰ᙜ௴ุҳ༟
ΥྫΆุ(Υྫ)) (“ Chunyang
Songteng ”) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,314,373 105,500,000 2.02
Beijing Shuimu Hydrogen Source
Phase I Industrial Investment Center
(Limited Partnership) ( ̏ԯ˥˝૫๕
ɓಂପุҳ༟ʕː(Υྫ))
(“Shuimu Hydrogen ”)/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118996,681 80,000,000 1.53
Guangdong Dezaihou Qicheng Equity
Investment Partnership (Limited
Partnership) (ᛆҳ
༟ΥྫΆุ(Υྫ)) (“ Dezaihou
Qicheng ”) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118579,321 46,500,000 0.89
Guangdong Jiayuan Technology
Co., Ltd. (ʮ
̡)( “ Jiayuan Technology ”) /H1118/H1118/H1118/H1118/H1118/H1118498,340 40,000,000 0.77
Zhangjiagang Bohua /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118498,340 40,000,000 0.77
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Subscribers
Number of Shares
subscribed for Consideration
Approximate
corresponding
equity interest in
our Company
(upon completion
of the capital
increase)
(RMB) (%)
Ningbo Meishan Free Trade Port Zone
Weiming Venture Capital
Partnership (Limited Partnership)
(௴ุҳ༟Υ
ྫΆุ(Υྫ)) (formerly known
as Ningbo Meishan Free Trade Port
Zone Weiming Investment
Partnership (Limited Partnership)
(ҳ༟ΥྫΆ
ุ(Υྫ))) (“ Weiming VC ”) /H1118/H1118/H1118498,340 40,000,000 0.77
Hubei Cathay Smart New Energy
Fund, L.P. ( ಳ̏௱ሾ౽ᅆอঐ๕ਿ
ΥྫΆุ(Υྫ)) (“ Hubei
Cathay Energy ”)/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118498,340 40,000,000 0.77
Yiwu Hexie Jinhong Equity
Investment Partnership (Limited
Partnership) (ᛆҳ༟
ΥྫΆุ(Υྫ)) (“ Hexie
Jinhong ”) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118373,755 30,000,000 0.58
Dongfang Electric (Chengdu)
Hydrogen Energy Equity
Investment Fund Partnership
(Limited Partnership)
(˙ཥं(ϓே)Υ
ྫΆุ(Υྫ))
(“Dongfang Electric ”)/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118249,170 20,000,000 0.38
Mr. WAN Jingzhao ( ຬ౻๫) /H1118/H1118/H1118/H1118/H1118/H1118/H111862,293 5,000,000 0.10
The aforementioned capital increase was completed September 25, 2020.
(c) Equity Transfer in January 2022
Pursuant to an equity transfer agreement entered into between Ningbo Jiazhan and
Gongqingcheng Xiaofu Jucheng Equity Investment Partnership (Limited Partnership) (۬ڡ
ᛆҳ༟ΥྫΆุ(Υྫ)) (“ Xiaofu Jucheng ”) on December 31, 2021, Ningbo
Jiazhan agreed to transfer 199,058 Shares (representing approximately 0.31% equity interest in
our Company) to Xiaofu Jucheng at a consideration of RMB24,500,000. The equity transfer
was completed on January 20, 2022.
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Each of Xiaofu Jucheng and Ningbo Jiazhan is a limited partnership established under the
laws of the PRC and is managed by its general partner, Ningbo Meishan Free Trade Port Zone
Xiaofu Jiahui Equity Investment Management Partnership (Limited Partnership) (ڭ
ᛆҳ༟၍ଣΥྫΆุ(Υྫ)), which, to the best knowledge of our
Directors, is an Independent Third Party.
(d) Series E-1 Financing in March 2022
Pursuant to the share subscription agreement dated January 25, 2022 and the joinder
agreement dated March 23, 2022, the relevant subscribers agreed to subscribe for 12,715,320
Shares (representing approximately 16.36% equity interest in our Company upon completion
of the capital increase) at a total consideration of approximately RMB1,698,131,000 (as
adjusted by the joinder agreement dated November 29, 2022 as set out in the paragraph headed
“(f) Series E-2 Financing in December 2022” below) (“ Series E-1 Financing ”). As such, the
share capital of our Company increased from RMB64,996,051 to RMB77,711,371 pursuant to
the shareholders’ resolutions dated January 18, 2022 and March 23, 2022. The respective
subscription amounts and consideration paid by the relevant subscribers (as adjusted by the
joinder agreement dated November 29, 2022) were as follows:
Subscribers
Number of Shares
subscribed for
Consideration
(approximation)
Approximate
corresponding
equity interest in
our Company
(upon completion
of the capital
increase)
(RMB) (%)
Shenzhen Chunyang Hongxin Venture
Capital Partnership (Limited
Partnership) (௴ุҳ༟
ΥྫΆุ(Υྫ)) (“ Chunyang
Hongxin ”) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118224,124 29,932,000 0.29
National Manufacturing Transformation
and Upgrade Fund Co., Ltd. (Ⴁ
ʮ̡)
(“National Manufacturing Fund ”)/H1118/H1118 3,735,405 498,863,000 4.81
Yutong Bus Co., Ltd. (΅Ϟ
ʮ̡)( “ Yutong Bus ”)
(1) /H1118/H1118/H1118/H1118/H1118/H1118/H11181,494,162 199,545,000 1.92
Mr. WAN Jingzhao ( ຬ౻๫) /H1118/H1118/H1118/H1118/H1118/H1118/H111874,708 9,977,000 0.10
Shenzhen HongShan Hanchen Equity
Investment Partnership (Limited
Partnership) (ᛆҳ
༟ΥྫΆุ(Υྫ))
(“HongShan Hanchen ”) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,120,622 149,659,000 1.44
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Subscribers
Number of Shares
subscribed for
Consideration
(approximation)
Approximate
corresponding
equity interest in
our Company
(upon completion
of the capital
increase)
(RMB) (%)
Ningbo Meishan Free Trade Port Zone
Saifus Equity Investment Partnership
(Limited Partnership) (೼
ᛆҳ༟ΥྫΆุ(Υ
ྫ)) (“ Saifus Equity Investment ”) /H1118/H1118 313,774 41,905,000 0.40
Nakatsu Innovation (Tianjin)
Investment Co., Ltd. (௴อ(ݵ)
ʮ̡)( “ Nakatsu
Innovation ”) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,494,162 199,545,000 1.92
Yangzhou Huajian Chengding Equity
Investment Partnership (Limited
Partnership) (ᛆҳ
༟ΥྫΆุ(Υྫ))
(“Huajian Chengding ”) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118373,541 49,886,000 0.48
Wenzhou Zhemin Investment Loctite
Internet of Things Industry Fund
Partnership (Limited Partnership)
(Υྫ
Άุ(Υྫ)) (“ Wenzhou Zhemin
Investment ”) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118373,541 49,886,000 0.48
Shanghai Lianming Machinery Co., Ltd.
(ʮ̡)
(“Lianming Machinery ”)/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118149,416 19,955,000 0.19
Hangzhou Junze No. 3 Enterprise
Service Partnership (Limited
Partnership) (ψёዣ
ਕ
ΥྫΆุ(Υྫ))
(“Junze No. 3 ”)/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,120,622 149,659,000 1.44
Jiaxing Hydrogen Energy Industry
Development Equity Investment
Partnership (Limited Partnership)
(ᛆҳ༟ΥྫΆุ
(Υྫ)) (“ Jiaxing Hydrogen ”) /H1118/H1118 373,541 49,886,000 0.48
Jiayuan Technology /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118373,541 49,886,000 0.48
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
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Subscribers
Number of Shares
subscribed for
Consideration
(approximation)
Approximate
corresponding
equity interest in
our Company
(upon completion
of the capital
increase)
(RMB) (%)
Shanghai Shengyuehong Private
Investment Fund Partnership (Limited
Partnership) (ӷ෍ҳ༟ਿ
ΥྫΆุ(Υྫ))
(“Shanghai Shengyuehong ”) /H1118/H1118/H1118/H1118/H1118373,541 49,886,000 0.48
Suzhou Zhongheng Venture Capital
Center (Limited Partnership)
(ᘽψ଺㛬௴ุҳ༟ʕː(Υྫ))
(“Suzhou Zhongheng ”) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118224,124 29,932,000 0.29
Beijing Gao Ling Yurun Equity
Investment Fund Partnership (Limited
Partnership) (ᛆҳ༟
ΥྫΆุ(Υྫ))
(“Gao Ling Yurun ”)/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111874,708 9,977,000 0.10
Zhuhai Pangheng Equity Investment
Partnership (Limited Partnership)
(ᛆҳ༟ΥྫΆุ(Υ
ྫ)) (“ Zhuhai Pangheng ”) /H1118/H1118/H1118/H1118/H1118/H1118/H111874,708 9,977,000 0.10
Hangzhou Financial Investment
Industrial Co., Ltd. (ҳྼุϞ
ʮ̡)( “ Hangzhou Industrial ”) /H1118/H1118 74,708 9,977,000 0.10
Hangzhou Financial Investment
Enterprises Group Co., Ltd.
(ʮ̡)
(“Hangzhou Enterprises ”) /H1118/H1118/H1118/H1118/H1118/H1118/H111874,708 9,977,000 0.10
Ningbo Xucheng Enterprise
Management Consulting Partnership
(Limited Partnership) (ϛᆋΆุ
၍ଣፔ༔ΥྫΆุ(Υྫ))
(“Ningbo Xucheng”) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118149,416 19,955,000 0.19
Mr. CAO Hongwei ( ૎ᒿਃ) /H1118/H1118/H1118/H1118/H1118/H1118/H1118224,124 29,932,000 0.29
Wuxi Binni Venture Capital Partnership
(Limited Partnership) (௴ุ
ҳ༟ΥྫΆุ(Υྫ))
(“Wuxi Binni ”) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118149,416 19,955,000 0.19
Shanghai Fulemi Exhibition Service
Co., Ltd. (ʮ
̡)( “ Shanghai Fulemi ”)
(2) /H1118/H1118/H1118/H1118/H1118/H111874,708 9,977,000 (3) 0.10
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Notes:
(1) Yutong Group (including Yutong Bus) had also been one of our five largest customers of hydrogen fuel
cell systems, components and after-sale services during the Track Record Period.
(2) Shanghai Fulemi transferred its entire equity interest in our Company to Guangdong Kaiding Hongtai
Equity Investment Partnership (Limited Partnership) (ᛆҳ༟ΥྫΆุ(Υྫ))
(“Kaiding Hongtai ”) and ceased to be our Shareholder in June 2022. As such, pursuant to the joinder
agreement dated November 29, 2022, Kaiding Hongtai, as a transferee of the Shares subscribed by
Shanghai Fulemi in Series E-1 Financing, was refunded part of the consideration paid by Shanghai
Fulemi in accordance with the adjustment to the total consideration for Series E-1 Financing. For further
details relating to the aforementioned equity transfer, see “— (3) Conversion into Joint Stock Limited
Company and Major Shareholding Changes of Our Company After Conversion — (e) Equity Transfers
in June 2022” in this section.
The capital increase in connection with the share subscription by Chunyang Hongxin was
completed on February 9, 2022 and the capital increase in connection with the share
subscription by the other subscribers as set out above was completed March 30, 2022.
(e) Equity Transfers in June 2022
In June 2022, each of (i) Tianjin Chongmin, (ii) Shanghai Fulemi, and (iii) Dongfang
Electric entered into a share transfer agreement with Kaiding Hongtai, pursuant to which (i)
Tianjin Chongmin transferred 83,009 Shares (representing approximately 0.11% equity interest
in our Company) to Kaiding Hongtai at a consideration of RMB10,000,000, (ii) Shanghai
Fulemi transferred 74,708 Shares (representing approximately 0.10% equity interest in our
Company) to Kaiding Hongtai at a consideration of RMB10,000,000, and (iii) Dongfang
Electric transferred 94,464 Shares (representing approximately 0.12% equity interest in our
Company) to Kaiding Hongtai at a consideration of RMB11,380,000.
Further, in June 2022, Mr. Lin transferred 1,165,728 Shares (representing approximately
1.50% equity interest in our Company) to Shanghai Weijing (one of our ESOP Platforms) at a
consideration of RMB39,215,090.
The aforementioned equity transfers were completed on June 28, 2022.
(f) Series E-2 Financing in December 2022
Pursuant to the joinder agreement dated November 29, 2022 to the share subscription
agreement in connection with the Series E-1 Financing, FAW Jiefang Automotive Co., Ltd. ( ɓ
ʮ̡)( “FA W Jiefang”) agreed to subscribe for 3,600,000 Shares (representing
approximately 4.43% equity interest upon completion of the capital increase) at a total
consideration of RMB480,780,000 (“ Series E-2 Financing ”). As such, the share capital of our
Company increased from RMB77,711,371 to RMB81,311,371 pursuant to the shareholders’
resolutions of the same date. The capital increase was completed on December 16, 2022.
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FAW Jiefang had also been one of our five largest customers of hydrogen fuel cell
systems and components during the Track Record Period.
EMPLOYEE INCENTIVE PLATFORMS
In recognition of the contributions of our employees and external consultant to our
Group’s development, Shanghai Weilan, Shanghai Weiqing, Shanghai Weijing, Shanghai
Weijun, Shanghai Yuanyiqing, Shanghai Weiyi and Canada ESOP Platform were established as
our employee incentive platforms.
(1) Shanghai Weilan
Shanghai Weilan was established as a limited partnership under the laws of the PRC on
March 3, 2017. Mr. Lin is the general partner and executive partner of Shanghai Weilan and
is responsible for the management of Shanghai Weilan. As of the date of this prospectus,
Shanghai Weilan had 22 limited partners, including Dr. HU Zhe (ࡪߡour executive
Director), Ms. MA Audrey Jing Nan ( ৵౺฻) (our executive Director), Dr. ZHAI Shuang ( ၱ
ᕐ) (our executive Director), Mr. WANG Chuqi ( ӓูಒ) (our Supervisor), Mr. SUN Bei (࢑
̏) (our Supervisor), 16 former/existing employees of our Group and one external technology
consultant to our Group, and directly held approximately 1.48% equity interest in our
Company.
(2) Shanghai Weiqing
Shanghai Weiqing was established as a limited partnership under the laws of the PRC on
June 12, 2018. Mr. Lin is the general partner and executive partner of Shanghai Weiqing and
is responsible for the management of Shanghai Weiqing. As of the date of this prospectus,
Shanghai Weiqing had 36 limited partners, including Shanghai Weijun, Ms. MA Audrey Jing
Nan ( ৵౺฻) (our executive Director), Dr. ZHAI Shuang ( ၱᕐ) (our executive Director), Mr.
ZHAO Yongsheng (͛) (our executive Director), Mr. WANG Chuqi ( ӓูಒ) (our
Supervisor), Mr. SUN Bei (̏) (our Supervisor), Mr. ZHENG Zhong (ࠠour senior
management), Mr. XIE Hongyu (ڠߎour senior management), Mr. SHAO Liangming (ڑ
׼our senior management) and 27 former/existing employees of our Group, and directly
held approximately 4.49% equity interest in our Company.
(3) Shanghai Weijing
Shanghai Weijing was established as a limited partnership under the laws of the PRC on
May 27, 2022. Mr. Lin is the general partner and executive partner of Shanghai Weijing and
is responsible for the management of Shanghai Weijing. As of the date of this prospectus,
Shanghai Weijing had 38 limited partners, including Shanghai Weiyi, Canada ESOP Platform,
Dr. ZHAI Shuang ( ၱᕐ) (our executive Director), Mr. ZHAO Yongsheng (͛) (our
executive Director), Mr. SUN Bei (̏) (our Supervisor), Mr. XIE Hongyu (ڠߎour
senior management) and 32 former/existing employees of our Group and directly held
approximately 1.43% equity interest in our Company.
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(4) Shanghai Weijun
Shanghai Weijun was established as a limited partnership under the laws of the PRC on
July 18, 2018. Mr. Lin is the general partner and executive partner of Shanghai Weijun and is
responsible for the management of Shanghai Weijun. As of the date of this prospectus,
Shanghai Weijun had 37 limited partners, including Shanghai Yuanyiqing (one of our ESOP
Platforms), Ms. MA Audrey Jing Nan ( ৵౺฻) (our executive Director), Mr. WANG Chuqi ( ӓ
ูಒ) (our Supervisor), Mr. SUN Bei (̏) (our Supervisor), Mr. ZHENG Zhong (ࠠour
senior management), Mr. XIE Hongyu (ڠߎour senior management) and 31
former/existing employees of our Group, and indirectly held approximately 2.43% equity
interest in our Company through Shanghai Weiqing.
(5) Shanghai Yuanyiqing
Shanghai Yuanyiqing was established as a limited partnership under the laws of the PRC
on June 3, 2019. Mr. Lin is the general partner and executive partner of Shanghai Yuanyiqing
and is responsible for the management of Shanghai Yuanyiqing. As of the date of this
prospectus, Shanghai Yuanyiqing had 14 limited partners, including Dr. HU Zhe (ࡪߡour
executive Director), Dr. Christopher John GUZY (our senior management) and 12
former/existing employees of our Group, and indirectly held approximately 1.04% equity
interest in our Company through Shanghai Weiqing.
(6) Shanghai Weiyi
Shanghai Weiyi was established as a limited partnership under the laws of the PRC on
February 13, 2023. Mr. Lin is the general partner and executive partner of Shanghai Weiyi and
is responsible for the management of Shanghai Weiyi. As of the date of this prospectus,
Shanghai Weiyi had 23 limited partners, all of whom are existing employees of our Group, and
indirectly held approximately 0.33% equity interest in our Company through Shanghai
Weijing.
(7) Canada ESOP Platform
Canada ESOP Platform was established as a limited partnership under the laws of the
Province of British Columbia on January 9, 2024. The general partner of Canada ESOP
Platform is 1415085 B.C. Ltd., which has delegated all of its powers and duties as a general
partner of Canada ESOP Platform to Mr. Lin pursuant to a management agreement dated
January 9, 2024. As such, Mr. Lin is responsible for the management of Canada ESOP
Platform. As of the date of this prospectus, Canada ESOP Platform had seven limited partners,
including 1415085 B.C. Ltd. (which is held by three employees of Unilia (Canada) Fuel Cells
Inc., a non-wholly owned subsidiary of our Company, and holds partnership interest as a
limited partner) and six existing employees of our Group, and indirectly held approximately
0.03% equity interest in our Company through Shanghai Weijing.
For further details of our ESOP Platforms, see also “— Further Information about our
Directors, Supervisors and Substantial Shareholders — 5. Employee Incentive Schemes” in
Appendix VI to this prospectus.
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EMPLOYEE INCENTIVE SCHEMES
We have adopted the Employee Incentive Schemes, the purpose of which is to incentivize
our employees and external consultant who have made contribution to our Group’s
development.
For details of the Employee Incentive Schemes, see “Further Information about our
Directors, Supervisors and Substantial Shareholders — 5. Employee Incentive Schemes” in
Appendix VI to this prospectus.
PRE-IPO SHARE OPTION SCHEME
We have adopted the Pre-IPO Share Option Scheme, the purpose of which is to recognize
the contribution to our Group by our employees. As of the Latest Practicable Date, options to
subscribe for an aggregate of 4,828,750 Domestic Shares (representing approximately 5.61%
of the total issued share capital of our Company immediately upon completion of the Global
Offering (assuming the Over-allotment Option is not exercised and the options granted under
the Pre-IPO Share Option Scheme are not exercised) have been conditionally granted to 128
eligible participants under the Pre-IPO Share Option Scheme.
For details of the Pre-IPO Share Option Scheme, see “Further Information about our
Directors, Supervisors and Substantial Shareholders — 6. Pre-IPO Share Option Scheme” in
Appendix VI to this prospectus.
Save as disclosed above and in the paragraphs headed “Further Information about our
Directors, Supervisors and Substantial Shareholders — 5. Employee Incentive Schemes” and
“Further Information about our Directors, Supervisors and Substantial Shareholders — 6.
Pre-IPO Share Option Scheme” in Appendix VI to this prospectus, as of the Latest Practicable
Date, our Group does not have any outstanding share options, warrants, convertible debt
securities or other convertible instruments, or similar rights convertible into our Shares.
PRINCIPAL TERMS OF THE PRE-IPO INVESTMENTS
(1) Overview
Between July 2016 and December 2022, our Company obtained several rounds of
investments from the Pre-IPO Investors through subscriptions for increased registered capital
of our Company and/or through transfers by the then Shareholders. For further details, see “—
Establishment and Development of Our Company” in this section.
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(2) Principal terms of the Pre-IPO Investments
The following table (1) summarizes the key terms of the Pre-IPO Investments:
Series Pre-A
Financing Series A Financing Series B Financing
Series B+
Financing Series C Financing Series D Financing
Series E-1
Financing
Series E-2
Financing
Date(s) of agreement(s) /H1118/H1118/H1118June 26, 2016 March 12, 2017 June 3, 2019 July 12, 2019 June 3, 2020 September 22, 2020 January 25, 2022;
March 23, 2022
November 29, 2022
Amount of registered
capital/number of Shares
subscribed for
(2) /H1118/H1118/H1118/H1118/H1118/H1118
RMB1,300,000 RMB6,575,000 RMB7,305,700 RMB11,651,900 RMB578,000 8,932,751 Shares 12,715,320 Shares 3,600,000 Shares
Amount of registered
capital/number of Shares
after each round of the
Pre-IPO Investments /H1118/H1118/H1118/H1118
RMB29,300,000
(3) RMB32,875,000 RMB43,833,400 RMB55,485,300 RMB56,063,300 64,996,051 Shares 77,711,371 Shares 81,311,371 Shares
Amount of consideration
paid(2) (approximation) /H1118/H1118
RMB20.00 million RMB200.00 million RMB300.00 million RMB491.77 million RMB31.25 million RMB717.00 million RMB1,698.13
million (4)
RMB480.78 million
Date of payment of full
consideration /H1118/H1118/H1118/H1118/H1118/H1118/H1118
July 7, 2016 October 30, 2017 November 27, 2019 August 23, 2019 June 18, 2020 September 27, 2020 March 31, 2022 (4) December 15, 2022
Cost per Share paid (5)
(approximation) /H1118/H1118/H1118/H1118/H1118/H1118
RMB15.38 RMB30.42 RMB41.06 RMB42.21 RMB54.07 RMB80.27 RMB133.55 (4) RMB133.55
Discount to the Offer Price (6)
(approximation) /H1118/H1118/H1118/H1118/H1118/H1118
89.26% 78.75% 71.32% 70.52% 62.24% 43.94% 6.72% 6.72%
Basis of determination of the
consideration /H1118/H1118/H1118/H1118/H1118/H1118/H1118
The considerations for each round of Pre-IPO Investments were determined based on arm’s length negotiation between the relevant parties, after taki ng into consideration the
timing of the investments and the status of our business operations and product development advancement.
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Series Pre-A
Financing Series A Financing Series B Financing
Series B+
Financing Series C Financing Series D Financing
Series E-1
Financing
Series E-2
Financing
Lock-up period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118All existing Shareholders (including the Pre-IPO Investors) shall not dispose of any of the Shares held by them within the 12 months following the List ing Date as required
under the applicable PRC laws. Further, pursuant to an undertaking by our Single Largest Group of Shareholders dated November 20, 2024, Mr. Lin, Shang hai Weiqing,
Shanghai Weilan and Shanghai Weijing have undertaken that subject to the requirements under applicable laws and regulations, at any time during the p eriod of 24 months
following the Listing Date, our Single Largest Group of Shareholders shall not dispose any Shares held by them as of the date of this prospectus which, i n aggregate,
represents more than 1% of the total issued share capital of our Company upon completion of the Global Offering (where the Over-allotment Option is exe rcised in part or in
full, the total issued share capital of our Company after taking into account any H Shares issued pursuant to such exercise of the Over-allotment Optio n).
Use of proceeds from the
Pre-IPO Investments /H1118/H1118/H1118/H1118
Proceeds from the Pre-IPO Investments received by our Company have been utilized for principal business of our Group, including but not limited to res earch and development
activities, procurement of production materials, expansion of our production bases and general working capital purposes. As of the Latest Practica ble Date, approximately
96.7% of the net proceeds from the Pre-IPO Investments had been utilized.
Strategic benefits to our
Company brought by the
Pre-IPO Investors /H1118/H1118/H1118/H1118/H1118
At the time of the Pre-IPO Investments, our Directors were of the view that our Group could benefit from the additional funds provided by the Pre-IPO Inv estors’ investments
in our Group and the knowledge and experience of the Pre-IPO Investors.
Notes:
(1) The equity transfers in September 2019 are not included in the above table as the consideration of the respective transfers in the aggregate amount of RMB195,993,300
was paid to Huifeng Hydrogen Energy and Baohui Chuangneng (instead of our Company) by the relevant Pre-IPO Investors, with the date on which full consi deration
was paid being September 25, 2019. The cost per Share of such equity transfers ranged from approximately RMB6.19 to RMB46.54. Based on the currency tra nslation
of HK$1 to RMB0.92371 and on the Offer Price of HK$155.00 (being the mid-point of the indicative Offer Price range), the discount to the Offer Price of su ch equity
transfers ranges from approximately 95.68% to 67.49%. For details of the equity transfers in September 2019, see “— Establishment and Development of Our Company
— (2) Major Shareholding Changes of Our Company Before Conversion into Joint Stock Limited Company — (g) Equity Transfers in September 2019” in this se ction.
The equity transfers in June 2020 are not included in the above table as the consideration of the respective transfers in the aggregate amount of RMB51, 000,000 was
paid to Mr. LI Cong ( ҽᑋ) (instead of our Company) by the relevant Pre-IPO Investors, with the date on which full consideration was paid being June 15, 2020. The
cost per Share of such equity transfers ranged from approximately RMB48.78 to RMB51.49. Based on the currency translation of HK$1 to RMB0.92371 and on the Offer
Price of HK$155.00 (being the mid-point of the indicative Offer Price range), the discount to the Offer Price of such equity transfers ranges from appr oximately 65.93%
to 64.04%. For details of the equity transfers in June 2020, see “— Establishment and Development of Our Company — (2) Major Shareholding Changes of Our Company
Before Conversion into Joint Stock Limited Company — (h) Series C Financing and Equity Transfers in June 2020” in this section.
The equity transfers in August 2020 are not included in the above table as the consideration of the respective transfers in the aggregate amount of RMB3 3,500,000 was
paid to Mr. LI Cong ( ҽᑋ) (instead of our Company) by the relevant Pre-IPO Investors, with the date on which full consideration was paid being August 21, 2020. The
cost per Share of such equity transfers was approximately RMB48.78. Based on the currency translation of HK$1 to RMB0.92371 and on the Offer Price of HK $155.00
(being the mid-point of the indicative Offer Price range), the discount to the Offer Price of such equity transfers is approximately 65.93%. For detai ls of the equity transfers
in August 2020, see “— Establishment and Development of Our Company — (2) Major Shareholding Changes of Our Company Before Conversion into Joint Stock
Limited Company — (i) Equity Transfers in August 2020” in this section.
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The equity transfer in January 2022 is not included in the above table as the consideration of the transfer in the amount of RMB24,500,000 was paid to Nin gbo Jiazhan
(instead of our Company) by the relevant Pre-IPO Investor, with the date on which full consideration was paid being February 22, 2022. The cost per Shar e of such equity
transfer was approximately RMB123.08. Based on the currency translation of HK$1 to RMB0.92371 and on the Offer Price of HK$155.00 (being the mid-poin to ft h e
indicative Offer Price range), the discount to the Offer Price of such equity transfer is approximately 14.04%. For details of the equity transfer in J anuary 2022, see “—
Establishment and Development of Our Company — (3) Conversion into Joint Stock Limited Company and Major Shareholding Changes of Our Company After
Conversion — (c) Equity Transfer in January 2022” in this section.
The equity transfers in June 2022 (other than the equity transfer from Mr. Lin to Shanghai Weijing) are not included in the above table as the considerat ion of the relevant
respective transfers in the aggregate amount of RMB31,380,000 was paid to Tianjin Chongmin, Shanghai Fulemi and Dongfang Electric (instead of our Co mpany) by
the relevant Pre-IPO Investors, with the date on which full consideration was paid being July 6, 2022. The cost per Share of such equity transfers range d from
approximately RMB120.47 to RMB133.85. Based on the currency translation of HK$1 to RMB0.92371 and on the Offer Price of HK$155.00 (being the mid-poin to ft h e
indicative Offer Price range), the discount to the Offer Price of such equity transfers ranges from approximately 15.86% to 6.51%. For details of such equity transfers
in June 2022, see “— Establishment and Development of Our Company — (3) Conversion into Joint Stock Limited Company and Major Shareholding Changes of O ur
Company After Conversion — (e) Equity Transfers in June 2022” in this section.
(2) For details relating to the registered capital of our Company subscribed for by or transferred to each Pre-IPO Investor and the corresponding cons ideration paid by each
Pre-IPO Investor for each round of the Pre-IPO Investments, see “— Establishment and Development of Our Company” in this section.
(3) The amount of registered capital of our Company after Series Pre-A Financing included the amount of registered share capital subscribed for by Pen gfan Zhibin as part
of Series A Financing in July 2017 as the capital increase in connection with Series Pre-A Financing and the first tranche of Series A Financing was comp leted on the
same date.
(4) In connection with Series E-2 Financing, the cost per Share for Series E-1 Financing was adjusted from RMB133.85 to RMB133.55 pursuant to the joind er agreement
dated November 29, 2022. Accordingly, a total consideration of approximately RMB3,869,000 was refunded by our Company to each the Pre-IPO Investors who
participated in Series E-1 Financing (or the transferee of the relevant Shares in Series E-1 Financing) with reference to the number of Shares subscri bed by each of them
in Series E-1 Financing, which was fully settled on January 4, 2023.
(5) Calculated based on the amount of consideration paid divided by the number of Shares as adjusted after joint stock reform in September 2020.
(6) Calculated based on the currency translation of HK$1 to RMB0.92371 and on the Offer Price of HK$155.00, being the mid-point of the indicative Offer Price range.
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
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(3) Rights of the Pre-IPO Investors
The Pre-IPO Investors were granted customary special rights, including but not limited to
the right of first refusal, tag-along right, pre-emptive right, anti-dilution right and redemption
right. As of the Latest Practicable Date, all special rights were terminated.
(4) Sole Sponsor’s Confirmation
On the basis that (i) the considerations for the Pre-IPO Investments (save for the equity
transfer between Mr. LI Cong and Ms. ZHANG Xiuying) were settled more than 28 clear days
before the date of first submission of the Listing application to the Stock Exchange; (ii) the
consideration for the equity transfer between Mr. LI Cong and Ms. ZHANG Xiuying was
settled no less than 120 clear days before the Listing Date; and (iii) the special rights granted
to the Pre-IPO Investors had been terminated as disclosed in the paragraph headed “— (3)
Rights of the Pre-IPO Investors” in this section, the Sole Sponsor confirms that the Pre-IPO
Investments are in compliance with sections headed “Timing of Pre-IPO Investment” and
“Special Rights of Pre-IPO Investors” set out in Chapter 4.2 of the Guide for New Listing
Applicants.
(5) Information about our Pre-IPO Investors
Below sets out information of our Pre-IPO Investors. To the best knowledge of our
Directors, save as disclosed below, each of our Pre-IPO Investors and where applicable, their
respective general partner(s), limited partner(s) and ultimate beneficial owner(s) is an
Independent Third Party.
1. Sinopec
Capital /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Sinopec Capital is a limited liability company established under the
laws of the PRC and is principally engaged in investments with a focus
on strategic emerging industries such as new energy, new materials,
energy conservation and environmental protection industries. As of the
Latest Practicable Date, it was held as to 51% by China Petrochemical
Corporation (ʮ̡) and 49% by China Petroleum
& Chemical Corporation (ʮ̡) (which is a
non-wholly owned subsidiary of China Petrochemical Corporation and
listed on the Stock Exchange (stock code: 386) and the Shanghai Stock
Exchange (stock code: 600028)), respectively. Established in September
1983, China Petrochemical Corporation is a state-owned enterprise.
Apart from the nomination of Mr. LIU Huiyou ( ᄎึʾ) (our non-
executive Director), Sinopec Capital is a substantial shareholder of our
Company immediately upon Listing. For details of Mr. LIU Huiyou, see
“Directors, Supervisors and Senior Management” in this prospectus.
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
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2. Pengfan Zhibin,
Chunyang
Songteng,
Jinglong Baoluo
and Chunyang
Hongxin /H1118/H1118/H1118/H1118/H1118/H1118
Pengfan Zhibin is a limited partnership established under the laws of the
PRC and is managed by its general partner, Chunyang Capital, which is
ultimately controlled by Mr. FU Junru (ν). As of the Latest
Practicable Date, Pengfan Zhibin was held as to approximately 99.81%
by Ms. LIANG Lanyin ( ૑ᚆত) as the sole limited partner.
Chunyang Songteng is a limited partnership established under the laws
of the PRC and is managed by its general partner, Chunyang Capital. As
of the Latest Practicable Date, Chunyang Songteng had 18 limited
partners, and was held as to approximately 36.44% by Guangzhou Kaide
Investment Holdings Co., Ltd. (ʮ̡)a st h e
largest limited partner.
Jinglong Baoluo is a limited partnership established under the laws of
the PRC and is managed by its general partner, Chunyang Capital. As of
the Latest Practicable Date, Jinglong Baoluo was held as to
approximately 99.78% by Ms. LIANG Lanyin as the sole limited
partner.
Chunyang Hongxin is a limited partnership established under the laws of
the PRC and is managed by its general partner, Shenzhen Qianhai
Chunyang Venture Capital Partnership (Limited Partnership) (ऎ
ජ௴ุҳ༟ΥྫΆุ(Υྫ)), whose general partner is Chunyang
Capital. As of the Latest Practicable Date, Chunyang Hongxin had two
limited partners, and was held as to approximately 64.52% by Shenzhen
Chunyang Hongxin Venture Capital Partnership (Limited Partnership)
(㒥௴ุҳ༟ΥྫΆุ(Υྫ)) as the largest limited
partner.
Chunyang Capital is an investment manager managing funds of more
than RMB5 billion as of December 31, 2023, and has made investments
across various industries, such as new energy, new materials, intelligent
manufacturing and healthcare industries.
To the best knowledge of our Directors, save for the nomination of Mr.
WU Yang (ݱ؛our Supervisor), each of Pengfan Zhibin, Chunyang
Songteng, Jinglong Baoluo and Chunyang Hongxin is an Independent
Third Party. For details of Mr. WU Yang, see “Directors, Supervisors
and Senior Management” in this prospectus.
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3. Yutong Group
and Mr. WAN
Jingzhao (
ຬ౻
๫) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Zhengzhou Spruce is a limited partnership established under the laws of
the PRC and is managed by its general partner, Zhengzhou Yunshan
Investment Management Co., Ltd. (ʮ̡), which
is an indirect wholly-owned subsidiary of Zhengzhou Yutong Group
Co., Ltd. (ʮ̡), which is in turn indirectly controlled
by Mr. TANG Yuxiang ( ಷ͗ୂ). As of the Latest Practicable Date, it
had two limited partners, and was held as to approximately 79.84% by
Lhasa Deyu Xinrong Industrial Co., Ltd. (ʮ̡)
as the largest limited partner. Zhengzhou Spruce is an investment fund
with total assets under management of more than RMB500 million as of
December 31, 2023, and has made investments across various
industries, such as hydrogen energy, high-end equipment and new
materials industries.
Yutong Bus, a joint stock limited company established under the laws of
the PRC and listed on the Shanghai Stock Exchange (stock code:
600066), is principally engaged in R&D, manufacturing and sales of
commercial vehicles. It was held as to approximately 37.70% directly by
Zhengzhou Yutong Group Co., Ltd. as its controlling shareholder as of
the Latest Practicable Date.
Mr. WAN Jingzhao ( ຬ౻๫) is an executive director and the general
manager of Zhengzhou Yunshan Investment Management Co., Ltd., and
an individual investor. He became acquainted with our Company in
2020 through Zhengzhou Spruce.
As confirmed by Zhengzhou Spruce, Yutong Bus and Mr. WAN
Jingzhao, they are parties acting in concert in exercising Shareholders’
rights pertaining to our Company.
4. National
Manufacturing
Fund /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
National Manufacturing Fund is a joint stock limited company
established under the laws of the PRC, and was held as to approximately
15.29% by the MOF as its single largest shareholder as of the Latest
Practicable Date. National Manufacturing Fund is a private equity fund
with total assets under management of more than RMB147.2 billion as
of December 31, 2023, and has made investments across various
industries, such as new materials, next-generation information
technology, basic intelligent manufacturing and power equipment
industries.
To the best knowledge of our Directors, save for the nomination of Mr.
ZHANG Cheng ( ੵ೻) (our Supervisor), National Manufacturing Fund
is an Independent Third Party. For details of Mr. ZHANG Cheng, see
“Directors, Supervisors and Senior Management” in this prospectus.
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
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5. FAW Jiefang /H1118/H1118/H1118FAW Jiefang is a limited liability company established under the laws of
the PRC and is a wholly-owned subsidiary of FAW Jiefang Group Co.,
Ltd. (ʮ̡), which is listed on the Shenzhen
Stock Exchange (stock code: 000800). FAW Jiefang is principally
engaged in manufacturing and sales of commercial vehicles.
To the best knowledge of our Directors, save for the nomination of Mr.
JI Yizhi (ɓқ) (our Supervisor) and being a substantial shareholder of
Foshan Diyi Element New Energy Technology Co., Ltd. (ɓʩ९
ʮ̡) (an insignificant subsidiary of our Company
pursuant to Rule 14A.09 of the Listing Rules), FAW Jiefang is an
Independent Third Party. For details of Mr. JI Yizhi, see “Directors,
Supervisors and Senior Management” in this prospectus.
6. Trustbridge II
and Trustbridge
New Economy /H1118/H1118
Trustbridge II is a limited partnership established under the laws of the
PRC and is managed by its general partner, Ningbo Trustbridge
Investment Management Partnership (Limited Partnership) (ҳ
༟၍ଣΥྫΆุ(Υྫ)), whose general partner is Shanghai
Trustbridge New Economy Equity Investment Management Partnership
(Limited Partnership) (ᛆҳ༟၍ଣΥྫΆุ(Υ
ྫ)), whose general partner is Shanghai Trustbridge Investment
Management Co., Ltd. (ʮ̡). As of the Latest
Practicable Date, Trustbridge II was held as to approximately 98.96% by
Yimeng Co., Ltd. (ʮ̡) as the sole limited partner.
Trustbridge II is an investment fund with total assets under management
of more than RMB90 million as of December 31, 2023, and has an
investment focus on the new energy industry.
Trustbridge New Economy is a limited partnership established under the
laws of the PRC and is managed by its general partner, Shanghai
Trustbridge New Economy Equity Investment Management Partnership
(Limited Partnership). As of the Latest Practicable Date, Trustbridge
New Economy had nine limited partners, and was held as to
approximately 16.48% by each of Yimeng Co., Ltd. and Ningbo
Trustbridge Investment Management Partnership (Limited Partnership)
as the two largest limited partners. Trustbridge New Economy is an
investment fund with total assets under management of more than
RMB370 million as of December 31, 2023, and has made investments in
companies across various industries, such as the Internet and cultural
education industries.
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
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7. Huiqing
Jingnuo and
Luping
Jingneng /H1118/H1118/H1118/H1118/H1118/H1118
Each of Huiqing Jingnuo and Luping Jingneng is a limited partnership
established under the laws of the PRC and is managed by its general
partner, Huiyang Capital, which is wholly owned by Mr. LU Qingping
(ኁ૶̻). Mr. LU Qingping is a relative of Ms. LIANG Lanyin ( ૑ᚆত)
who is the sole limited partner of each of Pengfan Zhibin and Jinglong
Baoluo. As of the Latest Practicable Date, Huiqing Jingnuo had two
limited partners, and was held as to approximately 98.27% by Mr. LU
Qingping as the largest limited partner. As of the Latest Practicable
Date, Luping Jingneng had two limited partners, and was held as to
approximately 97.84% by Mr. LU Qingping as the largest limited
partner.
Huiyang Capital is an investment management company with total
assets under management of more than RMB100 million as of December
31, 2023, and has made investments in companies across various
industries, such as the new energy, new technology and new materials
industries.
8. Qianshi
Shengxin and
Qianshi Fenghe /H1118
Each of Qianshi Shengxin and Qianshi Fenghe is a limited partnership
established under the laws of the PRC and is managed by its general
partner, Ningbo Qianshi Herun Equity Investment Management Co.,
Ltd. (ʮ̡), which is ultimately
controlled by Mr. LI Zhuiyang ( ҽ৛ජ). As of the Latest Practicable
Date, Qianshi Shengxin was held as to approximately 98.99% by
Tongling Jiantong Science and Technology Innovation Equity
Investment Partnership (Limited Partnership) (ᛆҳ༟
ΥྫΆุ(Υྫ)) as the sole limited partner. As of the Latest
Practicable Date, Qianshi Fenghe was held as to approximately 99.93%
by Ms. HUANG Wenjin ( රතᆩ) as the sole limited partner.
Each of Qianshi Shengxin and Qianshi Fenghe is a private equity fund
with an investment focus on the hydrogen technology industry. As of
December 31, 2023, Qianshi Shengxin had total assets under
management of RMB97.7 million and Qianshi Fenghe had total assets
under management of RMB12.5 million.
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9. Qianshi Guoxin
and Qianshi
Zhengxin /H1118/H1118/H1118/H1118/H1118/H1118
Each of Qianshi Guoxin and Qianshi Zhengxin is a limited partnership
established under the laws of the PRC and is managed by its general
partner, Quancun Entrepreneurship Investment Management
(Guangdong Hengqin) Partnership (Limited Partnership) ( ΌӀ௴ุҳ༟
၍ଣ(ዑೞ)ΥྫΆุ(Υྫ)), whose general partner is Hainan
Quancun Industrial Management Co., Ltd. (ப΂
ʮ̡), which was in turn held as to 60% by Mr. LI Wenqing ( ҽ˖ᅅ),
20% by Ms. CHENG Jing (ẙ), and 20% by Ms. BAO Yuanyuan ( Ꭹ
ధధ) as of the Latest Practicable Date. As of the Latest Practicable
Date, Qianshi Guoxin had 16 limited partners, and was held as to
approximately 21.24% by Ms. BAO Yuanyuan as the largest limited
partner. As of the Latest Practicable Date, Qianshi Zhengxin had eight
limited partners, and was held as to approximately 21.27% by Ms. ZHU
Wenmin ( ϡ˖ઽ) as the largest limited partner.
Each of Qianshi Guoxin and Qianshi Zhengxin is a private equity fund
with an investment focus on the new energy industry. As of December
31, 2023, Qianshi Guoxin had total assets under management of more
than RMB40 million and Qianshi Zhengxin had total assets under
management of more than RMB47 million.
10. Legend
Chengye and
Legend
Bingde /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Legend Chengye is a limited partnership established under the laws of
the PRC, and its general partner is Beijing Legend Tongdao Private
Equity Management Partnership (Limited Partnership) ( ̏ԯёᑌΝ༸ӷ
၍ଣΥྫΆุ(Υྫ)), which is controlled by Legend Capital
Co., Ltd. (ʮ̡), which is in turn controlled by
Beijing Junqi Jiarui Enterprise Management Co., Ltd. ( ̏ԯёຩྗြΆ
ʮ̡), which was in turn held as to 40% by Mr. CHEN Hao
(௓ख), 20% by Mr. ZHU Linan (ی20% by Mr. LI Jiaqing (࢕
ᅅ) and 20% by Mr. WANG Nengguang ( ˮঐΈ) as of the Latest
Practicable Date. As of the same date, Legend Chengye had 19 limited
partners, and was held as to approximately 70.09% by Beijing Legend
Huicheng Equity Investment Partnership (Limited Partnership) ( ̏ԯё
ᛆҳ༟ΥྫΆุ(Υྫ)) as the largest limited partner.
Legend Bingde is a limited partnership established under the laws of the
PRC, and its general partner is Lhasa Junqi Enterprise Management Co.,
Ltd. (ʮ̡), which is controlled by Legend
Capital Co., Ltd.. As of the Latest Practicable Date, Legend Bingde was
held as to approximately 99.67% by Suzhou Industrial Park Guochuang
Kaiyuan Phase II Investment Center (Limited Partnership) ( ᘽψʈุ෤
ਜ਷௴කʩɚಂҳ༟ʕː(Υྫ)) as the sole limited partner.
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Legend Chengye and Legend Bingde are investments funds under
Legend Capital ( ёᑌ༟͉), which was established in April 2001.
Legend Capital is a leading professional investment institution in the
PRC with a focus on early-stage venture capital investments and
growth-stage private equity investments, and had total assets under
management of more than RMB80 billion as of December 31, 2023.
Legend Capital has made investments in companies across various
industries, such as the technology, healthcare, consumer, enterprise
service and intelligent manufacturing industries.
11. Zhangjiagang
Bohua /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Zhangjiagang Bohua is a limited partnership established under the laws
of the PRC with registered capital of RMB2 billion, and its general
partner is Zhangjiagang Bohua Yaoshi Investment Partnership (Limited
Partnership) (ಥ௹ശᘴ˰ҳ༟ΥྫΆุ(Υྫ)), which is
ultimately controlled by Mr. XU Wenbo (˖௹). As of the Latest
Practicable Date, Zhangjiagang Bohua had 13 limited partners, and was
held as to approximately 16.30% by Suqian Zhiming Enterprise
Management Consulting Service Partnership (Limited Partnership) ( ੖
ਕΥྫΆุ(Υྫ)) as the largest limited
partner.
Zhangjiagang Bohua is an investment fund, and has made investments
in companies across various industries, such as the green technology,
digital intelligence, advanced manufacturing and life sciences
industries.
12. Nakatsu
Innovation /H1118/H1118/H1118/H1118/H1118
Nakatsu Innovation is a limited liability company established under the
laws of the PRC with registered capital of RMB880 million, and an
indirect wholly-owned subsidiary of Bank of China Limited (a company
listed on the Hong Kong Stock Exchange (stock code: 3988) and the
Shanghai Stock Exchange (stock code: 601988)). Nakatsu Innovation is
principally engaged in investments, and has made investments in
companies across various industries, such as the energy, transportation,
high technology, petrochemicals and minerals industries.
13. HongShan
Hanchen /H1118/H1118/H1118/H1118/H1118/H1118
HongShan Hanchen is a limited partnership established under the laws
of the PRC and is principally engaged in equity investments in private
companies. The general partner of HongShan Hanchen is Shenzhen
HongShan Antai Equity Investment Partnership (Limited Partnership)
(ᛆҳ༟ΥྫΆุ(Υྫ)), which is ultimately
controlled by Mr. ZHOU Kui ( մඃ). As of the Latest Practicable Date,
HongShan Hanchen was held as to approximately 99.99% by Shenzhen
HongShan Yuechen Investment Partnership (Limited Partnership) ( ଉέ
ԕҳ༟ΥྫΆุ(Υྫ)) as the sole limited partner.
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14. Junze No. 3 /H1118/H1118Junze No. 3 is a limited partnership established under the laws of the
PRC and is managed by its general partner, Wuchan Zhongda Zhilian
(Hangzhou) Enterprise Management Consulting Co., Ltd. (ପʕɽ౽
ᗡ(ψ)ʮ̡), which is indirectly wholly owned by
Wuchan Zhongda Group Co., Ltd. (ʮ̡)( a
company listed on the Shanghai Stock Exchange (stock code: 600704)).
As of the Latest Practicable Date, Junze No. 3 was held as to
approximately 99.33% by Wuchan Zhongda (Zhejiang) Industrial
Investment Co., Ltd. (ପʕɽ(एϪ)ʮ̡) as the sole
limited partner. Junze No. 3 is principally engaged in provision of
enterprise management, socio-economic consultancy services,
enterprise management consultancy, marketing management and
planning, and brand management services. As of December 31, 2023,
Junze No. 3 had total assets under management of approximately
RMB150 million with an investment focus on the hydrogen energy
industry.
15. Shuimu
Hydrogen /H1118/H1118/H1118/H1118/H1118/H1118
Shuimu Hydrogen is a limited partnership established under the laws of
the PRC and is managed by its general partner, Beijing Shuimu
Hydrogen Element Management Consulting Center (Limited
Partnership) ( ̏ԯ˥˝૫ʩ၍ଣፔ༔ʕː(Υྫ)), which is
ultimately controlled by Mr. LI Gang ( ҽᶩ). As of the Latest
Practicable Date, Shuimu Hydrogen had 11 limited partners, and was
held as to approximately 29.65% by Beijing Dongsheng Boiler Factory
(ʺᒢᘟᅀ) as the largest limited partner. Shuimu Hydrogen is
principally engaged in equity investments. As of December 31, 2023,
Shuimu Hydrogen had total assets under management of more than
RMB844 million with an investment focus on the hydrogen energy
industry.
16. Jiayuan
Technology /H1118/H1118/H1118/H1118
Jiayuan Technology is a joint stock limited company established under
the laws of the PRC and is listed on the Science and Technology
Innovation Board of the Shanghai Stock Exchange (the “ SSE Star
Market ”) (stock code: 688388). It is principally engaged in R&D,
manufacturing and sales of high-performance electrolytic copper foil.
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17. Jingxiang
Capital /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Jingxiang Capital is a limited partnership established under the laws of
the PRC and is managed by its general partner, Mr. SHEN Fengchun ( ӏ
݆As of the Latest Practicable Date, Jingxiang Capital was held as
to 0.0001% by Ms. SHEN Qi ( ӏೡ) as the sole limited partner.
Jingxiang Capital is principally engaged in equity investments on the
primary market. As of December 31, 2023, Jingxiang Capital had total
assets under management of more than RMB58 million with an
investment focus on the new energy, new materials and technology
industries.
18. Sanxing Zhiqi /H1118Sanxing Zhiqi is a limited partnership established under the laws of the
PRC and is managed by its general partner, Suzhou Sanxing Zhiqi
Capital Management Center (Limited Partnership) ( ᘽψɧБ౽ຩ༟͉
၍ଣʕː(Υྫ)), which is ultimately controlled by Mr. SUN Dafei
(࠭As of the Latest Practicable Date, Sanxing Zhiqi had 30
limited partners, and was held as to approximately 24.08% by Suzhou
Sanxing Zhirui Equity Investment Partnership (Limited Partnership) ( ᘽ
ᛆҳ༟ΥྫΆุ(Υྫ)) as the largest limited partner.
Sanxing Zhiqi is a private equity fund with total assets under
management of more than RMB2.2 billion as of December 31, 2023, and
has made investments in companies across various industries, such as
the hydrogen energy and pan-semiconductor industries.
19. Dezaihou
Qicheng /H1118/H1118/H1118/H1118/H1118/H1118/H1118
Dezaihou Qicheng is a limited partnership established under the laws of
the PRC and is managed by its general partner, Beijing Dezaihou
Investment Management Center (Limited Partnership) (ҳ༟
၍ଣʕː(Υྫ)), which is ultimately controlled by Mr. DONG
Yang ( ໨౮). As of the Latest Practicable Date, Dezaihou Qicheng had
four limited partners, and was held as to 70% by Shandong Railway
Development Fund Co., Ltd. (ʮ̡)a st h e
largest limited partner. Dezaihou Qicheng is principally engaged in
equity investments and venture capital investments with an investment
focus on the new energy automotive industry. As of December 31, 2023,
it had total assets under management of more than RMB13 million.
20. Toyota Tsusho /H1118Toyota Tsusho is a limited liability company established under the laws
of the PRC and a wholly-owned subsidiary of Toyota Tsusho
Corporation (a company listed on the Tokyo Stock Exchange (stock
code: 8015) and the Nasdaq (stock symbol: TYHOF)). Its principal
businesses cover various sectors, including the automotive, machinery,
metals, energy and chemicals sectors.
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
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21. Weiming VC /H1118/H1118Weiming VC is a limited partnership established under the laws of the
PRC and is managed by its general partner, Ningbo Meishan Free Trade
Port Zone Zijin Investment Management Partnership (Limited
Partnership) (೼ಥਜɿʦҳ༟၍ଣΥྫΆุ(Υྫ)),
which is controlled by Ms. LIU Xiaojuan (ࢇAs of the Latest
Practicable Date, Weiming VC had ten limited partners, and was held as
to approximately 30.62% by Ningbo Haorong Enterprise Management
Consulting Co., Ltd. (ʮ̡) as the largest
limited partner. Weiming VC is principally engaged in venture capital
investments with an investment focus on the environmental protection,
advanced manufacturing, technology, media, telecommunications,
pharmaceuticals and aviation industries. As of December 31, 2023, it
had total assets under management of more than RMB390 million.
22. Hubei Cathay
Energy /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Hubei Cathay Energy is a limited partnership established under the laws
of the PRC and is managed by its general partner, Kaihui (Quanzhou)
Private Equity Fund Management Co., Ltd. ( ௱ሾ(ψ)၍ଣϞ
ʮ̡), which is ultimately controlled by Mr. CAI Mingpo (ᆌ).
Hubei Cathay Energy is principally engaged in equity investments with
an investment focus on the new energy, energy management, clean
energy, clean technologies, circular economy and energy-related new
material sectors in the PRC.
23. Ningbo
Jiazhan and
Xiaofu Jucheng /H1118
Each of Ningbo Jiazhan and Xiaofu Jucheng is a limited partnership
established under the laws of the PRC and is managed by its general
partner, Ningbo Meishan Free Trade Port Zone Xiaofu Jiahui Equity
Investment Management Partnership (Limited Partnership) (ڭ
ᛆҳ༟၍ଣΥྫΆุ(Υྫ)), which is ultimately
controlled by Mr. XU Fang (׳ࢱAs of the Latest Practicable Date,
Ningbo Jiazhan had five limited partners, and was held as to
approximately 64.57% by Xintai Xiaotao Jucheng Venture Capital
Partnership (Limited Partnership) (ா௴ุҳ༟ΥྫΆุ(Ϟ
Υྫ)) as the largest limited partner. As of the Latest Practicable Date,
Xiaofu Jucheng had six limited partners, and was held as to
approximately 38.45% by Shanghai Kuanchen Enterprise Management
Consulting Center ( ɪऎᄱЅΆุ၍ଣፔ༔ʕː) as the largest limited
partner.
Ningbo Jiazhan is principally engaged in equity investments and
provision of related consultancy services. Ningbo Jiazhan had total
assets under management of more than RMB300 million as of December
31, 2023, and has made investments in companies across various
industries, such as the advanced manufacturing, transportation, logistics
and artificial intelligence industries.
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Xiaofu Jucheng is principally engaged in equity investments and project
investments. Xiaofu Jucheng had total assets under management of more
than RMB26 million as of December 31, 2023, and has made
investments in companies across various industries, such as the
advanced manufacturing, transportation, logistics and artificial
intelligence industries.
24. Hainan
Y ongheng/H1118/H1118/H1118/H1118/H1118/H1118
Hainan Yongheng is a limited partnership established under the laws of
the PRC with registered capital of RMB20 million, and is managed by
its general partner, Ms. MA Jie ( ৵ᆎ). As of the Latest Practicable Date,
Hainan Yongheng was held as to 99% by Hainan Yihe Shandao Venture
Capital Partnership (Limited Partnership) (᎚ձഛ༸௴ุҳ༟Υྫ
Άุ(Υྫ)) as the sole limited partner. Hainan Yongheng is
principally engaged in enterprise management.
25. Hexie
Jinhong /H1118/H1118/H1118/H1118/H1118/H1118/H1118
Hexie Jinhong is a limited partnership established under the laws of the
PRC. The general partners of Hexie Jinhong are Tibet Jinling Enterprise
Management Co., Ltd. (ʮ̡)( “ Tibet Jinling ”)
and Yiwu Ruiteng Investment Management Co., Ltd. ( ່ढြᙜҳ༟၍
ʮ̡). Hexie Jinhong is managed by its executive partner, Tibet
Jinling, which is an indirect wholly-owned subsidiary of Sichuan Hexie
Shuangma Co., Ltd. (ʮ̡) (a company listed on
the Shenzhen Stock Exchange (stock code: 000935)). As of the Latest
Practicable Date, Hexie Jinhong had 15 limited partners, and was held
as to approximately 29.62% by Yiwu Financial Holding Co., Ltd. ( ່ढ
ʮ̡) as the largest limited partner. Hexie Jinhong is
principally engaged in private equity investment management with total
assets under management of more than RMB10.8 billion.
26. Huajian
Chengding /H1118/H1118/H1118/H1118/H1118
Huajian Chengding is a limited partnership established under the laws of
the PRC and is managed by its general partner, Shanghai Chengding
Huajian Investment Management Partnership (Limited Partnership) ( ɪ
ҳ༟၍ଣΥྫΆุ(Υྫ)), whose general partner is
Shanghai Wotu Investment Management Co., Ltd. ( ɪऎӜɺҳ༟၍ଣϞ
ʮ̡), which is in turn held as to approximately 72.31% by Mr. CHEN
Zhihai ( ௓౽ऎ). As of the Latest Practicable Date, Huajian Chengding
had five limited partners, and was held as to approximately 33.06% by
each of Shanghai Chengtou Holding Co., Ltd. (ࠢ
ʮ̡) and Shanghai Yunzhu Investment Co., Ltd. (ʮ
̡) as the two largest limited partners. Huajian Chengding is principally
engaged in equity investments. As of December 31, 2023, Huajian
Chengding had total assets under management of more than RMB310
million with an investment focus on the new energy, next-generation
information technology, high-end equipment and intelligent
manufacturing industries.
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
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27. Wenzhou
Zhemin
Investment /H1118/H1118/H1118/H1118/H1118
Wenzhou Zhemin Investment is a limited partnership established under
the laws of the PRC and is managed by its general partner, Ningbo
Meishan Free Trade Port Zone Zhejiang United Investment Management
Co., Ltd. (ʮ̡), which is a
wholly-owned subsidiary of Zhejiang United Investment Group ( एϪ͏
ʮ̡), which was in turn held as to 40% by
Zhengtai Group Co., Ltd. (ʮ̡) and 10% by each of
the six remaining shareholders as of the Latest Practicable Date. As of
the Latest Practicable Date, Zhengtai Group Co., Ltd. was held by Mr.
NAN Cunhui (πሾ) as to approximately 31.23% and 130 other
shareholders each holding less than 15% equity interest. As of the same
date, Wenzhou Zhemin Investment had four limited partners, and was
held as to approximately 44.44% by Zhengtai Group Co., Ltd. as the
largest limited partner.
Wenzhou Zhemin Investment is an equity investment fund with an
investment focus on the new energy, Internet of Things and technology-
based manufacturing industries. As of December 31, 2023, it had total
assets under management of approximately RMB630 million.
28. Jiaxing
Hydrogen /H1118/H1118/H1118/H1118/H1118/H1118
Jiaxing Hydrogen is a limited partnership established under the laws of
the PRC and is managed by its general partner, Jiaxing Nanhu Equity
Investment Fund Co., Ltd. (ʮ̡), which
is indirectly controlled by Chiyue Investment Co., Ltd. (ࠢ
ʮ̡), which was held by ten shareholders each holding less than 30%
equity interest as of the Latest Practicable Date. As of the Latest
Practicable Date, Jiaxing Hydrogen had four limited partners, and was
held as to 69% by Zhejiang Hydrogen Energy Industry Development
Co., Ltd. (ʮ̡) as the largest limited partner.
Jiaxing Hydrogen is principally engaged in equity investments. As of
December 31, 2023, Jiaxing Hydrogen had total assets under
management of more than RMB300 million with an investment focus on
the hydrogen energy industry.
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29. Shanghai
Shengyuehong /H1118/H1118
Shanghai Shengyuehong is a limited partnership established under the
laws of the PRC. The general partners of Shanghai Shengyuehong are
Shanghai Guosheng Capital Management Co., Ltd. ( ɪऎ਷ସ༟͉၍ଣ
ʮ̡), Shanghai Yichonghong Enterprise Management Partnership
(Limited Partnership) (Άุ၍ଣΥྫΆุ(Υྫ)) and
Shanghai Shengpu Enterprise Management Partnership (Limited
Partnership) ( ɪऎସऌΆุ၍ଣΥྫΆุ(Υྫ)). Shanghai
Shengyuehong is managed by its executive partner, Shanghai Guosheng
Capital Management Co., Ltd., which was held by Shanghai Guosheng
(Group) Co., Ltd. ( ɪऎ਷ସ(ණྠ)ʮ̡) as to 30% and seven other
shareholders each holding less than 30% equity interest as of the Latest
Practicable Date. As of the Latest Practicable Date, Shanghai Guosheng
(Group) Co., Ltd. was wholly owned by Shanghai State-owned Assets
Supervision and Administration Commission ( ɪऎ̹਷Ϟ༟ପ္ຖ၍ଣ
ึ). As of the same date, Shanghai Shengyuehong was held as to
99.70% by Ningbo Youkai Venture Capital Partnership (Limited
Partnership) (Ꮄ௱௴ุҳ༟ΥྫΆุ(Υྫ)) as the sole limited
partner. Shanghai Shengyuehong is a private equity fund with total
assets under management of RMB187 million as of December 31, 2023,
and has made investments in companies across various industries, such
as the new materials and radio frequency front end chip design
industries.
30. Saifus Equity
Investment /H1118/H1118/H1118/H1118/H1118
Saifus Equity Investment is a limited partnership established under the
laws of the PRC with registered capital of RMB42.01 million, and is
managed by its general partner, Zhuhai Tongzhe Enterprise Management
Partnership (Limited Partnership) (Άุ၍ଣΥྫΆุ(Υ
ྫ), which is controlled by Mr. LIN Xiaohui (ወሾ). As of the Latest
Practicable Date, Saifus Equity Investment had six limited partners, and
was held as to approximately 23.80% by Hainan Yinuo Venture Capital
Co., Ltd. (ʮ̡) as the largest limited partner.
Saifus Equity Investment has made investments in companies in the new
energy industry.
31. Suzhou
Zhongheng,
Zhuhai
Pangheng and
Gao Ling
Yurun /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Suzhou Zhongheng is a limited partnership established under the laws of
the PRC. Its general partner is Shenzhen Gao Ling Tiancheng Phase III
Investment Consulting Center (Limited Liability Partnership) ( ଉέ৷ᵌ
˂ϓɧಂҳ༟ፔ༔ʕː(Υྫ)) and its investment manager is
Zhuhai Gao Ling Private Equity Fund Management Co., Ltd. ( मऎ৷ᵌ
ʮ̡)( “ Zhuhai Gao Ling ”), which is a limited
liability company established in the PRC.
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Zhuhai Pangheng is a limited partnership established under the laws of
the PRC. Its general partner is Shenzhen Gao Ling Tiancheng Phase III
Investment Co. Ltd. (ʮ̡) and its
investment manager is Zhuhai Gao Ling.
Gao Ling Yurun is a limited partnership established under the laws of
the PRC. Its general partner is Beijing Gao Ling Yuqing Investment
Management Co. Ltd. (ʮ̡) and its
investment manager is Zhuhai Gao Ling.
Zhuhai Gao Ling partners with exceptional entrepreneurs and
management teams to create value, often with a focus on innovation and
growth.
32. Suqian
Yuanguan /H1118/H1118/H1118/H1118/H1118
Suqian Yuanguan is a limited partnership established under the laws of
the PRC and is managed by its general partner, Mr. MAO Wenxiu ( ˣ˖
Ӹ). As of the Latest Practicable Date, Suqian Yuanguan had 12 limited
partners, and was held as to approximately 19.26% by Mr. YE Minzhi
(ٝas the largest limited partner. Suqian Yuanguan is principally
engaged in enterprise management and investments. As of December 31,
2023, Suqian Yuanguan had total assets under management of RMB13.5
million with an investment focus on the hydrogen energy industry.
33. Kaiding
Hongtai /H1118/H1118/H1118/H1118/H1118/H1118/H1118
Kaiding Hongtai is a limited partnership established under the laws of
the PRC and is managed by its general partner, Guangdong Kaiding
Investment Co., Ltd. (ʮ̡), which was held by Mr.
DAI Jianxin (อ) as to 35% and ten other shareholders each holding
less than 20% equity interest as of the Latest Practicable Date. As of the
Latest Practicable Date, Kaiding Hongtai had 13 limited partners, and
was held by Ms. LIANG Mei ( ૑ૠ) as to approximately 19.33% as the
largest limited partner. Kaiding Hongtai is a private equity fund with
total assets under management of more than RMB44 million as of
December 31, 2023, and has made investments in companies principally
engaged in manufacturing of hydrogen fuel cell systems and
components.
34. Mr. CAO
Hongwei (
૎ᒿ
ਃ) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Mr. CAO Hongwei is an individual investor, and became acquainted
with our Company in 2022 through Ms. FENG Yan ( ඹዲ).
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35. Ms. FENG Yan
(ඹዲ) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Ms. FENG Yan is an individual investor, and has become our
Shareholder following the equity transfer from Baohui Chuangneng in
September 2019. She was a limited partner of Baohui Chuangneng at the
time of transfer. For further details relating to the equity transfer, see
“ — (2) Major Shareholding Changes of Our Company Before
Conversion into Joint Stock Limited Company — (g) Equity Transfers
in September 2019” in this section.
36. Dongfang
Electric /H1118/H1118/H1118/H1118/H1118/H1118/H1118
Dongfang Electric is a limited partnership established under the laws of
the PRC and is managed by its general partner, Dongfang Jiangxia
Industrial Investment Private Fund Management (Chengdu) Co., Ltd.
(၍ଣ(ϓே)ʮ̡), which is ultimately
controlled by the State-owned Assets Supervision and Administration
Commission of the State Council (ึ). As
of the Latest Practicable Date, Dongfang Electric had seven limited
partners, and was held as to approximately 32.61% by each of Dongfang
Electric Investment Management Co., Ltd. (ʮ
̡) and Sanxia Capital Holding Co., Ltd. (ப΂ʮ̡)
as the two largest limited partners. Dongfang Electric is an investment
fund with total assets under management of approximately RMB600
million as of December 31, 2023, and has made investments in
companies in the hydrogen energy industry.
37. Lianming
Machinery /H1118/H1118/H1118/H1118/H1118
Lianming Machinery is a joint stock limited company established under
the laws of the PRC and is listed on the Shanghai Stock Exchange (stock
code: 603006). It is principally engaged in manufacturing and sales of
automotive body parts, and provision of supply chain integrated
services.
38. Ningbo
Xucheng /H1118/H1118/H1118/H1118/H1118/H1118
Ningbo Xucheng is a limited partnership established under the laws of
the PRC and is managed by its general partner, Ningbo Xucheng Shitu
New Materials Technology Co., Ltd. (ʮ
̡), which is wholly owned by Ms. WANG Aiping ( ˮฌറ). As of the
Latest Practicable Date, Ningbo Xucheng was held as to 95% by Mr. XU
Zhenye (ุ) as the sole limited partner. Ningbo Xucheng is
principally engaged in provision of enterprise management consultancy
services, socio-economic consultancy services and information
consultancy services. As of December 31, 2023, Ningbo Xucheng had
total assets under management of more than RMB114 million with an
investment focus on the new energy, new materials and digital economy
industries.
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39. Wuxi Binni /H1118/H1118/H1118Wuxi Binni is a limited partnership established under the laws of the
PRC and is managed by its general partner, Shanghai Zibin Investment
Management Co., Ltd. (ʮ̡), which is
controlled by Mr. FAN Huizhong (౉଺). As of the Latest Practicable
Date, Wuxi Binni was held as to approximately 99.92% by Mr. NI
Daixing (˾ጳ) as the sole limited partner. Wuxi Binni is principally
engaged in private equity investments with an investment focus on the
new energy and digital economy industries. As of December 31, 2023,
it had total assets under management of more than RMB100 million.
40. Hangzhou
Industrial and
Hangzhou
Enterprises /H1118/H1118/H1118/H1118
Hangzhou Industrial is a limited liability company established under the
laws of the PRC and a subsidiary of Hangzhou Enterprises. It is
principally engaged in sales, hedging, import and export of, and
provision of warehousing services relating to, various commodities,
such as coal, chemical compounds, steel and rubber.
Hangzhou Enterprises is a limited liability company established under
the laws of the PRC, and is principally engaged in provision of
international investment and financial services and industrial
operational services relating to commodities and e-commerce. It is
ultimately controlled by the Finance Bureau of Hangzhou Municipality
(҅).
41. Tianjin
Chongmin /H1118/H1118/H1118/H1118/H1118
Tianjin Chongmin is a limited partnership established under the laws of
the PRC and is managed by its general partner, Mr. LIU Jiayin (ߥ.)
As of the Latest Practicable Date, Tianjin Chongmin had two limited
partners, and was held as to approximately 76.09% by Lishui Zhongmin
Enterprise Management Partnership (Limited Partnership) (ᦩΆ
ุ၍ଣΥྫΆุ(Υྫ)) as the largest limited partner. Tianjin
Chongmin is principally engaged in provision of socio-economic
consultancy services. As of December 31, 2023, Tianjin Chongmin had
total assets under management of more than RMB4.6 million with an
investment focus on the advanced manufacturing industry.
42. Global
Holding /H1118/H1118/H1118/H1118/H1118/H1118/H1118
Global Holding is a limited liability company established under the laws
of the PRC, and is principally engaged in investment management,
investment consultancy, equity investment, urban infrastructure
construction and asset management. It is ultimately controlled by Mr.
XU Daocong (༸ᑋ). Global Holding had total assets under
management of more than RMB100 million as of December 31, 2023,
and has invested in companies in various industries, such as the
intelligent manufacturing and new materials industries.
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PREVIOUS LISTING ATTEMPT AND REASONS FOR LISTING ON THE STOCK
EXCHANGE
In March 2021, our Company submitted an application for listing (the “ Previous A-Share
Listing Application ”) to list the Shares on the SSE Star Market. The Shanghai Stock Exchange
issued two rounds of vetting comments in respect of the application proof of our Company’s
prospectus in relation to the Previous A-Share Listing Application and our Company provided
responses to such comments in June 2021 and August 2021, respectively, all of which are
publicly disclosed. In August 2021, our Company voluntarily withdrew the Previous A-Share
Listing Application after considering, among other things, future business strategic positioning
and capital planning, and we had addressed all of the comments raised by the Shanghai Stock
Exchange up to the date of our withdrawal of the Previous A-Share Listing Application. As of
the Latest Practicable Date, there was no outstanding comment or enquiry from the Shanghai
Stock Exchange in connection with the Previous A-Share Listing Application, nor material
disagreement between our Company and any professional parties engaged for the Previous
A-Share Listing Application.
In October 2022, we initiated the tutoring filing (ࣩthe “ Tutoring Filing ”) with
the Shanghai Regulatory Bureau of the CSRC (ึɪऎ္၍҅) for a
potential application for listing on the SSE Star Market. As of the Latest Practicable Date, we
were still in the process of assessing merits of such potential listing and did not submit any
formal application for listing on the SSE Star Market, while tutoring progress reports ( Ⴞኬආ
జѓ) have been made periodically to comply with the relevant requirements in connection
with the potential application for listing on the SSE Star Market. As of the Latest Practicable
Date, there had been no comment or enquiry from the Shanghai Regulatory Bureau of the
CSRC (ึɪऎ္၍҅) in connection with the Tutoring Filing, nor
material disagreement between our Company and any professional parties engaged for the
Tutoring Filing.
On the other hand, our Directors consider that the Stock Exchange, as an internationally
recognized and reputable stock exchange, can provide us with a good platform to access the
international capital markets and expand our global business, the Global Offering will provide
us with the necessary funding to increase our competitiveness by assisting us to expand our
operations and strengthen our business prospects, and the Listing on the Stock Exchange will
raise our profile and market awareness of our brand name and present us with an opportunity
to further expand our investor base. Taking into account, among others, the aforementioned
factors and the long-term business development strategies of our Group, our Directors consider
the Stock Exchange to be a more suitable venue to access international equity markets, and the
Listing will be in the best interests of our Company and our Shareholders as a whole.
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
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--- page 247 ---
Our Directors are not aware of any matters or findings from the Previous A-Share Listing
Application or the aforementioned tutoring filing/tutoring progress reports which have been
brought to their attention and would have a material adverse implication on the Listing, or any
matters that might materially and adversely affect our Company’s suitability for the Listing.
Our Directors further confirm that there is no other matter in relation to the Previous A-Share
Listing Application or the aforementioned tutoring filing/tutoring progress reports that needs
to be brought to the attention of the Stock Exchange or potential investors.
Based on the independent due diligence work performed by the Sole Sponsor and the
information and representation given to the Sole Sponsor, nothing has come to the Sole
Sponsor’s attention that could cast doubts on the Directors’ views set out above.
PUBLIC FLOAT
The 45,482,153 Shares held by our Shareholders as of the Latest Practicable Date,
representing approximately 55.94% of our total issued share capital as of the Latest Practicable
Date, or approximately 52.80% of our total issued share capital upon Listing (assuming the
Over-allotment Option is not exercised and the options granted under the Pre-IPO Share Option
Scheme are not exercised), or approximately 52.36% of our total issued share capital upon
exercise of the Over-allotment Option in full (assuming the options granted under the Pre-IPO
Share Option Scheme are not exercised), will not be counted towards public float for the
purpose of Rule 8.08 of the Listing Rules after the Listing as these Shares are Domestic Shares
which will not be converted into H Shares and listed following the completion of the Global
Offering.
The 2,912,975 Shares held by Sinopec Capital, representing approximately 3.58% of our
total issued share capital as of the Latest Practicable Date, or approximately 3.38% of our total
issued share capital upon Listing (assuming the Over-allotment Option is not exercised and the
options granted under the Pre-IPO Share Option Scheme are not exercised), or approximately
3.35% of our total issued share capital upon exercise of the Over-allotment Option in full
(assuming the options granted under the Pre-IPO Share Option Scheme are not exercised), are
Domestic Shares which will be converted into H Shares and listed upon completion of the
Global Offering. As Sinopec Capital will be a substantial shareholder of our Company
immediately upon Listing and therefore, a core connected person of our Company, the H Shares
held by Sinopec Capital will not be counted towards the public float for the purpose of Rule
8.08 of the Listing Rules after the Listing.
The 32,916,243 Shares held by Ms. ZHANG Xiuying (ߵMr. SHEN Xianglong ( ӏ
ୂᎲ), Ms. FENG Yan ( ඹዲ), Pengfan Zhibin, Jinglong Baoluo, Chunyang Songteng,
Chunyang Hongxin, Luping Jingneng, Huiqing Jingnuo, Trustbridge II, Trustbridge New
Economy, Legend Bingde, Legend Chengye, Ningbo Jiazhan, Tianjin Chongmin, Xiaofu
Jucheng, Sanxing Zhiqi, Qianshi Guoxin, Qianshi Zhengxin, Qianshi Fenghe, Qianshi
Shengxin, Toyota Tsusho, Jingxiang Capital, Hainan Yongheng, Global Holding, Suqian
Yuanguan, Zhengzhou Spruce, Yutong Bus, Mr. WAN Jingzhao ( ຬ౻๫), Shuimu Hydrogen,
Dongfang Electric, Jiayuan Technology, Dezaihou Qicheng, Hexie Jinhong, Hubei Cathay
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
– 237 –


--- page 248 ---
Energy, HongShan Hanchen, Saifus Equity Investment, Wenzhou Zhemin Investment, Junze
No. 3, Suzhou Zhongheng, Gao Ling Yurun, Zhuhai Pangheng, Hangzhou Industrial, Hangzhou
Enterprises, Ningbo Xucheng, Mr. CAO Hongwei ( ૎ᒿਃ) and Wuxi Binni, representing
approximately 40.48% of our total issued share capital as of the Latest Practicable Date, or
approximately 38.21% of our total issued share capital upon Listing (assuming the Over-
allotment Option is not exercised and the options granted under the Pre-IPO Share Option
Scheme are not exercised), or approximately 37.89% of our total issued share capital upon
exercise of the Over-allotment Option in full (assuming the options granted under the Pre-IPO
Share Option Scheme are not exercised), are Domestic Shares which will be converted into H
Shares and listed following the completion of the Global Offering. As these entities/individuals
will not be core connected persons of our Company upon Listing, are not accustomed to take
instructions from core connected persons of our Company 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 core connected persons of our Company, the H Shares held
by them will be counted towards the public float for the purpose of Rule 8.08 of the Listing
Rules after the Listing.
Immediately upon the completion of the Global Offering, assuming that (i) 4,827,920 H
Shares are allotted and issued in the Global Offering; (ii) the Over-allotment Option is not
exercised; (iii) the options granted under the Pre-IPO Share Option Scheme are not exercised;
(iv) 35,829,218 Domestic Shares are converted into H Shares; and (v) 86,139,291 Shares are
issued and outstanding in the share capital of our Company upon completion of the Global
Offering, 37,744,163 Shares, representing approximately 43.82% of our total issued share
capital, will be counted towards the public float for the purpose of Rule 8.08 of the Listing
Rules.
CAPITALIZATION OF OUR COMPANY
The table below is a summary of the capitalization of our Company as of the date of this
prospectus and the Listing Date (assuming the Over-allotment Option is not exercised and the
options granted under the Pre-IPO Share Option Scheme are not exercised):
As of the date of this prospectus
As of the Listing Date (assuming the Over-allotment Option is not exercised and the options granted
under the Pre-IPO Share Option Scheme are not exercised)
Shareholder
Number of
Domestic
Shares
Approximate
ownership
percentage in
total issued
share capital
Number of H
Shares
Approximate
ownership
percentage in
H Shares
Number of
Domestic
Shares
Approximate
ownership
percentage in
Domestic
Shares
Total number
of Shares
Approximate
ownership
percentage in
total issued
share capital
Mr. Lin /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111811,834,272 14.55% – – 11,834,272 26.02% 11,834,272 13.74%
Sinopec Capital /H1118/H1118/H1118/H111811,651,900 14.33% 2,912,975 7.16% 8,738,925 19.21% 11,651,900 13.53%
Ms. ZHANG Xiuying
(ߵ)H1118/H1118/H1118/H1118/H1118/H1118/H11183,863,800 4.75% 3,863,800 9.50% – – 3,863,800 4.49%
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
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--- page 249 ---
As of the date of this prospectus
As of the Listing Date (assuming the Over-allotment Option is not exercised and the options granted
under the Pre-IPO Share Option Scheme are not exercised)
Shareholder
Number of
Domestic
Shares
Approximate
ownership
percentage in
total issued
share capital
Number of H
Shares
Approximate
ownership
percentage in
H Shares
Number of
Domestic
Shares
Approximate
ownership
percentage in
Domestic
Shares
Total number
of Shares
Approximate
ownership
percentage in
total issued
share capital
National Manufacturing
Fund /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,735,405 4.59% – – 3,735,405 8.21% 3,735,405 4.34%
Shanghai Weiqing /H1118/H1118/H11183,652,700 4.49% – – 3,652,700 8.03% 3,652,700 4.24%
FAW Jiefang /H1118/H1118/H1118/H1118/H1118/H11183,600,000 4.43% – – 3,600,000 7.92% 3,600,000 4.18%
Zhengzhou Spruce /H1118/H1118/H11183,363,798 4.14% 3,363,798 8.27% – – 3,363,798 3.91%
Pengfan Zhibin /H1118/H1118/H1118/H1118/H11183,000,000 3.69% 3,000,000 7.38% – – 3,000,000 3.48%
Trustbridge II /H1118/H1118/H1118/H1118/H11182,191,700 2.70% 2,191,700 5.39% – – 2,191,700 2.54%
Qianshi Shengxin /H1118/H1118/H11182,084,600 2.56% 1,042,300 2.56% 1,042,300 2.29% 2,084,600 2.42%
Ms. MA Audrey Jing
Nan ( ৵౺฻) /H1118/H1118/H1118/H11181,767,500 2.17% – – 1,767,500 3.89% 1,767,500 2.05%
Zhangjiagang Bohua /H1118/H11181,715,940 2.11% – – 1,715,940 3.77% 1,715,940 1.99%
Yutong Bus /H1118/H1118/H1118/H1118/H1118/H11181,494,162 1.84% 1,494,162 3.68% – – 1,494,162 1.73%
Nakatsu Innovation /H1118/H1118/H11181,494,162 1.84% – – 1,494,162 3.29% 1,494,162 1.73%
Huiqing Jingnuo /H1118/H1118/H1118/H11181,430,000 1.76% 1,430,000 3.52% – – 1,430,000 1.66%
Chunyang Songteng /H1118/H11181,314,373 1.62% 1,314,373 3.23% – – 1,314,373 1.53%
Legend Chengye /H1118/H1118/H1118/H11181,217,600 1.50% 1,217,600 2.99% – – 1,217,600 1.41%
Shanghai Weilan /H1118/H1118/H1118/H11181,200,000 1.48% – – 1,200,000 2.64% 1,200,000 1.39%
Shanghai Weijing /H1118/H1118/H1118/H11181,165,728 1.43% – – 1,165,728 2.56% 1,165,728 1.35%
Luping Jingneng /H1118/H1118/H1118/H11181,144,000 1.41% 1,144,000 2.81% – – 1,144,000 1.33%
HongShan Hanchen /H1118/H1118/H11181,120,622 1.38% 336,187 0.83% 784,435 1.72% 1,120,622 1.30%
Junze No. 3 /H1118/H1118/H1118/H1118/H1118/H11181,120,622 1.38% 373,541 0.92% 747,081 1.64% 1,120,622 1.30%
Jinglong Baoluo /H1118/H1118/H1118/H11181,001,000 1.23% 1,001,000 2.46% – – 1,001,000 1.16%
Shuimu Hydrogen /H1118/H1118/H1118996,681 1.23% 996,681 2.45% – – 996,681 1.16%
Qianshi Guoxin /H1118/H1118/H1118/H1118995,600 1.22% 497,800 1.22% 497,800 1.09% 995,600 1.16%
Qianshi Zhengxin /H1118/H1118/H1118986,300 1.21% 493,150 1.21% 493,150 1.08% 986,300 1.15%
Jiayuan Technology /H1118/H1118 871,881 1.07% 871,881 2.14% – – 871,881 1.01%
Jingxiang Capital /H1118/H1118/H1118/H1118776,800 0.96% 500,000 1.23% 276,800 0.61% 776,800 0.90%
Trustbridge New
Economy /H1118/H1118/H1118/H1118/H1118/H1118730,600 0.90% 730,600 1.80% – – 730,600 0.85%
Legend Bingde /H1118/H1118/H1118/H1118/H1118730,600 0.90% 730,600 1.80% – – 730,600 0.85%
Sanxing Zhiqi /H1118/H1118/H1118/H1118/H1118730,600 0.90% 730,600 1.80% – – 730,600 0.85%
Dezaihou Qicheng /H1118/H1118/H1118579,321 0.71% 434,491 1.07% 144,830 0.32% 579,321 0.67%
Toyota Tsusho /H1118/H1118/H1118/H1118/H1118578,000 0.71% 578,000 1.42% – – 578,000 0.67%
Weiming VC /H1118/H1118/H1118/H1118/H1118/H1118498,340 0.61% – – 498,340 1.10% 498,340 0.58%
Hubei Cathay Energy /H1118/H1118 498,340 0.61% 498,340 1.23% – – 498,340 0.58%
Hainan Yongheng /H1118/H1118/H1118410,000 0.50% 410,000 1.01% – – 410,000 0.48%
Hexie Jinhong /H1118/H1118/H1118/H1118/H1118373,755 0.46% 373,755 0.92% – – 373,755 0.43%
Huajian Chengding /H1118/H1118/H1118373,541 0.46% – – 373,541 0.82% 373,541 0.43%
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
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--- page 250 ---
As of the date of this prospectus
As of the Listing Date (assuming the Over-allotment Option is not exercised and the options granted
under the Pre-IPO Share Option Scheme are not exercised)
Shareholder
Number of
Domestic
Shares
Approximate
ownership
percentage in
total issued
share capital
Number of H
Shares
Approximate
ownership
percentage in
H Shares
Number of
Domestic
Shares
Approximate
ownership
percentage in
Domestic
Shares
Total number
of Shares
Approximate
ownership
percentage in
total issued
share capital
Wenzhou Zhemin
Investment /H1118/H1118/H1118/H1118/H1118/H1118373,541 0.46% 373,541 0.92% – – 373,541 0.43%
Jiaxing Hydrogen /H1118/H1118/H1118373,541 0.46% – – 373,541 0.82% 373,541 0.43%
Shanghai
Shengyuehong /H1118/H1118/H1118/H1118373,541 0.46% – – 373,541 0.82% 373,541 0.43%
Saifus Equity
Investment /H1118/H1118/H1118/H1118/H1118/H1118313,774 0.39% 156,887 0.39% 156,887 0.34% 313,774 0.36%
Qianshi Fenghe /H1118/H1118/H1118/H1118304,400 0.37% 152,200 0.37% 152,200 0.33% 304,400 0.35%
Ningbo Jiazhan /H1118/H1118/H1118/H1118/H1118287,942 0.35% 287,942 0.71% – – 287,942 0.33%
Suqian Yuanguan /H1118/H1118/H1118/H1118276,800 0.34% 276,800 0.68% – – 276,800 0.32%
Kaiding Hongtai /H1118/H1118/H1118/H1118252,181 0.31% – – 252,181 0.55% 252,181 0.29%
Mr. SHEN Xianglong
(ӏୂᎲ) /H1118/H1118/H1118/H1118/H1118/H1118/H1118250,000 0.31% 250,000 0.61% – – 250,000 0.29%
Chunyang Hongxin /H1118/H1118/H1118224,124 0.28% 224,124 0.55% – – 224,124 0.26%
Suzhou Zhongheng /H1118/H1118/H1118224,124 0.28% 112,062 0.28% 112,062 0.25% 224,124 0.26%
Mr. CAO Hongwei
(૎ᒿਃ) /H1118/H1118/H1118/H1118/H1118/H1118/H1118224,124 0.28% 224,124 0.55% – – 224,124 0.26%
Xiaofu Jucheng /H1118/H1118/H1118/H1118199,058 0.24% 199,058 0.49% – – 199,058 0.23%
Ms. FENG Yan
(ඹዲ) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118161,600 0.20% 161,600 0.40% – – 161,600 0.19%
Dongfang Electric /H1118/H1118/H1118154,706 0.19% 154,706 0.38% – – 154,706 0.18%
Lianming Machinery /H1118/H1118 149,416 0.18% – – 149,416 0.33% 149,416 0.17%
Ningbo Xucheng /H1118/H1118/H1118/H1118149,416 0.18% 149,416 0.37% – – 149,416 0.17%
Wuxi Binni /H1118/H1118/H1118/H1118/H1118/H1118149,416 0.18% 74,708 0.18% 74,708 0.16% 149,416 0.17%
Mr. WAN Jingzhao
(ຬ౻๫) /H1118/H1118/H1118/H1118/H1118/H1118/H1118137,001 0.17% 137,001 0.34% – – 137,001 0.16%
Tianjin Chongmin /H1118/H1118/H111898,591 0.12% 98,591 0.24% – – 98,591 0.11%
Gao Ling Yurun /H1118/H1118/H1118/H111874,708 0.09% 37,354 0.09% 37,354 0.08% 74,708 0.09%
Zhuhai Pangheng /H1118/H1118/H1118/H111874,708 0.09% 37,354 0.09% 37,354 0.08% 74,708 0.09%
Hangzhou Industrial /H1118/H1118 74,708 0.09% 74,708 0.18% – – 74,708 0.09%
Hangzhou
Enterprises /H1118/H1118/H1118/H1118/H1118/H111874,708 0.09% 74,708 0.18% – – 74,708 0.09%
Global Holding /H1118/H1118/H1118/H1118/H111841,000 0.05% 41,000 0.10% – – 41,000 0.05%
Other investors taking
part in the Global
Offering /H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 4,827,920 11.87% – – 4,827,920 5.60%
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111881,311,371 100% 40,657,138 100% 45,482,153 100% 86,139,291 100%
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
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--- page 251 ---
CORPORATE STRUCTURE IMMEDIATELY BEFORE COMPLETION OF THE GLOBAL OFFERING
The chart below sets out the shareholding structure of our Company immediately before completion of the Global Offering:
4.49%
Shanghai
Weiqing(1)
4.75%
Ms. ZHANG
Xiuying
(ߵ3)
4.43%
FAW
Jiefang(5)
3.69%
Pengfan
Zhibin(7)
2.11%
Zhangjiagang
Bohua(11)
1.41%
Luping
Jingneng(12)
14.55%
Mr. Lin(1) Shanghai
Weilan(1)
1.48% 4.59%
National
Manufacturing
Fund(4)
Zhengzhou
Spruce(6)
4.14% 2.17%
Ms. MA Audrey
Jing Nan
(৵౺฻)(10)
Yutong
Bus(6)
1.84% 0.17%
Mr. W AN
Jingzhao
(ຬ౻๫)(6)
Our Company
(PRC)
100% 80% 56% 100%
100%
100% 51.03%
100%
14.29%
13.71%
80.90%
100% 100%
Shanghai REFIRE
Prismatic Hydrogen
Technology Co., Ltd.
(෧౴ᙴ૫ঐ
ʮ̡)(16)
(PRC)
Foshan Nanhai Cunqiu
Equity Investment Co., Ltd.
(߇
ʮ̡)(19)
(PRC)
Guangdong Discovery
Motors Co., Ltd.
(ઞ॰
ʮ̡)
(PRC) Shanghai Wutang Technology
Partnership (Limited Partnership)
(ҦΥྫΆุ
(Υྫ))(20)
(PRC)Unilia (Guangdong)
Fuel Cells Inc.
(ཥϫ
ʮ̡)(20)
(PRC)
Zhejiang Unilia Hydrogen
Technology Ltd. (एϪ
ʮ̡)
(PRC)
100%
100%
Shanghai Unilia
Technologies Inc.
(ɪऎඎᗲ
ʮ̡)
(PRC)
Unilia (Hong Kong)
Fuel Cells Limited (ಥᗲඎ
ʮ̡)
(Hong Kong)
100%
Unilia (Canada)
Fuel Cells Inc.
(Canada)
Shanghai Unilia
(PRC)
Changde REFIRE
Surge New Materials
Technology Co., Ltd.
(෧ᆔ಼อҿ
ʮ̡)(17)
(PRC)
REFIRE New Energy Development
(Shanghai) Co., Ltd. (෧อঐ๕
ʮ̡)
(PRC)
Other subsidiaries
of our Company(18)
REFIRE Technology
(PRC)
Jiangsu REFIRE
Technology Co., Ltd. (෧
ʮ̡)
(PRC)
REFIRE Europe
GmbH
(Germany)
1.43%
Shanghai
Weijing(1)
14.33%
Sinopec
Capital(2)
2.70%
Trustbridge II(8)
2.56%
Qianshi
Shengxin(9)
1.62%
Chunyang
Songteng(7)
1.22%
Qianshi
Guoxin(14)
0.90%
Trustbridge
New Economy(8)
0.37%
Qianshi
Fenghe(9)
1.21%
Qianshi
Zhengxin(14)
Huiqing
Jingnuo(12)
1.76% 1.50%
Legend
Chengye(13)
1.23%
Jinglong
Baoluo(7)
0.90%
Legend
Bingde(13)
0.28%
Chunyang
Hongxin(7)
18.16%
Other 36
Shareholders(15)
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
– 241 –


--- page 252 ---
Notes:
(1) Each of Shanghai Weiqing, Shanghai Weilan and Shanghai Weijing is a limited partnership established in the
PRC and is one of our ESOP Platforms. Mr. Lin is the general partner and executive partner of Shanghai
Weiqing, Shanghai Weilan and Shanghai Weijing and is responsible for their respective management.
(2) Sinopec Capital is a limited liability company established under the laws of the PRC and is controlled by China
Petrochemical Corporation (ʮ̡), which is in turn wholly owned by the State-owned
Assets Supervision and Administration Commission of the State Council (ึ).
Sinopec Capital is a substantial shareholder of our Company immediately upon Listing, and China
Petrochemical Corporation is an associate of Sinopec Capital. As such, each of Sinopec Capital and China
Petrochemical Corporation is a connected person of our Company.
(3) To the best knowledge of our Directors, Ms. ZHANG Xiuying (ߵis an Independent Third Party.
(4) National Manufacturing Fund is a joint stock limited company established under the laws of the PRC, and was
held as to 15.29% by the MOF as its single largest shareholder as of the Latest Practicable Date. National
Manufacturing Fund is an Independent Third Party.
(5) FAW Jiefang is a limited liability company established under the laws of the PRC and is a wholly-owned
subsidiary of FAW Jiefang Group Co., Ltd. (ʮ̡), which is listed on the Shenzhen
Stock Exchange (stock code: 000800). Each of FAW Jiefang and FAW Jiefang Group Co., Ltd. is an
Independent Third Party.
(6) Zhengzhou Spruce is a limited partnership established under the laws of the PRC and is managed by its general
partner, Zhengzhou Yunshan Investment Management Co., Ltd. (ʮ̡), which is an
indirect wholly-owned subsidiary of Zhengzhou Yutong Group Co., Ltd. (ʮ̡), which is in
turn indirectly controlled by Mr. TANG Yuxiang ( ಷ͗ୂ). Yutong Bus is a joint stock limited company
established under the laws of the PRC and is listed on the Shanghai Stock Exchange (stock code: 600066), and
was held as to approximately 37.70% directly by Zhengzhou Yutong Group Co., Ltd. as its controlling
shareholder as of the Latest Practicable Date. Further, as confirmed by Zhengzhou Spruce, Yutong Bus and Mr.
WAN Jingzhao ( ຬ౻๫), they are parties acting in concert in exercising Shareholders’ rights pertaining to our
Company. Each of Zhengzhou Spruce, Yutong Bus, Mr. TANG Yuxiang and Mr. WAN Jingzhao is an
Independent Third Party.
(7) Pengfan Zhibin is a limited partnership established under the laws of the PRC and is managed by Shenzhen
Qianhai Chunyang Asset Management Co., Ltd. (ʮ̡)( “ Chunyang Capital ”).
Chunyang Songteng is a limited partnership established under the laws of the PRC and is managed by its
general partner, Chunyang Capital. Jinglong Baoluo is a limited partnership established under the laws of the
PRC and is managed by its general partner, Chunyang Capital. Chunyang Hongxin is a limited partnership
established under the laws of the PRC and is managed by its general partner, Shenzhen Qianhai Chunyang
Venture Capital Partnership (Limited Partnership) (ජ௴ุҳ༟ΥྫΆุ(Υྫ)), whose
general partner is Chunyang Capital. Chunyang Capital is ultimately controlled by Mr. FU Junru (ν).
Each of Pengfan Zhibin, Chunyang Songteng, Jinglong Baoluo, Chunyang Hongxin and Mr. FU Junru is an
Independent Third Party.
(8) Trustbridge II is a limited partnership established under the laws of the PRC and is managed by its general
partner, Ningbo Trustbridge Investment Management Partnership (Limited Partnership) (ҳ༟၍ଣΥ
ྫΆุ(Υྫ)), whose general partner is Shanghai Trustbridge New Economy Equity Investment
Management Partnership (Limited Partnership) (ᛆҳ༟၍ଣΥྫΆุ(Υྫ)).
Trustbridge New Economy is a limited partnership established under the laws of the PRC and is managed by
its general partner, Shanghai Trustbridge New Economy Equity Investment Management Partnership (Limited
Partnership). The general partner of Shanghai Trustbridge New Economy Equity Investment Management
Partnership (Limited Partnership) is Shanghai Trustbridge Investment Management Co., Ltd. (ҳ༟
ʮ̡)( “ Shanghai Trustbridge ”). Each of Trustbridge II, Trustbridge New Economy and Shanghai
Trustbridge is an Independent Third Party.
(9) Each of Qianshi Shengxin and Qianshi Fenghe is a limited partnership established under the laws of the PRC
and is managed by its general partner, Ningbo Qianshi Herun Equity Investment Management Co., Ltd. (ت
ʮ̡), which is ultimately controlled by Mr. LI Zhuiyang ( ҽ৛ජ). Each of
Qianshi Shengxin, Qianshi Fenghe and Mr. LI Zhuiyang ( ҽ৛ජ) is an Independent Third Party.
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
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(10) Ms. MA Audrey Jing Nan ( ৵౺฻) is our executive Director and vice president.
(11) Zhangjiagang Bohua is a limited partnership established under the laws of the PRC and is managed by its
general partner, Zhangjiagang Bohua Yaoshi Investment Partnership (Limited Partnership) (ಥ௹ശᘴ˰ҳ
༟ΥྫΆุ(Υྫ)), which is ultimately controlled by Mr. XU Wenbo (˖௹). Each of Zhangjiagang
Bohua and Mr. XU Wenbo is an Independent Third Party.
(12) Each of Huiqing Jingnuo and Luping Jingneng is a limited partnership established under the laws of the PRC
and is managed by its general partner, Huiyang Jingneng Investment Management (Beijing) Co., Ltd. (ԯ
ঐҳ༟၍ଣ(̏ԯ)ʮ̡), which is wholly owned by Mr. LU Qingping ( ኁ૶̻). Each of Huiqing Jingnuo,
Luping Jingneng and Mr. LU Qingping is an Independent Third Party.
(13) Legend Chengye is a limited partnership established under the laws of the PRC and is managed by its general
partner, Beijing Legend Tongdao Private Equity Management Partnership (Limited Partnership) ( ̏ԯёᑌΝ
၍ଣΥྫΆุ(Υྫ)), which is indirectly controlled by Beijing Junqi Jiarui Enterprise
Management Co., Ltd. (ʮ̡). Legend Bingde is a limited partnership established
under the laws of the PRC and is managed by its general partner, Lhasa Junqi Enterprise Management Co., Ltd.
(ʮ̡), which is indirectly controlled by Beijing Junqi Jiarui Enterprise Management
Co., Ltd.. Beijing Junqi Jiarui Enterprise Management Co., Ltd. was in turn held as to 40% by Mr. CHEN Hao
(௓ख), 20% by Mr. ZHU Linan (ی20% by Mr. LI Jiaqing (ᅅ) and 20% by Mr. WANG Nengguang
(ˮঐΈ) as of the Latest Practicable Date. Each of Legend Chengye, Legend Bingde, Mr. CHEN Hao, Mr.
ZHU Linan, Mr. LI Jiaqing and Mr. WANG Nengguang is an Independent Third Party.
(14) Each of Qianshi Guoxin and Qianshi Zhengxin is a limited partnership established under the laws of the PRC
and is managed by its general partner, Quancun Entrepreneurship Investment Management (Guangdong
Hengqin) Partnership (Limited Partnership) ( ΌӀ௴ุҳ༟၍ଣ(ዑೞ)ΥྫΆุ(Υྫ)), whose
general partner is Hainan Quancun Industrial Management Co., Ltd. (ப΂ʮ̡), which
was in turn held as to 60% by Mr. LI Wenqing ( ҽ˖ᅅ), 20% by Ms. CHENG Jing (ẙ), 20% by Ms. BAO
Yuanyuan ( Ꭹధధ) as of the Latest Practicable Date. Each of Qianshi Guoxin, Qianshi Zhengxin, Mr. LI
Wenqing, Ms. CHENG Jing and Ms. BAO Yuanyuan is an Independent Third Party.
(15) Each of Nakatsu Innovation, Junze No. 3, HongShan Hanchen, Shuimu Hydrogen, Jiayuan Technology,
Jingxiang Capital, Sanxing Zhiqi, Dezaihou Qicheng, Toyota Tsusho, Weiming VC, Hubei Cathay Energy,
Hainan Yongheng, Hexie Jinhong, Huajian Chengding, Wenzhou Zhemin Investment, Jiaxing Hydrogen,
Shanghai Shengyuehong, Saifus Equity Investment, Ningbo Jiazhan, Suqian Yuanguan, Kaiding Hongtai, Mr.
SHEN Xianglong ( ӏୂᎲ), Suzhou Zhongheng, Mr. CAO Hongwei ( ૎ᒿਃ), Xiaofu Jucheng, Ms. FENG Yan
(ඹዲ), Dongfang Electric, Lianming Machinery, Ningbo Xucheng, Wuxi Binni, Tianjin Chongmin, Gao Ling
Yurun, Zhuhai Pangheng, Hangzhou Industrial, Hangzhou Enterprises and Global Holding is an Independent
Third Party. For details relating to their shareholding in our Company, see “— Capitalization of Our Company”
in this section.
(16) Shanghai REFIRE Prismatic Hydrogen Technology Co., Ltd. (ʮ̡) is a limited
liability company established under the laws of the PRC and is held as to 80% by our Company, 10% by
Shanghai All Hydrogen Times Business Management Consulting Partnership (Limited Partnership) ( ɪऎΌ૫
˾ਠਕ၍ଣፔ༔ΥྫΆุ(Υྫ)) and 10% by Shenzhen Biqu Technology Co., Ltd. (ҦϞ
ʮ̡), respectively. Each of Shanghai All Hydrogen Times Business Management Consulting Partnership
(Limited Partnership) and Shenzhen Biqu Technology Co., Ltd. is an Independent Third Party. Shanghai
REFIRE Prismatic Hydrogen Technology Co., Ltd. is an insignificant subsidiary pursuant to Rule 14A.09 of
the Listing Rules.
(17) Changde REFIRE Surge New Materials Technology Co., Ltd. (ʮ̡) is a limited
liability company established under the laws of the PRC and is held as to 56% by our Company, 24% by Hunan
Yongyou Technology Co., Ltd. (ʮ̡) and 20% by Shanghai Taiqingchen Energy
Technology Co., Ltd. (
ʮ̡). Save for the minority equity stake in Shanghai
Taiqingchen Energy Technology Co., Ltd. held by our Group, each of Hunan Yongyou Technology Co., Ltd.
and Shanghai Taiqingchen Energy Technology Co., Ltd. is an Independent Third Party. Changde REFIRE
Surge New Materials Technology Co., Ltd. is an insignificant subsidiary pursuant to Rule 14A.09 of the Listing
Rules.
(18) As of the date of this prospectus, there were 31 other subsidiaries of our Company. For further details of the
subsidiaries of our Company, see note 1 to the Accountants’ Report.
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(19) Foshan Nanhai Cunqiu Equity Investment Co., Ltd. (ʮ̡) is a limited
liability company established under the laws of the PRC and is held as to 51.03% by REFIRE Technology and
48.97% by Guangdong Nanhai Industry Group Co., Ltd. (ʮ̡), which is controlled by
State-owned Assets Supervision and Administration Commission of Nanhai District of Foshan (ऎਜ
਷Ϟ༟ପ္ຖ၍ଣ҅) and an Independent Third Party, respectively. Foshan Nanhai Cunqiu Equity Investment
Co., Ltd. is an insignificant subsidiary pursuant to Rule 14A.09 of the Listing Rules.
(20) Unilia (Guangdong) Fuel Cells Inc. (ཥϫ(؇)ʮ̡) is a limited liability company established
under the laws of the PRC and is held as to 80.90% by Guangdong Discovery Motors Co., Ltd. (ઞ॰ӛ
ʮ̡), 13.71% by Shanghai Wutang Technology Partnership (Limited Partnership) (ҦΥྫ
Άุ(Υྫ)) (“Shanghai Wutang ”) and 5.39% by Anqing Juming Equity Investment Partnership (Limited
Partnership) (ᛆҳ༟ΥྫΆุ(Υྫ)), respectively. Shanghai Wutang is our subsidiary and an
employee incentive platform, and is managed by Guangdong Discovery Motors Co., Ltd. as its general partner
with approximately 14.29% partnership interest. As of the date of this prospectus, Shanghai Wutang had four
limited partners, including Dr. Christopher John GUZY (our senior management), Cosmic Overdrive Team
Canada Corp. (which is an employee incentive platform, and was held by employees of our Group as of the
date of this prospectus) and two directors of our subsidiaries. Anqing Juming Equity Investment Partnership
(Limited Partnership) (ᛆҳ༟ΥྫΆุ(Υྫ)) is an Independent Third Party. Unilia
(Guangdong) Fuel Cells Inc. is an insignificant subsidiary pursuant to Rule 14A.09 of the Listing Rules.
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CORPORATE STRUCTURE IMMEDIATELY FOLLOWING COMPLETION OF THE GLOBAL OFFERING
The chart below sets out the shareholding structure of our Company immediately following completion of the Global Offering (assuming the
Over-allotment Option is not exercised and the options granted under the Pre-IPO Share Option Scheme are not exercised):
4.24%
Shanghai
Weiqing(1)
4.49%
Ms. ZHANG
Xiuying
(ߵ3)
4.18%
FAW
Jiefang(5)
3.48%
Pengfan
Zhibin(7)
1.99%
Zhangjiagang
Bohua(11)
1.33%
Luping
Jingneng(12)
13.74%
Mr. Lin(1) Shanghai
Weilan(1)
1.39% 4.34%
National
Manufacturing
Fund(4)
Zhengzhou
Spruce(6)
3.91% 2.05%
Ms. MA Audrey
Jing Nan
(৵౺฻)(10)
Yutong
Bus(6)
1.73% 0.16%
Mr. W AN
Jingzhao
(ຬ౻๫)(6)
Our Company
(PRC)
100% 80% 56% 100%
100%
100% 51.03%
100%
14.29%
13.71%
80.90%
100% 100%
Shanghai REFIRE
Prismatic Hydrogen
Technology Co., Ltd.
(෧౴ᙴ૫ঐ
ʮ̡)(16)
(PRC)
Foshan Nanhai Cunqiu
Equity Investment Co., Ltd.
(߇
ʮ̡)(19)
(PRC)
Guangdong Discovery
Motors Co., Ltd.
(ઞ॰
ʮ̡)
(PRC) Shanghai Wutang Technology
Partnership (Limited Partnership)
(ҦΥྫΆุ
(Υྫ))(20)
(PRC)Unilia (Guangdong)
Fuel Cells Inc.
(ཥϫ
ʮ̡)(20)
(PRC)
Zhejiang Unilia Hydrogen
Technology Ltd. (एϪ
ʮ̡)
(PRC)
100%
100%
Shanghai Unilia
Technologies Inc.
(ɪऎඎᗲ
ʮ̡)
(PRC)
Unilia (Hong Kong)
Fuel Cells Limited (ಥᗲඎ
ʮ̡)
(Hong Kong)
100%
Unilia (Canada)
Fuel Cells Inc.
(Canada)
Shanghai Unilia
(PRC)
Changde REFIRE
Surge New Materials
Technology Co., Ltd.
(෧ᆔ಼อҿ
ʮ̡)(17)
(PRC)
REFIRE New Energy Development
(Shanghai) Co., Ltd. (෧อঐ๕
ʮ̡)
(PRC)
Other subsidiaries
of our Company(18)
REFIRE Technology
(PRC)
Jiangsu REFIRE
Technology Co., Ltd. (෧
ʮ̡)
(PRC)
REFIRE Europe
GmbH
(Germany)
1.35%
Shanghai
Weijing(1)
13.53%
Sinopec
Capital(2)
2.54%
Trustbridge II(8)
2.42%
Qianshi
Shengxin(9)
1.53%
Chunyang
Songteng(7)
1.16%
Qianshi
Guoxin(14)
0.85%
Trustbridge
New Economy(8)
0.35%
Qianshi
Fenghe(9)
1.15%
Qianshi
Zhengxin(14)
Huiqing
Jingnuo(12)
1.66% 1.41%
Legend
Chengye(13)
1.16%
Jinglong
Baoluo(7)
0.85%
Legend
Bingde(13)
0.26%
Chunyang
Hongxin(7)
17.15%
Other 36
Shareholders(15)
5.60%
Other public
Shareholders
Note: See the notes to “— Corporate Structure Immediately Before Completion of the Global Offering” in this section.
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OVERVIEW
We are a leading hydrogen technology company in China. We have proven track record
in policy-driven projects, as well as noteworthy achievements in market-driven projects. Our
established presence in the domestic hydrogen market is complemented by our successful and
constant expansion into overseas markets, with a growing revenue contribution in overseas
markets. During the Track Record Period, we focused on the design, development,
manufacture, and sales of hydrogen fuel cell systems, hydrogen production systems, and
related components, as well as providing fuel cell engineering and technical services catering
to customers’ needs, enabling us to provide one-stop solution for hydrogen production and
end-use applications.
Benefiting from our robust R&D team holding deep industrial insights, our strong
marketing capabilities, and rich first-hand experience, we have been making continuous
product development and iteration that are well-received by the market since our inception,
with particular strength on hydrogen fuel cell technologies and know-how that may bring
enhanced performance, great reliability, long lifespan, great environmental adaptability and
cost-effectiveness for hydrogen fuel cells. In recent years, leveraging our extensive technology
capacity and valuable market resources, we have further explored into the upstream of
hydrogen industry, where we have independently developed PEM water electrolysis hydrogen
production systems, hydrogen production power sources, electrodes for ALK electrolysis and
other key components that can effectively utilize electricity to produce hydrogen. Our
comprehensive product and service portfolio enables us to achieve the synergies among
hydrogen and electricity, therefore forming a new business model of
“electricity-hydrogen-electricity”, where our hydrogen fuel cell systems and hydrogen
production systems can be used for our customers’ one-stop solution for utilizing rich
renewable power resources, such as wind power and solar power in generating electricity,
which will be then used to produce green hydrogen with our PEM and ALK water electrolysis
technologies and products. Hydrogen can be stored for long-term for generating electricity for
various application scenarios with our hydrogen fuel cell products when needed.
Capitalizing on our proven track record and strong research and development forces in
China and abroad, we have established a well-recognized brand reputation in offering
high-quality hydrogen fuel cell systems in China, and have successfully set our footprint in
overseas hydrogen market. In addition, through offering quality products and services and
identifying and solving customers’ demands, we have formed and retained strong business
relationship with commercial vehicle manufacturers, automotive part manufacturers and
energy enterprises in China and abroad, such as Yutong Group ( ρஷ), FAW Jiefang (׳,)
Hangcha (ɸ), CHINT ( ͍इණྠ) in China, Toyota Motor in Japan and Continental and
Schaeffler Group in Germany.
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According to Frost & Sullivan, we ranked the first in the hydrogen fuel cell system market
in China, in terms of the sales power output of hydrogen fuel cell systems in 2023, with a
market share of 23.8%. We ranked the first in the hydrogen fuel cell system market in China,
in terms of the total sales power output of hydrogen fuel cell systems that have been used for
heavy-duty trucks in 2023, with a market share of 42.4%. We ranked the first in the hydrogen
fuel cell system market in China, in terms of the total sales value of hydrogen fuel cell systems
that have been used for heavy-duty trucks in 2023, with a market share of 29.4%. We are the
first company in hydrogen fuel cell industry in China that has independently developed and
realized mass-production of hydrogen fuel cell systems, fuel cell stacks, MEAs, and bipolar
plates. We have both PEM and ALK electrolysis products. In addition, we became the first
enterprise in hydrogen fuel cell industry in China that realized commercialization of its
proprietary hydrogen fuel cell systems abroad, winning numerous international certifications.
Furthermore, as of May 31, 2024, our hydrogen fuel cell systems had powered over 5,900 fuel
cell vehicles on the road in China. By the same date, these vehicles had accumulated around
210 million kilometers of operations, and had reduced carbon emissions of around 116,851
tons.
Since our inception, we have made continuous breakthroughs, gaining valuable
experience and know-hows in relation to the hydrogen fuel cell systems. We are a hydrogen
technology company that offers high-quality hydrogen fuel cell systems, and has realized
self-development and production of numerous key components for hydrogen fuel cell systems.
In recent years, we have been investing in developing hydrogen generation technologies, which
effectively complement our hydrogen fuel cell business and create synergies with a broad range
of downstream hydrogen utilization scenarios, enabling us to provide more comprehensive
hydrogen energy solutions to relevant clients. In addition, leveraging the strong market
recognition on our technology capacity, and the trust clients place in us for offering customized
hydrogen fuel cell technology services, we are well-positioned to identify and capture market
opportunities in the hydrogen production system market. For instance, our product portfolio
allows us to cater to customers’ needs, especially conglomerates seeking comprehensive
solutions from hydrogen generation to hydrogen application, particularly those featured with
reduced carbon emissions.
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As of the Latest Practicable Date, our product and service portfolio covered the entire
industrial chain of hydrogen from hydrogen generation (upstream supplies) to hydrogen
application (downstream applications in commercial vehicles, power generation stations,
construction machinery, etc.), as a result of which, we have achieved the synergies among
hydrogen and electricity, therefore forming a new business model of
“electricity-hydrogen-electricity”. Embracing the “dual-carbon” goals of China, which aim to
peak carbon dioxide emissions by 2030 and achieve carbon neutrality before 2060, we are
dedicated to providing full-services in hydrogen industry, including effective, cost-efficient,
safe and reliable hydrogen generation and application products and services, to help achieve a
sustainable future. Below is an illustration of our products and their applications:
Industry Chain of the Hydrogen Market
Midstream Downstream
Hydrogen Production Hydrogen Storage, Transportation, Refuel End-use Applications
Upstream
Directly use
Hydrogen
storage
Transportation
Industry Power
Distributed power generation
Off-grid power generation
Hydrogen energy storage
Heat supply
Steel
Chemical
Industry
Construction
CHP
Backup power
Rail transit
Hydrogen
transportation
Hydrogen
refueling
Using industrial by-product
Using fossil fuel
Fuel Cell System
Fuel
Cell
Stack
Bipolar plate
MEA
Balance
of Plant
(BOP)
Air compressor
Hydrogen circulation
system
FCU
Heavy truck
Construction
machinery
Omnibus
Ship
DC-to-DC converters
Medium and
light-duty truck
Using water electrolysis
(ALK, PEM, SOEC)
Notes:
1. the blue-colored text represents items which fall within the Group’s business scope.
2. the green-colored text represents downstream applications of the Group’s products.
Source: Frost & Sullivan
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In observing that the hydrogen fuel cell industry in China is currently in a transitioning
period from a policy-driven industry, where market players heavily rely on governmental
policies, subsidies and incentives to drive their growth and market acceptance, to a
market-driven one, where market players start to rely less on government support and shift
their focus to market-driven factors, such as performance, cost-effectiveness, and consumer
preferences, we have taken proactive measures to extend the application of our products from
demonstration cities to non-demonstration cities in China, from commercial vehicles to other
scenarios, and from domestic market in China to overseas. As of the Latest Practicable Date,
we had successfully distinguished ourselves from other industry peers by our strong track
record of achieving sustainable growth in non-demonstration cities in China. We have also
successfully realized commercialization of our fuel cell systems in non-vehicle scenarios, such
as stationary power stations, and construction machinery. We are the first enterprise in
hydrogen fuel cell industry in China that realized commercialization of proprietary hydrogen
fuel cell systems abroad. During the Track Record Period, our revenue derived from foreign
countries or regions increased from RMB5.5 million in 2021, to RMB8.6 million in 2022, and
further increased to RMB23.2 million in 2023.
We attribute our success to the following factors, including, (i) products featuring of great
reliability, long lifespan, environmental adaptability, which combined with our ability to offer
comprehensive after-sales services and technical support, enable adaption to vehicles carrying
heavy loads and working under complicated conditions; (ii) high power generation efficiency
and low hydrogen consumption, which help reduce associated costs in heavy-load and long
distance transportation scenarios; and (iii) our ability to continuously drive down production
costs of our fuel cell systems, as we are able to develop and produce greater variety of
components, and source high-quality raw materials and components locally.
Capitalizing on our established brand reputation in demonstration city clusters in China,
we are well-positioned to attract and engage new customers in non-demonstration cities.
During the Track Record Period, while continuously enhancing our customer base and loyalty
in demonstration cities, we have successfully distinguished us from industry peers by
promoting applications of hydrogen fuel cell systems to heavy-duty trucks operating in
non-demonstration cities in China. Our revenue derived from non-demonstration cities in
China increased from approximately RMB89.7 million in 2021 to approximately RMB110.8
million in 2022, and further increased to approximately RMB213.3 million in 2023. We believe
we are able to benefit from the industry transitioning and continue to enhance our position
while market keeps evolving.
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Especially, in terms of penetration into non-demonstration cities, we have successfully
entered the low-price hydrogen market in non-demonstration cities, such as those located in
Shanxi province, Shaanxi province, and Shandong province. These regions enjoy rich and
low-cost by-product hydrogen resources, as a result of which, the cost of obtaining hydrogen
is relatively lower as compared to other regions. To be specific, high-purity hydrogen in
regions with rich and low-cost by-product hydrogen resources, such as Shanxi province, is
around RMB25 per kilogram to RMB40 per kilogram at local hydrogen refueling stations,
while high-purity hydrogen in other regions, such as Shanghai, is around RMB50 per kilogram
to RMB70 per kilogram at local hydrogen refueling stations. Meanwhile, there is a large
demand for long-distance transportation of different industrial raw materials in such regions,
such as coke, steel, and chlor-alkali. To address this demand, we are able to help reduce
operation costs for heavy-duty trucks for medium to long distance transportation, making it
affordable to end customers, even without relying on subsidies or other preferential policies.
The operating cost of a hydrogen fuel cell heavy-duty truck for one hundred kilometers is
generally around 35% lower than the corresponding operating cost of a diesel-fueled
heavy-duty truck for one hundred kilometers.
Over the years, we have received numerous awards and recognitions in the hydrogen
industry. We were the only enterprise in hydrogen fuel cell industry that won the title of
“Manufacturing Individual Champion Enterprise” (“ࠏڿgranted by MIIT in
2021. We were in the second batch of national specialized and new “little giant” enterprises
(“ਖ਼ၚतอ“ʃ̶ɛ”Άุ”) recognized by MIIT. In addition, we won the first prize of
Technology Award of the China Automotive Industry” (“ኪҦஔᆤ”) in 2020,
the first prize of the “Science and, the first prize of the “Science and Technology Award of
China Machinery Industry” (“ኪҦஔᆤ”) in 2021, the first prize of “Scientific
Technology Advancement” in Shanghai for 2022 (“2022ҦආӉᆤ”), the title of
“Leading Enterprise of National Intellectual Property” (“ᗆପᛆᎴැΆุ”) in 2022, and
TOP100 Enterprises of Shanghai Hardcore Science and Technology in 2022 (“2022ࣨ
ҦΆุTOP100”). Furthermore, our high-power hydrogen fuel cell energy supply equipment
has been listed as the first (unit) of major technical equipment project in energy sector in 2021
by the National Energy Administration (ঐ๕҅). We have received recognition from
authorities including NDRC as a “National Enterprise Technology Center” and a “2021
Shanghai Hydrogen fuel cell System Technology Innovation Center,” among other industry
identities.
Moreover, we won numerous scientific research project awards, led major national
scientific research projects, and participated in the formulation of national and industry
standards. To name a few, as evaluated by the China Society of Automotive Engineers and the
Shanghai Society of Transportation Engineering ( ʕ਷ӛԓʈ೻ኪึձɪऎ̹ʹஷʈ೻ኪึ),
our hydrogen fuel cell system technologies applied in commercial vehicles excel in system
control, low-temperature damage-free freeze-start and durability. As of the Latest Practicable
Date, we had obtained 339 patents, 37 software copyrights, including 120 invention patents in
China; and we had led or participated in ten national research and development programs
initiated by the Ministry of Science and Technology (Ҧ௅); we had also led or participated
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in the development of 47 technical standards of hydrogen fuel cell systems, among which, there
were one international standard, eight national standards, two municipal standards, and two
industry standards for hydrogen fuel cell systems.
We also had business relationships with renowned international enterprises in hydrogen
fuel cell industry, such as, Schaeffler Group in Germany, and Toyota Motor in Japan. In
addition, we have been deeply engaged in the development of hydrogen fuel cell system
technologies. Leveraging our industry influence, we are the support institution for the
Hydrogen fuel cell Subcenter of the National Power Battery Innovation Center (ਗɢཥϫ
ཥϫʱʕː) and serve as the chairman enterprise of the Hydrogen fuel cell
Subdivision of the China Automobile Power Battery Industry Innovation Alliance ( ʕ਷ӛԓਗ
ཥϫʱึ). We have joined the International Hydrogen Council,
being among the first batch of PRC enterprises to join the Hydrogen Council, along with GWM
(ӛԓ), Weichai Power (ਗɢ), State Energy Group (ঐ๕ණྠ), and Sinopec ( ʕ
਷ͩʷ).
Our Industry
Developing hydrogen industry has become a global consensus for sustainable and green
development and decarbonization. With the increasing challenges on energy, environment and
safety, the global energy transformation is imminent. Hydrogen is an alternative that possesses
the characteristics and advantages of being able to have zero emissions during the energy
conversion process, high efficiency, high energy density and storable on large scale. It can be
produced from a variety of sources, including by-product hydrogen resources, and renewable
energy sources, making it a more sustainable option for energy storage. In addition, it produces
water only through electrochemical reactions, without producing any waste or pollutant to the
environment, which makes hydrogen an ideal energy resource for decarbonization.
Furthermore, hydrogen energy can be widely used in sectors such as chemical, transportation,
construction, energy storage and power generation.
In particular, the hydrogen fuel cell industry witnessed the promulgation of various
supporting policies and clear developmental goals. In December 2023, the National
Development and Reform Commission (the “ NDRC”) released the Catalogue for the Guidance
of Industrial Structure Adjustment (2024) (ኬͦ፽(2024 ϋ͉)‘), in which
hydrogen related industries, such as, hydrogen fuel cell systems, hydrogen production, are
encouraged. Other supporting policies include but not limited to the “Blue Book on the
Development of New Electric Power Systems” (‘), the Medium
and Long-term Plan for Hydrogen Industry (2021-2035) (ಂ஝ྌ(2021-2035
ϋ)‘), and the “14th Five Year Plan — Renewable Energy Development Plan” ( “ɤ̬ʞ”ତ
˾ঐ๕᜗ӻ஝ྌ‘) in China, as well as favorable policies in overseas countries, including
Japan, Korea, France, Germany, Australia, the U.S., Canada and United Arab Emirates, for
more information, see “Industry Overview — Overview of the Hydrogen Industry —
Preferential Policies and Regulations” in this prospectus. Supported by the favorable policies,
the hydrogen industry is expected to grow continuously.
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Pursuant to the Notice on Launching the Pilot Application of Fuel Cell Vehicles (׵
‘), during the demonstration period, certain hydrogen fuel
cell system manufacturer and related market participants, such as FCEV manufacturer, along
the industry chain in certain demonstration city form a consortium, and applies for the
admission into the award candidate pool in such demonstration city, such candidate consortium
will be then rewarded with cash incentives if the FCEVs they jointly produced meet certain
targets, such as reaching certain mileage accumulatively in the year of award. Members in the
consortium, such as fuel cell system manufacturer, FCEV manufacturer, can be directly
benefited therefrom. The transition from subsidies to awards is aimed at encouraging
companies to focus on technological advancements in relation to the practical performance of
the products, and advancements that truly contribute to the broad use of FCEV in daily life or
commercial scenes, leading to more sustainable and market-driven growth in the hydrogen fuel
cell sector. In forming a consortium, the Group has more knowledge-sharing opportunities with
FCEV manufacturers and other market participants, which help boost the Group’s product
iteration and upgrading, and the Group is able to gain recognition and credibility in the market
by receiving such award. Also, FCEV manufacturers are incentivized to provide discount to
end users of the vehicles as they receive cash rewards from the government, which will help
increase the sales volume of FCEVs. For more information, see “Regulatory Overview —
Regulations Relating to Our Industry and Products” in this prospectus.
According to Frost & Sullivan, the market size of global hydrogen consumption measured
by value increased from USD113.4 billion from 2018 to USD137.3 billion in 2023, and is
expected to increase to USD203.1 billion in 2028. In addition, the market size of low carbon
hydrogen consumption measured by value globally increased from approximately USD9.6
billion in 2018 to approximately USD27.8 billion in 2023, with a CAGR of 23.7%, and is
expected to increase to USD88.0 billion in 2028, with a CAGR of 25.9% for the period from
2023 to 2028.
The market size of hydrogen consumption measured by value in China increased from
RMB244.3 billion from 2018 to RMB355.2 billion in 2023, and is expected to increase to
RMB578.1 billion in 2028. In addition, low carbon hydrogen consumption measured by value
in China increased from approximately RMB20.8 billion in 2018 to approximately RMB78.0
billion in 2023, with a CAGR of 30.3%, and is expected to significantly increase to RMB267.7
billion in 2028, with a CAGR of 28.0% for the period from 2023 to 2028.
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Our Products and Services
Our product and service portfolio covers the entire industrial chain from hydrogen
generation (upstream supplies) to hydrogen application (downstream applications in
commercial vehicles, power generation stations, construction machinery, etc.), effectively
establishing the synergies among hydrogen and electricity, therefore forming a new business
model of “electricity-hydrogen-electricity”. To be specific, our products mainly include
electrolysis-based hydrogen production systems and their key components for electricity-to-
hydrogen conversion and hydrogen fuel cell systems and key components for hydrogen-to-
electricity conversion. Our broad and comprehensive product portfolio enables us to provide
comprehensive hydrogen technology solutions across diverse sectors globally, such as
commercial vehicles, power generation stations, construction machinery, hydrogen production,
where we help to drive the downstream consumption of green hydrogen.
During the Track Record Period, we sold various hydrogen fuel cell systems with
different rated power, widely ranging from 32kW to 220kW. Our hydrogen fuel cell systems
were mainly sold to hydrogen fuel cell commercial vehicle manufacturers and some fuel cell
stack manufacturers. The end customers of our hydrogen fuel cell systems generally include,
among others, bus companies, logistics companies, freight transportation companies, public
transportation companies, engineering and construction companies, etc.
During the Track Record Period, we self-developed and produced various types of
Components for Fuel Cell Systems, which were incorporated into our hydrogen fuel cell
systems sold to customers. We sold stand-alone fuel cell stacks and DC-to-DC boost converters
to our customers. Leveraging our proven-track record in hydrogen fuel cell industry, robust
technologies and know-how in hydrogen fuel cell system, and well established business
relationship with upstream suppliers, we provide customized fuel cell product solutions to our
customers. In providing such product solutions, in addition to fuel cell systems, we provided
Components for Fuel Cell Vehicles out-sourced from our suppliers, such as hydrogen supply
systems, fuel cell engine accessories, energy storage systems, to our customers, aiding our
customers in optimizing fuel cell applications within their specific end-use scenarios. If
needed, we would provide technical support to our customers as well. Attributable to our
comprehensive engineering and technical knowledge and know-how in hydrogen fuel cell
system, we provided our customers with professional and customized engineering application
development services, which mainly include customized design and development of hydrogen
fuel cell systems, calibration and related assessment services, power system and cooling
solutions, and other engineering and technical support.
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Since August 2023, we have launched proton-exchange membrane (PEM) water
electrolysis hydrogen production systems, PEM water electrolysis cells, hydrogen production
MEAs, hydrogen production power sources, and electrodes for ALK electrolysis, which are
mainly sold to hydrogen production facilities and hydrogen production system manufacturers
for high purity hydrogen production. Such systems can be used to generate hydrogen by way
of water electrolysis from renewable power, which hydrogen can be then used in electronic
semiconductor industry, hydrogen refueling stations, power plants, powder metallurgy
industry, petrochemical industry, and etc.
OUR COMPETITIVE STRENGTHS
We believe the following competitive strengths contribute to our success and position us
for continued growth:
A leader in the fast growing hydrogen industry, with full-service capabilities covering the
entire industrial chain in hydrogen industry
We are a leading hydrogen technology company in China. We have proven track record
in policy-driven projects, as well as noteworthy achievements in market-driven projects. Our
established presence in the domestic hydrogen market is complemented by our successful and
constant expansion into overseas markets, with a growing revenue contribution in overseas
markets. During the Track Record Period, we focused on the design, development,
manufacture, and sales of hydrogen fuel cell systems, hydrogen production systems, and
related components, as well as providing fuel cell engineering and technical services catering
to customers’ needs, enabling us to provide one-stop solution for hydrogen production and
end-use applications.
Benefiting from our robust R&D team holding deep industrial insights, our strong
marketing capabilities, and rich first-hand experience, we have been making continuous
product development and iteration that are well-received by the market since our inception,
with particular strength on hydrogen fuel cell technologies and know-how that may bring
enhanced performance, great reliability, long lifespan, great environmental adaptability and
cost-effectiveness for hydrogen fuel cells. In recent years, leveraging our extensive technology
capacity and valuable market resources, we have further explored into the upstream of
hydrogen industry, where we have independently developed PEM water electrolysis hydrogen
production systems, electrodes for ALK electrolysis and other related key components for
hydrogen production. Our comprehensive product and service portfolio enables us to achieve
the synergies among hydrogen and electricity, therefore forming a new business model of
“electricity-hydrogen-electricity”. According to Frost & Sullivan, we ranked the first in the
hydrogen fuel cell system market in China, in terms of the sales power output of hydrogen fuel
cell systems in 2023, with a market share of 23.8%. We ranked the first in the hydrogen fuel
cell system market in China, in terms of the total sales power output of hydrogen fuel cell
systems that have been used for heavy-duty trucks in 2023, with a market share of 42.4 %. Up
to May 31, 2024, accumulated mileage operated by fuel cell vehicles powered by fuel cell
systems we sold amounted to around 210 million kilometers.
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Attributable to our electrochemistry and materials science capabilities, our mature supply
chain, our system integration design capability, and the continuous improvement of production
processes and batch production capacity, we have successfully built the fundamental core
capabilities for our hydrogen business. Our product and service portfolio covers the entire
industrial chain of hydrogen from hydrogen generation (upstream supplies) and hydrogen
application (downstream applications in commercial vehicles, power generation stations,
construction machinery, etc.), where we have achieved the synergies among hydrogen and
electricity, therefore forming a new business model of “electricity-hydrogen-electricity”. To be
specific, (i) in the field of hydrogen production system, we have launched proton-exchange
membrane (PEM) water electrolysis hydrogen production systems, PEM water electrolysis
cells, PEM hydrogen production MEAs, hydrogen production power sources, and electrodes
for ALK electrolysis; and (ii) in the field of hydrogen fuel cell systems, we have achieved
mass-production and commercialization of our independently developed hydrogen fuel cell
systems, and production of related key components, such as fuel cell stacks, MEAs, bipolar
plates, and hydrogen circulation systems, which systems and components will be installed on
commercial vehicles, such as buses, material handling vehicles, heavy-duty trucks;
construction machinery, and emergency power supplies. Our comprehensive product portfolio
evidenced our capability to provide full services covering the entire industrial chain of
hydrogen from hydrogen generation to hydrogen application, which enable us to meet diverse
needs in both upstream (supply side) and downstream (demand side) of hydrogen industry. Our
full-service capability also enables us to gain additional customers who expect to get
comprehensive hydrogen technology solutions covering both supply side and demand side of
hydrogen industry. For instance, in September 2023, we launched the project of integrating
green hydrogen production, storage, transportation and application with annual output of
100,000 tons hydrogen in Taiyang Mountain, Ningxia (“˄ජʆϋପ10ຬኚၠ૫ႡᎷ፩͜
ɓ᜗ʷͪᇍධͦ”), jointly with the Management Committee of Taiyang Mountain
Development Zone of Wuzhong, Ningxia (̹˄ජʆක೯ਜ၍։ึ), and Jiangsu
Sailafei Power Development Limited Company (ʮ̡). In the project,
the rich wind and solar power resources in Taiyang mountain area will be transformed into
electricity, which will be then utilized to produce green hydrogen with our PEM and ALK water
electrolysis technologies and products. Hydrogen can be stored for long-term for generating
electricity with our hydrogen fuel cell products when needed. It can be transported to various
locations and in different scenarios, such as commercial vehicles.
We are continuously introducing new products, and optimizing and upgrading our product
portfolio. We have effectively integrate industry resources and expand our business into our
upstream, providing full-services covering the entire industrial chain in hydrogen industry. As
we are always at the forefront of industry, we believe we are able to benefit from the rapid
growth of the hydrogen industry.
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Strong technological and research and development capabilities, enabling continual
iteration in products
We believe our strong technological and R&D capabilities enable us to keep developing
the best hydrogen technologies and maintaining our advantages in the hydrogen market, which
is critical to our competitiveness and our ability to improve and optimize product performance
while reducing costs.
As of the Latest Practicable Date, we had a R&D team of 108 members, with abundant
industrial experience and deep insights. Robust research and development force is the fuel for
an enterprise’s product iteration, which is crucial in hydrogen industry. We are supported by a
talented and skilled R&D team, comprising of personnel from various countries, such as,
China, Germany, Japan, Canada, and the U.S. as of the Latest Practicable Date, 38.9% of whom
earned a master’s degree or higher. In addition, our R&D team members have extensive
experience in hydrogen industry, with eight to 30 years of relevant experience working in
hydrogen industry. For each area of hydrogen fuel cell system and hydrogen production system,
we have more than one chief scientific expert leading the continuous research and product
iteration for each of our main products, a number of whom had led or participated in the
national level hydrogen related research projects. For instance, Dr. Christopher John GUZY ,
our chief technology officer from the U.S., with 40 years of experience in engineering and
higher education, is an expert under the Chinese Government Friendship Award (ʾ
ሒᆤ) in recognition of his significant contributions to China’s hydrogen and fuel cell
industries. For more information, see “Directors, Supervisors and Senior Management” section
in this prospectus. Dr. Tsuyoshi Takahashi, PhD in Kyushu University majored in hydrogen
system, is the technology development chief engineer in our Company. He is an expert in the
development of hydrogen fuel cell system, and has published over 10 papers about hydrogen
technology, including but not limited to “Cold Start Cycling Durability of Fuel Cell Stacks for
Commercial Automotive Applications” in 2022. He was awarded “Mechanical Society Award
in Japan” and “Technology Development Prize” in 2022. Robert Artibise, is an executive
director of our research and development center. He has over 25 years of experience working
in PEM fuel cells, and specializes in fuel cell stack design, fuel cell stack testing, simulation,
etc. He is currently an active member of the board of directors of the Canadian Hydrogen and
Fuel Cell Association.
We also cooperated with research universities in China, such as Tongji University ( Ν᏶
ɽኪ), Beijing Institute of Technology ( ̏ԯଣʈɽኪ), and Shanghai Jiao Tong University ( ɪ
ऎʹஷɽኪ), to facilitate the development and commercialization of suitable hydrogen
technologies so that we can respond to the fast-changing market demands.
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As a hydrogen technology company rooted in hydrogen fuel cell technologies, we have
consistently pursued independent development in hydrogen fuel cell technologies, continually
enhancing our core technological competitiveness, especially in key hydrogen fuel cell
components, such as fuel cell stacks, MEAs, bipolar plates that contribute most to the lifespan,
cost, efficiency and reliability of the hydrogen fuel cell systems. For instance,
 we have established physical models and control models for our fuel cell stacks and
other subsystems, and key components, in order to help enhance operational
stability, extend lifespan, reduce hydrogen consumption, enhance reliability of
hydrogen fuel cell systems, and reduce operational cost for our customers. Based on
these models, we have developed closed-loop control algorithms and corresponding
software, enabling precise management of water and thermal balance in fuel cell
stacks, as well as control over operational conditions. Such technologies have
significantly improved the lifespan and freeze-start capability of the fuel cell stacks.
Additionally, we have developed cross-time and cross-region collaborative
management techniques based on cloud platforms and big data. These techniques
involve iterative optimization control, aiming to enhance the stability of hydrogen
fuel cell system operation and reduce hydrogen consumption;
 we have developed high-temperature resistant fuel cell stacks, in order to help
extend lifespan, and enhance high-temperature resistance and overall reliability of
hydrogen fuel cell systems. When operating at high power, the fuel cell stack will
generate huge amount of heat. Through precise design of flow field structure,
selection of high-temperature resistant materials and control of manufacturing
quality, we can balance the heat generation and heat dissipation and distribution in
the fuel cell stack, avoiding over-heating overall or certain parts in the fuel cell
stack, and over-dry or burning of the MEA in the fuel cell stack. Therefore, the
operating temperature of our high-power hydrogen fuel cell system can reach around
95°C, which is notably higher than the common industrial limit of 85°C, so as to
enable broader high-power application scenarios and enhanced working efficiency
and cost-effectiveness;
 we have crafted a suite of cutting-edge technologies to enhance the performance and
durability of our new generation MEAs, which have a polarization exceeding 0.65V
@ 2.7A/cm
2, enhanced power density over 1.76W/cm 2, and lower production costs,
allowing end users to embrace a wider range of power applications with reduced
hydrogen consumption and better cost-efficiency. In terms of durability, we have
fortified the durability of MEAs through cutting-edge sealing techniques and
optimized features, which improves reliability of our MEAs while minimizing
overall maintenance cost; and
 we have developed technologies to improve the performance and durability of our
bipolar plates. By using a combination of natural graphite, strong resins, and special
additives, we have innovated a composite material formula that enhances
conductivity and toughness of the bipolar plates. We have also optimized the size,
media distribution and matching of fluid flow resistance of micro structures in
different parts of the bipolar plates. Technologies of ultra-high vacuum, precision
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fluid control and all-in-one surface treatment allow us to precisely control the
amount of resin on the surface of the bipolar plates. We also automate plate bonding,
product inspection, and lamination. We achieved a comprehensive yield rate of over
95% for the bipolar plates with extended lifespan and reduced overall cost. Our
graphite bipolar plates can satisfy the needs of commercial vehicles for operation of
more than 1.0 million kilometers.
As evaluated by the China Society of Automotive Engineers and the Shanghai Society of
Transportation Engineering ( ʕ਷ӛԓʈ೻ኪึձɪऎ̹ʹஷʈ೻ኪึ), our hydrogen fuel cell
system technologies applied in commercial vehicles excel in system control, low-temperature
damage-free freeze-start and durability.
In addition, with our years of technology advancement, industry practice and experience
accumulation in the field of hydrogen fuel cell systems, as well as our strong supply chain
network, we have gradually expanded our product portfolio to hydrogen production systems
and components, and effectively develop products, such as PEM water electrolysis hydrogen
production system, as we already have extensive knowledge about PEM in the process of
developing our hydrogen fuel cell systems and components.
Set forth below are some examples of our key products with launch timelines of the
Company:
2017, Aug
CAVEN3
2020, Jun
Polaris fuel cell stack
2020, Oct
CAVEN5
2021, Sep
Electra MEA
2020, Jun
Graphite composite
bipolar plate
2021, Sep
Electra fuel cell stack
2021, Sep
Prisma 8
2022, Dec
Prisma 22
2023, Aug
Hydrogen fuel
cell power station
2023, Aug
PEM water
electrolysis hydrogen
production system
2023, Jul
Sirius fuel cell stack
2019, Jan
CAVEN4
2020, Sept
Prisma 6
2020, Nov
Prisma 11
2021, Nov
Hydrogen circulation
system
2023, Aug
Hydrogen production power
source
2023, Aug
PEM water electrolysis cell
2017 2019 2020 2021 2022 2023
2021, Nov
Prisma 12+
Attributable to our technologies in hydrogen industry, we are in the forefront of the
market in developing fuel cell systems and hydrogen production systems. To be specific:
 High rated power and power density : our hydrogen fuel cell systems have rated
power ranging from 32kW to 220kW, and power density up to approximately
815W/kg. Additionally, our proprietary MEAs demonstrate a polarization of 0.65V
@ 2.7A/cm
2 and a power density over 1.76W/cm 2. Such key specifications and can
cover power and service life requirements for broad commercial vehicle
applications, including light commercial vehicles that require relatively low rated
power, and mid to heavy duty commercial vehicles, buses, and construction
machinery, that require relatively high rated power.
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 Outstanding product durability : we have optimized hydrothermal management and
enhanced durability of hydrogen fuel cell systems from the perspective of fuel cell
stack materials and structural design. We have also optimized operating conditions
and special function responses from the perspective of system matching and
function control. Currently, our fuel cell systems can reach lifespan up to 30,000
hours, outrunning the market average of 15,000 hours, and keep stable operation as
high as 95°C, where similar products of other hydrogen fuel cell companies can only
reach 90°C or lower. Furthermore, the latest generation of our in-house developed
fuel cell stacks and MEAs can reach lifespan of 30,000 hours as well. The
outstanding product durability and environmental adaptability enable smooth
operation and less frequent malfunction of the fuel cell vehicles working under
heavy loads in harsh environment.
 Low freeze-start temperature and strong environmental adaptability : we are able
to achieve quick start-up of the hydrogen fuel cell system at temperature as low as
-30°C without external heat source or causing harm to the hydrogen fuel cell stack.
This is due to our design and process refinement for MEAs and hydrogen fuel cell
stacks, as well as system integration design and freeze-start control technology.
While other market players may need to rely on external heat sources, or the lifespan
of the hydrogen fuel cell system is greatly compromised to achieve freeze-start with
external heat sources, thus are not suitable for heavy-duty trucks. We have also
completed the adaptive development of the hydrogen fuel cell system in the
5,500-meter plateau environment. These achievements have enabled hydrogen fuel
cell vehicles equipped with our hydrogen fuel cell systems operating in a wide range
of regions to meet the customers’ needs.
 Low hydrogen consumption : We have designed a cathode pressure closed-loop
decoupling control strategy based on the oxygen excess coefficient estimation
algorithm. Additionally, we have established a water balance model for fuel cell
stack. By employing high-frequency impedance measurement technology, we have
achieved real-time observation of fuel cell stack humidity. Through the combination
of real-time humidity observation, the cathode closed-loop decoupling strategy, and
a dynamic water temperature prediction model, we have achieved dynamic adaptive
optimal control of fuel cell stack operating conditions. By applying these
technologies in heavy-duty trucks, under operational conditions, the average
working efficiency of the vehicles exceed 50%, and the power variable load rates
exceed 35kW/sec. Meanwhile, we can optimize vehicle energy management by
utilizing optimal equivalent energy consumption and dynamic programming
methods jointly. For instance, hydrogen consumption of a 6x4 heavy-duty tractor
under full capacity and high-speed working condition is lower than 10kg/100km,
which is 10%~20% lower than the average hydrogen consumption of other
heavy-duty trucks.
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 High efficiency with reduced costs : our proprietary PEM water electrolysis
hydrogen production system is able to operate effectively at high current densities
(around 1.5A/cm
2), variable power levels (around 5% to 130%), wide range of
temperature and altitudes, with high electrolysis efficiency (around 80%), therefore
it pairs well with renewable energies. Our PEM water electrolysis hydrogen
production system reduces overall energy consumption by approximately 10% as
compared with other hydrogen production system in the market. The PEM
electrolysis method is adaptive to various renewable energy sources, and high
efficiency feature helps reduce hydrogen generation costs.
Commercially viable application in heavy-duty trucks in low-price hydrogen market in
non-demonstration cities
In observing that the hydrogen fuel cell industry in China is currently in a transitioning
period from a policy-driven industry to a market-driven one, we have taken proactive measures
to promote application of our products from demonstration cities in China to non-
demonstration cities. As of the Latest Practicable Date, we had successfully distinguished
ourselves from other industry peers by our strong track record of achieving sustainable growth
in non-demonstration cities. We attribute our success to the following factors, including, (i)
products featuring of great reliability, long lifespan, environmental adaptability, which
combined with our ability to offer comprehensive after-sales services and technical support,
enable adaption to vehicles carrying heavy loads and working under complicated conditions;
(ii) high power generation efficiency and low hydrogen consumption, which help reduce
associated costs in heavy-load and long distance transportation scenarios; and (iii) our ability
to continuously drive down production costs of our fuel cell systems, as we are able to develop
and produce greater variety of components, and source high-quality raw materials and
components locally.
Capitalizing on our established brand reputation in demonstration city clusters in China,
we are well-positioned to attract and engage new customers in non-demonstration cities.
During the Track Record Period, while continuously enhancing our customer base and loyalty
in demonstration cities, we have successfully distinguished us from industry peers by
promoting applications of hydrogen fuel cell systems to heavy-duty trucks operating in
non-demonstration cities in China. Our revenue derived from non-demonstration cities in
China increased from approximately RMB89.7 million in 2021 to approximately RMB110.8
million in 2022 and further increased significantly to RMB213.3 million in 2023. We believe
we are able to benefit from the industry transitioning and continue to enhance our position
while market keeps evolving.
In particular, we have successfully entered the low-price hydrogen market in non-
demonstration cities, such as those located in Shanxi province, Shaanxi province, and
Shandong province. These regions enjoy rich and low-cost by-product hydrogen resources, as
a result of which, the cost of obtaining hydrogen is relatively lower as compared to other
regions. To be specific, high-purity hydrogen in regions with rich and low-cost by-product
hydrogen resources, such as Shanxi province, is around RMB25 per kilogram to RMB40 per
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kilogram at local hydrogen refueling stations, while high-purity hydrogen in other regions,
such as Shanghai, is around RMB50 per kilogram to RMB70 per kilogram at local hydrogen
refueling stations. Meanwhile, there is a large demand for long-distance transportation of
different industrial raw materials in such regions, such as coke, steel, and chlor-alkali. We are
able to help reduce operation costs for heavy-duty trucks for medium to long distance
transportation, making it affordable to end customers, even without relying on subsidies or
other preferential policies. The operating cost of a hydrogen fuel cell heavy-duty truck for one
hundred kilometers is generally around 35% lower than the corresponding operating cost of a
diesel-fueled heavy-duty truck for one hundred kilometers.
Extensive and expanding global presence evidenced by international business network
and numerous international certifications
Driven by various factors, the global hydrogen production and global hydrogen fuel cell
market are expecting continuous growth in the future. For more information, see “Industry
Overview” in this prospectus. In observing the industrial trend, we are not only committed to
developing hydrogen fuel cell systems and hydrogen production systems domestically, but also
attaching great importance to the globalization of our business since our establishment. We are
the first enterprise in hydrogen fuel cell industry in China that realized commercialization of
proprietary hydrogen fuel cell systems abroad. We strive to establish in-depth partnerships with
internationally renowned commercial vehicle manufacturers and component suppliers ahead of
our competitors, integrate upstream and downstream resources. We believe this advantage
enables us to gain more market opportunities in the subsequent rapid development of global
hydrogen industry than other market players.
Specifically, we have started business collaborations with renowned enterprises in fuel
cell industry overseas since 2017, including internationally renowned upstream suppliers and
downstream manufacturers. By collaborating with internationally renowned upstream
suppliers, we are able to continuously enhance product quality and performance. Additionally,
attributable to our position in the hydrogen industry, well-established reputation, proprietary
technologies and know-how, and robust product portfolio, we have also actively explored
cooperation opportunities with downstream manufacturers of fuel cell vehicles. For example,
we provide material, product and technical support for the research and development of fuel
cell vehicles for internationally renowned commercial vehicle manufacturers and automotive
part manufacturers, such as Mitsubishi Fuso Truck and Bus Corporation (“Mitsubishi Fosu”)
in Japan, and Schaeffler Group in Germany. Since 2019, we had collaborated with Mitsubishi
Fuso to develop hydrogen fuel cell trucks, namely, FUSO Vision F-CELL, which truck is able
to achieve zero pollution and a maximum of 300 kilometers’ running with less than ten
minutes’ refueling, where we had provided hydrogen fuel cell products, as well as engineering
and technical services, such as early-stage vehicle layout, power system configuration, vehicle
integration, and truck loading and debugging. In April 2024, we entered into sales contract with
certain customer in Korea, achieving our first overseas bulk sale, with contract price exceeding
RMB30.0 million. In June 2024, Hong Kong government launched hydrogen-powered
street-washing vehicles jointly developed by us and Yutong Group, which will be put into
operation in near future. In June 2024, the Hong Kong V ocational Training Council and us
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signed a Memorandum of Understanding to explore opportunities for cooperation in the field
of hydrogen energy. During the Track Record Period, our revenue derived from foreign
countries or regions increased from RMB5.5 million in 2021, to RMB8.6 million in 2022, and
further increased to RMB23.2 million in 2023.
Furthermore, we obtained the first fuel cell system and fuel cell stack performance
assessment certificate issued by TÜV Rheinland globally. We also received the RDW initial
assessment and EMC certification for our Prisma Series products, supported by TÜV NORD,
evidencing that our products have reached EU standards in terms of conformity of production
management and fuel cell product technical requirements. This is also the first time that TÜV
NORD has conducted a series of rigorous audits and assessments on a PRC fuel cell company
globally. Such endorsement helps increase the recognition of our products among international
fuel cell commercial vehicle manufacturers, laying a solid foundation for further international
cooperation.
We have established a research and development base of fuel cell stacks and key
components in Vancouver, Canada, which benefits from both domestic and international
resources and advantages, as well as hydrogen technologies and management experience in
foreign countries. Meanwhile, we have a subsidiary in Stuttgart, Germany, which provides
product and technical demonstrations and support for our customers, suppliers, and potential
business partners in Europe. Our global presence and connections enable us to keep up with or
even surpassing the international technologies in hydrogen industry, and stay informed of the
latest customer demands in hydrogen industry, forming a differentiated competitive advantage
against our competitors in the hydrogen industry. We have also established business
relationship with commercial vehicle manufacturers and upstream suppliers in the United
States, Germany, Switzerland, Japan, Italy, etc. We believe that in the coming years, with the
development of the international hydrogen technology market, we will shine in the global
hydrogen energy market.
Proven ability to satisfy various power demands with rich hydrogen related product
matrix and comprehensive applications
Leveraging our strong technological and research and development capabilities in
hydrogen industry during the Track Record Period, we provided and sold various hydrogen fuel
cell systems and components, professional and customized hydrogen fuel cell technology
solution services, and hydrogen production systems and components, catering to the specific
needs of our customers.
Our products have been widely applied in the diversified markets amid the current and
future hydrogen industry market opportunities to set ourselves apart from our competitors. We
have been closely cooperated with our existing downstream customers and partners to develop
new models and products suitable to the evolving hydrogen fuel cell industry in China while
reaching out to potential customers for new collaboration opportunities. For our fuel cell
systems, in addition to commercial vehicle applications, we have expanded our reach in power
generation stations, construction machinery, off-grid charging equipment, rail transportation,
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and other new application scenarios, which also helps to drive downstream consumption of
green hydrogen. Furthermore, for hydrogen production systems, we are actively exploring
commercial application scenarios. To be specific:
 Commercial vehicles : Our fuel cell systems were widely used in commercial
vehicles, such as heavy-duty trucks, buses, in both demonstration city clusters and
non-demonstration cities. Our customers include renowned enterprises in hydrogen
fuel cell industry in China and abroad, such as Yutong Group ( ρஷ), FAW Jiefang
(׳in China, Toyota Motor in Japan and Schaeffler Group in Germany.
 Construction machinery : Construction machinery, such as forklifts, cranes, and
tractors, also serve as important downstream applications for fuel cell systems. In
particular, hydrogen fuel cell forklifts are gaining popularity increasingly in recent
years, as customers in the industry are expecting forklifts to conduct intensive work
for long hours with minimized environmental pollution. To name a few, we
cooperated with Hangcha (ɸ), Sany Group ( ɧɓණ䕈) and Caterpillar for
construction machinery. For example, in 2022, Hangcha (ɸ) entered into an
cooperation agreement with us for the development of hydrogen fuel cell forklifts.
In 2022, we delivered several units of hydrogen fuel cell systems to Hangcha (ɸ)
for its manufacturing of hydrogen fuel cell forklifts.
 Power generation stations : We have been actively exploring hydrogen fuel cell
system applications in the field of power generation, which requires high efficiency,
cost-effectiveness, reliability, and durability of hydrogen fuel cell systems. For
example, in 2022, we started to jointly develop megawatt-class hydrogen fuel cell
power generation station with CHINT ( ͍इණྠ), which power generation station
applies our fuel cell technologies and electrical solutions from CHINT ( ͍इණྠ),
and can be used in a variety of scenarios, including but not limited to wind-solar-
hydrogen power generation, CHP, peak cut.
 Off-grid charging equipment : Our hydrogen fuel cell systems are applied to the
backup power units, as well as supercharging power generation units of hydrogen
refueling stations in various places, such as Shanghai, Jiangsu province, Hubei
province, and Shaanxi province, replacing the original diesel generators. Such
power units can be used to generate electricity and charge electric cars. In addition,
in 2023, in conjunction with the Hong Kong Automotive Platforms and Application
Systems R&D Center, we released the first off-grid charging equipment in Hong
Kong, which equipment can meet the charging needs of electric private cars, taxis,
trucks, minibuses, etc.
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 Hydrogen production equipment : Hydrogen production plants and integrated
hydrogen production and refueling stations can use our hydrogen production
systems to produce hydrogen at low-price. Meanwhile, leveraging the characteristics
of high-stability and safety, 24-hour unmanned operation of our hydrogen
production systems, industrial facilities, such as electronic semiconductor factories,
synthetic diamond facilities, can use our hydrogen production systems to generate
hydrogen conveniently when needed, so that they do not need to purchase
out-sourced hydrogen from others.
Seasoned management team, with strong shareholder support
Our senior management team is well versed in the hydrogen industry. They have broad
industry knowledge, profound market insights and strong management skills. Our Chairman of
the Board, Mr. Lin Qi, has over 19 years of experience in the hydrogen fuel cell industry, and
has been guiding our strategic direction ever since our inception in 2015. Other core members
of our management team are experts in different aspects such as technology research and
development, finance and market operations. Certain members of our senior management hold
doctoral degrees. Our senior management team has been highly stable and working together for
over eight years.
We also believe our success is built on the collective efforts and achievements of our
employees, and we are committed to rewarding them for their contributions and to recognizing
their performance. To that end, we have devised a multi-tier long-term incentive mechanism
primarily based on share incentives. We have also digitalized our human resource management
system for digital performance recording, and internal review and evaluation. Transparent
corporate governance, and adaptive values and ideas are the cornerstones of our continuous
growth.
We are grateful for the trust and support of our shareholders, who share similar strategic
layout or industrial insights with us, have been instrumental in our growth and success. We
believe that our shareholders’ global customer base, reputation and brand recognition have
contributed and will continue to contribute to our expansion strategy. Sinopec Capital,
established by China Petrochemical Corporation and China Petroleum & Chemical Corporation,
with an aim to make strategic investment on emerging industries such as new energy, energy
conservation and environmental protection, has made strategic investment in us, and has
provided invaluable guidance for our value creation strategy and sustainable growth. In addition,
commercial vehicle manufacturers globally, such as Yutong Group ( ρஷ), and FAW Jiefang ( ɓ
׳which have been committed to the development of fuel cell vehicles, have also made
strategic investments on us. Toyota Tsusho, is not only a strategic investor to us, but also an
important business partner to us in terms of supply chain and market expansion. Furthermore,
renowned investment institutions, such as Gao Ling Yurun, National Manufacturing Fund,
HongShan Hanchen, have made investments in us. For more information, see “History,
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Development and Corporate Structure — Establishment and Development of Our Company” in
this prospectus. Through close collaboration and alliance with such downstream manufacturers,
we are able to create incremental value for our core business and enhance the reliable and
integrated industry chain layout.
OUR STRATEGIES
To establish a profitable and sustainable business covering the entire industrial chain in
hydrogen industry, we intend to reinforce our position as a hydrogen technology company in
China and expand our businesses by broaden the application scenarios of our product portfolio,
and entering into new markets in overseas countries. We intend to adopt the following
strategies to achieve our goals:
Further expand our customer base and footprint nationally and internationally
We plan to acquire additional customers, and build a more diversified and stable customer
base in more regions in both domestic and overseas market, by:
 Establish more cooperation in key cities : We will continuously improve our product
reliability and cost-effectiveness in line with favorable hydrogen industry related
policies in major fuel cell vehicle demonstration city clusters, led by Beijing,
Shanghai, Foshan, Zhengzhou and Zhangjiakou. Leveraging our role in Shanghai
Hydrogen fuel cell Vehicle Demonstration and Application Consortium (ࣘ
ཥϫӛԓͪᇍᏐ͜ᑌΥ᜗), we aim to establish more stable cooperative relationship
with upstream and downstream enterprises, and to maintain our position in local
hydrogen market in Shanghai and Henan city clusters. Meanwhile, we will increase
penetration of our products in the demonstration city clusters of Shanghai and Henan
province.
 Penetrate into low-price hydrogen market : At present, the hydrogen fuel cell
industry is gradually expanding from a few demonstration cities aided by national
favorable policies to a wider geographical area, including cities without hydrogen
energy-related policy support. We aim to further penetrate into regions with rich
industrial by-product hydrogen resources, such as the western region of China, such
as Shanxi province and Shaanxi province. By incorporating our high-power and low
hydrogen consumption hydrogen fuel cell systems in heavy-duty trucks, the
abundant by-product hydrogen resources in such regions can be fully utilized in
heavy-duty truck transportation scenarios on the one hand; the operation costs of
heavy-duty trucks in the transportation of bulk materials, such as coke, steel, and
chlor-alkali, can be significantly reduced by utilizing such by-product hydrogen,
which is generally lower than other hydrogen resources and fossil fuel resources,
therefore achieving commercially viable application of hydrogen fuel cell systems
in such regions, without relying on favorable policies.
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 Promote hydrogen production products : In regions with rich renewable energy
resources, we will actively participate in low-carbon hydrogen generation projects,
in which, electricity generated from renewable energy will be used to produce
hydrogen. Such projects, on the one hand, help increase renewable energy
consumption in local markets, on the other hand, help produce hydrogen with
competitive price. Through such projects, we aim to increase sales of our products,
such as electrolyzed water hydrogen production systems and components, and to
expand hydrogen application scenarios to heavy-duty trucks, hydrogen energy
storage, power generation, etc.
 Accelerate global expansion : We will actively extend our footprint to broader
overseas market, such as European, the Middle East and Southeastern Asia
countries, and other regions, through building our global branding by strengthening
our front-end sales network, and driving customer growth through proactive
marketing. Leveraging our subsidiaries in overseas countries, such as REFIRE
Europe GmbH in Stuttgart, Germany, R&D base in Vancouver, Canada, we aim to
develop products that cater to the local markets and customer preferences, so as to
enhance our localized design capabilities and competitiveness.
Further advance the R&D of hydrogen fuel cell systems, hydrogen production systems
and other products to improve product performance, competitiveness and cost-efficiency
We will continue to conduct R&D and the testing activities to improve our products’
durability, reliability, efficiency, safety and cost-effectiveness, while enhancing research and
development efficiency. To develop the next generation of our hydrogen fuel cell systems, we
aim to further extend the lifespan of the systems, lower the production costs and lower the
hydrogen consumption, so as to build our differentiated technical advantages against market
competitors, to substantially improve our product performance with lower technology
development costs.
In addition, we will enhance our collaboration with material suppliers, continue to source
high-quality raw materials and components locally, so as to reduce product development and
production costs, while maintaining the performance and durability of the products.
For PEM related products, we aim to continue to reduce development costs of electrolysis
cells, electrodes, and PEM hydrogen production and also improved their performance and
reliability by utilizing our proprietary production technologies of electrolysis cells and MEAs.
Meanwhile, through proprietary control system, such products will be properly applied in
hydrogen production scenarios utilizing renewable energy. For ALK related products, we will
continue to independently design and develop electrodes to improve the performance of ALK
electrolysis hydrogen production systems, and independently design and develop hydrogen
power supplies to help control the high volatility of hydrogen generated from large-scale ALK
electrolyzed water hydrogen production system, and related impact on power grids.
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We intend to leverage our years of experience in the hydrogen fuel cell system industry
and our understanding of the downstream market to improve our R&D capabilities. To further
commercialize our hydrogen fuel cell related researches, we plan to collaborate with industrial,
educational and research institutions and further build our competitive strengths. In addition to
our strong R&D force in Vancouver, Canada, we also intend to further explore overseas R&D
opportunities to develop key raw materials for our fuel cell stacks.
Expand the production capacity to meet the growing market demand
As an industry leader in China, we plan to expand our production capacity nationwide in
line with the hydrogen industry development policies, plans and market demand in different
regions. Considering (i) the PRC government’s favorable policies supporting the hydrogen
industry; (ii) Frost & Sullivan’s estimate regarding the increasing future demand for hydrogen;
(iii) utilization of existing production facilities; (iv) the need to maintain our competitive
advantage in scaled production; and (v) the current and future development of hydrogen
production related products, as well as our strategic plan to devote efforts in such field, we plan
to (i) expand our production facilities for fuel cell stacks and MEAs; (ii) upgrade our existing
production facilities for bipolar plates; and (iii) build new production line for hydrogen
production systems and components.
After the expansion, our maximum annual production capacity of fuel cell stacks is
expected to reach 20,000 units, and our maximum annual production capacity of MEAs is
expected to reach six million pieces, respectively. We plan to enhance the production capability
of proprietary PEM water electrolysis hydrogen production systems and ALK electrolysis
products and hydrogen production power sources. For more information, see “Future Plans and
Use of Proceeds” in this prospectus.
Actively venture into supply chains of the industry and enhance industry-wide synergies
We have established a solid commercial presence in the field of hydrogen technology,
which includes hydrogen production systems, hydrogen fuel cell systems, and their related key
components. We plan to venture into other areas in the industry with high growth potential or
can create synergies with us, including but not limited to upstream business segments of
hydrogen industry, such as hydrogen production, hydrogen storage, hydrogen transportation
and hydrogen refueling, and supply chains of hydrogen fuel cell systems, such as fuel cell
components and parts. By exploring more areas in the industry chain and production chain, we
can achieve vertical integration, which enhances our control over multiple stages of the green
energy solution, or production process, allowing us to effectively reduce production costs,
improve product performance and stability by streamlining operations and reducing
dependencies on external suppliers. In addition, exploring more areas in the industry chain and
production chain allows us to broaden our customer bases and increase market penetration.
Furthermore, venturing into different segments of the industry chain and production chain
provides us with the opportunities to develop expertise in various technologies and processes.
Such knowledge and experience can be leveraged to enhance our existing products and develop
suitable solutions. It also strengthens our competitive advantage by positioning us as a
comprehensive solution provider in the hydrogen industry.
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As of the Latest Practicable Date, we had made strategic investments in 28 investee
companies in which we hold equity stakes ranging from approximately 1.52% to 49.00%. Such
investee companies are either industry players in the new or renewable energy (including
hydrogen energy) and related industries or investment holding companies with portfolio
companies in such industries. During the Track Record Period, we entered into transactions
with certain investee companies during the ordinary course of business under normal
commercial terms and on arm’s length basis, primarily for sales of our products (such as fuel
cells, fuel cell systems and related components), purchases of raw materials and components
for our R&D and production (such as hydrogen gas, fuel cell stacks and membrane electrodes),
subscription of data management services for our R&D and quality assurance, and leases of our
land for hydrogen refueling stations. All transactions with such investee companies were
related party transactions. For details, see “Financial Information — Related Party
Transactions” in this prospectus.
In particular, in terms of upstream business segments of hydrogen industry, we have
strategically invested in Shanghai Hyfun Energy Technology Ltd. (ʮ
̡), a PRC company that have developed high-density, high-safety magnesium-based solid-
state hydrogen storage technologies, and rich experience in building hydrogen refueling
stations. We have also invested in Shaanxi HydroTransformer Energy Technology Co., Ltd. ( ৯
ʮ̡) that focuses on LOHC technologies. In the future we will continue
to explore opportunities to make strategic investment in suitable companies in the industry
chain and also devote ourselves to in-house research and development.
Further, in terms of supply chains of hydrogen fuel cell systems, we will focus on raw
materials and key components, through cooperative development, strategic investments and
in-house research and development. For instance, we have developed fuel cell systems
incorporating fuel cell stacks with metal bipolar plates provided by Toyota. We will also
cooperate with domestic manufacturers for product calibration and related testing and
assessment, and further reduce the cost of producing our products.
As of the Latest Practicable Date, we had not identified any other definite target for
cooperation, or investment.
Continue to attract and cultivate professional talents, improve team building,
management and operation efficiency
We adhere to our talent development strategy and have assembled a team of top talents
in management, research and development, and production teams. We plan to continue to
attract and hire more professional and talents in hydrogen industry, as well as improve our
personnel training and talent acquisition through collaborations with domestic universities to
further enhance our position in the industry. Especially, with respect to research and
development, we will continue to attract qualified research and development talents in the field
of hydrogen industry. At the same time, we will further strengthen our employee training
mechanism to cultivate trained personnel for research and development of hydrogen
technology, which in turn help improve our overall management and operation efficiency. We
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plan to attract and recruit more personnel among referrals from our employees, upstream and
downstream partners and industrial experts, as well as through internet recruitment.
Furthermore, we will continue to supplement our internal staff training by, for instance,
periodically holding lectures, seminars and training sessions jointly with industrial experts.
Through technical skills training, corporate culture and core values training, combined with
more attractive compensation schemes, we plan to comprehensively train and retain talents to
realize their full potential.
Through the recruitment and training of talents, we will be able to comprehensively
strengthen our corporate governance, management and operation, thereby effectively
consolidating and enhancing our competitiveness in the industry.
OUR BUSINESS
During the Track Record Period, we primarily engaged in research and development,
production and sales of hydrogen fuel cell systems and components. Apart from our sales
activities, we also provided clients with comprehensive fuel cell engineering and technical
services catering to their specific engineering needs in developing and producing hydrogen fuel
cell products. In addition, since 2022, we commenced research and development, production
and sales of hydrogen production systems and components, and are committed to devote more
efforts in this segment in the future. According to Frost & Sullivan, we ranked the first in the
hydrogen fuel cell system market in China, in terms of the sales power output of hydrogen fuel
cell systems in 2023, with a market share of 23.8%. We ranked the first in the hydrogen fuel
cell system market in China, in terms of the total sales power output of hydrogen fuel cell
systems that have been used for heavy-duty trucks in 2023, with a market share of 42.4%. Up
to May 31, 2024, accumulated mileage operated by fuel cell vehicles powered by fuel cell
systems we sold amounted to around 210 million kilometers.
The table below sets out revenue breakdown of our business segments:
Y ear Ended December 31, Five Months Ended May 31,
2021 2022 2023 2023 2024
RMB’000 % RMB’000 % RMB’000 % RMB’000 % RMB’000 %
(unaudited)
Sales of hydrogen
fuel cell systems
and components
– Hydrogen fuel cell
systems /H1118/H1118/H1118/H1118/H1118/H1118/H1118452,725 86.4 423,265 70.0 637,176 71.2 52,996 60.2 7,091 56.6
– Components
(1) /H1118/H1118/H111861,017 11.6 150,297 24.9 220,082 24.6 32,700 37.1 1,897 15.1
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118513,742 98.0 573,562 94.9 857,258 95.8 85,696 97.3 8,987 71.8
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Y ear Ended December 31, Five Months Ended May 31,
2021 2022 2023 2023 2024
RMB’000 % RMB’000 % RMB’000 % RMB’000 % RMB’000 %
(unaudited)
Provision of fuel cell
engineering and
technical services /H1118 7,251 1.4 26,473 4.4 23,444 2.6 – – 966 7.7
Sales of hydrogen
production systems
and related
components /H1118/H1118/H1118/H1118/H1118– – – – 7,681 0.9 – – – –
Others
(2) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,116 0.6 4,613 0.8 6,895 0.8 2,372 2.7 2,568 20.5
Total revenue /H1118/H1118/H1118/H1118524,109 100.0 604,648 100.0 895,278 100.0 88,068 100.0 12,521 100.0
Notes:
(1) Components mainly included hydrogen supply systems, fuel cell engine accessories, energy storage systems
and others for fuel cell vehicles, and DC-to-DC boost converters, hydrogen circulation systems and others for
fuel cell systems.
(2) Others mainly included provision of after-sales services.
Hydrogen Fuel Cell Systems and Components Business Segment
Hydrogen Fuel Cell Systems
A hydrogen fuel cell system is a power generation device that converts chemical energy
into electricity without combustion and producing water and thermal energy as by-product.
Compared to an internal combustion engine, a hydrogen fuel cell system is also quiet in
operation. In general, a hydrogen fuel cell system produces zero carbon emission and is durable
under low temperature, highly efficient and quiet. The diagram below illustrates the operating
principles of a hydrogen fuel cell system:
Gas Diffusion Layer
Chemical Reaction Process
MEA
−
−
O
−
+ O+
Catalyst Layer
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Leveraging our technology capability and strong operation efficiency, we offer and sell
various hydrogen fuel cell systems with different rated power, ranging from 32kW to 220 kW.
Our hydrogen fuel cell systems are typically equipped with our in-house manufactured fuel cell
stacks, as well as some fuel cell stacks procured from third-party suppliers. During the Track
Record Period, our hydrogen fuel cell systems were mainly sold to hydrogen fuel cell
commercial vehicle manufacturers and some fuel cell stack manufacturers. The end customers
of our hydrogen fuel cell systems generally include, among others, bus companies, logistics
companies, freight transportation companies, public transportation companies, engineering and
construction companies, etc. Applications of our products include: (i) commercial vehicles,
such as light, mid and heavy-duty trucks, buses, material handling vehicles, dump trucks, (ii)
construction machinery, such as forklifts, and (iii) power generation applications, such as
stationary power stations, emergency power supplies and back-up power stations.
We provide customized fuel cell product solutions to our customers, rather than
standalone fuel cell systems. In providing such product solutions, where applicable, we will
assist customers in determining the right models of equipment and key components they need,
as well as provide vehicle performance evaluation, simulation and calibration, and other
engineering and technical services. With respect to fuel cell systems offered in such product
solutions, as requested by our customers, where applicable, we provide customized hydrogen
fuel cell systems equipped with fuel cell stacks provided by the customers.
During the Track Record Period, we sold proprietary hydrogen fuel cell systems,
including Caven Series and Prisma Series. Since 2017, we gradually launched Caven Series
(Caven 3, Caven 4 and Caven 5). In recent years, with our continued efforts in the development
and iteration of hydrogen fuel cell systems, we have successfully launched more series with
greater working efficiency, environment adaptability and service life, namely, our Prisma
Series (including, P series, E series, S series) from 2020 to 2022, which are all equipped with
our in-house developed fuel cell stacks. Attributable to such advancement, the application
scenarios of our hydrogen fuel cell systems were greatly expanded from small commercial
vehicles to mid to heavy-duty vehicles, power generation stations, and others. Compared with
Caven Series, Prisma Series have utilized proprietary and self-produced fuel cell stacks, MEAs
and bipolar plates, and have enhanced working efficiency, environmental adaptability, and
service life which specifications lead to broader applications in wider geographic regions
nationally and internationally. As such, we strategically devoted our marketing and sales efforts
to Prisma Series gradually. However, we continue to provide maintenance services and other
technical support services and components for customers who already purchased Caven Series
products.
During the Track Record Period, to cater to some of our customers’ needs, we provided
customized fuel cell product solutions to our customers, where we sold customized hydrogen
fuel cell systems, which may incorporate fuel cell stacks provided by such customers, and we
also provided certain types of subsystems, such as air supply subsystem, hydrogen management
subsystem, and cooling subsystem to our customers as requested. The customized fuel cell
systems, equipped with fuel cell stacks provided by third party suppliers, are named N series,
T series, and H series.
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Cost control and reduction is crucial for the overall development of hydrogen fuel cell
industry, especially in the transition period from policy-driven to market-driven. According to
Frost & Sullivan, fuel cell stack is the key component of the hydrogen fuel cell system, which
in general accounts for around 63.0% of the total cost of a fuel cell system. Within a fuel cell
stack, MEA and bipolar plate are important, which in general account for around 61.8% and
27.5% of the cost of a fuel cell stack. Outrunning other market players in the hydrogen fuel cell
industry, rather than relying on third party suppliers, we have achieved self-development and
production of fuel cell stacks, MEAs, and bipolar plates.
Since our inception, we have been committed to the research and development of fuel cell
stacks. As the key component of the hydrogen fuel cell system, a fuel cell stack is formed by
stacking multiple hydrogen fuel cells in series, and each single cell is composed of bipolar
plates and a MEA. Benefited from our high-temperature resistance technology, low-
temperature and non-destructive design, freeze-start technology for fuel cell stacks, and
highly-automated production technology for fuel cell stacks, as of May 31, 2024, we had three
series of fuel cell stacks, namely, Polaris series, Electra series and Sirius series. Our Prisma
series hydrogen fuel cell systems are equipped with our proprietary fuel cell stacks.
Membrane electrode assembly, or MEA, is a key component of a fuel cell stack where
electrochemical reaction takes place. As a key component for fuel cell stacks, the functionality,
performance and lifespan of the MEAs have great impact on the performance, and lifespan of
the fuel cell stacks, which in turn have great impact on the performance and the production
costs of the hydrogen fuel cell systems. Benefited from our design and manufacture
technologies of long-lifespan, high-temperature resistance and high-consistency for MEAs, our
proprietary and self-manufactured MEAs has high power density (>1.32W/cm
2), long
estimated lifespan (>30,000hours), low freeze-start temperature (-30°C), long anti-reverse
polarity duration (>3hours), high uniformity coating with high platinum loading CPK over
1.67, high coating size control accuracy with CCM wide-width CPK over 1.67, and high defect
automatic classification accuracy (>99%).
Bipolar plate, another key component of the fuel cell stack that we produce, is the
electrical connections between cells. As the raw material for hydrogen fuel cell bipolar plates,
graphite material is stable. Compared to metal, it has advantages in corrosion resistance, and
can withstand high temperature and high pressure environments.
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The table below sets details of our major hydrogen fuel cell systems categorized by the source of fuel cell stack incorporated during the Track
Record Period:
Prisma Series P Series E Series S Series
Models /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Prisma 6, Prisma 8,
Prisma 11
Prisma 12+ Prisma 8, Prisma 12+,
Prisma 18, Prisma 22
Illustrations /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Types of proprietary and self-manufactured
key components (1) equipped in the
hydrogen fuel cell systems /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Fuel cell stacks Fuel cell stacks, MEAs Fuel cell stacks, MEAs,
bipolar plates
Fuel cell stacks used /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Polaris series Electra series Sirius series
Key specifications
Rated power /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111863kW-110kW 120kW-130kW 80kW-220kW
Power density under rated power /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118400W/kg-541W/kg 556W/kg-702W/kg 487W/kg-815W/kg
Freeze-start temperature /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118-30˚C
High-temperature operating capability /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111885˚C 90˚C 95˚C
Applications /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Light, mid, and heavy duty
vehicles
Heavy duty vehicles, power
generation stations
Mid and heavy duty
vehicles, power
generation stations,
construction machinery
Commencement
of production
(2) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
2020 2021 2023
Notes:
(1) key components here include: fuel cell stacks, MEAs, bipolar plates.
(2) represent the year from which the respective products were started to produce.
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Customized fuel cell systems T Series H Series N Series
Illustrations /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Key specifications
Rated power /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111880kW-110kW 110kW-135kW 80kW-160kW
Power density under rated power /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118390W/kg-498W/kg 431W/kg-466W/kg 363W/kg-503W/kg
Freeze-start temperature /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118-30˚C
High-temperature operating capability /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111880˚C 80˚C 85˚C
Applications /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Light, mid, and heavy duty vehicles
Commencement of production (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182022 2020 2021
Note: represent the year from which the respective products were started to produce.
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The tables below set out details on sales volume, sales power output, revenue, and
average selling prices of our hydrogen fuel cell systems during the Track Record Period:
Y ear Ended December 31,
Five Months Ended
May 31,
2021 2022 2023 2024
(units) % (units) % (units) % (units) %
Sales volume of fuel
cell systems equipped
with fuel cell stacks
provided by:
– our Group /H1118/H1118/H1118/H1118/H1118/H1118/H1118639 55.8 790 63.4 1,234 64.9 11 84.6
– third party
suppliers /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118507 44.2 456 36.6 668 35.1 2 15.4
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,146 100.0 1,246 100.0 1,902 100.0 13 100.0
Y ear Ended December 31,
Five Months Ended
May 31,
2021 2022 2023 2024
(kW) % (kW) % (kW) % (kW) %
Sales power output of
fuel cell systems
equipped with fuel
cell stacks provided
by:
– our Group /H1118/H1118/H1118/H1118/H1118/H1118/H111869,155 59.8 82,958 62.5 158,916 65.6 943 85.5
– third party
suppliers /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111846,438 40.2 49,757 37.5 83,410 34.4 160 14.5
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118115,593 100.0 132,715 100.0 242,326 100.0 1,103 100.0
Y ear Ended December 31,
Five Months Ended
May 31,
2021 2022 2023 2024
RMB’000 % RMB’000 % RMB’000 % RMB’000 %
Revenue of fuel cell
systems equipped with
fuel cell stacks
provided by:
– our Group /H1118/H1118/H1118/H1118/H1118/H1118/H1118320,563 70.8 308,565 72.9 473,893 74.4 6,285 88.6
– third party
suppliers /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118132,163 29.2 114,701 27.1 163,283 25.6 806 11.4
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118452,725 100.0 423,265 100.0 637,176 100.0 7,091 100.0
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Y ear Ended December 31,
Five Months Ended
May 31,
2021 2022 2023 2024
RMB’000 % RMB’000 % RMB’000 % RMB’000 %
Revenue of fuel cell
systems sold to
customers in:
Mainland China
– fuel cell vehicle
demonstration city
clusters
(1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118357,853 79.0 305,046 72.1 407,527 64.0 – –
– others (2) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111889,715 19.8 110,839 26.2 213,275 33.5 6,285 88.6
Overseas (3) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,158 1.1 7,380 1.7 16,374 2.6 806 11.4
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118452,725 100.0 423,265 100.0 637,176 100.0 7,091 100.0
Y ear Ended December 31,
Five Months Ended
May 31,
2021 2022 2023 2024
RMB’000 % RMB’000 % RMB’000 % RMB’000 %
Revenue of fuel cell
systems attributable
to:
– policy-driven
projects
(5) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118357,853 79.0 305,046 72.1 407,527 64.0 – –
– market-driven
projects (6) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111894,872 21.0 118,219 27.9 229,649 36.0 7,091 100.0
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118452,725 100.0 423,265 100.0 637,176 100.0 7,091 100.0
Y ear Ended December 31,
Five Months Ended
May 31,
2021 2022 2023 2024
RMB’000 % RMB’000 % RMB’000 % RMB’000 %
Revenue of fuel cell
systems to be
equipped in:
– Heavy-duty trucks /H1118/H1118/H1118278,951 61.6 290,887 68.7 549,633 86.3 1,497 21.1
– other vehicles /H1118/H1118/H1118/H1118/H1118171,716 37.9 127,040 30.0 64,269 10.1 5,151 72.6
– equipment and other
machinery
(4) /H1118/H1118/H1118/H1118/H1118/H1118/H11182,058 0.5 5,338 1.3 23,274 3.7 442 6.2
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118452,725 100.0 423,265 100.0 637,176 100.0 7,091 100.0
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Y ear Ended December 31,
Five Months
Ended
May 31,
2021 2022 2023 2024
RMB per kW RMB per kW RMB per kW RMB per kW
Average selling prices of fuel
cell systems equipped with
fuel cell stacks provided
by:
– our Group /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,635 3,720 2,982 6,665
– third party suppliers /H1118/H1118/H1118/H11182,846 2,305 1,958 5,038
Overall /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,917 3,189 2,629 6,429
Notes:
(1) Demonstration city clusters include Shanghai city cluster, Beijing-Tianjin-Hebei city cluster,
Guangdong city cluster, Henan city cluster, Hebei city cluster.
(2) Other regions in Mainland China mainly included Gansu, Shanxi, Shaanxi and Hubei.
(3) Overseas regions mainly included Hong Kong, Germany, and Japan.
(4) Equipment and other machinery include forklift, airplane, power station, and charging station.
(5) policy-driven project means project or sales activity with governmental subsidies or governmental
incentives.
(6) Market-driven project means project or sales activity without governmental subsidies or governmental
incentives in China and abroad.
Components
During the Track Record Period, we self-developed and produced various types of
Components for Fuel Cell Systems, which were incorporated into our hydrogen fuel cell
systems sold to customers, including but not limited to fuel cell stacks, MEAs, bipolar plates,
DC-to-DC boost converters, hydrogen circulation systems, etc. We sold stand-alone fuel cell
stacks and DC-to-DC boost converters to our customers. Leveraging our proven-track record
in hydrogen fuel cell industry, robust technologies and know-how in hydrogen fuel cell system,
and well established business relationship with upstream suppliers, we provide customized fuel
cell product solutions to our customers. In providing such product solutions, in addition to fuel
cell systems, we provided Components for Fuel Cell Vehicles out-sourced from our suppliers,
such as hydrogen supply systems, fuel cell engine accessories, energy storage systems, to our
customers, aiding our customers in optimizing fuel cell applications within their specific
end-use scenarios. If needed, we would provide technical support to our customers as well.
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Fuel Cell Engineering and Technical Services
Attributable to our comprehensive engineering and technical knowledge and know-how
in hydrogen fuel cell systems and components, to cater to our customers’ needs, we provide
services to support our customers in their research and development programs in relation to the
design of hydrogen fuel cell systems, calibration and related assessment, power system and
cooling solutions, and other engineering and technical support.
Customers of fuel cell engineering and technical services are often commercial vehicle
manufacturers. These manufacturers intend to promote their component products by offering
fully integrated vehicle engines encompassing their manufactured components to their
downstream customers. However, as these manufacturers lack the expertise to integrate the
components into engines, they sometimes contact us to provide related services. Such fuel cell
solution services typically include technical consulting, system integration, performance
testing and other customized engineering solutions.
The prices for fuel cell engineering and technical services vary depending on the scope,
duration and complexity of the services, which usually include product development fees, and
material fees.
We believe these fuel cell solution services have synergies and are closely related to our
other sales business segments. Our proven track record in the hydrogen technology industry,
and strong research and production capabilities, have laid a solid foundation for our good
reputation in the industry, making customers trust our technology and service capabilities and
willing to let us provide product design and other related services. In turn, we provide
high-quality design and other services to customers, which may also involve the use of
self-researched and produced components or subassemblies, thereby driving the sales of our
related products.
Hydrogen Production Systems and Related Components
Since 2022, we started our research and development of hydrogen production system and
related components, which will be used to generate hydrogen from water, that can be used in
different industries, such as electronic semiconductor industry, hydrogen refueling stations,
power plants, powder metallurgy industry, petrochemical industry, and etc. Since August 2023,
we have launched proton-exchange membrane (PEM) water electrolysis hydrogen production
systems, PEM water electrolysis cells, PEM hydrogen production MEAs, hydrogen production
power sources, and electrodes for ALK electrolysis. In 2021, 2022 and 2023, revenue derived
from the sales of hydrogen production systems and related components amounted to nil, nil and
RMB7.7 million. For more information, see “Financial Information — Description of Selected
Components of Consolidated Statements of Profit or Loss — Revenue” in this prospectus.
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In particular, PEM electrolysis is industrially important as a green source of high-purity
hydrogen. The main advantages of our PEM water electrolysis hydrogen production system are
the ability to operate effectively at high current densities (around 1.5A/cm
2), variable power
levels (around 5% to 130%), wide range of temperature and altitudes, high electrolysis
efficiency (around 80%), and that it pairs well with renewable energy. Our PEM water
electrolysis hydrogen production system reduces overall energy consumption by approximately
10% as compared with other hydrogen production system in the market. We started to produce
PEM water electrolysis hydrogen production system in June 2023, and we entered into a sales
agreement of our PEM water electrolysis hydrogen production system in September 2023.
Set forth below are some pictures of our hydrogen production system and key
components:
PEM water electrolysis hydrogen production system
Hydrogen production power source PEM water electrolysis cell
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Product Life Cycle
The product life cycle is affected by the pace of technological development and the launch
of new products by our competitors. Our hydrogen fuel cell systems generally have a product
life cycle ranging from three to four years. The components we sell, mainly including hydrogen
supply systems, energy storage systems, fuel cell engine accessories and fuel cell stacks,
generally have a product life cycle ranging from two to four years. However, the multi-use
nature of our products and the wide range of applications we serve enable them to be utilized
in different fields, even as technology advances and products iterate. This allows our products
to continue being applied in sectors with relatively less intense competition beyond the
mentioned life cycle. For instance, after our fuel cell stacks evolved from the Electra 1.0 series
to the Sirius series for utilization in the domestic vehicle market, the Electra 1.0 series found
applications in overseas vehicle markets as well as the domestic stationary power generation
systems market. It achieved sales in the overseas market and also recorded sales for its use in
stationary power generation systems in China during the Track Record Period.
The life cycle of our hydrogen production systems generally ranges from three to four
years. Meanwhile, with advancements in technology and changing market demands, older
hydrogen production systems may gradually give way to more efficient and cost-effective
alternatives. Although retired hydrogen production systems may no longer be used for their
original purposes at the end of their life cycle, they can still have other applications and value.
For instance, older hydrogen production systems can be extended in their lifespan through
upgrades and maintenance or repurposed for applications with lower performance
requirements. Additionally, valuable materials in hydrogen production systems, such as
catalysts and proton exchange membranes, can be recovered to optimize resource utilization.
Furthermore, retired hydrogen production systems can be utilized for educational and research
purposes, contributing to the study of water electrolysis for hydrogen production.
OUR PRODUCTION
Our Production Facilities
Leveraging manufacturing equipment and process technology that we accumulated
through continuous iteration, we have established three manufacturing plants in Changshu
Jiangsu, Jiaxing Zhejiang and Shanghai, respectively. Our hydrogen fuel cell systems are
mostly produced in our plant in Changshu (“Changshu Plant”). There are two production lines
in our Changshu Plant, which have partially realized automated production. Our Components
for Fuel Cell Systems are produced in our plants in Jiaxing (“Jiaxing Plant”) or Shanghai
(“Shanghai Plant”). In addition, we may assess and test our new products at our Shanghai
Plant, including but not limited to functional and quality conformance test prior to production,
pressure test, electrical test, and bench test.
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Regarding the production of our PEM hydrogen production systems, which primarily
consisted of our self-developed components including hydrogen production power source and
PEM water electrolysis cell, we currently assemble the hydrogen production systems manually
in our Shanghai Plant. As for our self-developed hydrogen production components, certain
components, such as hydrogen production power source, we assemble it with outsourced parts
at our production facilities and further integrate such component and its functionalities to
seamlessly fit into our PEM hydrogen production systems; and certain other self-developed
components, such as PEM water electrolysis cell, we engage third party manufacturer to
produce it for us. In addition, we produce the ALK electrodes in-house in a production line
located in a leased facility in an industrial park in Changde, Hunan. The production line of
ALK electrodes was established in October 2023 and had commenced production in August
2024.
We have established and implemented a customized management system that covers the
entire production process to ensure effective control of design, procurement, manufacturing,
inspection and testing. We regularly inspect and maintain our production facilities and conduct
overall overhauls of specific production equipment. We implement specific maintenance
procedures for production equipment based on each equipment’s unique characteristics to
ensure their proper operations. During the Track Record Period, we did not experience any
major or long-lasting cessation of business due to failure of machinery, equipment or other
facilities.
The table below sets out details of our plants as of the dates indicated:
Location Site area Primary products
Commencement of
Production Date
Annual
Production
Capacity as of
May 31, 2024
(sq.m.)
Changshu /H1118/H1118/H1118Approximately
13,000
Hydrogen fuel cell
systems
2020 Approximately
5,000 units
Fuel cell stacks (1) 2024 Approximately
5,184 units
Jiaxing /H1118/H1118/H1118/H1118/H1118Approximately
3,000
Bipolar plates 2023 Approximately
400,000
pieces
(2)
Shanghai /H1118/H1118/H1118/H1118Approximately
3,000
MEAs 2021 Approximately
1,200,000
pieces
(3)
Notes:
(1). We completed the relocation of the production line of fuel cell stacks from Shanghai Plant to Changshu
Plant in February 2024.
(2). The production line of bipolar plates in Jiaxing Plant commenced production in July 2023.
(3). The second production line of MEAs in Shanghai Plant commenced production in July 2023.
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Set forth below are some pictures of our plants:
Changshu Plant
Jiaxing Plant
Shanghai Plant
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Production and Utilization Rate
The following table sets forth a summary of our production volume, estimated production capacity and utilization rate for our hydrogen fuel
cell systems, fuel cell stacks, graphite bipolar plates and MEAs for the periods indicated, respectively:
Y ear ended December 31, Five months ended May 31,
2021 2022 2023 2024
Production
volume
Estimated
production
capacity (1)
Utilization (2)
(%)
Production
volume
Estimated
production
capacity (1)
Utilization (2)
(%)
Production
volume
Estimated
production
capacity (1)
Utilization (2)
(%)
Production
volume
Estimated
production
capacity (1)
Utilization (2)
(%)
Products
Changshu Plant
– hydrogen fuel cell
systems /H1118/H1118/H1118/H1118/H1118/H1118/H1118(units) 1,362 5,000 27.2 1,323 5,000 26.5 1,754 5,000 35.1 3 2,080 0.1
– fuel cell stacks (3) /H1118/H1118(units) ––––––––– 9 5 1 , 2 9 6 7 . 3
Jiaxing Plant
– bipolar plates (4) /H1118/H1118/H1118( p i e c e s ) –––––– 198,457 214,440 92.5 92,586 174,000 53.2
Shanghai Plant
– fuel cell stacks (3) /H1118/H1118(units) 1,533 5,184 29.6 1,357 5,184 26.2 2,272 5,184 43. 8–––
– MEAs (5) /H1118/H1118/H1118/H1118/H1118/H1118(pieces) 77,470 86,400 89.7 213,200 432,000 49.4 484,868 820,800 59.1 52,455 492,000 10.7
Changde Production
Line
– ALK electrodes (6) /H1118/H1118(square
meters) –––––– –
50,000 for
ALK anodes – 1,697
50,000 for
ALK anodes 3.4
–
20,000 for
ALK cathodes – 60
20,000 for
ALK cathodes 0.3
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Notes:
(1). The estimated production capacity is based on the assumption of twelve working hours per shift with two shifts per day and 288 working days per year (288 working days are
based on 24 working days per months multiplied by 12 months for the year).
(2). Utilization rate is calculated based on the actual production volume divided by the estimated production capacity.
(3). Between January 2024 and February 2024, we were relocating the production line of fuel cell stacks from Shanghai Plant to Changshu Plant, and ther efore recorded nil of the
estimated production capacity during such relocation period.
(4). The production line of bipolar plates in Jiaxing Plant commenced production in July 2023.
(5). The second production line of MEAs in Shanghai Plant commenced production in July 2023.
(6). We currently have one production line of ALK electrodes located in a leased facility in an industrial park in Changde, Hunan. Such production line was established in October
2023 and had commenced production in August 2024.
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Production Expansion Plan
To meet the greater market demand for hydrogen fuel cell systems, we intend to expand
our production capacity of hydrogen fuel cell systems and hydrogen production systems. With
regard to hydrogen fuel cell systems, we plan to expand our annual production capacity fuel
cell stacks to approximately 20,000 units and the annual production capacity of MEAs to six
million pieces. We also plan to enhance our production capability of bipolar plates to a
designed annual production capacity of approximately three million pieces. In addition, we
intend to establish new production facilities to expand the production capability of hydrogen
production systems. For details, see “Future Plans and Use of Proceeds” in this prospectus.
Considering (i) the PRC government’s favorable policies supporting the fuel cell related
industry; (ii) Frost & Sullivan’s estimates regarding the increasing future demand for fuel cell
vehicles in the next five years; (iii) utilization of existing production facilities; (iv) the need
to maintain our competitive advantage in the market; and (v) our business expansion strategies,
we believe that it is necessary to expand our production capacity for the hydrogen fuel cell
systems and hydrogen production systems. We also believe that we can benefit from the
economies of scale based on the size of the operations and scale of production capacity.
Production Process
Our production process is designed to promote high standards of quality while being able
to rapidly ramp up production to satisfy customers’ needs. Our streamlined and standardized
production process, which primarily consisting of four stages including inspection of
outsourced materials, product assembly, quality inspection and storage of finished products,
utilizes automatic technology and quality control system to ensure production safety, output
stability and normative process flow as well as to meet customers’ requirements on product
quality and timely delivery.
The following chart illustrates the key steps of the production process for our hydrogen
fuel cell systems:
Inspection of outsourced
materials
Product production and
assembly Quality inspection Storage of finished
products
Hydrogen subsystem components
Air subsystem components
Cooling subsystem components
DC control
Carbon paper, proton
exchange membrane,
catalyst, etc.
Expanded graphite
Hardware including air
intake plates, pressure
plates, etc.
Production of MEAs
Production of bipolar plates Assembly of stacks Stack FAT testing
Assembly of fuel cell
systems System offline testing
Storage of finished
products
Inspection of finished
products
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We adopt an “on-demand manufacturing” approach for the production of our hydrogen
fuel cell systems where we start manufacturing based on customer orders and sales forecasts.
The production cycle for our fuel cell stacks is around 15 days. Utilizing finished fuel cell
stacks and other materials, the production cycle for our hydrogen fuel cell systems is around
eight days. However, the production lead time is subject to the availability and delivery lead
time of raw materials such as electrostack catalysts and proton exchange membranes. See “Risk
Factors — Risks Relating to Our Business. If we fail to obtain sufficient amounts of raw
materials or components in time or that meet our quality standards and/or at commercially
acceptable prices, our business, financial condition and results of operations would be
materially and adversely affected” in this prospectus.
Production Equipment
We procure our equipment from quality domestic and overseas production equipment
suppliers. As the equipment used in our productions were either (i) standard machineries and
equipment which are readily available on the market, or (ii) tailor-made equipment produced
based on the designs we provided to the manufacturers, and such manufacturers are also widely
available, we believe we do not materially rely on any machineries and equipment
manufacturers. In addition, with the expansion of our production capability, we have completed
the localization process for our material equipment and machinery.
The following table describes our main production equipment as of May 31, 2024:
Name of the equipment Usage and characteristics of the equipment
Assembly line /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Assembly of hydrogen fuel cell systems, conducting
automatic grabs and tightening with robots and
conducting air tightness test and electrical
performance test
EOL testing equipment /H1118/H1118/H1118/H1118/H1118Conducting performance and operating condition
testing of hydrogen fuel cell systems
Automatic coating line /H1118/H1118/H1118/H1118/H1118Primarily used for coating the rolled substrate
automatically
Automatic transfer line /H1118/H1118/H1118/H1118/H1118Primarily used for transferring the catalyst layer on
the release film to PEM by hot pressing
MEFA automatic assembly
line /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Primarily used for MEFA assembly, automatic loading
of PEN&GDL and laser cutting, high-precision
dispensing
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We regularly carry out inspections and maintenance of our production facility. We have
developed and implemented internal procedures at our production facility according to the
characteristics and maintenance requirements of the particular equipment and machinery in
order to ensure they function properly. For the accounting policies in regard to the depreciation
of the machineries and equipment, see “Financial Information — Material Accounting Policies
and Estimates — Property, Plant and Equipment and Depreciation” in this prospectus. During
the Track Record Period, we did not experience any material or prolonged suspensions of
operations due to machinery, equipment or other facility failures.
QUALITY CONTROL
We perform quality control, inspection, testing, identifying defects and irregularities
throughout all stages in our production process. Our employees follow our quality control
protocols to control and monitor each stage of our operating process, including procurement of
components and raw materials, production, and inspection of finished products, to ensure
product quality. We have obtained ISO9001:2015 and IATF16949:2016 quality control system
certifications. We have established or been establishing our manufacturing execution system
(MES), quality management system (QMS) and enterprise resource planning (ERP) system,
that help us get deeper and richer manufacturing insights and drive quality and process
improvements across the enterprise.
We believe it is important to improve the quality and reliability of our products, and
therefore we continue to increase productivity by streamlining our production procedures and
increasing the automation level of our production lines, and improving inspection and control
measures for materials and components. To this end, our quality control team supervises the
operating process to improve the quality and reliability of our products; meanwhile, we also
host internal meetings regularly to discuss issues arising from the production process and to
formulate tactics for potential improvement.
During the Track Record Period and up to the Latest Practicable Date, there were no
product recalls or returns, product liability claims, or customer complaints that materially and
adversely affected our business. We normally provide a five-year or 200,000-kilometer limited
warranty for our hydrogen fuel cell systems, whichever is reached first as stated in our
contracts with the customers. Our warranty policy is usually limited to defects or failures of
products that do not satisfy product specifications or fall short of the quality standards agreed
with our customers. In case of product failure, we are able to analyze our hydrogen fuel cell
systems through remote access and diagnosis, and identify and cure the problems. For further
information, see “Financial Information — Description of Selected Components of
Consolidated Statements of Profit or Loss — Selling and Marketing Expenses” in this
prospectus.
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OUR SUPPLIERS
Overview
We select and procure raw materials and key components from third-party suppliers.
During the Track Record Period, we have purchased certain raw materials from overseas
suppliers. Besides, we have established stable partnership with domestic suppliers. Our
partnership with domestic supplier has enabled us to have a stable supply of raw materials at
competitive prices, and helped us to ensure our capability to produce and deliver quality
products in a timely manner in response to our customers’ demand.
We purchased raw materials primarily for the sales of hydrogen fuel cell systems and
components. During the Track Record Period, our purchases of raw materials from Mainland
China increased continuously, both in absolute amount and as a percentage of our total
purchases of raw materials. The following table sets forth a breakdown of our purchases of raw
materials by source location for the periods indicated:
Y ear Ended December 31, Five Months Ended May 31,
2021 2022 2023 2023 2024
RMB’000 % RMB’000 % RMB’000 % RMB’000 % RMB’000 %
(unaudited)
Overseas (1) /H1118/H1118/H1118/H1118/H1118/H1118224,923 49.6 165,493 32.1 133,497 22.8 6,578 4.6 5,394 5.5
Mainland China /H1118/H1118/H1118228,479 50.4 350,776 67.9 453,054 77.2 137,754 95.4 92,903 94.5
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118453,402 100.0 516,268 100.0 586,551 100.0 144,332 100.0 98,296 100.0
Note:
(1) Refer to the purchases of raw materials which are produced overseas.
During the Track Record Period, the prices of major raw materials we purchased from
suppliers for our production did not experience any material fluctuations. During the Track
Record Period, we did not experience any shortage of raw materials that resulted in
interruptions in our production. We believe our stable relationships with our suppliers will
continue to ensure an adequate and stable supply of raw materials and manage fluctuations of
prices of our raw materials in the future. We did not experience any quality issues with our raw
materials during the Track Record Period that materially affected our operations.
During the Track Record Period and as of the Latest Practicable Date, although we
procured limited amount of components with core technology from our suppliers, we did not
rely on any suppliers for providing such key components.
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Major Suppliers
We carefully select our external suppliers and require them to meet certain evaluation and
assessment criteria. We take into consideration various factors in our supplier selection
process, including price, quality, production capacity, payment terms, and timeliness of
delivery. We generally plan our procurement of raw materials based on our production plan,
expected sales target as well as market conditions. We generally do not enter into long-term
purchase agreements with suppliers except for yearly framework agreements, and place orders
on demand. The purchase orders set out details such as the specifications and quality standards
of raw materials, quantity, payment obligations, delivery method and termination clauses. In
addition, we have not entered into any exclusive supply agreements with our suppliers during
the Track Record Period.
Below is a summary of the key terms of typical procurement arrangements that we entered
into with our suppliers during the Track Record Period:
Pricing /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118In line with market practice, prices of raw materials are generally
either fixed and specified in the procurement agreement, or
adjusted taking into account the then prevailing market price
when placing orders.
Delivery arrangements /H1118/H1118The suppliers are generally responsible for costs of delivery. The
suppliers will deliver the goods to the place designated by us, and
the risk of loss of the goods shall be borne by the suppliers until
acceptance by us.
Payment method and
credit terms /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
We settle our payments with suppliers by way of bank transfer.
We are typically offered a credit term of one month to one year.
Inspection /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Inspections are normally carried out onsite at our designated
place of delivery, and unqualified goods will be returned at the
suppliers’ expenses.
Confidentiality /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118We usually set confidentiality clauses in the framework
agreements, and the period of confidentiality obligations shall
extend for a duration of up to five years from the effective date
of the agreements.
Termination /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Either party shall be entitled to terminate the agreement when: (i)
the other party breaches any of the conditions in the agreement
and fails to rectify such breach within 30 days after written notice
of the non-breaching party; (ii) the other party has commenced
insolvency or other proceedings for bankruptcy; (iii) an
application for insolvency proceedings has been filed to against
the other party and such application has not been withdrawn or
refused within four weeks, (iv) the other party has lost capacity
for civil conduct.
BUSINESS
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Purchase from our five largest suppliers in each year/period during the Track Record
Period amounted to RMB268.4 million, RMB214.5 million, RMB220.5 million and RMB53.0
million, which accounted for 29.5%, 27.5%, 23.2% and 20.3% of our total purchase for the
respective years/periods. Purchase from the largest supplier in each year/period during the
Track Record Period amounted to RMB82.5 million, RMB52.4 million, RMB65.3 million and
RMB29.4 million, which accounted for 9.1%, 6.7%, 6.9% and 11.2% of our total purchase for
the respective years/periods. The following table sets forth details of our five largest suppliers
for the years/periods indicated.
BUSINESS
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--- page 301 ---
For the five months ended May 31, 2024
Suppliers Purchase
As a percentage of
total purchase
amount for
the corresponding
period Company background
Y ear of
commence of
relationship Credit term Payment method
Products
purchased by
our Group
Registered
capital/Issued
share capital
(RMB’000)
CIMC Hydrogen Energy
Technology (Nantong)
Co., Ltd. and entities
under its control
(1) /H1118/H1118/H1118/H1118
29,401 11.2% A group of PRC companies
principally engages in design
and manufacture of special
equipment.
2022 Partial prepayment,
outstanding balance
to be paid after
delivery of goods
and receipt of V AT
invoice within
12-24 months
Bank transfer Hydrogen supply
systems
See note (1)
Shanghai YunFei Industrial
& Trading Development
Co., Ltd /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
6,455 2.5% A PRC company principally
engaged in sales and production
of special instruments.
2017 Within 60 days after
receipt of V AT
invoice
Bank transfer Rent and
property
management
RMB50.0
million
Tanaka Kikinzoku
International (Shanghai)
Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
6,336 2.4% A PRC company principally
engaged in sales of chemical
products.
2019 Prepayments Bank transfer Catalyst USD0.2 million
Supplier E /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,398 2.1% A PRC company listed on the
Shanghai Stock Exchange
engaged in research and
development, production and
sales of professional testing
equipment.
2022 30% prepayment,
30% before
delivery, 30% after
acceptance and
10% for one-year
warranty
Bank transfer 10kW fuel cell
stack test
system,
feedback
electronic
load, etc
RMB80.3
million
BUSINESS
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--- page 302 ---
Suppliers Purchase
As a percentage of
total purchase
amount for
the corresponding
period Company background
Y ear of
commence of
relationship Credit term Payment method
Products
purchased by
our Group
Registered
capital/Issued
share capital
(RMB’000)
Supplier F /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,393 2.1% A PRC company engaged in
technology research and
development, technical
consultation, and technical
services related to fuel cell
system components and parts, as
well as the manufacturing and
sales of new energy vehicle
parts; and the production,
processing, and sales of
mechanical equipment.
2017 Within 120 days after
receipt of V AT
invoice and arrival
of goods
Bank transfer Fuel cell thermal
management
system
RMB50.0
million
BUSINESS
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For the year ended December 31, 2023
Suppliers Purchase
As a percentage of
total purchase
amount for
the corresponding
period Company background
Y ear of
commence of
Relationship Credit Term Payment Method
Products
purchased by
our Group
Registered
capital/Issued
share capital
(RMB’000)
CIMC Hydrogen Energy
Technology (Nantong)
Co., Ltd. and entities
under its control
(1) /H1118/H1118/H1118/H1118
65,253 6.9% A group of PRC companies
principally engages in design
and manufacture of special
equipment.
2022 Partial prepayment,
outstanding balance
to be paid after
delivery of goods
and receipt of V AT
invoice within
12-24 months
Bank transfer Hydrogen supply
systems
See note (1)
Supplier B /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111855,561 5.8% A company engages in the R&D,
manufacturing and sales of
hydrogen energy related
equipment.
2017 Partial prepayment,
outstanding balance
to be paid after
arrival of goods
and receipt of V AT
invoice within
12-24 months
Bank transfer Hydrogen supply
systems
RMB98.7
million
Toyota Tsusho (Shanghai)
Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
44,591 4.7% A PRC company mainly engages in
sales of specialized electronic
materials, solar thermal power
generation equipment, and
graphite and carbon products.
2019 Prepayment Bank transfer Bipolar plates,
graphite plates
and optical
plates
USD4.0 million
BUSINESS
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--- page 304 ---
Suppliers Purchase
As a percentage of
total purchase
amount for
the corresponding
period Company background
Y ear of
commence of
Relationship Credit Term Payment Method
Products
purchased by
our Group
Registered
capital/Issued
share capital
(RMB’000)
Supplier C /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111829,560 3.1% A company engages in the R&D of
emerging energy technologies,
manufacturing of new energy
power equipment, sales of new
energy vehicle accessories, sales
of new energy power equipment,
software development,
blockchain technology related
software and services, cloud
computing equipment technology
services, and retail of automotive
parts.
2023 Within 12 month
after arrival of
goods
Bank transfer Hydrogen fuel
cell stacks,
fuel cell
voltage
inspectors, and
related
components
RMB80.0
million
Supplier D /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111825,561 2.7% A company specializes in the
installation, renovation, and
repair of special equipment. It
also engages in sales of special
equipment, station hydrogen
refueling and storage facilities;
manufacturing and sales of gas
and liquid separation and
purification equipment, battery
manufacturing, battery sales, and
other services.
2021 10% of the purchase
price after delivery
of the purchase
order, 45% of the
price within 12
months, 40% of the
price within 24
months, and 5% of
the price within 36
months
Bank transfer Hydrogen supply
systems
RMB104.4
million
BUSINESS
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--- page 305 ---
For the year ended December 31, 2022
Suppliers Purchase
As a percentage of
total purchase
amount for
the corresponding
period Company background
Y ear of
commence of
Relationship Credit Term Payment Method
Products
purchased by
our Group
Registered
capital/Issued
share capital
(RMB’000)
Toyota Tsusho (Shanghai)
Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
52,441 6.7% A PRC company mainly engages in
sales of specialized electronic
materials, solar thermal power
generation equipment, and
graphite and carbon products.
2019 Prepayments Bank transfer Bipolar plates,
graphite plates
and optical
plates
USD4.0 million
Tianjin Machinery IMP. &
EXP. Corp /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
50,194 6.4% A PRC company principally
engages in provision of import
and export agency services.
2018 Within 30 days after
arrival of goods
Bank transfer Specialized
equipment,
sensors and
humidifiers
RMB51.0
million
CIMC Hydrogen Energy
Technology (Nantong)
Co., Ltd. and entities
under its control
(1) /H1118/H1118/H1118/H1118
47,126 6.1% A group of PRC companies
principally engages in design
and manufacture of special
equipment.
2022 Partial prepayment,
outstanding balance
to be paid after
delivery of goods
and receipt of V AT
invoice within
12-24 months
Bank transfer Hydrogen supply
systems
See note (1)
Supplier Group A
(2) /H1118/H1118/H1118/H111835,353 4.5% A group of UK companies engages
in the development and
manufacture of catalysts, catalyst
coated membranes (CCM),
MEAs and other fuel cell
components.
2020 Prepayments and
balances are due
within 30 days of
receipt of an
invoice, on the
dates and in the
amounts specified
in the schedule of
deliveries
Bank transfer Membrane
electrodes and
precious
metals
See note (2)
Beijing Nowogen
Technology Co., Ltd.
and entities under its
control
(3) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
29,345 3.8% A group of PRC companies
engages in R&D and production
of fuel cell stacks, graphite plate
and water-cooled fuel cell and
the R&D of methanol hydrogen
technologies.
2020 Partial payment upon
execution of
contract,
outstanding balance
to be paid by
installments within
24 months
Bank transfer Fuel cell stacks See note (3)
BUSINESS
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--- page 306 ---
For the year ended December 31, 2021
Suppliers Purchase
As a percentage of
total purchase
amount for
the corresponding
period Company background
Y ear of
commence of
Relationship Credit Term Payment Method
Products
purchased by
our Group
Registered
capital/Issued
share capital
(RMB’000)
Supplier Group A (2) /H1118/H1118/H1118/H111882,540 9.1% A group of UK companies engages
in the development and
manufacture of catalysts, catalyst
coated membranes (CCM), MEA
and other fuel cell components.
2020 Prepayments and
balances are due
within 30 days of
receipt of an
invoice, on the
dates and in the
amounts specified
in the schedule of
deliveries
Bank transfer Membrane
electrodes and
precious
metals
See note (2)
Toyota Tsusho (Shanghai)
Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
62,029 6.8% A PRC company mainly engages in
sales of specialized electronic
materials, solar thermal power
generation equipment, and
graphite and carbon products.
2019 Prepayments Bank transfer Bipolar plates,
graphite plates
and optical
plates
USD4.0 million
Shanghai H-Rise New
Energy Technology Co.,
Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
47,575 5.2% A PRC company principally
engages in R&D, manufacture
and sales of high-power fuel cell
stacks, PEM electrolysers, and
other components.
2020 Within 30 to 180
days after receipt
of V AT invoice
Bank transfer Fuel cell stacks RMB17.1
million
BUSINESS
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--- page 307 ---
Suppliers Purchase
As a percentage of
total purchase
amount for
the corresponding
period Company background
Y ear of
commence of
Relationship Credit Term Payment Method
Products
purchased by
our Group
Registered
capital/Issued
share capital
(RMB’000)
Tianjin Machinery IMP. &
EXP. Corp /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
41,928 4.6% A PRC company principally
engages in provision of import
and export agency services.
2018 Within 30 days after
arrival of goods
Bank transfer Specialized
equipment,
sensors and
humidifiers
RMB51.0
million
XecaTurbo Clean Power
Rugao Co. and entities
under its control
(4) /H1118/H1118/H1118/H1118
34,293 3.8% A group of PRC companies
engages in system equipment
related to power machinery,
hydrogen energy, and fuel cells.
2020 Within 60 to 180
days after receipt
of V AT invoice
Bank or notes
transfer
Air compressor See note (4)
Notes:
(1) Including CIMC Hydrogen Energy Technology (Nantong) Co., Ltd. and Nantong CIMC Energy Equipment Co., Ltd., of which the registered capital are RM B15.0 million and
RMB500.0 million, respectively.
(2) In 2021 and 2022, we had transactions with three entities in Supplier Group A, of which the registered capital are £20.6 million, RMB50.0 million an d USD30.0 million,
respectively.
(3) Including Beijing Nowogen Technology Co., Ltd. and Guangdong Nowogen Technology Co., Ltd., of which the registered capital are RMB55.7 million a nd RMB10.0 million,
respectively.
(4) Including XecaTurbo Clean Power Rugao Co., and XecaTurbo (Shanghai) Energy Technology Co., Ltd. and Guangdong XecaTurbo Power Technology Co., o f which the
registered capital are RMB100.0 million, RMB5.0 million and RMB30.0 million, respectively.
None of the Directors, their associates or any shareholders holding more than 5% of the Group’s issued share capital, to the best knowledge
of our Directors, had any interest in the five largest suppliers in each year during the Track Record Period and as of the Latest Practicable Date.
BUSINESS
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--- page 308 ---
CUSTOMERS, SALES AND PRICING
Major Customers
Our customers mainly comprise commercial vehicle manufacturers located in China.
Below is a summary of the key terms of typical sales agreements that we entered into with our
customers during the Track Record Period:
Pricing /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118We specify the price of each product and service provided to
customers in the sales agreement, including unit price and total
price.
Delivery arrangements /H1118/H1118We are generally responsible for costs of delivery. We will deliver
the goods to the place designated by our customers, and the risk
of loss of the goods shall be borne by us until acceptance by our
customers.
Credit term /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118We generally grant credit period to our customers ranging from
20 days to three years according to their credit profile and
historical performance.
Inspection /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Inspections are normally carried out onsite at the place of
delivery designated by our customers, and unqualified goods will
be returned at our expenses.
Warranty /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118For our hydrogen fuel cell systems, we usually provide our
customers with a warranty of five years or 200,000 kilometers,
whichever is reached first. During the warranty period, if the
damages or malfunctions of the product are due to quality defects
attributable to us, we shall be responsible for repairing or
replacing the product at our own expenses.
Termination /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118If the buyer delays the payment of the purchase price for reasons
not attributable to the seller, the buyer shall pay the seller a daily
penalty for overdue payment. If the buyer’s payment is overdue
for certain period, for example, more than 60 days, the seller has
the right to terminate the contract. In such a case, the buyer shall
pay the seller a penalty of 20% of the total contract amount and
compensate the seller for any losses incurred as a result.
BUSINESS
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--- page 309 ---
If the seller delays the delivery for reasons not attributable to the
buyer, the seller shall pay the buyer a daily penalty for overdue
delivery. If the seller’s delivery is delayed for certain period, for
example, for more than 60 days, the buyer has the right to
terminate the contract. In such a case, the seller shall pay the
buyer a penalty of 20% of the total contract amount and
compensate the buyer for any losses incurred as a result.
We generated revenue of RMB393.0 million, RMB433.6 million, RMB620.6 million and
RMB7.3 million from our five largest customers in each year/period during the Track Record
Period, which accounted for 75.0%, 71.7%, 69.3% and 58.2% of our total revenue for the
respective years/periods. We generated revenue of RMB117.4 million, RMB134.2 million,
RMB261.8 million and RMB4.9 million from the largest customer in each year/period during
the Track Record Period, which accounted for 22.4%, 22.2%, 29.2% and 38.9% of our total
revenue for the respective years/periods. The following table sets forth details of our five
largest customers for the years/periods indicated.
BUSINESS
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--- page 310 ---
For the five months ended May 31, 2024
Customers
Revenue
contribution
As a percentage of
total revenue for
the corresponding
period
Company background and financial
standing/our relationship
Y ear of
commence of
relationship Credit term Payment method
Products sold by
our Group
Scale of operation/
Registered capital
(RMB’000)
Yutong Group (1) /H1118/H1118/H1118/H1118/H1118/H1118/H11184,864 38.9% A group of PRC companies
principally engages in
manufacture of commercial
vehicles. To the best knowledge
of our Directors, Yutong Group
had good financial standing.
Yutong Group became one of
our shareholders in 2022. We
became acquainted with Yutong
Group through the outreach of
our marketing personnel
2018 Within 60 days after
receipt of V AT
invoice
Bank or notes
transfer
Hydrogen fuel
cell systems,
components,
and after-sale
services
See note (1)
Customer F /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118806 6.4% A Korean company principally
engaged in manufacture of
automobiles. We became
acquainted with Customer F
through the introduction of one
of our shareholders
2023 70% prepayment in
advance before
product delivery;
Outstanding 30%
balance to be paid
by end of next
month after
delivery
Bank transfer Hydrogen fuel
cell systems
KRW2,400
million
BUSINESS
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--- page 311 ---
Customers
Revenue
contribution
As a percentage of
total revenue for
the corresponding
period
Company background and financial
standing/our relationship
Y ear of
commence of
relationship Credit term Payment method
Products sold by
our Group
Scale of operation/
Registered capital
(RMB’000)
Foshan Feichi Motor
Technology Co., Ltd /H1118/H1118/H1118
604 4.8% A PRC company principally
engages in manufacture of
commercial vehicles. To the best
knowledge of our Directors,
Foshan Feichi Motor Technology
Co., Ltd. had good financial
standing. We became acquainted
with Foshan Feichi Motor
Technology Co., Ltd. through the
introduction of one of our
shareholders
2018 Partial payment
within 24 months
after execution of
contract,
outstanding balance
to be paid by
installments within
36 months
Bank transfer Components and
others
RMB276.9
million
Beijing Nowogen
Technology Co., Ltd /H1118/H1118/H1118
518 4.1% A PRC company engages in R&D
and production of fuel cell
stacks, graphite plate and
watercooled fuel cell and the
R&D of methanol hydrogen
technologies. To the best
knowledge of our Directors,
Beijing Nowogen had good
financial standing. We became
acquainted with Beijing
Nowogen through the outreach
of our marketing personnel
2020 Within twelve months
after
acknowledgement
of receiving goods
Bank transfer Components and
others
RMB55.7
million
BUSINESS
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--- page 312 ---
Customers
Revenue
contribution
As a percentage of
total revenue for
the corresponding
period
Company background and financial
standing/our relationship
Y ear of
commence of
relationship Credit term Payment method
Products sold by
our Group
Scale of operation/
Registered capital
(RMB’000)
Customer G /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118489 3.9% A Japanese company principally
engaged in manufacture of
automobiles. We became
acquainted with Customer G
through the outreach of our
marketing personnel
2019 Within 30 days after
receipt of the
invoice
Bank transfer Fuel cell test
bench and
others
JPY35.0 billion
For the year ended December 31, 2023
Customers
Revenue
contribution
As a percentage of
total revenue for
the corresponding
period
Company background and financial
standing/our relationship
Y ear of
commence of
relationship Credit term Payment method
Products sold by
our Group
Scale of operation/
Registered capital
(RMB’000)
Yutong Group (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118261,789 29.2% A group of PRC companies
principally engages in
manufacture of commercial
vehicles. To the best knowledge
of our Directors, Yutong Group
had good financial standing.
Yutong Group became one of
our shareholders in 2022. We
became acquainted with Yutong
Group through the outreach of
our marketing personnel
2018 Within 60 days after
receipt of V AT
invoice
Bank or notes
transfer
Hydrogen fuel
cell systems,
components
and after-sale
services
See note (1)
BUSINESS
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--- page 313 ---
Customers
Revenue
contribution
As a percentage of
total revenue for
the corresponding
period
Company background and financial
standing/our relationship
Y ear of
commence of
relationship Credit term Payment method
Products sold by
our Group
Scale of operation/
Registered capital
(RMB’000)
FAW Jiefang Automotive
Co., Ltd. (2) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
165,938 18.5% A PRC company principally
engages in manufacture of
commercial vehicles. To the best
knowledge of our Directors,
FAW Jiefang had good financial
standing. FAW Jiefang became
one of our shareholders in 2022.
We became acquainted with
FAW Jiefang through the
outreach of our marketing
personnel
2019 80% payment within
three months and
20% payment
within twelve
months after
receipt of V AT
invoice and
acknowledgment of
receiving goods;
back-to-back
(2)
Bank or notes
transfer
Hydrogen fuel
cell systems
and
components
See note (2)
Foshan Feichi Motor
Technology Co., Ltd. /H1118/H1118
71,919 8.0% A PRC company principally
engages in manufacture of
commercial vehicles. To the best
knowledge of our Directors,
Foshan Feichi Motor Technology
Co., Ltd. had good financial
standing. We became acquainted
with Foshan Feichi Motor
Technology Co., Ltd. through the
introduction of one of our
shareholders
2018 Partial payment
within 24 months
after execution
of contract,
outstanding balance
to be paid by
installments within
36 months
Bank transfer Hydrogen fuel
cell systems,
components,
and others
RMB276.9
million
BUSINESS
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--- page 314 ---
Customers
Revenue
contribution
As a percentage of
total revenue for
the corresponding
period
Company background and financial
standing/our relationship
Y ear of
commence of
relationship Credit term Payment method
Products sold by
our Group
Scale of operation/
Registered capital
(RMB’000)
Beijing Nowogen
Technology Co., Ltd. /H1118/H1118
60,800 6.8% A PRC company engages in R&D
and production of fuel cell
stacks, graphite plate and water-
cooled fuel cell and the R&D of
methanol hydrogen technologies.
To the best knowledge of our
Directors, Beijing Nowogen had
good financial standing. We
became acquainted with Beijing
Nowogen through the outreach
of our marketing personnel
2020 Within twelve months
after
acknowledgement
of receiving goods
Bank transfer Hydrogen fuel
cell systems,
components,
and others
RMB55.7
million
Customer A /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111860,177 6.7% A PRC company principally
engages in manufacture of
commercial vehicles. To the best
knowledge of our Directors,
Customer A had good financial
standing. We became acquainted
with the leader of a hydrogen
project at the research institute
of Customer A in 2023 and have
collaborated on R&D projects
with Customer A. Customer A
decided to purchase hydrogen
fuel cell systems and
components from us considering
our technologies and product
quality
2023 Within 60 days after
acknowledgement
of receiving goods
Bank transfer Hydrogen fuel
cell systems
and
components
RMB5,785.8
million
BUSINESS
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--- page 315 ---
For the year ended December 31, 2022
Customers
Revenue
Contribution
As a percentage of
total revenue for
the corresponding
period
Company background and financial
standing/our relationship
Y ear of
commence of
Relationship Credit Term Payment Method
Products sold by
our Group
Scale of operation/
Registered capital
(RMB’000)
FAW Jiefang Automotive
Co., Ltd. (2) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
134,226 22.2% As disclosed in the table above 2019 80% payment within
three months and
20% payment
within twelve
months after
receipt of V AT
invoice and
acknowledgement
of receiving goods;
back-to-back
(2)
Bank or notes
transfer
Hydrogen fuel
cell systems
and
components
See note (2)
Yutong Group
(1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118112,563 18.6% As disclosed in the table above 2018 Within 60 days after
receipt of V AT
invoice
Bank or notes
transfer
Hydrogen fuel
cell systems
and
components
See note (1)
Customer B /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111873,461 12.1% A PRC company principally
engages in manufacture of
commercial vehicles. We became
acquainted with Customer B
through the introduction of a
shared customer
2021 Within 24 months
after
acknowledgement
of receiving goods
Bank transfer Hydrogen fuel
cell systems
and
components
RMB100.0
million
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Customers
Revenue
Contribution
As a percentage of
total revenue for
the corresponding
period
Company background and financial
standing/our relationship
Y ear of
commence of
Relationship Credit Term Payment Method
Products sold by
our Group
Scale of operation/
Registered capital
(RMB’000)
Customer Group C (3) /H1118/H1118/H1118/H111869,438 11.5% A group of PRC companies
principally engages in
manufacture of commercial
vehicles. To the best knowledge
of our Directors, Customer
Group C had good financial
standing. We collaborated with
Customer Group C in a
industrial park establishment
project. Customer Group C then
decided to purchase hydrogen
fuel cell systems, components
and others from us considering
our technologies and product
quality
2021 Within 24 months
after
acknowledgement
of receiving goods
Bank transfer Hydrogen fuel
cell systems,
components
and other
See note (3)
Customer Group D
(4) /H1118/H1118/H1118/H111843,917 7.3% A group of PRC companies
principally engages in
manufacture of commercial
vehicles. To the best knowledge
of our Directors, Customer
Group D had good financial
standing. We became acquainted
with Customer Group D through
the outreach of our marketing
personnel
2016 Within 24 months
after the execution
of contract; with
acknowledgment of
goods and receipt
of V AT invoice
Bank or notes
transfer
Hydrogen fuel
cell systems,
components
and other
See note (4)
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For the year ended December 31, 2021
Customers
Revenue
Contribution
As a percentage of
total revenue for
the corresponding
period
Company background and financial
standing/our relationship
Y ear of
commence of
Relationship Credit Term Payment Method
Products sold by
our Group
Scale of operation/
Registered capital
(RMB’000)
Yutong Group (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118117,394 22.4% As disclosed in the table above 2018 Within 60 days after
receipt of V AT
invoice
Bank or notes
transfer
Hydrogen fuel
cell systems
and
components
See note (1)
Customer Group D
(4) /H1118/H1118/H1118/H1118112,934 21.5% As disclosed in the table above 2016 Within 24 months
after the execution
of contract; with
acknowledgment of
receiving goods
and receipt of V AT
invoice
Bank or notes
transfer
Hydrogen fuel
cell systems,
components
and others
See note (4)
Customer E /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111875,737 14.5% A PRC company principally
engages in manufacture of
commercial vehicles. To the best
knowledge of our Directors,
Customer E had good financial
standing. We became acquainted
with Customer E through the
introduction of one of our
customers
2021 Within 24 months
after the execution
of contract; with
acknowledgment of
receiving goods
and receipt of V AT
invoice
Bank transfer Hydrogen fuel
cell systems
and
components
RMB1,200.0
million
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Customers
Revenue
Contribution
As a percentage of
total revenue for
the corresponding
period
Company background and financial
standing/our relationship
Y ear of
commence of
Relationship Credit Term Payment Method
Products sold by
our Group
Scale of operation/
Registered capital
(RMB’000)
FAW Jiefang Automotive
Co., Ltd. (2) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
54,248 10.4% As disclosed in the table above 2019 80% payment within
three months and
20% payment
within twelve
months after
receipt of V AT
invoice and
acknowledgement
of receiving goods;
back-to-back
(2)
Bank or notes
transfer
Hydrogen fuel
cell systems
and
components
See note (2)
Customer Group C
(3) /H1118/H1118/H1118/H111832,730 6.2% As disclosed in the table above 2021 Within 24 months
after
acknowledgement
of receiving goods
Bank transfer Hydrogen fuel
cell systems
See note (3)
Notes:
(1) In 2021, we had transactions with Yutong Bus Co., Ltd. and Yutong Commercial Vehicle Co., Ltd., of which the registered capital are RMB2,213.9 mill ion and RMB470.4
million, respectively. In 2022, we had transactions with Yutong Bus Co., Ltd., Yutong Commercial Vehicle Co., Ltd., Yutong Light Commercial Vehicle and Zhengzhou Yutong
Heavy Industries Co., Ltd., of which the registered capital are RMB2,213.9 million, RMB470.4 million, RMB200.0 million and RMB677.5 million, respe ctively. In 2023, we
had transactions with Yutong Bus Co., Ltd., Yutong Commercial Vehicle Co., Ltd. and Zhengzhou Yutong Heavy Industries Co., Ltd., of which the registe red capital are
RMB2,213.9 million, RMB470.4 million and RMB677.5 million, respectively. According to the 2023 annual report of Yutong Group, it recorded RMB27.0 b illion in revenue
in 2023. For the five months ended May 31, 2024. we had transactions with Yutong Bus Co., Ltd., Yutong Commercial Vehicle Co., Ltd. and Zhengzhou Yutong Heavy Industries
Co., Ltd., of which the registered capital are RMB2,213.9 million, RMB470.4 million, and RMB677.5 million, respectively. As confirmed by our Direct ors, the pricing and
payment arrangements between Yutong Group and us are similar to those between other independent customers and us. In addition, save for Yutong Group’ s shareholdings in
us (where Yutong Bus Co., Ltd., Zhengzhou Spruce Automotive Industry Equity Investment Fund (Limited Partnership) and Mr. WAN Jingzhao would act in c oncert in exercising
Shareholders’ rights pertaining to us) and our sales transactions with Yutong Group, we do not have any past or present relationships (including, wit hout limitation, financing,
family, employment, trust or otherwise) between Yutong Group or its respective substantial shareholders, directors or senior management, or any of its respective associates.
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(2) The registered capital of FAW Jiefang Automotive Co., Ltd. is RMB10,803.0 million. According to the 2023 annual report of FAW Jiefang Automotive C o., Ltd., it recorded
RMB63.9 billion in revenue in 2023. FAW Jiefang is wholly owned by FAW Jiefang Group Co., Ltd. (ʮ̡) (stock code: 000800.SZ), that is a state-owned
company listed at Shenzhen Stock Exchange.
Under back-to-back payment arrangements that were provided in the supplement agreements we entered into with FAW Jiefang Automotive Co., Ltd. in Dec ember 2023 and
February 2024, the settlement of trade receivables from FAW Jiefang Automotive Co., Ltd. associated with its receipt of subsidies from government. A ccording to the agreements
entered into between FAW Jiefang and us, after the receipt of the cash awards, we are obliged to transfer the FAW Jiefang’s portion to it within 24 months after the delivery
of eligible vehicles. FAW Jiefang will then settle its trade payables based on the back-to-back arrangements with us upon its receipt of the correspon ding cash awards in due
course. We recognize revenue from contracts with customers when control of goods or services is transferred to the customers.
We agree to provide the back-to-back payment arrangement primarily because (i) FAW Jiefang focuses on the development and manufacturing of heavy-du ty trucks, which is
perfectly in line with our business focus in heavy-duty truck field. For instance, sales volume of heavy-duty trucks sold by FAW Jiefang accounted for over 20% of total
heavy-duty trucks sold in China in 2022. We ranked the first in the hydrogen fuel cell system market in China, in terms of the total sales power output of h ydrogen fuel cell
systems that have been used for heavy-duty trucks in 2023, with a market share of 42.4%. This overlap of business focus lays a solid foundation for busin ess synergy between
us and FAW Jiefang; (ii) FAW Jiefang has been one of our major customers. We and FAW Jiefang have also established strategic cooperation relationship i n hydrogen fuel cell
industry, which brings us with sustainable business development opportunities in a long run; and (iii) backed by strong governmental support in deve loping fuel cell industry
as exhibited in relevant favorable policies, and based on our contracts with the relevant governmental authorities for the Projects, we are confiden t that the awards will be
provided by the authorities in due course upon completion of certain technical and mileage requirements. Such arrangement is reasonable in our indus try as it is still in the early
stage of development, as confirmed by Frost & Sullivan.
In 2021, 2022 and 2023, our revenue attributable to FAW Jiefang that was subject to such back-to-back arrangements amounted to RMB53.5 million, RMB12 8.3 million and
RMB164.4 million, respectively, accounting for 98.7%, 94.8%, 99.1% of the total revenue attributable to FAW Jiefang, respectively. We do not adopt s imilar arrangements with
any other customers as confirmed by our Directors. In addition, except for the back-to-back arrangements, our Directors confirm that the pricing and payment arrangements
between FAW Jiefang and us are similar to those between other independent customers and us. Further, save for FAW Jiefang’s shareholdings in our Compa ny and Foshan Diyi
Element New Energy Technology Co., Ltd. (ʮ̡) (an insignificant subsidiary of our Company pursuant to Rule 14A.09 of the Listing Rules), the
nomination of Mr. JI Yizhi (ɓқ) (our Supervisor) and our sales transactions with FAW Jiefang, we do not have any past or present relationships (including, without limitation,
financing, family, employment, trust or otherwise) between FAW Jiefang or its respective substantial shareholders, directors or senior managemen t, or any of its respective
associates.
(3) In 2021, we had transaction with one entity of Customer Group C, of which the registered capital is RMB150.0 million. In 2022, we had transactions wi th three entities of
Customer Group C, of which the registered capital are RMB150.0 million, RMB100.0 million and RMB137.2 million, respectively.
(4) In 2021 and 2022, we had transactions with two entities of Customer Group D, of which the registered capital are RMB928.0 million and RMB755.4 milli on, respectively.
Except for Yutong Group, none of the Directors, their associates or any shareholders holding more than 5% of the Group’s issued share capital,
to the best knowledge of our Directors, had any interest in the five largest customers in each year during the Track Record Period and as of the Latest
Practicable Date. Except as disclosed above and as disclosed in the “— Overlapping Customers and Suppliers” in this section, as confirmed by our
Directors, we do not have any other past or present relationships (including financing, family, employment, trust or otherwise) between each of thes e
customers, their respective substantial shareholders, directors or senior management, or any of their respective associates.
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Involvement in Application Projects For “Award in Lieu of Subsidy”
Forming a Consortium
As hydrogen fuel cell industry is supported nationally and locally, the government
provides subsidies and awards in relation to FCEVs, hydrogen refueling stations, etc. We
sometimes apply for subsidies and awards together with our customers, i.e. FCEV
manufacturers for FCEVs in accordance with relevant local policies and implementation rules.
Policies for government subsidies and awards for FCEVs vary across different cities in
China. The central governmental departments issued the “Notice on Launching the Pilot
Application of FCEVs” (‘) (the “Policy”) in
September 2020, which is the overarching policy introducing “award in lieu of subsidy” with
a demonstration period of four years. Demonstration cities subsequently issued numerous
supporting policies and rules for the local implementation of the Policy. However, in making
such specific plans for implementing “award in lieu of subsidy”, there is in general a deadline
to complete related targets or goals by the end of 2025. As advised by Frost & Sullivan, apart
from the policies in relation to “award in lieu of subsidy”, local governments in China also
constantly implement favorable policies related to the hydrogen industry, including but not
limited to “14th Five Year Plan” Period (˜ɤ̬ʞ™஝ྌ‘) in Hebei,
(ྌ (2021–2025 ϋ)‘) in Shanghai, “Hydrogen
Highway ( ૫ঐʮ༩)” initiative in Shandong, Zhejiang and some other provinces, trial period
to exempt FCEVs with ETC kit from highway tolls in Shandong, Sichuan, and Jilin, which are
not governed or confined by the Policy or the demonstration period. As further advised by Frost
& Sullivan, local governments in China will continue to release and implement new favorable
policies related to the hydrogen industry in the future.
Requirements for applying for such awards vary across different cities as well. For
example, in some cities, a Consortium is required for the award applications for FCEVs.
Whereas, among such cities, some of them require fuel cell system manufacturers to be the
leading entity in the Consortium, such as in Shanghai, while in some of such cities, FCEV
manufacturers are required to be the leading entity in the Consortium, such as in Beijing. There
are also cities that require FCEV manufacturers to directly apply for the awards for FCEVs,
such as in Henan. As a hydrogen technology company established in the Shanghai, we
primarily apply for awards in Shanghai.
Pursuant to the Policy, relevant local policies, and annual notices issued by Shanghai
Municipal Commission of Economy and Information (ึ)
(“SHEITC”), in order to apply for the awards in Shanghai, relevant market participants are
required to form a consortium for each application project (the “Consortium”). As the industry
is still at early stage, and the market players are in the process of exploring the sustainable and
cost-effective commercial scenes, forming a Consortium helps to get relevant market players
together to figure out solutions for having FCEVs with technologies efficiently utilized in
commercial scenes, such as logistics transportation services. We, as the leading entity in the
Consortium, are responsible for coordination and notification of application progress among
the members, application procedures, and communication with the relevant authority.
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Pursuant to the consortium cooperation agreement signed by the members (“Consortium
Agreement”), each Consortium is generally comprised of five roles: (1) hydrogen fuel cell
company; (2) FCEV manufacturer(s); (3) FCEV operating entities; (4) hydrogen refueling
entities; and (5) FCEV lessees. Salient terms of a Consortium Agreement is summarized as
follows:
 Leading Entity : The leading entity in the Consortium will lead the application
project, which is responsible for coordination and notification of application
progress among the members, application procedures, and communication with the
relevant authority.
 Application : The hydrogen fuel cell company is responsible for the application, and
coordination among the members. All members in the Consortium are obligated to
actively cooperate with and support the application.
 Work allocation : Among the Consortium members, (1) hydrogen fuel cell company
shall be responsible for providing hydrogen fuel cell systems and related
components meeting the technical requirements, also for ensuring proper operation
of the fuel cell systems; (2) FCEV manufacturer(s), shall be responsible for
designing, manufacturing, and maintenance of FCEVs incorporating hydrogen fuel
cell systems and related components provided by the hydrogen fuel cell company;
(3) FCEV operating entities shall be responsible for procuring the FCEVs from the
manufacturer(s), and taking charge of the operation of the FCEVs either through (i)
self-use; or (ii) leasing the FCEVs to FCEV lessees; (4) hydrogen refueling entities
shall be responsible for establishing and operating proper hydrogen refueling
stations, and providing proper hydrogen refueling to FCEV operating entities and
FCEV lessees, to ensure convenient and sustainable refueling supplies to such
entities that use the FCEVs; and (5) FCEV lessees, which are generally entities that
engage in logistics businesses or other businesses that have logistics needs, shall
lease FCEVs from the FCEV operating entities, and use such FCEVs in their
business operation.
 Intellectual Property : The intellectual property rights independently developed and
completed by any member according to work allocation shall be solely owned by
that corresponding member. The intellectual property rights jointly developed and
completed by some members shall be owned jointly by that corresponding members.
During the Track Record Period, other than the Consortium Agreement, we only had
direct transactions with the FCEV manufacturer(s) in such Consortium for the application
projects, which transactions were the purchase and sale of the hydrogen fuel cell systems and
related components. We, however, did not have any transaction with other members in the
Consortium for the application projects, and did not sign any other side agreements with other
members in the Consortium, except for the Consortium Agreement.
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For clarification, according to the “Policies on Supporting the Development of Fuel Cell
Vehicle Industry in Shanghai” (ഄ‘) the
(“Supporting Policy”), FCEV manufacturers are entitled to awards that are linked to the
FCEVs. Therefore, for the application projects in Shanghai, although the relevant awards will
be given to the Company as the leading entity in the Consortium, the Company shall
subsequently transfer the full amount of the awards to FCEV manufacturers after receiving
them, pursuant to the Supporting Policy. Given the clear rule in the Supporting Policy, the
members in the Consortium have not entered into any commercial arrangement with respect to
the allocation of the subsidies and timing of settlement.
Please refer to a brief summary of the transaction and fund flows among the members in
a Consortium as follows based on our knowledge and understanding of the rights and
obligations of the Consortium members as stipulated in the Consortium Agreements. We,
however, are not aware of the details of transaction and fund flows among other members in
the Consortium as we are not a party of such transactions, except for transaction and fund flows
between us and FAW Jiefang:
Hydrogen Refueling Entities
The Company
FCEV Manufacturers
FCEV Operating Entities FCEV Lesses
Lease FCEVs
Consideration for
FCEVs
Payment for
hydrogen refueling services
Hydrogen refueling
services
Hydrogen refueling
services
Payment for
hydrogen refueling services
Procurement payment for
hydrogen fuel cell systems
and related components
Hydrogen fuel
cell systems and
related components
FCEVs
Rents
Transactions flow
Fund flow
During the Track Record Period, we had formed Consortiums with some of our customers
in Shanghai.
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Fulfilment Requirement
The award for FCEVs are targeted towards vehicles that meet the technical requirements
specified in the annex of the Notice named “Fuel Cell Vehicle City Cluster Demonstration
Targets and Score Evaluation System” (໊̹ͪᇍͦᅺձጐʱ൙ᄆ᜗ӻ‘)
(“Application Guide”), which technical requirements include rated power, freeze-start
temperature, rated power density for fuel cell stack, rated power density for fuel cell system,
amongst others. Pursuant to the Application Guide, different FCEVs shall be rated in points,
which points shall be arrived at with a formula covering various indicators of the FCEV , such
as the year of operation, vehicle type, rated power, and total weight.
As the leading city in Shanghai demonstration city cluster, Shanghai Development and
Reform Commission and a few other related authorities in Shanghai formulated the “Notice on
Supporting the Development of Fuel Cell Vehicle Industry in Shanghai” (ࣘ
ഄ‘) in October 2021 (the “Supporting Rules”), for the localized
implementation of the Notice in the Shanghai. According to the Supporting Rules, for the
points of the relevant FCEV as calculated based on the Application Guide, competent authority
in Shanghai will provide award of RMB200,000 for each point in total.
Furthermore, for specific application and evaluation process in each year during the
demonstration period, Shanghai Municipal Commission of Economy and Information ( ɪऎ̹
ึ) (“SHEITC”) issued annual notices regarding the award application (the
“SHEITC Notices”), such as the “Notice on the Application for Shanghai Fuel Cell Vehicle
Demonstration Projects in 2021” ( 2021ٙ
‘), which notices stipulate the project eligibility requirements, application requirements,
application methods, and other detailed application rules for the year. To obtain the application
eligibility in Shanghai, as the leading entity, the fuel cell system enterprise needs to
demonstrate project advantages to the competent district commercial department, where the
fuel cell system enterprise is located, in order to obtain the recommendation from such
department (in the form of a recommendation summary table with governmental stamp). After
obtaining the application eligibility and after the application and selection procedure, the fuel
cell system enterprise will sign an agreement with SHEITC (the “Project Agreement”),
stipulating that the FCEVs applied by the Consortium will operate and complete a certain
mileage within a specified period before receiving the award. Pursuant to the Project
Agreements, the mileage requirement is listed as one of a few project assessment criteria, such
as, rated power of hydrogen fuel cell systems, rated power density of fuel cell stack, and freeze
start temperature. The intermediate time points in the designated time frames of the mileage
requirements serve as expected timelines for FCEV operations, rather than a rigid requirement.
SHEITC has the authority to adjust the mileage requirements based on the actual progress of
the projects, in line with the overall strategic vision of promoting utilization of FCEVs at its
early stage of development. Our Directors are of the view that the risk for us to lose
government awards specified in relevant Project Agreements due to failure to reach the mileage
requirements is remote. In terms of the probability of receiving the awards, our Directors
believe that there is no material obstacle in receiving the awards in due course.
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Award will be distributed to the fuel cell system enterprise based on the number of total
points corresponding to the FCEVs. However, according to “Notice on Supporting the
Development of Fuel Cell Vehicle Industry in Shanghai” (ཥϫӛԓପุ
ഄ‘), the awards provided by the government are linked to the FCEVs, rather than
the Consortium. Therefore, for the application projects in Shanghai, although the relevant
awards will be given to the leading entity, i.e., fuel cell system company, the fuel cell system
company will then transfer the full amount of the awards to FCEV manufacturer(s) in the
Consortium after receiving the awards.
Back-to-Back Payment Arrangement Linked to the Application Projects
Based on amiable negotiation between us and certain FCEV manufacturer (i.e. our
customer), such as FAW Jiefang, we offered back-to-back payment arrangement for such
customer during the Track Record Period, pursuant to which, the customer will settle the
procurement payment for fuel cell systems used in application projects only after the customer
received corresponding award. For more information, see “— Customers, Sales and Pricing”
in this section.
Overlapping Customers and Suppliers
During the Track Record Period, Beijing Nowogen Technology Co., Ltd. (“Beijing
Nowogen”) was our major supplier and also our major customer. Beijing Nowogen is a
company engaged in R&D and production of fuel cell stacks, graphite plate and hydrogen fuel
cell systems and the R&D of methanol hydrogen technologies in China. We established
business relationship with Beijing Nowogen in 2020. During the Track Record Period, we
purchased fuel cell stacks from certain of its subsidiaries. During the Track Record Period, we
procured fuel cell stacks from Beijing Nowogen. In certain instances, based on customers’
preference, we manufactured and supplied customized hydrogen fuel cell systems using the
fuel cell stacks obtained from Beijing Nowogen to our customers. In other cases, Beijing
Nowogen had established connections with FCEV manufacturers who had a demand for
hydrogen fuel cell systems and also valued the fuel cell stacks provided by Beijing Nowogen.
In these cases, although Beijing Nowogen lacked the capability to independently produce
hydrogen fuel cell systems, it preferred to maintain those connections for itself instead of
introducing us to potential customers. Consequently, Beijing Nowogen approached us to
manufacture and supply customized hydrogen fuel cell systems, which they would then sell to
the FCEV manufacturers. We have enjoyed a positive business relationship with Beijing
Nowogen and hold their business decisions in high regard. For the fuel cell stacks that are
incorporated in the fuel cell systems then sold to Beijing Nowogen, we adopt the net method
when recognizing our revenue attributable to it; and for the ones that are incorporated in the
fuel cell systems sold to other customers, we treat such portion as our purchase of components
from a third-party supplier. In 2021, 2022, 2023 and the five months ended May 31, 2024, our
procurement from Beijing Nowogen and its subsidiaries amounted to nil, RMB29.3 million, nil
and RMB0.6 million, respectively. During the Track Record Period, products we supplied to
Beijing Nowogen were primarily hydrogen fuel cell systems incorporating fuel cell stacks
sourced from Beijing Nowogen, primarily because Beijing Nowogen, though manufactures fuel
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cell stacks itself, does not engage in producing hydrogen fuel cell systems. This collaboration
was driven by our robust R&D capabilities, which enabled us to seamlessly integrate Beijing
Nowogen’s fuel cell stacks into the hydrogen fuel cell systems with optimized performances.
Such transaction is generally consistent with industry practice, according to Frost and Sullivan.
In 2021, 2022, 2023 and the five months ended May 31, 2024, our revenue generated from
Beijing Nowogen amounted to RMB20.2 million, RMB33.8 million, RMB60.8 million and
RMB0.5 million, respectively. Our Directors confirmed that the terms of transactions with
Beijing Nowogen are of normal commercial terms and similar to those transactions with our
other customers and suppliers.
To the best knowledge and belief of our Directors after making all reasonable enquiries,
Beijing Nowogen and its respective ultimate beneficial owners are Independent Third Parties.
As confirmed by our Directors, none of our Directors, Supervisors, their respective close
associates, or any Shareholders who or which, to the best knowledge of our Directors, owned
more than 5% of the issued share capital of our Company as of the Latest Practicable Date, has
any interests in Beijing Nowogen during the Track Record Period. Except for the purchases and
sales transactions with Beijing Nowogen, we and Beijing Nowogen jointly made equity
investment in four entities engaged in the hydrogen fuel cell industry between 2022 and 2023,
in order to strengthen our R&D capabilities, expand our market reach and enhance our ability
to capture future market opportunities. Save for the purchases and sales transactions and the
joint investments with Beijing Nowogen, as confirmed by our Directors, we do not have any
other past or present relationships (including, without limitation, financing, family,
employment, trust or otherwise) with Beijing Nowogen, its respective substantial shareholders,
directors or senior management, or any of its respective associates.
Warranty
We generally offer a five-year or 200,000-kilometer limited warranty for our hydrogen
fuel cell systems, whichever is reached first. We only allow product replacement due to quality
issue. Upon receipt of a customer service request, for products covered by the quality warranty
terms of our contracts we provide after-sales services, including issuance of after-sales service
plan, remote consultation, and remote or on-site repair and maintenance.
If the quality issue is attributed to the customer’s liability or beyond the scope of our
warranty terms, the customer shall bear the cost of after-sales service. If the quality issue is
caused by raw materials or components from our suppliers, we generally work together with
such suppliers to resolve our customers’ service requests before allocating liabilities between
us and the suppliers. For product defects caused by raw materials or components from
suppliers, we follow the warranty terms in the procurement agreements to make warranty
claims against such suppliers accordingly.
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We have three after-sales service centers in Shanghai, Foshan, and Zhengzhou,
respectively and an after-sales service team consisting of 29 technicians. Upon the receipt of
after-sales requests, our after-sales service center will take the lead and communicate with the
customer in a timely manner. Upon communication with the customer and further analysis of
the complaint, the technicians in charge of such compliant will provide remote consulting or
remote or on-site repair and maintenance services depending on the issues on hand. During the
Track Record Period, there were no product recalls or returns, product liability claims, or
customer complaints that materially and adversely affected our business.
PRICING
We price our products and services based on various factors as follows. According to
Frost & Sullivan, our pricing for strategies are generally in line with the prevailing market
trend.
Hydrogen Fuel Cell Systems
For hydrogen fuel cell systems, the prices are mainly determined by the raw material
costs, production costs, transportation costs, maintenance and repair costs, warranty offered,
competitors’ pricings, prevailing market conditions, and specification of products requested by
customers. The models selected by a customer also play an important role in pricing. For
instance, models with higher rated powers, power densities and enhanced specifications, such
as Sirius series, are generally priced higher than other models, such as Polaris series.
With respect to customized fuel cell systems requested by our customers, in addition to
the foregoing, we may adjust the prices based on the customization requested by the customers,
the amount and flexibility of additional technical services provided, seniority and number of
our engineers involved, as well as after-sales maintenance services to be provided to such
customers.
We conduct review on the pricing of our products on a regular basis to capture the
fluctuation of prices in the market. In particular, we inspect the price trend of key raw materials
from time to time to grasp the current and future purchase price, and to identify the potential
discrepancies between supply and demand in the industry.
In addition, we value our customers, and view some of our customers as our key
customers considering their long-term business relationship with us, their contribution to our
revenue, and synergies with our businesses. For such key customers, we may consider to
provide certain percentage of discount (around 10%) to their orders, and also provide extended
warranty and maintenance to such key customers. If our customers purchase over ten units per
order, we will also provide wholesale price, rather than individual unit price for such order.
During the Track Record Period, the average selling prices of fuel cell systems ranged
from RMB1,958 per kW to RMB4,635 per kW.
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Components of Hydrogen Fuel Cell Systems
During the Track Record Period, we sold various self-developed and produced
Components for Fuel Cell Systems, and Components for Fuel Cell Vehicles out-sourced from
our suppliers. With respect to Components for Fuel Cell Systems, we determine the prices
through a cost-plus basis, considering our management costs, labor costs, storage costs,
transportation costs, among other factors. For complex components that require substantial
R&D efforts (such as, DC-to-DC converters, humidifiers, hydrogen pumps,), we generally add
a higher markup toward to costs, as compared with standard components (such as, standard
parts and fasteners).
With respect to Components for Fuel Cell Vehicles, we mainly determine the selling price
of such components based on our research of prevailing market price and conditions. We also
take into consideration our expected gross profit margin in determining the selling prices.
Fuel Cell Engineering and Technical Services
For our fuel cell engineering and technical services, the prices are primarily determined
through a cost-plus basis, the services fees vary due to various factors, such as (i) the nature
and complexity of the services; (ii) whether design is required; (iii) labor costs of technicians
and engineers of different seniority and level of experience; (iv) installation or testing; and (v)
the overall quantity of the materials required.
Hydrogen Production Systems and Related Components
For hydrogen production systems and related components, the prices are mainly
determined by the raw material costs, production costs, transportation costs, maintenance and
repair costs, warranty offered, competitors’ pricings, prevailing market conditions, and
specification of products requested by customers.
As we started the sales of hydrogen production systems and related components in 2023,
and it is still an emerging market, we keep close attention to the market development as the
market evolves. We also inspect the price trend of key raw materials from time to time to grasp
the current and future purchase price, and to identify the potential discrepancies between
supply and demand in the industry.
During the Track Record Period, the average selling price of PEM water electrolysis
hydrogen production systems was approximately RMB16,165 per kW.
BUSINESS NETWORK
To meet the increasing downstream demands for hydrogen fuel cell systems and
components resulted from favorable industry policies promulgated by the relevant
governments, we strategically spread out our footprints internationally. As of May 31, 2024,
our national business network in China consisted of our headquarter in Shanghai, three
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production plants in Changshu, Jiaxing, and Shanghai, three after-sales service centers in
Shanghai, Foshan, Guangdong, and Zhengzhou, Henan. Meanwhile, we had one R&D base in
Shanghai. In addition, for overseas countries, we had one subsidiary in Stuttgart, Germany and
one subsidiary in Vancouver, Canada.
By staying close to relevant overseas markets, we are not only able to get first-hand
knowledge about industry trend and market preference in order to further penetrate into local
regions, but also attract and retain local talents so as to enhance our global competitiveness in
terms of technology advancement and latest technology applications.
China
Vancouver, Canada
Stuttgart, Germany
Shanghai
Headquarter, Production Plant,
R&D Base, After-sales Service Center
Jiaxing, Zhejiang
Production Plant
Changshu, Jiangsu
Production Plant
Foshan, Guangdong
After-sales Service Center
Zhengzhou, Henan
After-sales Service Center
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RESEARCH & DEVELOPMENT
Since our establishment in 2015, we have continuously invested in research and
development, and optimization of hydrogen fuel cell systems and components. Since 2022, we
started to devote ourselves to developing hydrogen production systems and related
components. As of the Latest Practicable Date, we have obtained core technologies in hydrogen
fuel cell system design, simulation, control, integration, and production, as well as design and
production of fuel cell stack, MEA, and bipolar plate, which collectively contribute to great
working efficiency, environment adaptability and service life of our hydrogen fuel cell systems
and components. As evaluated by the China Society of Automotive Engineers and the Shanghai
Society of Transportation Engineering ( ʕ਷ӛԓʈ೻ኪึձɪऎ̹ʹஷʈ೻ኪึ), our
hydrogen fuel cell system technologies applied in commercial vehicles excel in system control,
low-temperature, damage-free freeze-start and durability.
Our independent research experience and mass-production experience also allows us to
accumulate valuable technology and know-how that enabled us to streamline and modularize
development process of hydrogen fuel cell systems and components. Our other core
technologies include but not limited to high-performance controller and high robust control
system design technology; iterative optimization control technology of hydrogen fuel cell
system based on big data platform; non-destructive fast start technology for hydrogen fuel cell
system at -30°C without auxiliary heat; fuel cell water-heat balance management technology
and high-power system heat dissipation management technology; high-temperature resistance
technology of fuel cell stacks; long lifespan technology of fuel cell stacks; highly-automated
fuel cell stack production technology; long lifespan, high-temperature resistance, high
consistency membrane electrode design, and mass production technology; high-strength,
high-performance, and long-lifespan composite graphite bipolar plate seal structure design and
mass production technology, etc.
The customers’ needs for production types and power outputs differ in different
application scenarios. By modularizing key parts of our hydrogen fuel cell systems, subsystems
and fuel cell stacks, we are able to use certain components and parts in different products
interchangeably, so as to save research and development costs, and shorten the development
cycle. To be specific, we have a R&D platform for our Caven Series and Prisma Series, by
modularizing key parts of hydrogen fuel cell systems in each series, we are able to reduce
research and development resources, and spread costs among different products. Meanwhile,
the product development cycle is reduced by 30% to 50%. In addition, by modularizing other
parts, such as frame and end plates, we effectively reduce the volume and weight of the system,
and complexity of the parts, and reduce the heat loss and condensate water accumulation during
the transportation of hydrogen and oxygen, which in turn help increase the efficiency and
stability of the system.
As of the Latest Practicable Date, we had a research and development team of 108
personnel from various countries, such as China, Germany, Japan, the U.S., and Canada led by
Dr. Christopher John Guzy, Dr. Zhai Shuang ( ၱᕐ), Dr. Hu Zhe (ࡪߡMr. Liu Yun ( ᄎㄴ),
and Dr. Di Zhigang (қ੪). Among our research and development team members, around
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38.9% of whom earned a master’s degree or higher. In addition, our R&D team members have
extensive experience in hydrogen industry, with an average of ten years of relevant experience
working in hydrogen industry. For each area of hydrogen fuel cell system and hydrogen
production system, we have more than one chief scientific expert leading the continuous
research and product iteration in hydrogen fuel cell systems and hydrogen production systems.
We have participated in a number of national, provincial and municipal research projects as
well as independent research and development projects to develop hydrogen fuel cell
technology and accelerate product upgrades.
Our focus on research and development has fueled our growth and enabled us to
strengthen our market position. We possess frontier technologies and technical know-how for
our proprietary hydrogen fuel cell systems, fuel cell stacks, MEAs and other components.
Hydrogen fuel cell system design and iteration are conducted through our research and
development platform, through which, we have categorized some components and parts of
hydrogen fuel cell systems into standard parts. We developed standard parts adapt to all
hydrogen fuel cell system products on our platform. We also have standard interface for our
hydrogen fuel cell systems, so that standard parts can be easily installed or changed. By
utilizing such underlying technologies and common designs that are not product-specific, we
have significantly shortened development cycle of new products by 30%-50%, and saved
research and development expenses attributable to each single new product.
In terms of hydrogen production equipment, we had both PEM and ALK electrolysis
technologies and products. As compared with ALK electrolysis, PEM electrolysis is more
efficient and consumes less energy in generating same quantity of hydrogen, it also has higher
adaptability to renewable energy sources. On the other hand, at current stage, PEM electrolysis
hydrogen production system is still relying on imported main components, while ALK
electrolysis hydrogen production system is more cost-efficient, more mature, and widely
accepted in China.
We believe that our proprietary technologies and platform enable us to achieve efficient
development of future products to meet the market demand. We are of the view that our
upgraded research and development platform will help us adapt to the fast-evolving hydrogen
fuel cell systems and hydrogen production systems markets, and increase our market
competitiveness.
During the Track Record Period, our research and development expenses amounted to
RMB230.9 million, RMB198.7 million, RMB220.9 million and RMB90.3 million in 2021,
2022, 2023 and five months ended May 31, 2024, respectively. Our research and development
expenses have contributed to the enhancement, development and improvement of our
proprietary hydrogen fuel cell systems, fuel cell stacks, other components and their
productions.
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Cooperation in Research and Development and Ongoing Research and Development
Projects
During the Track Record Period, we have collaborated with top universities such as
Tongji University ( Ν᏶ɽኪ), and key players in our industry that possess technologies for
further exploring the iteration of our technologies. We believe these collaborations provide us
with insights into industry trends and emerging new technologies, which help direct the focus
of our current and future research and development efforts. Some of our noteworthy ongoing
R&D projects include:
 we cooperate with, amongst others, Tongji University ( Ν᏶ɽኪ), and Shanghai
Municipal Science Commission (ึ) to carry out research
project for highly-integrated fuel cell system for industrialization, and we are
responsible for the research and development of fuel cell system engineering. The
intellectual property rights independently developed and completed by each party
according to task allocation shall be solely owned by that corresponding party. For
the public interests, Shanghai Municipal Science Commission (ࡰ
ึ) has the royalty free right to use the intellectual property rights.
 we cooperate with, amongst others, FAW Jiefang (׳to carry out research
project for high-load and long-lifespan fuel cell stacks and engines for heavy-duty
trucks, aiming to enhance the fuel cell system efficiency, extend lifespan of fuel cell
stacks, reduce costs, so that fuel cell systems can be commercially used in
heavy-duty trucks. The intellectual property rights independently developed and
completed by each party according to task allocation shall be solely owned by that
corresponding party.
 we cooperate with, amongst others, Zhengzhou Yutong Bus Co., Ltd. (܄
ʮ̡), to carry out research project for hybrid power system platform for
bus – research on fuel cell system benchmarking and durability testing technology.
The intellectual property rights independently developed and completed by each
party according to task allocation shall be solely owned by that corresponding party;
and the intellectual property rights produced under the cooperation are jointly
owned by us and the participating parties.
 we cooperate with, amongst others, Shanghai Municipal Science Commission ( ɪऎ
ึ) to carry out research project for long lifespan high power fuel
cell stacks and key components for vehicles, and we are responsible for the
performance testing of fuel cell stacks. The intellectual property rights
independently developed and completed by each party according to task allocation
shall be solely owned by that corresponding party. For the public interests, Shanghai
Municipal Science Commission (ึ) has the royalty free right
to use the intellectual property rights.
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 we cooperate with, amongst others, Xi’an Jiaotong University ( Гτʹஷɽኪ), to
carry out research project for fuel cell air compressor for vehicles for enhanced
performance and control of air compressors. The intellectual property rights
independently developed and completed by each party according to task allocation
shall be solely owned by that corresponding party; and the intellectual property
rights produced under the cooperation are jointly owned by us and the participating
parties.
 we cooperate with, amongst others, Tongji University ( Ν᏶ɽኪ) to carry out
research project for reliability, durability and engineering manufacturing
technologies of PEM fuel cell stack — research and development of fuel cell stack
sealing and batch assembly technology and equipment. The intellectual property
rights independently developed and completed by each party according to task
allocation shall be solely owned by that corresponding party; and the intellectual
property rights produced under the cooperation are jointly owned by us and the
participating parties.
Salient terms of the collaboration agreement are as follows:
 The cooperation agreement sets out the major objectives, technical route and target
schedule of the R&D project.
 The R&D project usually designates the project leader and R&D members, with
each member taking a portion of the research.
 The terms for such cooperation agreements generally range from three to five years.
 The intellectual property right developed before the start of the cooperation shall be
solely owned by the original holder; the intellectual property rights jointly
developed during the cooperation shall be jointly owned by the contributing parties;
and the intellectual property rights formed by one party alone during the cooperation
shall be owned by such party alone.
 The technical achievements, patents, copyrights and other intellectual property
rights jointly owned by the parties shall not be transferred or licensed to a third party
without the consents of all related parties.
Breakthrough and Achievements
We believe that technology development is the key to our sustainable success and we are
committed to the development of our proprietary technologies. Over the years, our dedicated
efforts have allowed us to establish competitive edges over industry peers in terms of
development, manufacturing and integration of hydrogen fuel cell systems and key
components, including fuel cell stacks, MEAs, and bipolar plates. Through consistent
breakthroughs in technology, we have successfully positioned our products, in particular our
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fuel cell systems, as a recognized brand. These products are characterized by their enhanced
performance, great reliability, long lifespan, and great environmental adaptability. Some
examples of our key achievements are as follows:
High-Performance Controller and Highly Robust Control System Design Technology
Our high-performance controller and highly robust control system design technology can
effectively improve the reliability, lifespan, and robustness of hydrogen fuel cell systems in the
complex application environment of commercial vehicles. Our controller is designed in
accordance with the standards of electrical and electronic components in the automotive
industry. It offers excellent compatibility with the application environment and has
successfully passed tests and validations based on international standards and corresponding
national standards, such as ISO16750, CISPR25, ISO7637, ISO11452, and ISO10605.
Furthermore, our controller features a wide range of peripheral interfaces, allowing for quick
integration of new sensors and actuators during the development and iteration of the hydrogen
fuel cell system and have significantly shortened the system development time. In addition, we
have developed a model-based closed-loop control software system. This system ensures that
the fuel cell stacks in our hydrogen fuel cell system operate in a reasonable and healthy state.
It enables accurate reading, checking, risk identification, mitigation, and fault response for the
hydrogen fuel cell system and components’ operational status.
Iterative Optimization Control Technology of Hydrogen Fuel Cell System Based on Big
Data Platform
To address the challenges commonly encountered in fuel cell vehicles, such as isolated
vehicle information, multi-dimensional fault vectors, and difficulties in online historical data
analysis, we have undertaken extensive technology development and engineering applications
based on real vehicle data collected over a long time span on a cloud platform. Drawing upon
our strong technical capabilities and rich experience in providing fuel cell vehicle solutions, we
have developed a comprehensive suite of data-driven tools and technologies. These tools
enable accurate and real-time monitoring of key metrics from the fuel cells installed in relevant
vehicles. This capability facilitates cross-vehicle management, extends system lifespan, and
reduces hydrogen consumption. Furthermore, our tools enable quick analysis and comparison
of different failure events, allowing for efficient and effective solutions to be implemented.
They also provide early warnings and effective preventive measures for similar events,
enhancing and optimizing overall vehicle operation.
Non-Destructive Fast Start Technology for Hydrogen Fuel Cell System at -30°C Without
Auxiliary Heat
One of the significant design challenges in hydrogen fuel cell systems is the low-
temperature starting problem. It is crucial to achieve fast starting while minimizing energy loss
to the vehicle’s power system and preventing damage to the fuel cell’s lifespan. To address this
challenge, we have made several design improvements in the fuel cell design processes. These
improvements focus on enhancing the ice-tolerance of the membrane electrode, preventing the
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local accumulation and blockage of condensate and ice, realizing dynamic control of
concentration polarization through real-time impedance measurement, and minimizing the risk
of icing inside the fuel cell and key components with our anisotropic system integration
thermal conductivity design. Our design improvements enable fast freeze-starts without
compromising fuel cell’s lifespan, significantly optimize the customer’s utilization experience
of the fuel cell, and enhance the overall hydrogen safety design level of the hydrogen fuel cell
system.
Fuel Cell Water-Heat Balance Management Technology and High-Power System Heat
Dissipation Management Technology
The water balance and heat balance in a hydrogen fuel cell system significantly impact
its reliable and long-term stable operation. To address this, we have established a series of
control models, including the heat production model of the fuel cell stack, water temperature
model, cooling system model, internal water balance model of the fuel cell stack, humidifier
humidification model, and anode circuit component model. These models form the basis of our
complete closed-loop control strategy. By leveraging these control models, we ensure that the
fuel cell operates at a reasonable and healthy state and improve the lifespan, reliability, and
overall performance of the system.
Furthermore, we conduct system design and control technology optimization with the
focus on the characteristics of fuel cells, such as their high proportion of heat production and
the lower permissible temperature of the fuel cell stack materials. Meanwhile, by establishing
a whole vehicle heat dissipation model that takes into account factors like fan hysteresis,
thermal inertia of the heat dissipation circuit, and other physical characteristics, combined with
the system’s water transfer characteristics, we achieve closed-loop decoupling control of the
dynamic water temperature and hydrogen-air circuit operating conditions. This control
mechanism effectively mitigates material damage caused by high temperature. Moreover, we
have developed a route optimization system capable of analyzing different operating scenarios
and requirements. This system reduces high-temperature operation throughout the entire life
cycle of the vehicle and safeguard the lifespan of the hydrogen fuel cell system in high-power
heat dissipation applications.
High-temperature resistance technology of fuel cell stacks
We have developed high-temperature resistant graphite compression plates, and single-
cell sealing materials and corresponding sealing processes, through the optimization of
temperature-resistant graphite composite resin materials, material ratios, and precision
hot-press molding technology. We have also developed catalyst slurry ratios and coating
processes based on high-temperature operating conditions to reduce platinum aggregation and
carbon carrier corrosion rates at high temperatures, thereby improving proton exchange
membrane conductivity and humidification properties under high-temperature conditions.
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Furthermore, by optimizing the design and material selection of the three-chamber sealing
system, we have improved sealing stability at high temperatures. We have also established fuel
cell multi-physics coupling models suitable for high-temperature operation. Through the
combination of precise flow field structure design and dimension and quality control, we are
able to ensure consistent heat generation and dissipation distribution in the fuel cell stacks,
thereby achieving effective thermal and water management to balance performance and
lifespan under high-temperature operating conditions. As a result, working efficiency and
environmental adaptability of our fuel cell stacks are expanded.
Long lifespan technology of fuel cell stacks
To ensure the long lifespan of 15,000 hours to 30,000 hours for our fuel cell stacks in
complex fuel cell vehicle working environments, we employ corrosion-resistant graphite
bipolar plates to prevent corrosion associated with prolonged use of metal bipolar plates. We
also minimize performance degradation or internal leaks in single cells caused by deviations
in system operating conditions, extreme operating conditions, and other uncontrollable factors
through catalyst microstructure and active structure design, as well as the formulation of
anti-poisoning anode slurries.
Furthermore, we enhances electrode impurity and corrosion tolerance by adding hydroxyl
quenching agents to the membrane electrode assembly and optimizing the three-dimensional
hierarchical diffusion layer structure for gas and liquid-phase mass transfer. We employ
asymmetric membrane electrode assembly designs to strengthen surface reaction processes,
significantly improving impurity tolerance and corrosion resistance. Through studying the
degradation mechanisms, material selection criteria, and durability design guidelines for core
fuel cell components, we have developed corresponding accelerated durability methods, which
enable us to achieve long-lifespan engineering design configurations tailored to different
application scenarios and requirements.
Highly-automated fuel cell stack production technology
We have established comprehensive performance evaluation system for fuel cell stack
testing, covering dimensions, such as general performance, low-temperature characteristics,
and safety requirements. This evaluation system encompasses temperature, pressure, excess
factor, humidity, and other dimensions. We have designed micro-injection molding to achieve
rapid, high-quality, and controllable molding of ultra-thin composite graphite bipolar plates for
our fuel cell stacks. Through high-precision positioning, monitoring, error detection, and
automated assembly, we have achieved automated stacking, compression, and fully automated
welding processes for the bipolar plates.
We focus on intelligent design, operation, production (MES, control systems, intelligent
detection and assembly equipment, intelligent logistics, and warehousing), and intelligent
services. We integrate data and systems such as SAP, MES, and QMS into a unified platform.
This integration enables functionality across various aspects of the product lifecycle, including
design, manufacturing, assembly, logistics, and more, ultimately improving the research and
production efficiency of fuel cell stacks.
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Long lifespan, high-temperature resistance, high consistency membrane electrode design,
and mass production technology
We have effective control of the catalyst layer’s porous structure by customizing the
selection of high oxygen permeable polymers, regulating the morphology, particle size, and
slurry composition of the catalyst. By optimizing the hydrophilic/hydrophobic ratio and pore
distribution of the diffusion layer, along with micro-scale gas-liquid mass transfer simulations,
we are able to regulate the micro-scale water balance inside the electrode, therefore preventing
flooding or excessive dryness during operation of the MEA. By selecting OER catalysts with
special carriers and controlling the morphology of iridium and special carbon carriers, we
improve the utilization efficiency of OER catalysts and increase the membrane electrode’s
resistance to degradation.
In terms of MEA mass-production, we have established evaluation systems for slurry
dispersion, high-speed roll-to-roll process for membrane electrodes, integrated processes,
dual-sided heating, and active area cooling hot-pressing processes, among other technologies.
These advancement enables the MEA to achieve high power density (>1.32W/cm
2), long
estimated lifespan (>30,000hours), low freeze-start temperature (-30°C), long anti-reverse
polarity duration (>3hours), high uniformity coating with high platinum loading CPK over
1.67, high coating size control accuracy with CCM wide-width CPK over 1.67, and high defect
automatic classification accuracy (>99%).
High-Performance, and Long-Lifespan Composite Graphite Bipolar Plate Seal Structure
Design and Mass Production Technology
In order to meet high-performance and long-lifespan requirements in commercial vehicle
applications, we have developed composite material formulations using natural graphite and
highly durable resins. We have optimized space and structure of bipolar plates, and the
distribution of the medium, achieving a conductivity of /H11350100S/cm and durability of /H1135030,000
hours.
In terms of mass production technology, we have improved the resin formula to optimize
the polymerization mechanism and microscopic composite morphology of the resin and
graphite. Through the use of ultra-high vacuum and precision fluid control technology, we have
realized an automated mass production of the plates. With the coating process to achieve the
full intelligence and automation of the polar plate bonding, visual inspection to lamination, we
have achieved a comprehensive yield rate of over 95% for bipolar plates.
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A W ARDS
Throughout the years, we have received numerous rewards and recognitions in respect of
our market size, production capabilities, technological development, and others. Set forth
below are some examples of our awards received during the Track Record Period:
Y ear of grant Award of recognition
Accrediting/Issuing
institution/Authority
2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118List of Shanghai Patent-Intensive
Products and Organizations for
the Year of 2023 (“2023 ϋɪऎ
ʿఊЗΤఊ”)
China Patent Protection
Association
2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118List of Shanghai Intelligent
Factories for the Year of 2023
(“2023ɪऎ̹ॴ౽ঐʈᅀ
Τఊ”)
Shanghai Economy and
Information Technology
Commission
2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118National Enterprise Technology
Center of 2022 (29th Batch)
(2022 ϋ(ୋ29ҭ)ΆุҦஔ
ʕː)
National Development and
Reform Commission, Ministry
of Science and Technology,
Ministry of Finance, General
Administration of Customs and
General Administration of
Taxation
2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118First Prize of Shanghai Industry-
University-Research
Cooperation Outstanding
Projects in 2022 (2022 ϋɪऎ
ΥЪᎴӸධͦɓഃᆤ)
Shanghai Association for the
Promotion of Scientific and
Technological Achievements
2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118Scientific Technology
Advancement in Shanghai for
the Year of 2022 (2022ɪ
ኪҦஔᆤ)
People’s Government of Shanghai
2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118China Renewable Energy Society
Science and Technology
Progress Award in 2022 (2022
ኪ
ҦஔආӉᆤ)
China Renewable Energy Society
2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118The First (Unit) of Major
Technical Equipment Project in
Energy Sector in 2021 (2021 ϋ
̨(ࢁ)ɽҦஔༀ
௪ධͦ)
National Energy Administration
2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118Leading Enterprise of National
Intellectual Property (ᗆ
ପᛆᎴැΆุ)
Department of Utilization and
Promotion of State Intellectual
Property Office
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Y ear of grant Award of recognition
Accrediting/Issuing
institution/Authority
2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118TOP100 Enterprises of Shanghai
Hardcore Science and
Technology (2022߅ࣨ
ҦΆุTOP100)
Shanghai Industrial Technology
Innovation Conference
2021 /H1118/H1118/H1118/H1118/H1118/H1118/H1118Science and Technology Award
of China Machinery Industry
(ኪҦஔᆤ)
China Machinery Industry
Federation
2021 /H1118/H1118/H1118/H1118/H1118/H1118/H1118Manufacturing Individual
Champion Enterprise ( Ⴁிุ
ࠏڿ)
The Ministry of Industry and
Information Technology
2021 /H1118/H1118/H1118/H1118/H1118/H1118/H1118The First APEC “Light of
Innovation” Award for
Outstanding Achievements in
Small and Medium-sized
Enterprises’ Technological
Innovation (֣࠯APEC“௴อʘ
Έ”؈
ᆤ)
China SME Development
Promotion Center
2021 /H1118/H1118/H1118/H1118/H1118/H1118/H1118High-tech Enterprises ( ৷อҦஔ
Άุ)
Shanghai Science and
Technology Commission
INTELLECTUAL PROPERTIES
Our success depends to a large extent on our ability to protect our core technology and
intellectual property. We seek to protect our core technologies and proprietary technologies
through a combination of copyrights, trademarks, trade secrets and confidentiality policies. As
of the Latest Practicable Date, we had (i) 339 registered patents in China, including 120
invention patents, 206 utility model patents and 13 design patents, (ii) 108 registered
trademarks in China, two registered trademarks in Hong Kong, five registered trademarks in
Japan, seven registered trademarks in European Union, eight registered trademarks in United
States, and one registered trademark in Canada, (iii) 37 registered software copyrights and six
registered work copyrights in China, as well as (iv) seven registered domain names in China.
For details of our intellectual property portfolio, see “Appendix VI — Statutory and General
Information — Further Information About the Business of Our Company — 2. Intellectual
property rights” in this prospectus.
In addition, we have adopted and implemented policies to protect our core technologies
and avoid infringement, including (i) before the official launch of a new product, we generally
engage external counsels to conduct patent search and infringement analysis specifically for
our proprietary technology. If there is a high risk of patent infringement, we will consider take
actions, such as apply to invalidate the opposing party’s patent or modify our product plans to
avoid infringement risks; (ii) to prevent third-party infringement of our intellectual property,
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we have established an internal patent protection mechanism, involving our IP management
personnel, sales personnel, and research and development personnel. We will provide trainings
for such personnel periodically to get familiarize with our intellectual property rights and
related laws and regulations. They will promptly report to the IP management team for
appropriate action with the support of external counsels upon observation with potential
infringement; (iii) inclusion of confidentiality clauses as well as ownership and protection of
intellectual property rights clauses in commercial and research and development agreements
with business partners for instance, in the strategic collaborations with our business partners,
the relevant contracts would generally stipulate intellectual property protection-related clauses
such as (1) during the collaboration process, any technical information provided by one party
to the other party shall not be disclosed to any third party in any form; and (2) except for the
intellectual property developed independently by a party without using any drawings or
technical information from the other party, the intellectual property generated based on the
other party’s drawings and technical information shall be owned by the other party; (iv)
registration of our research and development achievements as patents or inventions timely and
(v) the protection of sensitive information stored on employee computers through protective
software. In addition, our intellectual property team proactively takes initiatives to identify
potential infringement upon our intellectual property rights and take appropriate actions based
on our findings.
We intend to protect our technology and proprietary rights vigorously. We have employed
internal policies, confidentiality clauses, and data security measures to protect our proprietary
rights. During the Track Record Period and up to the Latest Practicable Date, we did not initiate
any material litigations for the infringement of our intellectual property rights, and no material
claims or disputes were brought against us in relation to any infringement of trademarks,
copyrights or other intellectual properties. In addition, from time to time, third parties may
initiate litigation against us alleging infringement of their proprietary rights or declaring their
non-infringement of our intellectual property rights. See “Risk Factors — Risks Relating to
Our Business — We may not be able to adequately protect our intellectual property, which
could cause us to be less competitive. Intellectual property infringement claims or other
allegations by third parties and third-party infringements of our intellectual property rights may
adversely affect our business” in this prospectus.
SALES AND MARKETING
During the Track Record Period, we primarily focused our marketing and sales efforts on
our hydrogen fuel cell systems and components. As of the Latest Practicable Date, we had a
sales and marketing team of 90 employees, focusing on (i) business development in relation to
the application of hydrogen energy technology in various scenarios, including commercial
vehicles, power generation stations and construction machinery, (ii) cooperation within the
industry value chain, as well as (iii) after-sales services. We maintain respective sales and
marketing teams responsible for our sales efforts in different areas nationwide in accordance
with our sales strategy. Our sales and marketing staff analyze the dynamics of existing
customers and trends in key markets to determine where opportunities exist, and our regional
sales and marketing teams implement strategies within their respective regions.
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Our sales and marketing staff regularly contact our existing and potential customers about
our current offerings and development plans. They actively collect customer feedback on our
products and offer assistance in addressing their needs regarding product designs and other
aspects. Besides maintaining frequent communication with our existing customers, our sales
and marketing staff also seek to expand our customer base through presenting our strengths and
showcasing our products and services to their own existing contacts and potential customers.
In 2021, 2022, 2023 and May 31, 2024, our selling and marketing expenses were RMB90.5
million, RMB102.8 million, RMB134.8 million and RMB43.1 million, respectively,
accounting for 17.3%, 17.0%, 15.1% and 344.0%, respectively, of our revenue during the same
periods.
In terms of customer management, our customer management team directly reaches out
to our key customers by way of site visits or call communications on a regular basis to better
understand their demands and promote our products. We also actively participate in industry
conferences to track the market dynamics, explore market opportunities, enhance our brand
recognition and obtain more orders.
BUSINESS SUSTAINABILITY
We were established in 2015. Since our inception, we have achieved growth. During the
Track Record Period, our total revenue amounted to RMB524.1 million, RMB604.6 million,
RMB895.3 million and RMB12.5 million for 2021, 2022, 2023 and the five months ended
May 31, 2024.
We have recorded gross profit in 2021, 2022 and 2023, which amounted to RMB61.8
million, RMB49.8 million and RMB179.6 million, respectively, and gross loss of RMB24.2
million for the five months ended May 31, 2024. The decrease in gross profit from 2021 to
2022 was mainly due to the increased impairment losses on inventories as a result of the rapid
product iterations toward high-output fuel cell systems and the decline in market prices. Other
than impairment losses on inventories, our cost of sales of goods and services as a percentage
of our total revenue maintained a downward trend, decreasing from 79.1% in 2021 to 78.2%
in 2022, and further to 76.4% in 2023. In 2023, our gross profit surged significantly to
RMB179.6 million, mainly the sales growth of our hydrogen fuel cell systems. Meanwhile, the
gross profit margin of our hydrogen fuel cell systems increased from 21.6% in 2021 to 23.2%
in 2022 and further rose significantly to 28.0% in 2023, reflecting our efforts in cost control.
We recorded gross loss with a negative margin for the five months ended May 31, 2024, mainly
due to attributable to the gross loss from sales of fuel cell systems and components. This was
further because our revenue was relatively small in the first five months of 2024 due to the
seasonality and fluctuations in our customers’ demands for application of fuel cell systems and
components, which were in relation to their vehicle production schedules, while costs of sales
such as employee benefit expense and depreciation and amortization did not decline
significantly during the same period, resulting in a gross loss. For further information, see
“Financial Information — Results of Operations — Gross Profit and Gross Profit Margin” in
this prospectus.
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Cost control and reduction is crucial for the overall development of hydrogen fuel cell
industry, especially in the transition period from policy-driven to market-driven. According to
Frost & Sullivan, fuel cell stack is the key component of the hydrogen fuel cell system, which
in general accounts for around 63.0% of the total cost of a fuel cell system. Within a fuel cell
stack, MEA and bipolar plate are important, which in general account for around 61.8% and
27.5% of the cost of a fuel cell stack. Attributable to our continuous research and development
efforts and product iteration, outrunning other market players in the hydrogen fuel cell
industry, rather than relying on third party suppliers, we have achieved self-development and
production of fuel cell stacks, MEAs, and bipolar plates. We started to produce our proprietary
fuel cell stacks in 2020, our proprietary MEAs in 2021, our proprietary graphite bipolar plates
in 2023. The self-development and production of key components of fuel cell systems help us
drive down costs.
We have collaboration with internationally renowned component suppliers and
commercial vehicle manufacturers, so as to further develop new products. We also expand our
product application from commercial vehicles to diversified markets, such as power generation
stations, construction machinery, rail transportation, and other new application scenarios. In
addition to our vertical growth, we are also expanding our presence horizontally from hydrogen
fuel cell to hydrogen production, where we have self-developed PEM water electrolysis
hydrogen production system, and related components, and started to generate revenue in such
business segment in 2023.
Despite our continued growth in business, we are not yet profitable. We have incurred net
losses during the Track Record Period. In 2021, 2022, 2023 and the five months ended May 31,
2024, we recorded net losses of RMB654.3 million, RMB546.1 million, RMB577.5 million and
RMB409.4 million, respectively. Our net loss position was primarily because we are vigorously
expanding our product portfolio, and exploring upstream and downstream network and
collaborations in order to achieve the synergies among “electricity-hydrogen-electricity” in our
business model, and thus incur significant amount of research and development expenses,
selling and marketing expenses, as well as various other operating expenses.
Considering that hydrogen industry is still in its early developing stage, and is gradually
shifting from policy-driven to market-driven, to pave the way for a long-term success in such
new and fast-growing market, we believe it is more important to focus on building and
developing our research and development and production capacity, rather than seeking
immediate financial returns or profitability, so as to lay a solid foundation for future growth
as the hydrogen industry continues to mature. In the medium term, we aim to maintain
sustainability and achieve profitability through: (i) business expansion and revenue growth; (ii)
ability to manage costs and enhance operating leverage; and (iii) improving cash flow and
ability to raise funds. With our improved profitability, we also expect our cash flow to improve
concurrently.
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Business Expansion and Revenue Growth
Favorable Policies in Hydrogen Industry
We are operating in one of the fastest-growing industries in China with strong government
support. The PRC government has been announcing various favorable policies to develop the
hydrogen industry. In particular, in December 2023, the NDRC released the Catalogue for the
Guidance of Industrial Structure Adjustment (2024) (ኬͦ፽(2024 ϋ͉)‘),
in which hydrogen related industries, such as, hydrogen fuel cell systems, hydrogen
production, are encouraged. In June 2023, the National Energy Administration released the
Blue Book on the Development of New Power Systems (‘),
promotes the low-carbon development of energy used in various industries by 2030, the
transfer of industries from the eastern to central and western regions, and the increase in the
proportion of non-fossil energy consumption to 25 percent. In March 2022, the NDRC issued
the Medium- and Long-term Development Plan for Hydrogen Industry (2021–2035) ( ૫ঐପ
ಂ஝ྌ(2021–2035 ϋ)‘), proposing to (i) promote the diversified hydrogen energy
applications including fuel cell systems; (ii) improve the core technologies of fuel cell systems;
(iii) accelerate the construction of hydrogen energy infrastructure; and (iv) support enterprises
with strong R&D capabilities. It is anticipated that by 2035, a comprehensive hydrogen energy
industry will be established, creating a diverse ecosystem of hydrogen energy applications
covering sectors, such as transportation, energy storage, and more. It is also anticipated that by
2025, the total number of FCEVs will be around 50,000 units, with the support of enhanced and
more comprehensive infrastructures for FCEVs, such as hydrogen refueling stations,
representing a huge increase from around 18,000 units in 2023. The annual production volume
of hydrogen from renewable energies will be in the range of 100,000 to 200,000 tons. For more
information, see “Regulatory Overview — Regulations Relating to Our Industry and Products”
in this prospectus. For the year ended December 31, 2023, the annual production volume of
hydrogen from renewable energies was approximately 80,000 tons. As of September 30, 2024,
there were around 22,500 units of FCEVs. As of October 31, 2024, there were 435 units of
hydrogen refueling stations.
Many local governments in China have also proposed specific plan and target supporting
the development of hydrogen industry and fuel cells systems. For example, in July 2021, Hebei
Province issued the Development Plan of Hydrogen Energy Industry in Hebei Province for the
“14th Five Year Plan” Period (˜ɤ̬ʞ™஝ྌ‘), proposing that a
total of 100 hydrogen refueling stations will be built and the number of fuel cell vehicles in
Hebei province will reach 10,000 by 2025. In February 2021, Shanghai issued the
Implementation Plan for Accelerating the Development of New Energy Vehicle Industry in
Shanghai for 2021–2025 (ྌ(2021–2025 ϋ)‘),
proposing to achieve goals including construction and operation of over 70 hydrogen refueling
stations and promotion of nearly 10,000 fuel cell vehicles in Shanghai by 2025.
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In addition, various cities in China are encouraging commercial use of FCEVs, such as
“Hydrogen Highway ( ૫ঐʮ༩)” initiative in Shandong, Zhejiang and other provinces, which
projects aim to establish a network of hydrogen refuelling stations and promote the use of
commercial FCEVs, such as hydrogen-powered heavy-duty trucks, as a part of China’s broader
efforts to promote sustainable and green transportation solutions. For instance, in April 2024,
Sinopec’s hydrogen-powered heavy-duty trucks successfully completed a 1,500-kilometer test
run. The FCEVs used in this test run were two 49T hydrogen-powered heavy-duty trucks that
are equipped with 180kW fuel cell systems produced by us, providing an endurance mileage
of 600 kilometers. To enable long-distance and inter-regional transportation, attributable to
Sinopec’s traditional gas station network, it has established hydrogen refueling network along
the Beijing-Tianjin, Chengdu-Chongqing, Shanghai-Ningbo, Jinan-Qingdao, and Hankou-
Yichang expressways, with the longest distance being approximately 350 kilometers.
Some non-demonstration cities announce preferential policies to encourage the use of
FCEVs in local areas. For instance, local government in Shandong Province released notice to
start a trial period of two years to exempt FCEVs with ETC kit from highway tolls in March
2024 to promote long-term transportation of FCEV; local government in Sichuan Province
released notice to exempt registered FCEV with ETC kit from selected highway tolls in April
2024 for similar purpose; local government in Jilin Province released notice to start a trial
period of two years to exempt FCEVs with ETC kit from highway tolls in Jilin Province in
August 2024. There are also similar policies in other provinces, such as Shaanxi Province,
Lvliang City, Shanxi Province, and Ordos, Inner Mongolia. According to Frost & Sullivan,
assuming that the fuel cell heavy-duty trucks with ETC kit transport within the areas with such
exemption of highway tolls, such policies are expected to reduce total cost of ownership of the
fuel cell heavy-duty trucks by around 10% to 15%. In response to such policies, the number
of hydrogen refuelling stations and related infrastructure are expected to witness a huge
growth, which in turn will drive the adoption of fuel cell heavy-duty trucks and hydrogen fuel
cell systems. Furthermore, in 2023, the first domestically developed hydrogen-powered urban
rail train in China successfully completed a full-load running test in Changchun. This milestone
signifies a new breakthrough in the application of hydrogen fuel cell system in rail
transportation and demonstrating China’s goal of promoting diversified application of
hydrogen fuel cell systems, especially in heavy-duty logistics. The favourable policies will
further drive growth in hydrogen industry.
According to Frost & Sullivan, China’s hydrogen consumption measured by volume is
expected to increase from 36.6 million tons in 2023 to 52.8 million tons in 2028. In particular,
the consumption of China’s low carbon hydrogen measured by volume is expected to increase
from 2.9 million tons in 2023 to 13.5 million tons in 2028, with a CAGR of 36.0%. China’s
hydrogen fuel cell industry measured by sales value is expected to increase from RMB3,930
million in 2023 to RMB49,820 million in 2028, with a CAGR of 66.2%. China’s electrolyser
industry measured by shipment value is expected to increase from RMB1.9 billion in 2023 to
RMB64.1 billion in 2028, with a CAGR of 102.1%. For more information, see “Industry
Overview” in this prospectus.
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Business Development
We are a leading hydrogen technology company in China. As we continue to make
technological advancements, iterate our products, and enhance our market awareness, we have
been dedicated to expanding the application of our fuel cell systems beyond vehicles, venturing
into non-vehicle scenarios; expanding geographically into new non-demonstration cities in
China, and exploring opportunities in international markets. Leveraging our strong network in
hydrogen industry, apart from hydrogen fuel cell industry, we also gradually expands into
hydrogen production industry. This strategic positioning in hydrogen fuel cell industry and
hydrogen production industry enables us to establish a comprehensive
“electricity-hydrogen-electricity” business model. In the future, we plan to further expand our
business development in these five aspects through the following:
 Expanding application scenarios : In addition to commercial vehicles, we will also
expand our presence in vehicle applications such as special-purpose vehicles, and
passenger cars; and non-vehicle applications, such as railways, vessels, airplanes,
and power generation applications. To achieve this goal, we have been focusing on
continuous product iteration. For instance, we continue to optimize the Prisma
Series. The production costs for the new model of Prisma Series in 2024 has reduced
by approximately 10% compared to the ones with the same rated power in 2023.
Additionally, the new model of Prisma Series in 2025 will incorporate a new
generation of CCM, which has improved performance by around 23% compared to
the current CCM. This improvement can help reduce CCM used in hydrogen fuel
cell systems for achieving the same rated power, and in turn help reduce production
costs by approximately 20% or more compared to the ones with the same rated
power in 2023. The new series products are also designed to be highly adaptable to
harsh environments, complex working conditions, and heavy loads. This
adaptability makes them suitable for long-term transportation of heavy-duty trucks
on high-latitude highways and compatible with new scenarios.
We also plan to conduct pilot projects with industry stakeholders in such industries,
to showcase the practicality and benefits of hydrogen fuel cell systems. For instance,
we will participate in a research and development project with the 712th Institute of
China Shipbuilding Corporation (הfor the
development of fuel cell vessels. Additionally, we have formed a strategic
collaboration with Zhongqing (Hunan) Rail Transportation Co., Ltd. ( ʕ૫(ی)ࠐ
ʮ̡). Leveraging the respective technological strengths in hydrogen
fuel cell systems, and rail transportation, we aim to provide technical services,
prototype experiments, and customized production for CRRC Corporation Limited
(ʮ̡) for the development of fuel cell locomotives. We will
jointly develop a prototype of a fuel cell trainer aircraft with Jiangxi Hongdu
Aviation Industry Group Ltd. (ப΂ʮ̡). Successful
demonstrations can help build confidence in potential customers and encourage
wider adoption. In 2024, we jointly developed a 1.5 MW trailer-mounted hydrogen
power station with Gemstone Electrical Equipment Co., Ltd. (ப
΂ʮ̡), which is the largest integrated trailer-mounted fuel cell cogenerator in
China.
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 Expanding geographical presence : In observing that the hydrogen fuel cell industry
in China is currently in a transitioning period from a policy-driven industry to a
market-driven one, building upon the existing track record in demonstration city
clusters, we have successfully penetrated into various non-demonstration cities.
During the Track Record Period, our revenue of fuel cell systems from non-
demonstration cities in China increased from RMB89.7 million in 2021 to
RMB110.8 million in 2022, and further increased to RMB213.3 million in 2023. In
near future, we plan to expand into new non-demonstration cities, where hydrogen
fuel cells offer comparative advantages over other power sources, such as in
Qingdao, Ningbo, Chongqing, Wuhan, Jiyuan, Linfen, Jinan, and Hohhot. These
target markets share similarities with other non-demonstration cities where we have
already established proven track record. These markets possess unique geographic,
industrial, and/or market characteristics that promote the utilization of hydrogen
energy. These characteristics include but not limited to, strong hydrogen supply with
competitive prices, abundant industrial materials that require heavy-duty logistics,
and supportive local policies encouraging the adoption of FCEVs to reduce carbon
emissions in public transportation.
For instance, in April 2024, Yutong Group delivered and put into operation 50
hydrogen-powered heavy-duty trucks powered by our hydrogen fuel cell systems
that were customized for Henan Jinma Energy Co., Ltd. (ʮ
̡) (“Jinma”). Such trucks are specifically designed for transporting raw coal
between Jiyuan, Henan and Linfen, Shanxi. Utilizing low-price by-product
hydrogen produced in local industrial operations, such as coke, steel, and chlor-
alkalic production, the operating cost of a hydrogen fuel cell heavy-duty truck is
lower than the corresponding operating cost of a diesel-fueled heavy-duty truck,
which makes it a commercially viable scenario for hydrogen fuel cell systems in
non-demonstration cities without reliance on subsidies. In expecting a huge and
rapid market growth of hydrogen fuel cell industry in such demonstration cities,
leveraging and through our existing strategic alliance with fuel cell vehicle
manufacturers, we will actively seeks business opportunities with other companies
with bulk material transportation needs in local areas or within close regions, similar
to Jinma.
 Accelerating global expansion : We have obtained multiple international
certifications, evidencing that our products have reached international standards.
Also, we have collaborated with international commercial vehicle manufacturers
and suppliers in the development of fuel cell vehicles and components. We believe
that our presence in international market will enable us to take advantage of the
development of global hydrogen fuel cell industry.
During the Track Record Period, the revenue derived from overseas countries and
regions increased from RMB5.5 million in 2021, to RMB8.6 million in 2022, and
further increased to RMB23.2 million in 2023. In April 2024, we entered into sales
contract with certain customer in Korea, achieving our first overseas bulk sale, with
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contract price exceeding RMB30.0 million. In near future, we will further
collaborate with internationally renowned automotive manufacturers in the research
and development of hydrogen fuel cell vehicles. Through providing engineering and
technical services, we aim to enhance our international reputation and establish a
solid foundation for future large-scale commercialization efforts abroad. For
instance, we have provided engineering and technical services, including fuel cell
system integration, system ECU development, system performance testing and
evaluation, for the Haima 7X-H hydrogen fuel cell MPV jointly developed by
Toyota and Haima. Haima 7X-H hydrogen fuel cell MPV served as the shuttle for
the Bo’ao Forum for Asia Annual Conference in 2024, received positive feedback
from conference attendees. Through similar project collaboration and engineering
and technical support, we will strengthen partnerships with international automotive
manufacturers, such as Toyota, Schaeffler, and Daimler. We will continue to provide
high-quality engineering and technical services, enhance international cooperation,
and improve our competitiveness and reputation in overseas markets. In addition, we
will participate in international expos, such as FC Expo in Tokyo, Japan, which
attract a diverse range of industry professionals, potential customers around the
world, by showcasing our fuel cell systems, solutions and technologies, we can
significantly increase our visibility and brand recognition in the global market, as
well as establish connections with key stakeholders in the global fuel cell industry.
 Further development of hydrogen production products : We have gradually
expanded into hydrogen production industry. Such expansion is not only built upon
our mature network in the hydrogen industry and solid collaborations with other
relevant stakeholders in hydrogen market, but more importantly, built upon our
existing technologies and know-hows in MEAs. PEM fuel cell systems and PEM
water electrolysis hydrogen production systems have a reciprocal relationship in
terms of chemical reactions. As we have core technologies in developing and
producing MEAs, our research and development capabilities and technological
foundation provide a solid basis for the development of hydrogen production
systems, which provide robust support for development of hydrogen production
systems.
As we gradually extend our business to the supply side of hydrogen by providing
hydrogen production systems, we can satisfy the full-service needs of our customers
in hydrogen industry, especially conglomerates that seek comprehensive solutions
for hydrogen generation and application. Our extensive product portfolio can also
increase the client adherence and loyalty, and cross-sell our products. We aim to
build production capacity for hydrogen production products in the near future, and
produce hydrogen production systems and related key components.
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We have developed PEM water electrolysis hydrogen production systems, PEM
water electrolysis cells, PEM hydrogen production MEAs, hydrogen production
power sources, and electrodes for ALK electrolysis, all of which are well-received
by the market and is under continuous iteration strategy that designed to keep
enhancing their competitiveness. As of September 30, 2023, revenue derived from
this business segment amounted to RMB0.4 million. However, as of December 31,
2023, the revenue derived from this business segment had significantly increased
notably to RMB7.7 million despite that we are still in the early-stage
commercialization of hydrogen production products. As a front runner in developing
PEM and ALK electrolysis products, we anticipate a continuous increase the sales
of our hydrogen production systems and components.
By 2027, we plan to launch: (i) standardized industrial PEM hydrogen production
system that is capable of producing hydrogen for long period with remote control,
that facilitates mass production and scalable management; (ii) integrated hydrogen
production and refuelling solution, for one-stop hydrogen production, storage, and
refuelling. Such solution helps provide on-site hydrogen for hydrogen refueling
stations, saving transportation costs for out-sourced hydrogen; and (iii) compact
hydrogen production and refuelling unit, which is primarily developed as a
standardized solution to meet the hydrogen refuelling needs of non-road vehicles. It
integrates all necessary modules, including hydrogen production, storage, and
refuelling, into a single and small device, that help fulfilling hydrogen demands of
logistics parks, airports, hydrogen-powered forklifts, special-purpose vehicles, and
other non-road transportation vehicles.
In regions with abundant renewable energy resources, we plan to actively participate
in low-carbon hydrogen production projects by utilizing renewable energy
electricity. Such hydrogen, as a form of green energy, will be used as industrial raw
material to produce green ammonia and green methyl alcohol, reducing reliance on
traditional fossil energy sources and lowering greenhouse gas emissions. For
example, in the project of integrating green hydrogen production, storage,
transportation and application with annual output of 100,000 tons hydrogen in
Taiyang Mountain, Ningxia (“˄ජʆϋପ10ຬኚၠ૫ႡᎷ፩͜ɓ᜗ʷͪᇍධ
ͦ”), green hydrogen produced with our PEM and ALK water electrolysis products
will be used to produce green ammonia and green methyl alcohol locally.
 Enhancing marketing efforts : We plan to attend or hold more industrial forums,
events and activities so as to increase adherence of existing customers and gain new
customers. We intend to offer attractive performance-based compensation schemes
to incentivize marketing team to enhance their efforts and achieve our marketing
goal. In addition, we plan to actively promote the application of our products by (i)
assisting commercial vehicle manufacturers in their research and development and
testing of fuel cell vehicle prototypes; and (ii) leveraging the various local
supportive policies for the hydrogen fuel cell industry to enter different markets and
expand our sales channels.
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Management of Cost and Enhancement of Operational Leverage
Cost of Sales
In 2021, 2022, 2023 and the five months ended May 31, 2024, our cost of sales accounted
for 88.2%, 91.8%, 79.9% and 293.3% of our total revenue. The cost of sales as percentage of
total revenue increased in 2022, mainly due to an increase in impairment losses on inventories
as a result of the rapid product iterations toward high-output fuel cell systems and the decline
in market prices. Other than the impairment losses on inventories, our cost of sales of goods
and services as a percentage of total revenue declined from 79.1% in 2021 to 78.2% in 2022,
and further to 76.4% in 2023, reflecting our successful efforts in cost control. The cost of sales
as percentage of total revenue increased in the five months ended May 31, 2024, mainly due
to the fact that the lower sales volume of fuel cell systems and components during this period
led to a decease in costs of raw materials, while other costs like employee benefits,
depreciation, and amortization did not decline proportionately.
During the Track Record Period, the major component of our cost of sales was cost of raw
materials. In order to reduce raw material costs, we have enhanced our R&D capability and
strengthen our supply chain. In particular, we have made remarkable progress in developing
and producing key components of fuel cell systems, independent R&D of MEAs, bipolar
plates, and hydrogen production systems in the hydrogen fuel cell system industry in China.
Meanwhile, we intensified domestic raw material procurement, establishing stable partnerships
with reliable domestic suppliers. This allowed us to maintain supply of raw materials at
competitive prices and ensure our ability to manufacture and deliver high-quality products
promptly according to customer demand. Additionally, we actively promoted technological
advancements and updates to our products, further contributing to the reduction of our cost of
sales. As a result, during the Track Record Period, the average cost of sales per kW of our fuel
cell systems decreased from RMB3,070.1 in 2021 to RMB2,448.7 in 2022, and further to
RMB1,893.8 in 2023.
Looking ahead, we plan to further enhance the degree of self-development and production
of key components. Also, we will increase the procurement of domestically sourced raw
materials. These measures, combined with the continued evolvement of industry, technology
advancement, and the gradual maturity of the domestic fuel cell raw material supply system,
are expected to help us lower average cost of sales and optimize our gross profit margin further.
Specifically, we plan to carry out the following measures:
 In-house Development: Over the past eight years, we achieved significant
breakthroughs in the field of hydrogen fuel cell systems, conducting independent
R&D of crucial components to lower prices. We have independently developed and
realized mass-production of hydrogen fuel cell systems, fuel cell stacks, MEAs, and
bipolar plates, which contributed to cost reductions. For example, during the
transition from Electra 1.5 to Sirius 1.0, we achieved a cost reduction by
implementing in-house production of bipolar plates, reducing catalyst loading, and
increasing the single-cell reaction area as well as localization of certain structural
components of fuel cell stacks. Going forward, we will leverage technology
advancements and optimize our production processes to enhance yield, cycle time
and labor efficiency for the components we produce in-house.
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 Supply Management: We plan to increase the utilization of domestically sourced raw
materials, and collaborate with suppliers capable of delivering quality products at
competitive prices. We expect this strategy to further enhance the diversification and
localization of our supply chain for major materials in the fuel cell stack, such as
carbon paper and catalysts, leading to their cost reductions. We also anticipate a
further decrease in purchase cost from domestic suppliers, driven by advancements
in their technologies, increased production resulting from industry development, and
their own domestic procurement of raw materials. Additionally, we aim to optimize
production plans and manage inventory more efficiently through collaboration with
domestic suppliers, to improve production efficiency while reducing costs. As our
business scales, our purchases from suppliers will increase and we expect to
negotiate with suppliers to secure more favorable prices under similar quality and
conditions.
 Product Iteration and Upgrades: We have achieved cost reduction through annual
product iterations and upgrades, and we will continue to pursue further cost
reduction through ongoing product improvements. These iterations and upgrades
encompass various approaches, including but not limited to the following:
(a) Application of new technologies to enhance performance or increase
integration, resulting in cost reduction. For example, in the Prisma 18 product,
the introduction of a cathode technology enables energy recovery, reducing the
demand for stack power and thus achieving a cost reduction. Another example
is the adoption of a multi-in-one discrete SiC power control module in the
Prisma 8, Prisma 18, and Prisma 12+ products launched in 2023, which
integrates multiple components and reduces parts count, lowering the overall
cost of power electronic components.
(b) Streamlining system architecture by reducing the number of components to
achieve cost reduction. For instance, as part of our upgrade from the E Series
to the S Series, we eliminated the heaters and pressure relief valves in our fuel
cell systems. Additionally, we replaced controllers with integrated power
electronics converters in air circulation and hydrogen circulation systems,
resulting in an approximately 29% reduction in relevant costs. We also
optimized wiring harnesses and structural components, achieving an
approximately 14% decrease in related costs.
(c) Process improvements, including introducing new manufacturing processes
and improving material utilization. For example, we transitioned from sealing
on bipolar plates to injection molding sealing on membrane electrode frame,
realized in-house production of certain structural components of fuel cell
stacks, automated processes for membrane electrodes and bipolar plates. These
measures have enhanced process yield and utilization of core materials,
resulting in a overall cost reduction.
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 Optimization of Manufacturing Process and Costs: We plan to optimize production
processes, upgrade facilities and equipment, and utilize more automated production
to enhance production efficiency. For instance, we recently invested in new EGP
bipolar plate automated surface treatment equipment, successfully implementing it
in mass production. This equipment reduces the personnel requirement from 5.5
people per shift to 2.5 people, achieving a 55% reduction in the relevant workforce.
Additionally, we have made advancements in the production process by adopting a
design of an injection molding mold with two identical cavities for edge sealing.
This mold design increases the relevant production capacity from 190 units per shift
to 360 units per shift, resulting in a 79% increase in capacity. Furthermore, we are
developing automatic cutting equipment for CCM, aiming to lower the relevant
personnel requirement by 67% from three people per shift to just one.
In particular, we have developed specific strategies to reduce costs in key production
steps and major materials. Examples include:
 For MEAs, our cost reduction efforts focus on four aspects. (i) We actively develop
new domestic suppliers for key materials such as carbon paper and catalysts. By
localizing the supply chain, we aim to reduce costs associated with transportation
and importation. (ii) We are dedicated to optimizing the design and technology of
MEAs to enhance the overall performance and reduce costs. This includes the
development of high-performance catalysts, reducing the catalyst loading, and
customizing the micro-porous layers in carbon paper. (iii) We are streamlining the
manufacturing processes involved in MEA production. By optimizing the pulp
preparation and automating the cutting of CCMs, we aim to minimize material
waste, improve material utilization, and increase overall production efficiency. (iv)
One of the most commonly used precious metals in fuel cell catalysts is the platinum
group metal. We collaborate with our partner to recover and refine platinum group
metals from MEAs, waste materials in fuel cell stack manufacturing, and end-of-life
hydrogen fuel cells. The recovered precious metals contribute to cost savings in fuel
cell stack production, while ensuring a reliable supply of platinum group metals.
 In terms of bipolar plates, our cost reduction efforts primarily revolve around three
areas. (i) We are actively developing new domestic suppliers for materials such as
resin and adhesive bonding. By localizing the supply chain, we can reduce costs
associated with imports and potentially negotiate more favorable pricing terms. (ii)
We are committed to optimizing the design and technology of bipolar plates. This
includes increasing the reaction surface area of individual fuel cells and optimizing
the design for flow field of bipolar plates to lower costs. (iii) We also implement
automation of surface treatment and adhesive dispensing, and optimize mold usage
during the manufacturing process, to improve efficiency and reduce manual labor
requirements.
 In terms of the production of fuel cell stacks, our cost reduction strategies
encompass four major aspects. (i) We prioritize domestic sourcing for hardware and
sealing materials. By working with local suppliers, we can reduce costs associated
with international procurement and potentially take advantage of cost advantages
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offered by domestic markets. (ii) We focus on optimizing the design and technology
of fuel cell stacks. This includes refining the sealing design, transitioning from
bipolar plate sealing to membrane electrode frame sealing, and other improvements
to enhance overall yield and manufacturing efficiency. (iii) We are streamlining the
manufacturing processes involved in fuel cell stack production, with a particular
emphasis on testing. By reducing cycle times and minimizing hydrogen
consumption during testing, we can achieve significant cost savings throughout the
production process.
 In terms of the production of fuel cell systems, our cost reduction strategies center
around three major aspects. (i) We are actively developing components that offer
improved performance while simultaneously reducing costs. For example, we have
adopted cathode expansion technology for energy recovery and low-humidification
techniques to lessen humidification requirements and associated costs. (ii) We are
focused on developing new control models and optimizing control system strategies.
By simplifying the system architecture, increasing component integration, and
reducing the number of parts, we can achieve significant cost reductions. (iii) We
employ platform-based and modular design approaches, establish standardized
component libraries, and promote component sharing. These measures enable us to
streamline procurement processes, leverage economies of scale, and ultimately
achieve cost reductions.
Other Major Operating Expenses
During the Track Record Period, we incurred substantial operating expenses, including
research and development expenses, sales and marketing expenses, and administrative
expenses to support product development, business expansion, and brand awareness
enhancement.
During the period from 2021 to 2023, the proportion of our operating expenses to total
revenue exhibited a decreasing trend. In 2021, 2022 and 2023, our selling and marketing
expenses were RMB90.5 million, RMB102.8 million, and RMB134.8 million, representing
17.3%, 17.0%, and 15.1% of our revenue, respectively. Our administrative expenses were
RMB218.2 million, RMB242.7 million, and RMB339.7 million, representing 41.6%, 40.1%,
and 37.9% of our revenue in 2021, 2022 and 2023, respectively. Our research and development
expenses were RMB230.9 million, RMB198.7 million, and RMB220.9 million, representing
44.1%, 32.9%, and 24.7% of our revenue in 2021, 2022 and 2023, respectively. For the five
months ended May 31, 2024, our selling and marketing expenses, administrative expenses, and
research and development expenses amounted to RMB43.1 million, RMB196.6 million and
RMB90.3 million, respectively, representing 344.0%, 1,570.0% and 721.0% of our total
revenue for the same period. The relatively high proportion of such operating expenses to our
total revenue was mainly due to the relatively low revenue base in the first five months of 2024,
as well as the increase in employee benefit expenses due to granting shares to employees under
our share incentive scheme in January 2024.
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As we continued to invest in business expansion, brand promotion, and marketing
activities, the absolute amounts of our sales and marketing expenses and administrative
expenses experienced an increase. In addition, the share-based payment expenses that we
recorded as a result of the grant of shares under our employee incentive scheme, which
amounted to RMB31.3 million, RMB27.1 million, RMB87.1 million and RMB117.5 million in
2021, 2022, 2023 and the five months ended May 31, 2024, respectively, contributed to the
increase in the absolute amount of our costs and operating expenses, particularly the increase
in the absolute amount of our administrative expenses in 2023.
Moving forward, we do not expect significant growth in operating expenses as we work
to improve the efficiency of our research and development and sales activities, and optimize
our organizational structure as detailed below. Furthermore, as we continue to experience sales
growth and expand our business, we anticipate benefiting from greater economies of scale.
Together with the following measures, these factors are expected to drive a further decrease in
the proportion of operating expenses to our total revenue.
 Selling and Marketing Expenses: Employee benefit expenses, after-sales service
fees, and advertising and promotional expenses are major components of our selling
and marketing expenses during the Track Record Period. With respect to employee
benefit expenses, we have optimized our organizational structure starting from the
end of 2023 to improve overall operational efficiency. In particular, we will control
the number of sales personnel and consider incentivizing them through share-based
payments. Regarding after-sale service fees, we expect to reduce the proportion of
after-sales service fees relative to our revenue, considering factors such as our
ability to control product quality through in-house development and production of
core components, and the continuous improvement of hydrogen infrastructure.
Furthermore, when it comes to advertising and promotional expenses, we intend to
achieve certain reductions in line with our established brand influence and market
recognition. The economies of scale from our business expansion will also enable us
to optimize the efficiency of our selling and marketing expenses.
 Administrative Expenses: Employee benefit expenses, office and traveling
expenses, depreciation and amortization are major components of our administrative
expenses during the Track Record Period. For employee benefit expenses, starting
from the end of 2023, we initiated organizational restructuring to improve overall
operational efficiency. We plan to control the number of administrative personnel
and intend to compensate them through share-based payments. With respect to office
and traveling expenses, we have implemented strict budget control measures to
improve operational efficiency, including measures such as transitioning to lower-
priced property service providers. These measures contribute to reducing
unnecessary expenditures and enhancing our financial performance. Regarding
depreciation and amortization, we do not anticipate a significant increase in
depreciation and amortization expenses as our existing fixed assets for management
purposes are expected to meet future operational requirements.
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 Research and Development Expenses: Employee benefit expenses and raw materials
expenses are significant components of our research and development expenses
during the Track Record Period. With respect to employee benefit expenses, we will
integrate cross-product line research and development teams, combining similar
functions to achieve personnel reuse. Through talent assessment, high-performance
and high-potential individuals will be identified, and redundant staff will be
reduced, while retaining and incentivizing key employees to achieve a healthy
replacement and strengthen the team. Also, leveraging past product deployment
experience, we will focus on product planning and reduce investment in research
and development projects with low returns. In terms of raw materials expenses, we
plan to utilize mass-produced components, and consolidate related development and
verification work to minimize repetitive validation items and prototype quantities,
reducing material expenses and related R&D costs. By implementing these
measures, we aim to achieve cost savings and better cost management while
maintaining the quality and effectiveness of our R&D efforts.
Improving Cash Flow and Ability to Raise Funds
To mitigate the risks associated with net operating cash outflows, we plan to improve our
cash flow situation by enhancing operational capital efficiency. We believe that our working
capital condition will improve, and we have the capability to raise funds when necessary,
considering the following factors:
 Increasing Revenue and Enhancing Operational Leverage: Through measures such
as (i) boosting revenue by improving product performance and expanding product
applications, and (ii) managing cost of sales and increasing operational leverage, we
anticipate improving our net operating cash position.
 Enhancing Collection Efforts: We have and will continue to improve our trade
receivables collection process. We have implemented our sales and collection
policy, which specifies our cash flow and liquidity management policy, as well as
specific measures for collections of receivables. Our financial team regularly
monitors our bank accounts and compiles trade receivables data, while our sales
team maintains close communication with customers regarding outstanding
payments. We will regularly follow up on overdue trade receivables. Additionally,
with ongoing product improvements and increased brand recognition, we plan to
negotiate more favorable credit terms with customers, such as shortening credit
periods, and requiring customers to make a certain proportion of prepayments before
shipment. For further information, see “Financial Information — Discussion of
Certain Selected Items from the Consolidated Statements of Financial Position —
Trade and Bills Receivables and Contract Assets — Recoverability of Trade and
Bills Receivables” in this prospectus.
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 Prudent Credit Assessment: We undertake continuous credit assessments for both
new and existing customers. Before entering into any sales contracts, we assess the
credit quality and associated risks of potential customers, including their business
operations and past financial performance. We collect background information and
establish customer profiles for new clients, evaluating their credit risk as part of our
customer engaging process. For further information, see “Financial Information —
Discussion of Certain Selected Items from the Consolidated Statements of Financial
Position — Trade and Bills Receivables and Contract Assets — Recoverability of
Trade and Bills Receivables” in this prospectus.
 Strengthening Supply Management: As our business scale expands, we expect our
purchases from suppliers to further increase and we plan to negotiate more favorable
terms with suppliers, such as (i) extending payment periods and (ii) negotiating
flexible payment methods, including bills payables and supply chain finance
products, to reduce daily operating cash expenditures. In 2023, the Group has
entered into a supplier finance arrangement with a third-party factoring company in
China in order to extend the payment terms for its purchases from suppliers. The
total credit limit offered by the factoring company is RMB200 million, of which
RMB48.9 million had been utilized as of May 2024.
 Narrowing the Gap Between Trade Receivables and Payables Turnover Days: Given
the prolonged collection period for trade receivables, we face a significant mismatch
between our trade receivables and trade payables turnover days, which poses
liquidity risks as our business expands. In 2021, 2022 and 2023, our trade
receivables turnover days were 909, 1,029 and 866 days, respectively, while trade
and bills payables turnover days were considerably shorter at 501, 435, and 325 days
for the same years. To manage this risk and ensure sustainability, we have
implemented and will continue to implement various cash flow and liquidity
management measures. We established a robust budget management mechanism to
ensure effective financial control. Our annual budget includes a well-defined trade
receivable collection schedule, which is regularly updated. Our finance department
conducts a monthly aging analysis of trade receivables and collaborates with our
sales department to stay informed about any relevant changes. Our sales team
assesses the creditworthiness of customers and maintains ongoing communication to
facilitate timely payments. When selecting customers and projects, we carefully
consider the potential time for collecting trade receivables, and prioritize projects
with shorter payment cycles and stronger customers’ financial capabilities.
Moreover, we seek to source quality raw materials from local suppliers to benefit
from shorter lead times and longer payment terms compared to overseas suppliers.
We will also explore supply chain finance options, such as factoring, to improve our
cash flow. Through these efforts, we have reduced the gap between turnover days of
trade receivables and trade payables in 2023 compared to the data in 2022.
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For further information, see “Risk Factors — We recorded net losses in the past and
had negative cash flows from operating activities, and our trade receivables turnover
days remained at a relatively high level, all of which may continue if we may not
be able to implement our business plans successfully in the future” and “Financial
Information — Discussion of Certain Selected Items from the Consolidated
Statements of Financial Position — Trade and Bills Receivables and Contract Assets
— Measures to Narrow the Gap of Turnover Days of Trade Receivables and Trade
Payables” in this prospectus.
 Effective Inventory Management: We will optimize inventory control to improve
production planning and inventory turnover days. We believe that maintaining
appropriate inventory levels will help us to better plan our raw material purchases
and timely delivery of products without adding pressure on working capital. For
further information, see “Financial Information — Discussion of Certain Selected
Items from the Consolidated Statements of Financial Position — Inventories —
Inventory Management” in this prospectus.
 Available Financial Resources: Going forward, we will finance our working capital
mainly through cash generated from our operations, net proceeds from the Global
Offering, bank and other borrowings, supply chain financing, and/or other equity
financing when necessary. Historically, such sources of financing (other than the net
proceeds from the Global Offering) were available to our Group, and we believe that
such financing continues to be feasible in the future. In particular, we believe private
equity financing remains viable given the growing prominence of the hydrogen
industry and favorable market conditions suggested by recent financing activities, as
well as our strong market position and robust business development. We have
obtained, and believe that we can continue to obtain, borrowings and credit facilities
from banks for our utilization when needed. We have maintained long-standing and
positive relationships with a number of reputable banks. As of September 30, 2024,
we had unutilized banking facilities of RMB348.4 million, which were committed
and unrestricted. These banking facilities have been approved and formally
confirmed by the relevant banks in the associated agreements and/or confirmation
letters. They can only be canceled in rare circumstances, such as bankruptcy or
liquidation, which we consider unlikely to occur. Therefore, our Directors and our
PRC Legal Adviser are of the view that these banking facilities are highly certain.
Additionally, we can utilize supply chain financing, including factoring as discussed
above, to optimize working capital management.
With our aforementioned strategies and plans for (i) business development, (ii) enhanced
cost management and operating leverage, and (iii) improved cash flow positions, and subject
to inherent uncertainties and risks stated below, we believe our business will continue to grow
and we will be able to achieve profitability with cash flows in the short-term future. Our
Directors are of the view that we have sufficient working capital to support our business
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operations up to 2026, even without the net proceeds from the Global Offering, after taking into
account our existing cash and cash equivalents, unutilized banking facilities and our ability to
obtain additional banking facilities, supply chain financing and/or other equity financing when
necessary.
Nonetheless the above, our future profitability is subject to various factors, such as our
ability to develop new products and models, implement business strategies effectively,
continuously grow revenue and profit margin, and expand our customer base in a cost-effective
way, and thus inherent uncertainty exists. The foregoing 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. These forward-looking statements involve
known and unknown risks, uncertainties and other factors, some of which are beyond our
control, which may cause the actual results, performance or achievements to be materially
different from any future results, performance or achievements expressed or implied by the
forward-looking statements.
The relevant risks are set forth in the Risk Factors. See “Risk Factors — Risks Relating
to Our Industry — We are in a new industry where emerging technologies used in fuel cell
systems or hydrogen production system may not be mature. Any major product defects,
malfunctions or negative news concerning the hydrogen industry may damage our reputation
and adversely affect our business, financial condition and results of operations” and “Risk
Factors — Risks Relating to Our Business — We recorded net losses in the past and had
negative cash flows from operating activities, and our trade receivables turnover days remained
at a relatively high level, all of which may continue if we may not be able to implement our
business plans successfully in the future” in this prospectus.
SEASONALITY
During the Track Record Period, we received customer orders, manufactured products and
arranged deliveries to customers throughout the year. As we are subject to the seasonality of
the hydrogen industry, the majority of our production activities generally take place during the
second half of each year. We adopt an “on-demand manufacturing” approach for the batch
production of hydrogen fuel cell systems. Our customers will generally determine how much
supplies they need from us after assessing and determining their product and sales plans, and
then we commence production according to their demands in the second half of the year. As
a result, our production activities are subject to seasonality, which is common in hydrogen
industry, according to Frost & Sullivan. As advised by Frost & Sullivan, the seasonality in
hydrogen fuel cell industry is also influenced by the periodical issuance or updates of related
governmental policies in the hydrogen fuel cell industry and the kick-off of related government
award projects, which generally occurs in the second half of the year. Our main customers, i.e.,
the fuel cell vehicle manufacturers, generally determine and place orders accordingly only after
their assessment of such newly issued or updated award policies. We generally commence
production in the second half of the year after negotiating with our customers regarding the
purchase orders. Therefore, the final production completion and delivery time will usually be
in the second half of the year.
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The following table sets forth the quarterly estimated production capacity, actual
quarterly production volume and the utilization rate of our hydrogen fuel cell systems:
First
Quarter
Second
Quarter
Third
Quarter
Fourth
Quarter
2021
Estimated production capacity (units) /H1118/H1118/H11181,250 1,250 1,250 1,250
Actual production volume (units) /H1118/H1118/H1118/H1118/H1118/H111822 246 215 879
Utilization rate (%) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181.8 19.7 17.2 70.3
2022
Estimated production capacity (units) /H1118/H1118/H11181,250 1,250 1,250 1,250
Actual production volume (units) /H1118/H1118/H1118/H1118/H1118/H111836 61 252 974
Utilization rate (%) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182.9 4.9 20.2 77.9
2023
Estimated production capacity (units) /H1118/H1118/H11181,250 1,250 1,250 1,250
Actual production volume (units) /H1118/H1118/H1118/H1118/H1118/H1118181 303 330 940
Utilization rate (%) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111814.5 24.2 26.4 75.2
2024
Estimated production capacity (units) /H1118/H1118/H11181,250 N/A N/A N/A
Actual production volume (units) /H1118/H1118/H1118/H1118/H1118/H11181 N/A N/A N/A
Utilization rate (%) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– N/A N/A N/A
In line with the seasonality of our products’ demands, most of our revenue was recognized
in the second half of the year, especially in the fourth quarter. In 2021, 2022 and 2023, our
revenue for the second half of the year, especially the fourth quarter, accounted for a majority
of our total revenue in the same year. The following table sets forth our revenue and gross
profit for the sales of goods and services by quarters during the Track Record Period:
First Quarter Second Quarter Third Quarter Fourth Quarter Full Y ear
RMB’000 % RMB’000 % RMB’000 % RMB’000 % RMB’000
2021 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Revenue 6,037 1.2 15,339 2.9 1,756 0.3 500,977 95.6 524,109
Gross
profit 2,294 2.1 3,401 3.1 855 0.8 102,905 94.0 109,456
2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Revenue 18,581 3.1 42,904 7.1 53,950 8.9 489,213 80.9 604,648
Gross
profit 3,145 2.4 5,198 3.9 16,601 12.6 106,992 81.1 131,936
2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Revenue 38,406 4.3 106,007 11.8 75,074 8.4 675,833 75.5 895,278
Gross
profit 1,958 1.0 26,816 12.7 26,722 12.6 155,884 73.7 211,381
2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Revenue 3,876 N/A 8,645 N/A N/A N/A N/A N/A N/A
Gross
profit (8,915) N/A (6,810) N/A N/A N/A N/A N/A N/A
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Revenue in the first and second quarters of 2021 was larger than revenue in the third
quarter of that year, because the revenue of a few orders placed in prior years was recognized
in the first and second quarters of 2021. In addition, some customers in 2021 postponed placing
their orders till the fourth quarter because relevant award policies were issued later in that year,
such as “Policy Regarding the Support for the Development of the Local Fuel Cell Vehicle
Industry” (“ഄ”) issued by authorities of Shanghai
on October 25, 2021.
To cope with the seasonality and the high production demand in the third and fourth
quarter, we generally have control procedures to strengthen the management of production
orders. In particular, our sales and marketing teams regularly provide and update sales and
production forecasts to facilitate us to effectively plan and ensure timely deliveries,
considering our customers’ demands. Once the production planning forecast is updated, we
would share and synchronize a raw material forecast with suppliers. In cases involving longer
delivery time of raw materials, staff responsible for procurement would initiate raw material
stocking requests for long-cycle items according to our internal raw material management
processes to ensure an uninterrupted supply of these raw materials. Meanwhile, the production
plants will appropriately allocate production resources based on the products’ manufacturing
cycle to ensure customers’ seasonal production demands are satisfied. We generally arrange
more shifts for our production in the third and fourth quarter to ensure we have sufficient
manpower. We will also make appropriate equipment investments in advance in accordance
with our analysis for our production capacities, forecasts for volume of orders and customers’
demands. In addition, we expect to further expand our production capability, which would
enable us to ensure product availability, achieve economies of scale, enhance production
efficiency and reduce average production cost to alleviate the effects of seasonality.
The following tables set forth the quarterly estimated production capacity, actual
quarterly production volume and the utilization rate of our fuel cell stacks, MEAs and bipolar
plates:
(1) Fuel Cell Stacks
First
Quarter
Second
Quarter
Third
Quarter
Fourth
Quarter
2021
Estimated production capacity (units) /H1118/H1118/H11181,296 1,296 1,296 1,296
Actual production volume (units) /H1118/H1118/H1118/H1118/H1118/H1118137 226 371 799
Utilization rate (%) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111810.6 17.4 28.6 61.7
2022
Estimated production capacity (units) /H1118/H1118/H11181,296 1,296 1,296 1,296
Actual production volume (units) /H1118/H1118/H1118/H1118/H1118/H111842 202 363 750
Utilization rate (%) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183.2 15.6 28.0 57.9
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First
Quarter
Second
Quarter
Third
Quarter
Fourth
Quarter
2023
Estimated production capacity (units) /H1118/H1118/H11181,296 1,296 1,296 1,296
Actual production volume (units) /H1118/H1118/H1118/H1118/H1118/H1118263 353 625 1,031
Utilization rate (%) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111820.3 27.2 48.2 79.6
2024
Estimated production capacity (units) /H1118/H1118/H1118416* N/A N/A N/A
Actual production volume (units) /H1118/H1118/H1118/H1118/H1118/H1118– N/A N/A N/A
Utilization rate (%) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– N/A N/A N/A
Note:
* Between January 2024 and February 2024, we were relocating the production line of fuel cell stacks
from Shanghai Plant to Changshu Plant, and therefore recorded nil of the estimated production capacity
during such relocation period.
(2) MEAs
First
Quarter
Second
Quarter
Third
Quarter
Fourth
Quarter
2021
Estimated production capacity (units) /H1118/H1118/H1118– – – 86,400
Actual production volume (units) /H1118/H1118/H1118/H1118/H1118/H1118– – – 77,470
Utilization rate (%) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 89.7
2022
Estimated production capacity (units) /H1118/H1118/H111886,400 86,400 129,600 129,600
Actual production volume (units) /H1118/H1118/H1118/H1118/H1118/H111817,282 33,783 74,901 87,234
Utilization rate (%) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111820.0 39.1 57.8 67.3
2023
Estimated production capacity (units) /H1118/H1118/H1118129,600 129,600 280,800 280,800
Actual production volume (units) /H1118/H1118/H1118/H1118/H1118/H111854,014 91,303 159,864 179,687
Utilization rate (%) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111841.7 70.5 56.9 64.0
2024
Estimated production capacity (units) /H1118/H1118/H1118295,200 N/A N/A N/A
Actual production volume (units) /H1118/H1118/H1118/H1118/H1118/H1118– N/A N/A N/A
Utilization rate (%) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– N/A N/A N/A
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(3) Bipolar Plates
First
Quarter
Second
Quarter
Third
Quarter
Fourth
Quarter
2023
Estimated production capacity (units) /H1118/H1118/H1118– – 80,040 130,162
Actual production volume (units) /H1118/H1118/H1118/H1118/H1118/H1118– – 68,295 134,400
Utilization rate (%) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 85.3 96.9
2024
Estimated production capacity (units) /H1118/H1118/H1118104,400 N/A N/A N/A
Actual production volume (units) /H1118/H1118/H1118/H1118/H1118/H111827,508 N/A N/A N/A
Utilization rate (%) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111826.4 N/A N/A N/A
Our self-manufactured hydrogen fuel cell stacks, MEAs and bipolar plates are mostly
incorporated into our hydrogen fuel cell systems sold to customers, rather than direct sales to
customers. Thus, the seasonality of such core components is in line with the seasonality of our
hydrogen fuel cell system demand, where the majority of our production activities generally
take place during the second half of each year after our customers’ assessment and
determination of their product and sales plans and purchase needs. Therefore, we generally
reach peak utilization rate of the production capacity in the fourth quarter of the year for such
core components. However, in 2023, we reached peak utilization of our production capacity of
MEAs in the second quarter of the year because we launched the second production line of
MEAs in Shanghai Plant in July 2023, which expansion doubled our production capacity for
the third and fourth quarters, and in turn lowered the utilization rates such periods,
notwithstanding that the production volumes in the third and fourth quarters were actually
higher than the production volume in the second quarter.
We determine whether to out-source core components based on models we produce. For
our S Series, we use self-developed and produced fuel cell stacks, MEAs and bipolar plates;
for our E Series, we use self-developed and produced fuel cell stacks and MEAs; for our P
Series, we use self-developed and produced fuel cell stacks. While for customized models,
including T series, H series and N series, we use out-sourced fuel cell stacks, MEAs and bipolar
plates as specifically requested by the customers based on their various needs.
COMPETITION
According to Frost & Sullivan, the hydrogen fuel cell industry has been experiencing high
growth in recent years. From 2018 to 2023, sales power output of hydrogen fuel cell systems
in China jumped from 58.6MW to 1,016.5MW, with a CAGR of 76.9%, benefiting from the
rapid growth of sales of fuel cell vehicles in China.
Since 2021, the PRC government has pushed vigorously to establish Fuel cell vehicle
demonstration city clusters and provided awards based on the performance of different
projects. In addition, many cities and local governments nationwide proposed initiatives and
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set targets for fuel cell vehicles and related core technologies. For instance, Beijing has set its
targets of having a total ownership of 10,370 fuel cell vehicles and build 74 hydrogen refueling
stations in Beijing by 2025. Therefore, we expect more players to enter this market and the
competition to become more intense. We believe that the key competitive factors in this market
are technological development, product quality and safety, stable customer and supplier
relationships, and brand reputation.
See “Industry Overview” for more details of the competitive landscape of the industry in
which we operate. For risks relating to our competitiveness in the industry, see “Risk Factors
— Risks Relating to Our Industry — We face intense market competition and the industry may
undergo unforeseen changes under a rapid development. If we fail to compete successfully, our
business and results of operations may be materially and adversely affected” in this prospectus.
INSURANCE
We obtained property insurance for our equipment, machinery and inventories, as well as
marine, air and highway cargo insurance. These insurance policies cover the risk of damage
arising from natural disasters and certain accidents. Most of our insurance policies are subject
to standard deductions, exclusions and limitations. For our employees, we are required by PRC
social insurance laws and regulations to make contributions for social insurance funds for our
employees. We have also purchased employees’ supplementary medical insurance to cover the
employee’s medical expenses in the event of accidental death, accidental disability and
sickness.
In addition, to minimize our business risks during the operations, we have purchased (i)
the employer’s liability insurance to cover our liability for medical expenses and financial
compensation in the event of disability or death caused by an accident arising out of and in the
course of the employee’s employment and in connection with his/her occupation, or disability
or death caused by an occupational disease arising out of and in the course of the employee’s
employment and in connection with his/her occupation; (ii) the public liability insurance to
cover our liability for personal injury or property damage to third parties caused by accidents
arising out of and in the course of our business operation; and (iii) the patent and trademark
insurance cover any investigation fees and legal costs incurred by us arising out of the
infringement or being infringed on trademarks and patents.
We believe that our insurance coverage is in line with industry practice in China,
including with respect to the terms and coverage of the insurance policies. However, there is
no assurance that the insurance policies we maintain are sufficient to cover all of our
operational risks. For more information, see “Risk Factors — Risks Relating to Our Business
— We have limited insurance coverage, and any claims beyond our insurance coverage may
result in us incurring substantial costs” in this prospectus. As advised by our PRC Legal
Adviser, the procurement and maintenance of the insurance is not mandatory under the PRC
law for our business. The Group has not made or been subject to any material insurance claims
during the Track Record Period and up to the Latest Practicable Date.
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INTERNAL CONTROL AND RISK MANAGEMENT
We are dedicated to the establishment and maintenance of a robust risk management and
internal control system. We have adopted and have been continually improving our internal
control mechanisms to ensure the compliance of our business operations. Furthermore, we
conduct periodic review of the implementation of our risk management policies and internal
control measures to ensure their effectiveness and sufficiency. We have been committed to
promoting a compliance culture and will adopt policies and procedures on various compliance
matters, including the Stock Exchange’s requirements on corporate governance and
environmental, social and governance matters.
We are exposed to various risks during our operations. For details, see “Risk Factors” in
this prospectus. In order to address these risks, we have in place a set of internal control and
risk management procedures to address various potential operational, financial, legal and
market risks identified in relation to our operations, including revenue and receivables,
inventory management, procurement and payment, fixed assets management, treasury
management, human resources, financial reporting, tax management and information
technology and other various financial and operational controls and monitoring procedures.
These risk management policies set forth procedures for reporting risks identified in our
operations.
To monitor the continuous implementation of risk management policies and corporate
governance measures after the Global Offering, we have adopted or will continue to adopt,
among other things, the following risk management measures:
 Compliance with the Listing Rules : we adopt various policies to ensure compliance
with the Listing Rules, including aspects related to corporate governance, connected
transactions and information disclosure, such as:
(i) Anti-corruption risk and anti-fraud management : our Office of the Board is
directly responsible for the anti-corruption and anti-fraud risk management.
We have established a whistle-blower inbox encouraging the internal report of
suspicious activities. We have zero-tolerance of corruption and do not accept
employment or promotion of persons responsible for corruption incidents. We
require all suppliers to execute anti-corruption commitments before
engagement;
(ii) Connected transactions management : we have put in place connected
transactions management policies for all of our Directors and employees to
comply with. Trainings will be arranged for all of our Directors, Supervisors
and senior management members so as to discuss and study the relevant
regulatory requirements in relation to our responsibilities and duties under
these policies.
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 Business operations risk management : we have adopted various measures and
procedures regarding each aspect of our business operations, including the
protection of intellectual property, see “— Intellectual Properties” in this section of
the document, information system risk management, and human resources risk
management. We provide periodic training on these measures and procedures to our
employees as part of our employee training program. We also regularly monitor the
implementation of those measures and procedures through our on-site internal
control team for each stage of the produce development process;
 Financial reporting risk management : we have in place a set of accounting policies
in connection with our financial reporting risk management. We have various
procedures in place to implement accounting policies, and our financial department
reviews our management accounts based on such procedures;
 Audit Committee and Board Oversight : to monitor the ongoing implementation of
our risk management policies, we have established an Audit Committee to review
and supervise our financial reporting process and internal control system on an
ongoing basis to ensure that our internal control system is effective in identifying,
managing and mitigating risks involved in our business operations. The Audit
Committee consists of Mr. CHEN Fei (࠭Dr. QIAN Meifen (ځߕand Mr. LI
Wei (ҽਃ), with Mr. CHEN Fei (࠭being the chairperson of the committee. See
“Directors, Supervisors and Senior Management — Board of Directors” in this
prospectus.
Our internal control department is responsible for reviewing the effectiveness of internal
controls and improving our internal control system by identifying its weaknesses on an ongoing
basis. The internal audit department reports any major issues identified to the Audit Committee
and Board of Directors on a timely basis.
We have engaged an Independent Third Party consultant (the “Internal Control
Consultant”) to perform a review over selected areas of the internal controls over financial
reporting (the “Internal Control Review”). The selected areas of our Group’s internal controls
that were reviewed by the Internal Control Consultant included entity level controls and
business process level controls, to identify deficiencies and improvement opportunities,
provide recommendations on remedial actions, and review the implementation status of these
remedial actions.
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Our Internal Control Consultant mainly provided the following recommendations:
(i) improving the construction of corporate governance structure so that it meets the
requirements of the Listing Rules and to employ qualified personnel as the company
secretary;
(ii) establishing systematic risk assessment procedures, risk prevention and control
mechanisms to identify risks that lead to misstatement of financial reports, property
losses and fraud occurrence, and analyze their related impacts;
(iii) establishing a comprehensive legal management system to standardize the daily
legal work and management procedures to ensure the compliance with laws and
regulations;
(iv) developing policies or procedures related to compliance with U.S. OFAC sanctions
including identification of behaviors, prevention and reporting processes, and
recordkeeping;
(v) formulating comprehensive mechanism and policies for the identification and
management of anti-money laundering and other misconduct, regulating the
definition of anti-money laundering and other misconduct, identification and
monitoring, responsibility, investigation procedures, recordkeeping and reporting,
and whistleblower protection measures;
(vi) formalizing conflict of interest system, with clear definitions of conflict of interest,
declaration procedures, and handling methods, and stipulating that employees in
sensitive or important positions are required to periodically confirm that they are
aware of the requirements of the conflict of interest policy and declare that they have
not violated it; and
(vii) strengthening the security control of information technology systems, developing a
mechanism for data backup, server room management and regular review of
information access authority.
In response to the recommendations provided by the Internal Control Consultant, we
enhanced the following internal control measures:
(i) we have formulated the policies and working procedures in respect of corporate
governance, and has engaged a professional institution to provide company
secretarial services;
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(ii) we have formulated and issued the Risk Management Policy (‘),
established risk assessment procedures and management standards for risk
prevention and control mechanisms, and required the systematic identification,
assessment and timely supervision and management of all types of risks that we may
be involved in;
(iii) we have formulated and issued the Legal Affairs Management System (ԫਕ
‘), which specifies the management mechanism on case litigation, review
of legal documents, issuance of legal opinions, training and publicity of legal
knowledge, management of legal information, management of legal risks, periodic
reports on legal affairs and rewards and punishments;
(iv) we have formulated and issued the Management Measures for Compliance with the
U.S. OFAC Sanctions Program (਷OFAC‘), which
regulates the responsibilities and management requirements, including identification
of behaviors, prevention and reporting processes, and recordkeeping, for compliance
with the U.S. OFAC Sanctions Program;
(v) we have formulated and issued the Anti-Bribery Management System ( ˀ༡༤၍
‘), the Anti-Fraud Management System (‘) and the
Anti-Money Laundering Management System (‘), and
established the mechanism for identifying and dealing with misconduct in anti-
bribery, anti-fraud and anti-money laundering;
(vi) we have formulated and issued the Conflict of Interest Declaration System ( лू
‘), which specifies the definition of conflict of interest, the
declaration procedures and the handling methods; and
(vii) we have formulated and issued the IT Operation and Maintenance Management
System ( IT‘), which regulates the procedures for server room
management, server management, data backup and inspection, IT software
management, password management, enterprise ERP application account and
authority management, and information system modification management.
During the Internal Control Review, certain internal control matters were identified and
we have adopted corresponding internal control measures to improve on these matters. We have
adopted the recommendations made by the Internal Control Consultant, and the Internal
Control Consultant has completed a follow-up review on our internal control system with
regard to those actions taken by us and did not have any further recommendation.
CYBERSECURITY AND DATA SECURITY
During the Track Record Period, we primarily focused on the design, development,
manufacture, and sales of hydrogen fuel cell systems, hydrogen production systems, and
related components, as well as providing fuel cell engineering and technical services. To
accommodate our various business scenarios, we utilize different software and systems to
collect and store data. These software programs or systems, though developed by third parties,
are deployed and store data locally.
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We have formulated an Information Security Management System and established
relevant internal organizational structures, such as the Information Security Management
Committee and the Information System Department. We regularly carry out vulnerability
scanning and penetration testing to repair any network security vulnerabilities in a timely
manner. We ensure data security through the use of network security devices and technical
means, such as firewalls, VPNs, and bastion hosts. We retain cybersecurity logs for six months.
We adopt asymmetric transparent encryption and decryption technologies and also classify and
categorize data according to different levels of sensitivity. Our business data is backed up
incrementally on a daily basis, and a full backup is performed weekly. We logically isolate data
in storage according to different business scenarios. To ensure data security during
transmission, we employ secure transmission measures such as VPNs and HTTPS.
Through the installation of a remote communication terminal, known as Telematics Box
(T-Box), in the hydrogen fuel cell system, we collect various parameters related to the
operation of the hydrogen fuel cell during the use of the hydrogen fuel cell-powered vehicle.
These parameters include the voltage and current of the fuel cell, the flow and temperature of
hydrogen/air/coolant, the working status of auxiliary equipment, and etc. This data collection
enables the analysis of the hydrogen fuel cell’s working status, providing support for product
upgrades and optimization. In addition, with the authorization of our end users (vehicle
operators), we collect data such as vehicle mileage, location, and fault information for
after-sale maintenance purposes. Furthermore, only in maintenance scenarios do we collect the
drivers’ mobile phone numbers and the operational vehicles’ license plate numbers through our
customers. The collection of the aforementioned personal information is necessary for us to
provide maintenance services to our customers. Our data processing activities adhere to the
principles of legality and necessity. The purpose of data collection and use, is to analyze
product operation to support product development, upgrading and maintenance services. The
data is not used to identify the owners, drivers, or passengers of the vehicles. The data collected
and used are directly related to our business and do not exceed the scope of necessity.
As of the Latest Practicable Date, none of the data processed by us has been notified or
publicly announced as important data or core data by any relevant departments or regions. As
of the Latest Practicable Date, the responsible authorities had not promulgated any
implementation provisions or identification rules of critical information infrastructure in our
industry and sector, and we had not received any notification from relevant regulatory
authorities regarding our identification as critical information infrastructure operator (“CIIO”).
Therefore, as advised by our PRC Data Compliance Adviser, our Directors are of the view that
the provisions pertaining to CIIO and important data and core data in both the PRC
Cybersecurity Law and PRC Data Security Law are not applicable to the Group.
Based on the foregoing facts and analysis, and as advised by our PRC Data Compliance
Adviser, our Directors are of the view that they do not foresee any material impediments to our
Group’s compliance with the PRC Cybersecurity Law and PRC Data Security Law in all
material aspects, and that the PRC Cybersecurity Law and PRC Data Security Law would not
have any material adverse impact on our Group’s business operations or the proposed Listing.
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PROPERTIES
We are headquartered in Shanghai, China. As of the Latest Practicable Date, most of our
owned or leased properties are located in China. We also leased one property in Vancouver,
Canada as our R&D base, one property in Stuttgart, Germany as our local office, and one
leased property in Hong Kong as our local office.
As of May 31, 2024, none of our property interests had a carrying amount of 15% or more
of our consolidated total assets. According to section 6(2) of the Companies Ordinance
(Exemption of Companies and Prospectuses from Compliance with Provisions) Notice
(Chapter 32L of the Laws of Hong Kong), this prospectus is exempt from the requirements of
section 342(1)(b) of the Companies (Winding up and Miscellaneous Provisions) Ordinance to
include all interests in land or buildings in a valuation report as described under paragraph
34(2) of the Third Schedule to the Companies (Winding up and Miscellaneous Provisions)
Ordinance.
The table below sets forth a summary of our properties related to production and
operation in China as of the Latest Practicable Date:
Property right
Property
number Function
Approximate
Gross Floor area
(sq.m.)
Owned property /H1118/H1118/H1118/H1118/H1118/H11182 For offices, storage,
production, research and
development purposes
14,094.9
Land use rights /H1118/H1118/H1118/H1118/H1118/H11183 For offices, storage,
production, research and
development purposes
95,563.6
Leased property /H1118/H1118/H1118/H1118/H1118/H111827 For offices, storage,
production, research and
development, parking and
staff dormitory purposes
51,008.8
Owned Land and Properties
As of the Latest Practicable Date, we had the right to use three properties with a total
gross land area of approximately 95,563.6 sq.m. located in China. As of the Latest Practicable
Date, our PRC Legal Adviser confirmed that we had obtained all relevant land use rights
certificates of such three properties in China.
As of the Latest Practicable Date, we owned two properties in Changshu, Jiangsu, with
an aggregate area of approximately 14,094.9 sq.m. primarily used for offices, storage,
production, research and development purposes. As of the Latest Practicable Date, our PRC
Legal Adviser confirmed that, we are legally entitled to have ownership of such properties.
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Leased Properties
As of the Latest Practicable Date, we had 27 leased properties in China that are related
to our production and operation with a total area of 51,008.8 sq.m, which were used for offices,
storage, production, research and development, parking and staff dormitory purposes.
As of the Latest Practicable Date, 23 of the above-mentioned leases have not been
registered and filed with the relevant PRC authorities due to the respective landlords’
non-cooperation with respect to related registration procedures. We sought cooperation from
the landlords of the leased properties to register such executed lease agreements. Registration
of lease agreements requires the submission of certain documents of landlords, including their
identity documentation and property ownership certificates, to the relevant authorities and
therefore the registration is subject to cooperation of landlords of which we have limited
control. Our PRC Legal Adviser is of the view that the non-registration and filing of the
relevant property lease will not affect the validity of the lease contracts and the legal use of
the leased properties, but relevant local housing authorities may require us to complete the
filing within the prescribed period and we may be subject to penalties of RMB1,000 to
RMB10,000 for each of such properties if we fail to file within the prescribed period. In the
event that we are required by the competent authorities to register the property lease
agreements, we may be subject to a maximum penalty of around RMB0.2 million for the failure
to register the property lease agreements, which could adversely affect our financial condition
and results of operations. For details, see “Risk Factors — Risks Relating to Our Business —
We are subject to potential adverse consequences due to our lack of valid certificates and
permits in respect of certain properties we leased in China” in this prospectus. In accordance
with the relevant provisions of the Civil Code of PRC, the lack of registration and recording
of the property leases did not affect the validity of such leases, therefore, we did not receive
any rectification order or been subject to any fines in respect of non-registration of any of our
lease as of the Latest Practicable Date. Accordingly, our PRC Legal Adviser and we believe
that the failure to register these lease agreements will not have any material adverse effect on
our operations and financial position. In order to ensure on-going compliance with the PRC law
and regulations relating to the registration of executed lease agreements, we will continue to
seek cooperation from the landlords of the leased properties to register executed lease
agreements with the relevant PRC government authorities as soon as possible. Moving forward,
and as a remedial measure, we will proactively promote the registration of landlords, including
through timely and continuous communication with and supervision over the landlords by our
handling personnel, and strive to require the landlords to complete the registration. In addition,
whether the landlords cooperated in registration will be one of the criteria for future selection
of properties.
As of the Latest Practicable Date, with respect to one of our leased properties, the
landlord was not willing to cooperate and provide us with the title certificate. The reasons that
the landlord failed to provide us with the relevant title certificate are beyond our control. We
have maintained regular and active communications with such landlord regarding the progress
of their rectification of the title defect and we have obtained confirmation from all the relevant
lessor in which they promised to guarantee our use under the lease agreements. In addition, we
have enhanced our internal control procedures to improve our evaluation of the newly leased
buildings from a compliance perspective, and we will make careful inspections of the title of
leased buildings before signing the lease in the future. We will also consult our external legal
adviser with regard to reviewing the title certificates and other documents of our new leased
buildings in order to ensure ongoing compliance with applicable Chinese laws and regulation.
The leased property that has not provided title certificate of leased premise has not been put
into operation and is not main production and operation premises. As such, our PRC Legal
Adviser and our Directors are of the view that such title defect will not result in any material
adverse impact on our production and operation.
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As of the Latest Practicable Date, we had not received any notice from any regulatory
authority with respect to potential administrative penalties, nor have we experienced any
termination or interruption of business operations or major property loss because of the failure
to file the lease agreements described above.
EMPLOYEES
As of the Latest Practicable Date, the majority of our employees were based in China. The
following table sets forth the total number of employees by function as of the Latest Practicable
Date:
Function
Number of
employees % of total
Management and operation /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118121 29.2
Finance /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111815 3.6
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/H111890 21.7
Research and development /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118108 26.1
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/H111880 19.3
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/H1118414 100.0
We have entered into contracts with our employees in accordance with the PRC labor
laws. We believe that we have maintained good working relationships with our employees.
During the Track Record Period and up to the Latest Practicable Date, we did not experience
any major labor disputes, work stoppages or labor strikes or any work safety related incidents
that led to disruptions in our Group’s operations.
We recruit our employees based on the relevant requirements of the position, the
employee’s experience and qualification and the prevailing market conditions. During the
Track Record Period, we did not encounter any strikes, protests or other material labor
conflicts that may materially impair our business and image, and we did not encounter any
major difficulties in recruiting and retaining senior employees.
We believe that our success depends on our employees’ ability to provide continuous,
high-quality and reliable services. We value employee trainings and expect to provide our
employees with industrial knowledge and technical skills through our training programs. For
example, our new employees must attend introductory training courses, and may attend internal
training and seminars from time to time to improve their professional knowledge, skills, and
safety awareness.
We provide employees with basic salary and bonus. We also contribute to mandatory
social security funds (including endowment insurance, work-related injury insurance,
maternity insurance, medical insurance and unemployment insurance) for employees as
required by the PRC laws and regulations.
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ENVIRONMENTAL, SOCIAL AND GOVERNANCE (“ESG”)
We seek to be a responsible corporate in fulfilling environmental, social and governance
responsibilities by advancing the use of clean energy, supporting social causes and exploring
ways to protect the environment.
Identification, Assessment and Management
We are currently in the process of developing and implementing ESG policies under the
oversight of our Board. Our Board is placing an emphasis on and giving significant attention
to the areas of environmental impact management, social responsibilities, and corporate
governance that are significant to our operations. We are dedicated to taking proactive
measures to address associated risks and implement mitigating strategies in the future. Leading
by our Board, we also closely follow the latest legal developments on ESG matters and will
correspondingly update our ESG measures to ensure that we comply with the latest regulatory
requirements. For example, we are aware of the Hong Kong Stock Exchange’s ESG disclosure
requirements, and our Board and our general manager will oversee the compilation of our ESG
report and the Board shall review the content and quality of the ESG reports after we are listed
on the Hong Kong Stock Exchange.
We have identified several KPIs during the business operation to assess and manage our
short, medium and long term ESG-related risks, including:
 Resource consumption, including energy consumption, water consumption,
hydrogen consumption and nitrogen consumption
 Waste management
 Employee health and safety
 Diversity and inclusion
 Corporate governance
 Supply chain related risks
 Human resource risks
 Climate-related risks
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We intend to adopt various strategies and measures to assess and manage the above-
mentioned risks, including but not limited to:
 regularly reviewing and assessing the ESG issues under the oversight of our Board
to ensure that all relevant ESG-related risks are identified on a timely basis;
 discussing with key stakeholders on an ongoing basis on key ESG principles and
practices as well as their concerns and expectations to ensure that the significant
aspects are covered;
 setting targets for each major ESG risks with reference to guidance on ESG released
by the Stock Exchange evaluating the ESG results regularly; and
 reviewing the ESG-related studies in the industry periodically and optimize ESG
measures continuously.
Our Directors believe that under our current business operations, our long term risks
include resource consumption and climate-related risks, our medium term risks include waste
management, diversity and inclusion and supply chain related risks and our short term risks are
mainly employee health and safety, corporate governance and human resources related risks.
Where appropriate, our management are responsible to set targets for those KPIs that are
material to the Group in accordance with the requirements of Appendix C2 to the Listing Rules.
On a regular basis, the relevant targets on material KPIs will be reviewed and monitored to
ensure the appropriateness to the needs of our operation.
As such, we intend to establish and implement the following principal ESG policies and
implement mitigating measures accordingly.
Environmental Protection
With a focus on environmental consciousness, we strive to conserve our environment by
using resources responsibly, reducing waste, and maintaining a neutral carbon footprint. We
commercialize and produce hydrogen fuel cell products which are currently an important way
to reduce carbon emissions in the decarbonizing transportation sector, featuring
environmentally friendly, high energy conversion efficiency and zero emissions. Fuel cell
stacks and hydrogen fuel cell systems reduce the use of petroleum and carbon dioxide
emissions, making an important contribution to the overall green transformation of domestic
economic and social development. As of May 31, 2024, our products helped to reduce carbon
emissions by about 116,851 tons. We aim to continue to bring positive impact on the global
climate by contributing to the development of hydrogen applications.
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We are committed to exploring ways to protect the environment as we continue to grow
our revenue and expand our production facilities. We strive to minimize our environmental
impact through developing and integrating environmentally sustainable practices into our
operations.
Resource Consumption and Waste Management
We strictly monitor our consumption to ensure the efficient use of natural resources such
as energy and water consumption. The following is the metric of our environmental and climate
related indicators in our production process during the Track Record Period.
Y ear ended December 31,
Five
months ended
May 31,
2021 2022 2023 2024
Resource consumption
Energy consumption /H1118/H1118/H1118/H1118/H1118/H1118kWh 7,130,064 7,130,696 9,996,501 3,426,009
Energy consumption
intensity /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
kWh/number
of employee 11,923 11,355 17,979 6,771
Water consumption /H1118/H1118/H1118/H1118/H1118/H1118/H1118m3 14,374 15,522 29,753 9,784
Water consumption
intensity /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
m3/number
of employee 24 25 54 19
Hydrogen
consumption /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118kg 147,606 149,331 192,768 32,464
Hydrogen
consumption density /H1118/H1118/H1118/H1118/H1118
kg/number
of employee 247 238 347 64
Nitrogen consumption /H1118/H1118/H1118/H1118/H1118kg 56,040 87,420 137,464 27,570
Nitrogen consumption density /H1118
kg/number
of employee 94 139 247 54
Pollutant management
Greenhouse gas emission
– scope 1 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118tCO
2e 31.2 17.4 26.2 7.6
– scope 2 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118tCO2e 5,016.0 5,016.4 7,032.5 2,409.6
– scope 3 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118tCO2e 79.8 149.8 391.6 157.7
Hazardous waste /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118tonne 7.5 41.2 37.8 15.4
Waste water /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118tonne – – 2.6 0.9
During the Track Record Period, the Group’s resource consumption primarily consisted
of electricity, water, hydrogen and nitrogen which were in correlation with the Group’s
production and R&D activities. We have closely monitored our consumption of resources. We
assess the power and thermal efficiency, water consumption and gas consumption during the
production process on a monthly basis and review the information against historical data and
design intent to identify deviations and assess potential risks. In addition, we are committed to
environment protection by optimizing our production technology to reduce electric heating and
energy consumption and configuring efficient environmental protection treatment systems to
reduce environmental emissions. When we install new machines or software, we have a team
of technicians and engineers to perform inspection tests and monitor the results. We closely
follow the energy and water control measures implemented by the local governments including
any potential restrictions. As of the Latest Practicable Date, we have not experienced any
significant interruptions due to resource shortage.
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To continuously improve the energy performance and lower carbon footprint, we always
look for possible energy-saving opportunities, especially on choosing environmental friendly
equipment and facilities of the Group. We intend to encourage our staff members to use
electronic records to gradually replace paper-based records. We also plan to transit to green
plants by installing energy-saving lighting systems and appliances in our office building and
production facilities. In the operation of our business, we always recycle product packaging
and reuse the crates to reduce the production of paper shells. Employees are also regularly
reminded to adopt energy efficient measures in the workspace. To enhance the environment
protection and save energy consumption, we have established the energy saving measures,
including (i) lighting should be switched off while employees are off duty; and (ii) employees
are encouraged to switch off all non-essential items during non-office hours, such as computers
and photocopiers.
During the Track Record Period, the pollutants that we discharged primarily consist of
exhaust fumes, solid waste and waste water. The environment, health and safety (“ EHS”)
personnel monitor the emission of exhaust fumes and waste water on a regular basis in
accordance with local government regulations and internal management requirements, to
ensure that all emissions comply with the required standards. The equipment management
personnel formulate the maintenance plan and conduct regular maintenance and overhaul for
the environmental protection equipment to ensure its efficient operation to reduce exhaust
fumes, solid waste and waste water. While waste water is processed by our own wastewater
treatment stations to reach national safety standards for disposal, hazardous waste is collected
and disposed of by qualified waste disposal entities on a regular basis.
With the expansion of our business, we expect our overall resource consumption and
emissions to increase. However, we are committed to improving the environmental
performance of our entire value chain, including office operations, supplier selection, raw
material inflow, manufacturing process and waste management, so as to control the intensity
of resource consumption and waste levels. Based on our historical energy consumption levels
and average of industry peers, we have set the following specific ESG-related targets:
Types Targets
Energy consumption /H1118/H1118/H1118/H1118kWh/number of employee By 2025, plan to reach
18,856
Water consumption /H1118/H1118/H1118/H1118/H1118m3/number of employee By 2025, plan to reach 56
Hydrogen consumption /H1118/H1118Kg/number of employee By 2025, plan to reach 365
Nitrogen consumption /H1118/H1118/H1118Kg/number of employee By 2025, plan to reach 260
Hazardous waste /H1118/H1118/H1118/H1118/H1118/H1118/H1118tonne/number of
employee
By 2025, plan to reach 0.07
Waste water /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118tonne/number of
employee
By 2025, plan to reach 0.005
Greenhouse gas emissions
– Scope 1 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118tCO2e/number of
employee
By 2025, plan to reach 0.05
– Scope 2 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118tCO2e/number of
employee
By 2025, plan to reach 13.3
– Scope 3 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118tCO2e/number of
employee
By 2025, plan to reach 0.74
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We have established internal policies and measures for the targets above, including but
not limited to: (i) posting water-saving and power-saving signs at eye-catching areas in our
offices to enhance our employees’ awareness of environmental protection; (ii) encouraging
double-side printing and electronic reports to promote a paperless office environment; (iii)
using energy-saving air-conditioners and setting lowest indoor temperature in offices in
summer to reduce electricity consumption; (iv) encouraging teleconferences or online meetings
to reduce unnecessary travel for face-to-face meetings; and (v) requiring employees to shut
down the power supply after work and assigning personnel to check manually. We have also
established an EHS committee, responsible for the implementation of ESG policies. The EHS
committee is led by the president of the Group, with heads in each department being members
of EHS committee. The EHS committee shall report to the Board with risk respect to the
implementation periodically. Our Board will review the Group’s performance against the ESG
targets on a regular basis and revise the ESG-related measures as appropriate if significant
deviations from the targets are identified. Our directors are of the view that such measures will
not affect the our operation, either financially or non-financially.
In 2021, 2022, 2023 and the five months ended May 31, 2024, our cost of compliance
with the applicable environmental rules and regulations was approximately RMB0.2 million,
RMB0.5 million, RMB0.9 million and RMB0.6 million, respectively. During the Track Record
Period, as confirmed by our PRC Legal Adviser, we have complied with applicable national
and local environmental protection laws and regulations in all material aspects, and we have
not received any warning or sanctions or fines imposed by the PRC environmental authorities
for incidents of material non-compliance with respect to our production facilities. We expect
that the annual cost of compliance with such rules and regulations will be consistent with our
production expansion and business operations.
Supplier Qualification Requirements
In order to strengthen the environmental management of raw materials, we have taken
certain measures in raw material procurement. We procure raw materials in compliance with
the relevant environmental protection requirements and implement a qualified supplier
assessment and entry mechanism and regularly evaluate our suppliers in terms of compliance
with the relevant safety and environmental control requirements. We conduct due diligence on
our suppliers, including their financial credibility, ISO14001 certification, OHSAS18001
certification, to ensure their supplies quality, timeliness of delivery, responsiveness to our
service requests.
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Social Responsibility
We are subject to the PRC laws and regulations in respect of occupational health and
safety. We are committed to complying with the PRC’s regulatory requirements to prevent and
reduce the hazards and risks associated with our operations, and ensuring the health and safety
of our employees and the surrounding communities. We have adopted and maintained policies
and measures to maintain a safe environment for our employees, including safety incident
management policies, occupational hazard monitoring and management policies.
To ensure the compliance with applicable laws and regulations, we expect to seek
compliance advice and adjust our human resources policies to accommodate significant
changes in the relevant labor and safety laws and regulations from time to time.
We also encourage our employees to be vigilant and responsible for their safety and health
whilst performing their work obligations. We have formulated internal management policies to
identify, assess, classify and control the dangers and risks, including hazardous materials
management policies, fire safety management policies, and electrical safety management
policies. We organize various types of EHS inspections periodically to discover unsafe
behaviors conditions and eliminate relevant risks in a timely manner. We also provide regular
trainings and organize drills to help employees to identify abnormal conditions, increase their
safety awareness and improve their capabilities to handle emergencies. Our operations have not
experienced any material incidents and we maintain insurance plans and proper records for
incidents of work injuries that happened.
Diversity and Inclusion
We are fully aware of the value of a diverse and skilled work team. We are therefore
committed to building and maintaining an inclusive workplace culture so that all employees
can thrive. We are also dedicated to providing equal opportunities in all aspects of employment,
maintaining workplace that is free from discrimination, physical or verbal harassment against
any employee on the basis of external factors including race, religion, color, gender, physical
or mental disability, age, place of origin, marital status and sexual orientation. In addition, we
strictly prohibit any form of sexual harassment or abuse in the workplace.
The following tables set forth our total full-time workforce by gender, age group and
expertise as of December 31, 2021, 2022 and 2023 and May 31, 2024.
As of December 31,
As of
May 31,
Type Breakdown 2021 2022 2023 2024
Gender /H1118/H1118/H1118/H1118/H1118Male 436 462 416 379
Female 162 166 140 127
Age group /H1118/H111835 or below 376 382 323 278
Above 35 222 246 233 228
Expertise /H1118/H1118/H1118With background in
hydrogen industry
334 385 383 352
Without background in
hydrogen industry
264 243 173 154
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Governance
Our Board oversees our ESG practice. The primary responsibility of our Directors is to
collectively identify and assess our ESG related risks and opportunities, review and approve
the ESG policies, set up our annual ESG targets, and evaluate our annual performance against
the targets and revise the ESG strategies as appropriate if significant variance from the target
is identified.
Our Board helps promote a safe and healthy workplace and tackles environmental
challenges. The Board incorporates the requirements of the PRC laws and regulations, such as
incorporating the Production Safety Law and Environmental Protection Law in making annual
action plans for safety, workplace health and environmental protection measures. The Board
also incorporates requirements of the Hong Kong Stock Exchange by assessing current ESG
policies and improving measures taken. For example, the Board assesses and manages
climate-related risks and opportunities and advises us based on relevant results. The Board also
makes and updates employee protocols and regularly organizes internal discussions of issues
found across our Company based on the ESG policies. For example, the Board has established
precautionary measures to classify and manage safety risks identified. Pursuant to the internal
protocols, we would also investigate any violations and take mitigation measures accordingly.
As confirmed by our PRC Legal Adviser, we complied in all material respects with the
applicable environmental laws and regulations during the Track Record Period.
CERTIFICATE, PERMIT AND LICENSE
As advised by our PRC Legal Adviser, during the Track Record Period and up to the
Latest Practicable Date, we had obtained all licenses, permits, approvals and certificates
necessary to conduct our operations in all material respects from the relevant government
authorities in China, and such licenses, permits, approvals and certificates remained in full
effect. We are required to renew such licenses, permits, approvals and certificates from time
to time. As advised by our PRC Legal Adviser, we do not expect any legal obstacles in such
renewals so long as we meet the applicable requirements and conditions set by the relevant
government agencies and adhere to procedures set forth in the relevant laws and regulations.
LEGAL PROCEEDINGS AND COMPLIANCE
During the Track Record Period and up to the Latest Practicable Date, our Directors are
not aware of any litigation, arbitration or administrative proceedings pending or threatened
against the Company or any of our Directors which could have a material adverse effect on our
financial condition or results of operations and we did not experience any material insufficient
contributions to social security insurance or housing provident fund. Potential future litigation
or any other legal or administrative proceeding, regardless of the merit or outcome, is likely
to result in substantial costs, diversion of our resources, and have a negative impact on our
reputation and brand image, which in turn, would have a negative impact on our business,
financial condition, and results of operations. For potential impact of legal or administrative
proceedings on us, see “Risk Factors — Risks Relating to Government Regulations — We may
BUSINESS
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be subject to claims, especially of product liability, disputes, lawsuits and other legal and
administrative proceedings, which may result in significant direct or indirect costs and
adversely affect our results of operations, financial condition and development prospects” in
this prospectus.
Social Insurance and Housing Provident Funds
During the Track Record Period, we failed to make full contributions to social insurance
and housing provident fund for certain of our employees in accordance with the relevant PRC
laws and regulations. In 2021, 2022, 2023 and the five months ended May 31, 2024, the
shortfall amounts were approximately RMB0.1 million, RMB0.1 million, RMB17,000 and
RMB56,610, respectively.
Our failure to make full contributions to social insurance and housing provident fund was
primarily due to some of our employees requesting us not to make contributions to social
insurance and housing provident funds for them, as they did not want to bear the amount of
their portion of the relevant contribution. Some employees did not want to participate in the
social welfare schemes for personal reasons, and some have worked at or plan to work abroad,
and therefore did not want to participate in the social welfare schemes of cities where they may
reside only temporarily. We generally respected these requests.
In respect of the legal consequences and potential maximum penalties for our failure to
make full contributions to social insurance and housing provident fund, according to the
relevant PRC laws and regulations, the relevant PRC authorities may (i) demand us to pay the
outstanding social insurance contributions within a prescribed period and we may be liable to
a late payment fee equal to 0.05% of the outstanding amount for each day of delay. If we fail
to make such payments, we may be liable to a penalty of one to three times the amount of the
outstanding contributions; and (ii) order us to pay the outstanding housing provident fund
contributions within a prescribed time period, failing which the relevant PRC authorities may
apply to the People’s Court for compulsory enforcement. For details, see “Risk Factors —
Risks Relating to Government Regulations — Failure to make adequate contributions to
employee benefit plans as required by PRC regulations may subject us to penalties” in this
prospectus. If we were ordered to make such a payment, we would do so within the prescribed
time period.
For social insurance, pursuant to the Urgent Notice on Implementing the Spirit of the
Executive Meeting of the State Council in Stabilizing the Collection of Social Security
Contributions (ஷ
‘) promulgated on 21 September 2018, it is prohibited for administrative enforcement
authorities to organize a centralized collection of enterprises’ historical social insurance
arrears.
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During the Track Record Period and up to the Latest Practicable Date, we had not been
subject to any material administrative penalties. In addition, as of the Latest Practicable
Date,(i) we had not received any notification from the relevant PRC authorities requiring us to
pay shortfalls or the penalties with respect to social insurance and housing provident funds, and
(ii) we were neither aware of any material pending employee complaints nor were involved in
any material pending labor disputes with our employees with respect to social insurance and
housing provident funds.
As advised by our PRC Legal Adviser, based on the relevant regulatory policies, the
confirmation and the facts as stated above, and the written confirmations dated from October
24, 2023 to July 16, 2024 that we obtained from competent social insurance and housing
provident fund authorities including Shanghai Public Credit Information Service Center,
Hangzhou Public Credit Information, Credit China (Guangdong), Human Resources and Social
Security Bureau of Changde, Human Resources Bureau of Zhengzhou High-tech Industrial
Development Zone, Organization and Human Resources Department of Datong Economic
Development Zone, Human Resources and Social Security Bureau of Haidian District of
Beijing, Human Resources and Social Security Bureau of Changshu, Pinghu Branch Center of
Housing Provident Fund Management Service Center of Jiaxing, Suzhou Housing Provident
Fund Management Center, Changde Housing Provident Fund Management Center, Beijing
Housing Provident Fund Management Center, Datong Housing Provident Fund Management
Center and Zhengzhou Housing Provident Fund Management Center, in respect of the relevant
periods stated therein, no administrative penalties had been imposed and/or the relevant
subsidiary was in compliance with relevant laws and regulations. The aforementioned
authorities are either competent authorities or authorities that are empowered by competent
authorities for issuing the confirmation with respect to overseeing compliance with social
insurance and housing provident fund requirements as confirmed by our PRC Legal Adviser.
In addition, as confirmed by our PRC Legal Adviser, the likelihood that we would be subject
to material administrative penalties is relatively low and our Directors are of the opinion that
our failure to make full contribution to social insurance and housing provident funds for certain
of our employees will not have a material adverse impact on our business operations or
financial condition as a whole.
During the Track Record Period and save as disclosed above in this subsection, as advised
by our PRC Legal Adviser, our company and PRC subsidiaries had complied with the
applicable PRC laws and regulations in relation to our business operations in the PRC in all
material respects and we were not involved in any non-compliance incident which our
Directors believe would, individually, or in aggregate, have a material adverse effect on our
business as a whole.
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BOARD OF DIRECTORS
Our Board currently consists of nine Directors, comprising five executive Directors, one
non-executive Director and three independent non-executive Directors. Our Board serves a
term of three years and is responsible for, and has general powers for, the management and
conduct of our business.
The following table sets forth general information regarding our Directors:
Name Age Position(s)
Date of
appointment
as Director
Date of
founding/
joining our
Group
Role and
responsibilities
Relationship
with other
Directors,
Supervisors
and senior
management
Mr. LIN Qi
(ೡ) /H1118/H1118/H1118/H1118/H1118
43 Chairperson of our
Board, executive
Director and
chief executive
officer
September 18,
2015
September 18,
2015
Primarily responsible
for overseeing
overall strategic
management,
organizational
development and
strategic project
development of
our Group
None
Dr. HU Zhe
(ࡪߡ)H1118/H1118/H1118/H1118/H1118
39 Executive Director,
chief operating
officer and
president
July 15, 2017 November 7,
2015
Primarily responsible
for overseeing
overall business
operation and
management of
our Group
None
Ms. MA Audrey
Jing Nan
(৵౺฻)
(whose former
Chinese name
is ৵౺ళ) /H1118/H1118/H1118
39 Executive Director
and vice
president
December 27,
2023
September 1,
2017
Primarily responsible
for overseeing
development and
management of
our overseas
business
None
Dr. ZHAI Shuang
(ၱᕐ) /H1118/H1118/H1118/H1118/H1118
41 Executive Director
and deputy
executive director
of the R&D
center
September 8,
2020
March 30, 2016 Primarily responsible
for devising
technology
strategies, leading
R&D of new
products and
overseeing talent
development of
project teams
None
DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
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Name Age Position(s)
Date of
appointment
as Director
Date of
founding/
joining our
Group
Role and
responsibilities
Relationship
with other
Directors,
Supervisors
and senior
management
Mr. ZHAO
Yongsheng
(͛) /H1118/H1118/H1118/H1118
39 Executive Director
and director of
the supply chain
center
April 13, 2023 April 1, 2017 Primarily responsible
for overseeing
daily operation
and management
of the supply
chain center
None
Mr. LIU Huiyou
(ᄎึʾ) /H1118/H1118/H1118/H1118
60 Non-executive
Director
December 27,
2023
December 27,
2023
Primarily
responsible for
providing
professional
opinion and
judgment to our
Board
None
Mr. LI Wei
(ҽਃ) /H1118/H1118/H1118/H1118/H1118
54 Independent non-
executive
Director
September 8,
2020
September 8,
2020
Primarily responsible
for providing
independent
advice and
judgement to our
Board
None
Dr. QIAN Meifen
(ځߕ)H1118/H1118/H1118/H1118
42 Independent non-
executive
Director
September 8,
2020
September 8,
2020
Primarily responsible
for providing
independent
advice and
judgement to our
Board
None
Mr. CHEN Fei
(࠭)H1118/H1118/H1118/H1118/H1118
41 Independent non-
executive
Director
December 27,
2023
December 27,
2023
Primarily responsible
for providing
independent
advice and
judgement to our
Board
None
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The following sets forth the biographies of our Directors:
Executive Directors
Mr. LIN Qi (ೡ), aged 43, founded our Group in September 2015, and has served as
an executive Director and our chief executive officer since then. He has also been the
chairperson of our Board since July 2017. Mr. Lin currently also holds directorships and/or
senior management positions at our various subsidiaries, including REFIRE Technology,
Zhejiang Unilia Hydrogen Technology Ltd. (ʮ̡) and Shanghai Unilia.
He is primarily responsible for overseeing overall strategic management, organizational
development and strategic project development of our Group.
Mr. Lin has over 19 years of experience in the fuel cell industry. Prior to founding our
Group, from December 2004 to January 2010, he was an engineer at Shanghai Shenli
Technology Co., Ltd. (ʮ̡), a company principally engaged in development
and industrialization of fuel cell technology, where he was primarily responsible for
developing fuel cell control systems. From March 2010 to September 2015, he was a system
engineer at SAIC Motor Corporation Limited (ʮ̡), a company listed
on the Shanghai Stock Exchange (stock code: 600104) and principally engaged in automotive
manufacturing, where he was primarily responsible for developing fuel cell control systems.
Besides, Mr. Lin is currently a director of four companies in which our Company has a
minority equity stake, namely, Shanghai Taiqingchen Energy Technology Co., Ltd. ( ɪऎइ૫
ʮ̡) (a company principally engaged in manufacturing and sales of hydrogen
energy equipment (other than full cells) and provision of related technology), with a
non-executive role as nominated by our Company, Shanghai Hydrogen Energy Technology Co.,
Ltd. (ʮ̡) (the operating entity of Shanghai Fuel Cell Manufacturing
Industry Innovation Center (ཥϫႡிุ௴อʕː) which is a research platform for
technologies pertaining to fuel cells established under the guidance of Shanghai Municipal
Commission of Economy and Informatization (ึ)), Yulin Xuri
Hydrogen Wind Energy Technology Co., Ltd. (ʮ̡) (an
investment platform with investments in a company principally engaged in provision of
solutions relating to hydrogen power generation applications and a digital marketing solution
provider), and Shaanxi HydroTransformer Energy Technology Co., Ltd. (ҦϞ
ʮ̡) (a company principally engaged in provision of integrated solutions for organic liquid
hydrogen storage and supply), with a non-executive role as nominated by our Company.
Mr. Lin obtained his bachelor’s degree in software engineering from Nanchang University
(ɽኪ) in Jiangxi in November 2004. He further obtained his executive master of business
administration from the Guanghua School of Management of Peking University ( ̏ԯɽኪΈ
ശ၍ଣኪ৫) in Beijing in July 2023. Mr. Lin has been certified as a senior engineer of product
engineering by the China Society of Automotive Engineers ( ʕ਷ӛԓʈ೻ኪึ) since
December 2022.
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Dr. HU Zhe (ࡪߡ)aged 39, joined our Group in November 2015 as our manager and has
been our chief operating officer and president since January 2024. He was appointed as a
Director on July 15, 2017, and was re-designated as an executive Director on January 21, 2024.
Dr. Hu currently also holds directorships, supervisorships and/or senior management positions
at our various subsidiaries, including Jiangsu REFIRE Technology Co., Ltd. (߅
ʮ̡). He is primarily responsible for overseeing overall business operation and
management of our Group.
Dr. Hu has over 14 years of experience in the automotive industry. Prior to joining our
Group, from April 2010 to November 2015, he was an engineer at SAIC Motor Corporation
Limited (ʮ̡), where he was primarily responsible for R&D of fuel
cell systems and R&D and application of the durability of automotive fuel cells.
Besides, Dr. Hu is currently a director of three companies in which our Company has a
minority equity stake, namely, Shanghai Pegasus Hydrogen Technology Co., Ltd. ( ɪऎ᝘ᶲ૫
ʮ̡) (a company principally engaged in R&D, manufacturing and sales of metal
plate stacks), Aerospace Hydrogen Energy (Shanghai) Technology Co., Ltd. ( ঘ˂૫ঐ(ɪऎ)
ʮ̡) (a company principally engaged in R&D, manufacturing and sales of metal
plate stacks), and Beijing Yuzhou Tongda Hydrogen Energy Technology Co., Ltd. ( ̏ԯ፝ЋΝ
ʮ̡) (a company principally engaged in R&D of metal bipolar plates), all
with a non-executive role as nominated by our Company.
Dr. Hu obtained his bachelor’s degree in automotive engineering in July 2009 and his
master’s degree in automotive engineering in March 2010, both from Tongji University ( Ν᏶
ɽኪ) in Shanghai. He further obtained his doctor’s degree in automotive engineering from
Tongji University in December 2019. Dr. Hu has been certified as a senior engineer of product
engineering by the China Society of Automotive Engineers ( ʕ਷ӛԓʈ೻ኪึ) since
December 2022.
Ms. MA Audrey Jing Nan ( ৵౺฻), aged 39, joined our Group in September 2017 as the
director of the business development department at our subsidiary, REFIRE Technology, and
has been our vice president since January 2020. She was appointed as a Director on December
27, 2023, and was re-designated as an executive Director on January 21, 2024. Besides, Ms.
Ma is currently a managing director of our subsidiary, REFIRE Europe GmbH, and a director
of our subsidiaries, Unilia (Guangdong) Fuel Cells Inc. (ཥϫ(؇)ʮ̡) and
REFIRE Hong Kong Limited (ʮ̡). She is primarily responsible for
overseeing development and management of our overseas business.
Ms. Ma has over 11 years of experience in architectural designs, urban planning and
business development. Prior to joining our Group, from October 2009 to August 2010, she was
an architecture intern at B+H Architects, a company principally engaged in architectural
designs and urban planning. From March 2011 to August 2011, she was an architectural
assistant at 10 Design Limited, a company principally engaged in architectural designs and
master planning. From January 2013 to April 2014, Ms. Ma was an assistant architect at Head
Architecture Limited, a company principally engaged in architectural and interior designs,
where she was primarily responsible for architectural designs. From June 2014 to July 2016,
DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
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she worked at SOM Asia Limited, a company principally engaged in architectural designs,
construction and urban planning, where she was primarily responsible for market research and
business development. From August 2016 to January 2017, she served as the deputy general
manager of Hong Kong Nation-Synergy Hydrogen Power Technology Co., Limited (ಥ਷ᒿ
ʮ̡), a company principally engaged in provision of technologies relating to
fuel cell systems and a subsidiary of Sino-Synergy Hydrogen Energy Technology (Jiaxing) Co.,
Ltd. (Ҧ(ྗጳ)ʮ̡) (a company listed on the Stock Exchange (stock code:
9663)).
Ms. Ma obtained her bachelor’s degree in architectural studies from Carleton University
in Canada in June 2009. She obtained her master’s degree in urban design from the University
of Hong Kong in Hong Kong in November 2012.
Dr. ZHAI Shuang ( ၱᕐ), aged 41, joined our Group in March 2016 as a senior manager
of the preliminary design department at our subsidiary, REFIRE Technology. He has been the
chief engineer of the product engineering department at REFIRE Technology since March
2019, and has been a deputy executive director of the R&D center at our Company since March
2022. He was appointed as a Director on September 8, 2020, and was re-designated as an
executive Director on January 21, 2024. He is primarily responsible for devising technology
strategies, leading R&D of new products and overseeing talent development of project teams.
Dr. Zhai has over 13 years of experience of R&D and working in the automotive industry.
Prior to joining our Group, from December 2012 to March 2016, he was an engineer at SAIC
Motor Corporation Limited (ʮ̡), where he was primarily responsible
for constructing simulation platforms for fuel cell systems .
Dr. Zhai obtained his bachelor’s degree in mathematics and applied mathematics from
Xinyang Normal University (ᇍɽኪ (formerly known as Xinyang Normal Institute (ڦ
ᇍኪ৫)) in Henan in July 2007. He further obtained his doctor’s degree in automotive
engineering from Tongji University ( Ν᏶ɽኪ) in Shanghai in November 2012. Dr. Zhai has
been certified as a senior engineer by the Shanghai Municipal Human Resources and Social
Security Bureau (ღ҅) since December 2021.
Mr. ZHAO Y ongsheng (͛), aged 39, joined our Group in April 2017 as a senior
manager of the procurement department at our subsidiary, REFIRE Technology, and has been
the director of the supply chain center since December 2022. He was appointed as a Director
on April 13, 2023, and was re-designated as an executive Director on January 21, 2024. He is
primarily responsible for overseeing daily operation and management of the supply chain
center.
Mr. Zhao has over 14 years of experience in the automotive industry. Prior to joining our
Group, from April 2010 to March 2017, he worked at SAIC Motor Corporation Limited ( ɪऎ
ʮ̡).
DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
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Mr. Zhao obtained his bachelor’s degree in automotive engineering (vehicle) in July 2009
and his master’s degree in power machinery and engineering in March 2010, both from Tongji
University ( Ν᏶ɽኪ) in Shanghai.
Non-executive Director
Mr. LIU Huiyou ( ᄎึʾ), aged 60, joined our Group in December 2023 and has served
as a Director since then. He was re-designated as a non-executive Director on January 21,
2024. He is primarily responsible for providing professional opinion and judgment to our
Board.
Mr. Liu has over 39 years of experience in the energy industry. From July 1985 to October
1997, he was successively a deputy section chief, a section chief and deputy chief economist
at the Gudong Oil Production Factory (ᅀ) of Sinopec Shengli Petroleum
Administrative Bureau Co., Ltd. (ʮ̡)( “ Sinopec Shengli
Petroleum ”). From October 1997 to March 2003, he was successively a deputy director of the
planning management division at Sinopec Shengli Petroleum, a deputy director of the planning
department of Sinopec Shengli Petroleum and a deputy director of the planning division at
Sinopec Shengli Oilfield Company (ʮ̡). From March 2001 to May
2003, he was a manager at Sinopec Shengli Oilfield Construction Project Economic and
Technical Evaluation Consulting Co., Ltd. (ணධͦ຾᏶Ҧஔ൙Пፔ༔ʮ̡), where
he was primarily responsible for overseeing daily operation and management of construction
projects. From May 2003 to August 2009, he was the director of the planning division of
Sinopec Shengli Oilfield Company, where he was primarily responsible for strategic planning.
From August 2009 to July 2013, he was a deputy chief economist at Sinopec Shengli
Petroleum, where he was primarily responsible for economic and financial analyses. From July
2013 to June 2016, he was the chief of the Petroleum Engineering Cost Management Center
(ʈ೻ிᄆ၍ଣʕː) of China Petroleum & Chemical Corporation (΅Ϟ
ʮ̡), a company listed on the Stock Exchange (stock code: 386) and the Shanghai Stock
Exchange (stock code: 600028) and principally engaged in oil and gas exploration, refining and
marketing, where he was primarily responsible for overseeing daily management and operation
of the cost management center. Besides, Mr. Liu has successively been a deputy chief and a
deputy general manager of the development planning department of China Petroleum &
Chemical Corporation since June 2016, and has been the chief of the new energy office of
China Petroleum & Chemical Corporation since October 2018, where he has been primarily
responsible for overseeing daily operation and management of the development planning
department and the new energy office, respectively. Since January 2022, he has also been the
chief expert in energy conservation and environmental protection (new energy) at China
Petroleum & Chemical Corporation, where he has been primarily responsible for providing
professional advice relating to the new energy sector.
Mr. Liu obtained his bachelor’s degree in oil production engineering from China
University of Petroleum (ɽኪ(؇formerly known as Huadong Petroleum
College (ኪ৫)) in Shandong in July 1985.
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Independent Non-executive Directors
Mr. LI Wei ( ҽਃ), aged 54, joined our Group in September 2020 and has served as our
independent non-executive Director since then. He is primarily responsible for providing
independent advice and judgment to our Board.
Mr. Li has over 18 years of experience in finance. From June 2006 to November 2008,
he was the head of the investment banking division at Shenyin & Wanguo Securities Co., Ltd.
(ʮ̡), a company principally engaged in investment banking and
securities brokerage, where he was primarily responsible for overseeing the operation and
management of the securities brokerage business. From December 2008 to 2020, he was the
managing director of the investment banking division at China Galaxy Securities Co., Ltd. ( ʕ
ʮ̡), a company listed on the Stock Exchange (stock code: 6881) and the
Shanghai Stock Exchange (stock code: 601881) and principally engaged in investment banking
and securities brokerage, where he was primarily responsible for overseeing the operation and
management of the securities brokerage business. Since October 2022, he has also served as
an independent non-executive director of Hanhua Financial Holding Co., Ltd. (΅
ʮ̡), a company listed on the Stock Exchange (stock code: 3903) and principally engaged
in provision of diversified and comprehensive financial services for domestic small, medium
and micro enterprises and individuals.
Mr. Li obtained his bachelor’s degree in economics in June 1992 and his master’s degree
in economics in July 1995, both from Renmin University of China ( ʕ਷ɛ͏ɽኪ) in Beijing.
Dr. QIAN Meifen (ځߕ)aged 42, joined our Group in September 2020 and has served
as our independent non-executive Director since then. She is primarily responsible for
providing independent advice and judgement to our Board.
Dr. Qian has over 12 years of experience in higher education. From June 2012 to June
2015, she was a lecturer at Jiangxi University of Finance and Economics ( ϪГৌ຾ɽኪ). Dr.
Qian has successively been a lecturer and an associate professor at the school of management
of Zhejiang University ( एϪɽኪ) since September 2015, and has been a deputy director of the
finance and accounting department of the school of management of Zhejiang University since
March 2019.
Besides, Dr. Qian has served as an independent director of Hangzhou Flariant Co., Ltd.
(ʮ̡) (a company listed on the Shanghai Stock Exchange (stock code:
605566) and principally engaged in manufacturing of dyeing products) since December 2022,
and Zhejiang Rongpeng Air Tools Co., Ltd. (ʮ̡) (a company
listed on the National Equities Exchange and Quotations (stock code: 874187) and principally
engaged in manufacturing of air tools) since March 2023.
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Dr. Qian obtained her bachelor’s degree in public finance in June 2005 and her master’s
degree in finance in June 2007, both from Zhejiang University ( एϪɽኪ) in Zhejiang. She
further obtained her doctor’s degree in finance from Australian National University in Australia
in November 2012.
Mr. CHEN Fei (࠭)aged 41, joined our Group in December 2023 and has served as
our independent non-executive Director since then. He is primarily responsible for providing
independent advice and judgment to our Board.
Mr. Chen has over 16 years of experience in investment banking and financial
management. From July 2008 to May 2010, he was an investment banker at The Hongkong and
Shanghai Banking Corporation, where he was primarily responsible for advising on financings,
mergers and acquisitions for domestic and foreign clients. From May 2010 to May 2018, Mr.
Chen was an investment banker at UBS AG Hong Kong Branch, where he was primarily
responsible for advising on financings, mergers and acquisitions for domestic and foreign
clients. From May 2018 to April 2022, Mr. Chen was the chief financial officer and board
secretary at Tubatu Group Co., Ltd. (ʮ̡), a company principally
engaged in online home furnishing platform operation in China, where he was primarily
responsible for overseeing financial investment activities of the company, including
accounting, capital management, handling tax-related matters, preparing and reviewing
financial statements, and financial data analyses. Besides, Mr. Chen has served as an executive
director since April 2022 and the chief financial officer since May 2022, of YSB Inc., a digital
pharmaceutical platform listed on the Stock Exchange (stock code: 9885), where he has been
primarily responsible for overseeing overall financial management (including accounting,
capital management, handling tax-related matters, preparing and reviewing financial
statements, and financial data analyses), internal audits and control, corporate finance,
investment activities and legal matters of the company.
Mr. Chen obtained his bachelor’s degree in finance in July 2006 and his master’s degree
in finance in July 2008, both from Peking University ( ̏ԯɽኪ) in Beijing. Mr. Chen has been
certified as a chartered financial analyst by the CFA Institute since September 2012, and
obtained a certificate of board secretaries from the Shenzhen Stock Exchange in November
2020.
DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
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General
Save as disclosed in this section and the paragraph headed “Further Information about
Our Directors, Supervisors and Substantial Shareholders” in Appendix VI to this prospectus,
each of our Directors has confirmed that:
(1) he/she obtained the legal advice referred to under Rule 3.09D of the Listing Rules
on January 8, 2024, and understood his/her obligations as a director of a listed
issuer;
(2) he/she does not have any existing or proposed service contract with our Group other
than contracts expiring or determinable by the relevant member of our Group within
one year without payment of compensation (other than statutory compensation);
(3) he/she has no interest in the Shares within the meaning of Part XV of the SFO;
(4) he/she has not been a director of any other publicly listed company during the three
years prior to the Latest Practicable Date and as of the Latest Practicable Date;
(5) other than being a Director of our Group, he/she does not have any relationship with
any other Directors, Supervisors, senior management or substantial shareholders of
our Company; and
(6) he/she has not completed his/her respective education programs as disclosed in this
section by way of attendance of long distance learning or online courses.
Each of our independent non-executive Directors has confirmed:
(1) his/her independence after taking into consideration each of the factors referred to
under Rules 3.13(1) to 3.13(8) of the Listing Rules;
(2) that he/she does not have any past or present financial or other interest in the
business of our Company or our subsidiaries, or any connection with any core
connected person of our Company; and
(3) that there are no other factors which may affect his/her independence at the time of
his/her appointment as our independent non-executive Director.
DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
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SUPERVISORS
Our Supervisory Committee currently consists of five members. Pursuant to the Articles
of Association, at least one-third of our Supervisors must be employees’ representatives elected
by our employees. Except for the employees’ representative Supervisors, the other Supervisors
are elected and appointed by our Shareholders at a Shareholders’ meeting for a term of three
years, which is renewable upon re-election and re-appointment.
The following table sets forth general information regarding our Supervisors:
Name Age Position(s)
Date of
appointment
as Supervisor
Date of
joining our
Group
Role and
responsibilities
Relationship
with
Directors,
other
Supervisors
and senior
management
Mr. WU Yang
(ݱ؛)H1118/H1118/H1118/H1118/H1118
36 Chairperson of our
Supervisory
Committee
January 20,
2023
January 20,
2023
Primarily responsible
for supervising our
Board and
management
None
Mr. ZHANG
Cheng ( ੵ೻) /H1118
43 Supervisor August 21, 2024 August 21, 2024 Primarily responsible
for supervising our
Board and
management
None
Mr. JI Yizhi
(ɓқ) /H1118/H1118/H1118/H1118
54 Supervisor January 20,
2023
January 20,
2023
Primarily responsible
for supervising our
Board and
management
None
Mr. WANG
Chuqi ( ӓูಒ,
whose former
name was
WANG Qi
(ӓփ)) /H1118/H1118/H1118/H1118/H1118
41 Supervisor September 8,
2020
October 22,
2015
Primarily responsible
for supervising our
Board and
management
None
Mr. SUN Bei
(̏) /H1118/H1118/H1118/H1118/H1118
38 Supervisor May 18, 2022 April 26, 2016 Primarily responsible
for supervising our
Board and
management
None
DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
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The following sets forth the biographies of our Supervisors:
Mr. WU Y ang (ݱ؛)aged 36, joined our Group in January 2023 and has been our
shareholders’ representative Supervisor and the chairperson of our Supervisory Committee
since then.
Mr. Wu has over eight years of experience in market research and equity investment
management. Since May 2016, he has been the investment director at Shenzhen Qianhai Chun
Yang Asset Management Co., Ltd. (ʮ̡), a company principally
engaged in private equity investment, where he has been primarily responsible for investment
decisions and post-investment management.
Mr. Wu obtained his bachelor’s degree in logistics management from Nanjing University
of Finance and Economics (ԯৌ຾ɽኪ) in Jiangsu in June 2010.
Mr. ZHANG Cheng ( ੵ೻), aged 43, joined our Group in August 2024 and has been our
shareholders’ representative Supervisor since then.
Mr. Zhang has over 12 years of experience in economics and equity investments. From
July 2012 to May 2020, he worked at the Economic Construction Department under the MOF
(ண̡). Since June 2020, he has been a deputy general manager
of the secondary investment department at National Manufacturing Transformation and
Upgrade Fund Co., Ltd. (ʮ̡), a company principally
engaged in investment management and consulting and our Shareholder, where he has
primarily been responsible for equity investments. Further, from May 2023 to November 2023,
Mr. Zhang was a supervisor of Zhejiang RIFA Precision Machinery Co., Ltd. ( एϪ˚೯ၚ੗
ʮ̡), a company listed on the Shenzhen Stock Exchange (stock code: 002520)
and principally engaged in manufacturing of machine tools.
Mr. Zhang obtained his bachelor’s degree in economics in June 2006 and his master’s
degree in economics in June 2009, both from Central University of Finance and Economics ( ʕ
̯ৌ຾ɽኪ) in Beijing.
Mr. JI Yizhi (ɓқ), aged 54, joined our Group in January 2023 and has been our
shareholders’ representative Supervisor since then. Besides, he is currently a director of our
subsidiary, Foshan Diyi Element New Energy Technology Co., Ltd. (Ҧ
ʮ̡).
DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
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Mr. Ji has over 32 years of experience in the automotive industry. From July 1992 to July
2017, he was successively a technician, a device administrator, an assistant to the manager of
the technology division, a deputy manager of the technology division, a deputy manager of the
cooperation division and the procurement head of the manufacturing division, a deputy
manager of the planning and finance division, the manager of the planning and finance
department, a deputy chief economist, an assistant to the manager of the factory and a deputy
manager at the Wuxi Diesel Engine Works (ዚᅀ) of FAW Jiefang Automotive Co.,
Ltd. (ʮ̡), a company principally engaged in manufacturing and sales of
trucks and buses and our Shareholder, where he was primarily responsible for technical
designs, product developments, procurement of materials, costs management, sales and
marketing of products and daily operation and management of the factory. From October 2017
to October 2022, Mr. Ji was successively an executive deputy general manager of the engine
department, the general manager of the bus business department, the deputy general manager
of the marketing department and the general manager of the new energy department at FAW
Jiefang Automotive Co., Ltd., where he was primarily responsible for overseeing the operation
and management of the relevant departments. From September 2018 to July 2019, he was
successively the general manager and the head of finance at the Dalian Diesel Engine branch
of FAW Jiefang Automotive Co., Ltd., where he was primarily responsible for overseeing the
operation and management of the company. Since October 2022, he has been a deputy general
manager of FAW Jiefang Group Co., Ltd. (ʮ̡), a company listed on
the Shenzhen Stock Exchange (stock code: 000800) and principally engaged in manufacturing
and sales of automobiles, where he has been primarily responsible for financial matters, audits
and the development and sales of new energy vehicles. Further, Mr. Ji served or has served as
a director of Changchun FAW Baoyou Steel Processing and Distribution Co., Ltd. (ᘒʾ
ʮ̡) from November 2022 to June 2024, a director of FAW Finance
Co., Ltd. (ʮ̡) since October 2022, a director of Xin’n Automobile Insurance
Co., Ltd. (ʮ̡) since March 2023, and a director of Changchun
Angang Jiefang Steel Processing and Distribution Co., Ltd. (ࠢ
ʮ̡) (formerly knowns as Changchun FAW Angang Steel Processing and Distribution Co.,
Ltd. (ʮ̡)) from June 2023 to June 2024, where he was or has
been primarily responsible for overseeing the management of the aforementioned companies.
Mr. Ji obtained his bachelor’s degree in mechanical design and manufacturing from
Nanjing University of Science and Technology (ԯଣʈɽኪ) (formerly known as East China
Institute of Engineering (ʈ೻ኪ৫)) in Jiangsu in July 1992. He obtained his master’s
degree in business administration from Shanghai University of Finance and Economics ( ɪऎ
ৌ຾ɽኪ) in Shanghai in October 2011. Mr. Ji has been certified as a senior engineer by China
First Automobile Group Co., Ltd. (ʮ̡) since January 2022.
Mr. W ANG Chuqi ( ӓูಒ), aged 41, joined our Group in October 2015 and has been a
director of the data optimization, digitalization and intellectualization department at our
Company since then. In this capacity, he is primarily responsible for overseeing
intellectualization of the optimization management, data management and information system
of our Group. He has been our employees’ representative Supervisor since September 2020.
Besides, Mr. Wang is currently a supervisor of our subsidiary, REFIRE Technology.
DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
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Mr. Wang has over 19 years of experience in information technology. Prior to joining our
Group, from January 2005 to July 2014, he worked at Zhejiang SIF Technology Co., Ltd. ( ए
ʮ̡), a company principally engaged in software development. From
August 2014 to October 2015, he worked at Brother System Technology Development
(Hangzhou) Ltd. (Ҧஔ(ψ)ʮ̡), a company principally engaged in
software development.
Mr. Wang obtained his bachelor’s degree in software programming from Nanchang
University (ɽኪ) in Jiangxi in November 2004.
Mr. SUN Bei (̏), aged 38, joined our Group in April 2016 as the executive president
of the applied engineering department at our subsidiary, REFIRE Technology. Between April
2016 and January 2022, he was a deputy director of the R&D center at REFIRE Technology.
Since February 2022, he has been the general manager of the sales center of the system
business department at our Company. In this capacity, he is primarily responsible for
overseeing overall operation and management of the sales center of our Group. He has been our
employees’ representative Supervisor since May 2022.
Mr. Sun has over 13 years of experience in the automotive industry. Prior to joining our
Group, from July 2011 to April 2016, he worked at United Automotive Electronic Systems Co.,
Ltd. (ʮ̡), a company principally engaged in R&D, manufacturing and
sales of gasoline engine management systems, transmission control systems and automotive
drive control systems.
Mr. Sun obtained his bachelor’s in automotive engineering (vehicle) in July 2008 and his
master’s degree in automotive engineering in March 2011, both from Tongji University ( Ν᏶
ɽኪ) in Shanghai.
General
Save as disclosed in this section and the paragraph headed “Further Information about
Our Directors, Supervisors and Substantial Shareholders” in Appendix VI to this prospectus,
each of our Supervisors has confirmed that:
(1) he does not hold and has not held any other positions in our Group and any other
members of our Group as of the Latest Practicable Date;
(2) other than being a Supervisor of our Group, none of our Supervisors has any
relationship with any Directors, any other Supervisors, any senior management or
substantial shareholders of our Company;
(3) he does not hold and has not held any other directorships in public companies the
securities of which are listed on any securities market in Hong Kong or overseas in
the three years prior to the Latest Practicable Date and as of the Latest Practicable
Date; and
(4) he has not completed their respective education programs as disclosed in this section
by way of attendance of long distance learning or online courses.
DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
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--- page 392 ---
SENIOR MANAGEMENT
Our senior management is responsible for the day-to-day management and operation of
our business. The table below sets out certain information in respect of the senior management
of our Group:
Name Age Position(s)
Date of
appointment
as senior
management
Date of
founding/
joining our
Group
Role and
responsibilities
Relationship
with
Directors,
Supervisors
and other
senior
management
Mr. LIN Qi
(ೡ) /H1118/H1118/H1118/H1118/H1118
43 Chairperson of our
Board, executive
Director and
chief executive
officer
September 18,
2015
September 18,
2015
Primarily responsible
for overseeing
overall strategic
management,
organizational
development and
strategic project
development of
our Group
None
Dr. HU Zhe
(ࡪߡ)H1118/H1118/H1118/H1118/H1118
39 Executive Director,
chief operating
officer and
president
November 7,
2015
November 7,
2015
Primarily responsible
for overseeing
overall business
operation and
management of
our Group
None
Ms. MA Audrey
Jing Nan
(৵౺฻)
(whose former
Chinese name
is ৵౺ళ) /H1118/H1118/H1118
39 Executive Director
and vice
president
September 1,
2017
September 1,
2017
Primarily responsible
for overseeing
development and
management of
our overseas
business
None
Mr. ZHENG
Zhong (ࠠ)H1118
36 Vice president and
Board secretary
September 8,
2020
May 7, 2018 Primarily responsible
for overseeing
equity financing
and handling
matters relating to
investor relations,
legal affairs and
intellectual
properties of our
Group
None
DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
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--- page 393 ---
Name Age Position(s)
Date of
appointment
as senior
management
Date of
founding/
joining our
Group
Role and
responsibilities
Relationship
with
Directors,
Supervisors
and other
senior
management
Mr. XIE Hongyu
(ڠߎ)H1118/H1118/H1118/H1118
46 Vice president December 9,
2020
December 17,
2018
Primarily responsible
for overseeing
daily operation
and management
of our hydrogen
equipment
component
business
None
Dr. Christopher
John GUZY /H1118/H1118
69 Chief technology
officer
March 23, 2020 March 23, 2020 Primarily responsible
for overseeing
advanced
technology
development and
devising
technology
strategies
None
Mr. SHAO
Liangming
(׼)H1118/H1118/H1118/H1118
43 Financial controller January 7, 2024 June 25, 2018 Primarily responsible
for overseeing
financial
management of
our Group
NoneThe following sets forth the biographies of our senior management:
Mr. LIN Qi (ೡ) is the chairperson of our Board, our executive Director and chief
executive officer. For further details, see “— Board of Directors — Executive Directors” in this
section.
Dr. HU Zhe (ࡪߡ)is our executive Director, chief operating officer and president. For
further details, see “— Board of Directors — Executive Directors” in this section.
Ms. MA Audrey Jing Nan ( ৵౺฻) is our executive Director and vice president. For
further details, see “— Board of Directors — Executive Directors” in this section.
Mr. ZHENG Zhong (ࠠ)aged 36, joined our Group in May 2018 as an assistant to the
chairperson of the board of directors of our subsidiary, REFIRE Technology. He was an
assistant to the chairperson of our Board between January 2020 and September 2020, and has
been our Board secretary since September 2020 and our vice president since January 2024. Mr.
DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
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--- page 394 ---
Zheng currently also holds supervisorships at our various subsidiaries, including Jiangsu
REFIRE Technology Co., Ltd. (ʮ̡) and Shanghai REFIRE Prismatic
Hydrogen Technology Co., Ltd. (ʮ̡). He is primarily responsible
for overseeing equity financing and handling matters relating to investor relations, legal affairs
and intellectual properties of our Group.
Mr. Zheng has over 14 years of experience in legal profession. Prior to joining our Group,
from July 2010 to March 2017, he was a lawyer at the Shanghai office of Tian Yuan Law Firm
(הwhere he was primarily responsible for providing legal
services in respect of investments, financings, mergers and acquisitions. From April 2017 to
May 2017, he was a lawyer at the Shanghai office of Hai Run Law Firm (ԫ
הwhere he was primarily responsible for providing legal services in respect of
investments, financings, mergers and acquisitions. From June 2017 to April 2018, he served as
the legal director of Hongling Siqi (Zhuhai) Equity Investment Management Enterprise
(Limited Partnership) (ᄁ(मऎ)ᛆҳ༟၍ଣΆุ(Υྫ)), where he was primarily
responsible for overseeing risk management and compliance matters. Besides, Mr. Zheng is
currently a director of Jiangsu Jiahua Hydrogen Technology Co., Ltd. (ࠢ
ʮ̡), a company in which our Group has equity interest.
Mr. Zheng obtained his bachelor’s degree in law from Fudan University ( ూ͇ɽኪ)i n
Shanghai in June 2010. He obtained his qualification of legal profession from the Ministry of
Justice of the PRC (௅) in August 2010, his fund practice qualification
from the Asset Management Association of China (ุ՘ึ) in July 2017, and
a certificate of board secretaries from the Shanghai Stock Exchange in December 2020.
Mr. XIE Hongyu (ڠߎ)aged 46, joined our Group in December 2018 as a deputy
general manager of our subsidiary, REFIRE Technology, and has been our vice president since
December 2020. Further, Mr. Xie is currently a director of our subsidiaries, Shanghai PANDO
Electric Technology Co., Ltd. (ʮ̡), PANDO (Zhejiang) Electric
Technology Co., Ltd. ( ᇂਗ(एϪ)ʮ̡) and Changde REFIRE Surge New
Materials Technology Co., Ltd. (ʮ̡). He is primarily
responsible for overseeing daily operation and management of our hydrogen equipment
component business.
Mr. Xie has over 21 years of experience in new energy and new materials industries. Prior
to joining our Group, from January 2003 to October 2018, he worked at Hunan Corun New
Energy Co., Ltd. (ʮ̡) (formerly known as Changsha Lyrun
Materials Co., Ltd. (ʮ̡)), a company listed on the Shanghai Stock
Exchange (stock code: 600478) and principally engaged in R&D, manufacturing and sales of
foam metal materials, where he was successively a section chief of the production department,
a manager of the R&D department, the director of the quality management department and an
assistant to the general manager of Hunan Corun New Energy Co., Ltd., and was primarily
responsible for overseeing daily operation and management of the aforementioned departments
and assisting the general manager with daily operation of the company. During the same
period, Mr. Xie also served as the general manager of certain subsidiaries of Hunan Corun New
DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
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Energy Co., Ltd., including Changde Liyuan New Materials Co., Ltd. (ப
΂ʮ̡) (a company principally engaged in R&D, manufacturing and sales of energy-saving
and new energy automotive base materials, civil battery base materials and nickel-plated steel
strips) and Hunan Copower EV Battery Co., Ltd. (ப΂ʮ̡)( a
company principally engaged in R&D, manufacturing and sales of batteries for hybrid electric
vehicles), where he was primarily responsible for overseeing daily operation and corporate
management of the aforementioned companies.
Mr. Xie obtained his college diploma in chemical technology from Hunan Chemical
V ocational Technology College (ʷኪʈุᔖุҦஔኪ৫) (formerly known as Hunan
Chemical Engineering School (ࣧin Hunan in June 1998.
Dr. Christopher John GUZY , aged 69, joined our Group in March 2020 and has been
our chief technology officer since then. He is primarily responsible for overseeing advanced
technology development and devising technology strategies.
Dr. Guzy has over 41 years of experience in engineering and higher education. Prior to
joining our Group, from 1983 to 1986, he was an assistant professor at the David H. Koch
School of Chemical Engineering Practice of Massachusetts Institute of Technology in the
United States. From 2000 to 2001, he was the global general manager at GE Lighting, a
company principally engaged in lighting production and service, where he was primarily
responsible for the development of linear fluorescent technology. From 2001 to 2005, Dr. Guzy
was the general manager of global products of GE HealthCare (formerly known as GE Medical
Systems), a company principally engaged in R&D, manufacturing and sales of medical devices,
where he was primarily responsible for oversight of technology operations. From January 2005
to March 2016, he was a vice president and the chief technology officer of BALLARD Power
Systems, a company principally engaged in provision of clean energy fuel cell solutions and
products, where he was primarily responsible for leading product development, applications,
engineering and technology research. From May 2016 to March 2020, Dr. Guzy was a professor
at Foshan University (ኪҦஔኪ৫).
Dr. Guzy obtained his bachelor’s degree in chemical engineering in May 1977 and his
master’s degree in chemical engineering in May 1979, both from Clarkson University in the
United States. He further obtained his doctor’s degree in engineering from University of New
Mexico in the United States in July 1982. Dr. Guzy was accredited as an expert under the
Chinese Government Friendship Award (ʾሒᆤ) in September 2019 by the
Department of Foreign Expert Services of the Ministry of Science and Technology of the PRC
in recognition of his significant contributions to China’s hydrogen and fuel cell industries.
Further, he was awarded Shanghai Magnolia Silver Award (ᆤ) in 2023 in
recognition of his contribution to the development of Shanghai.
DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
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Mr. SHAO Liangming (׼)aged 43, joined our Group in June 2018 as a finance
manager at our subsidiary, REFIRE Technology. He was a senior manager of the internal audits
department at our Company from September 2020 to August 2023, and has been a senior
manager of the operation and management department since September 2023 and our financial
controller since January 2024. He is primarily responsible for overseeing financial
management of our Group.
Mr. Shao has over 17 years of experience in audits and financial management. Prior to
joining our Group, from September 2007 to June 2018, he was successively an audit manager
and a senior manager at BDO China Shu Lun Pan Certified Public Accountants LLP (ึ
ה(౷ஷΥྫ)), where he was primarily responsible for audits.
Mr. Shao graduated from Shanghai Jiao Tong University ( ɪऎʹஷɽኪ) in Shanghai
through online courses in accounting in July 2008. Mr. Shao has been certified as a certified
public accountant by the Chinese Institute of Certified Public Accountants (՘
ึ) since December 2007, and has been certified as a medium-level accountant (ᔖ၈)
by Shanghai Municipal Bureau of Human Resources and Social Security ( ɪऎ̹ɛɢ༟๕ձ
ღ҅) since May 2009.
General
Save as disclosed in this section and the paragraph headed “Further Information about
Our Directors, Supervisors and Substantial Shareholders” in Appendix VI to this prospectus,
each of our senior management members has confirmed that:
(1) he/she does not hold and has not held any other positions in our Group and any other
members of our Group as of the Latest Practicable Date;
(2) other than being a Director and/or member of our Group’s senior management,
he/she does not have any relationship with any Directors, Supervisors, other
members of senior management or substantial shareholders of our Company as of
the Latest Practicable Date;
(3) he/she does not hold and has not held any other directorships in public companies
the securities of which are listed on any securities market in Hong Kong or overseas
in the three years prior to the Latest Practicable Date and as of the Latest Practicable
Date; and
(4) he/she has not completed his/her respective education programs as disclosed in this
section by way of attendance of long distance learning or online courses.
DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
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JOINT COMPANY SECRETARIES
Mr. ZHENG Zhong (ࠠ)was appointed as one of our joint company secretaries on
January 7, 2024. Mr. Zheng is our vice president and Board secretary. For further details, see
“— Senior Management” in this section.
Mr. POON Ping Y eung (౮) was appointed as one of our joint company secretaries
on January 7, 2024. Mr. Poon is the manager of the listed & fiduciary corporate services of
Trident Corporate Services (Asia) Ltd., a global professional services firm. He has over 10
years of professional experience in company secretarial field. He is currently a joint company
secretary of each of Boyaa Interactive International Limited (a company listed on the Stock
Exchange (stock code: 434)) and Zhejiang Taimei Medical Technology Co., Ltd. (a company
listed on the Stock Exchange (stock code: 2576)).
Mr. Poon obtained his bachelor’s degree in arts (major in social policy and
administration) from The Hong Kong Polytechnic University in Hong Kong in October 2012.
He further obtained his master’s degree in corporate governance from Hong Kong Metropolitan
University (formerly known as The Open University of Hong Kong) in Hong Kong in October
2019.
Mr. Poon is an associate member (a holder of practitioner’s endorsement) of The Hong
Kong Chartered Governance Institute (formerly known as The Hong Kong Institute of
Chartered Secretaries) and The Chartered Governance Institute (formerly known as The
Institute of Chartered Secretaries and Administrators) in the United Kingdom.
COMPLIANCE ADVISER
We have appointed Maxa Capital Limited as our compliance adviser pursuant to Rule
3A.19 of the Listing Rules. Pursuant to Rule 3A.23 of the Listing Rules, the compliance
adviser will advise us on the following circumstances:
 before the publication of any announcements, circulars or financial reports;
 where a transaction, which might be a notifiable or connected transaction under
Chapters 14 and 14A of the Listing Rules is contemplated, including share issues,
sales or transfers of treasury shares and share repurchases;
 where we propose to use the proceeds of the Global Offering in a manner different
from that detailed in this prospectus or where our business activities, developments
or results deviate from any forecast, estimate or other information in this prospectus;
and
 where the Stock Exchange makes an inquiry of us regarding unusual price
movement and trading volume or other issues under Rule 13.10 of the Listing Rules.
DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
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Pursuant to Rule 3A.24 of the Listing Rules, Maxa Capital Limited will, in a timely
manner, inform us of any amendment or supplement to the Listing Rules and new or amended
laws and regulations in Hong Kong applicable to us.
The terms of the appointment shall commence on the Listing Date and end on the date
which we distribute our annual report of our financial results for the first full financial year
commencing after the Listing Date.
BOARD COMMITTEES
We have established the following committees on our Board: an audit committee, a
remuneration and appraisal committee, a nomination committee and a strategy committee. The
committees operate in accordance with the terms of reference established by our Board.
Audit Committee
We have established an audit committee with written terms of reference in compliance
with Rule 3.21 of the Listing Rules and paragraph D.3 of part 2 of the Corporate Governance
Code as set out in Appendix C1 to the Listing Rules (the “ Corporate Governance Code ”). The
Audit Committee consists of Mr. CHEN Fei (࠭Dr. QIAN Meifen (ځߕand Mr. LI Wei
(ҽਃ), with Mr. CHEN Fei (࠭being the chairperson of the committee. Mr. Chen holds the
appropriate accounting or related financial management expertise as required under Rules
3.10(2) and 3.21 of the Listing Rules.
The primary duties of the Audit Committee are to assist our Board in providing an
independent view of the effectiveness of our financial reporting process, internal control and
risk management systems, overseeing the audit process, and performing other duties and
responsibilities as assigned by our Board, which includes amongst other things:
 proposing to our Board the appointment and replacement of external audit firms;
 supervising the implementation of our internal audit system;
 liaising between our internal audit department and external auditors;
 reviewing our financial information and related disclosures; and
 other duties conferred by our Board.
DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
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Remuneration and Appraisal Committee
We have established a remuneration and appraisal committee with written terms of
reference in compliance with Rule 3.25 of the Listing Rules and paragraph E.1 of part 2 of the
Corporate Governance Code. The Remuneration and Appraisal Committee consists of Mr. LI
Wei (ҽਃ), Mr. LIU Huiyou ( ᄎึʾ) and Dr. QIAN Meifen (ځߕwith Mr. LI Wei ( ҽਃ)
being the chairperson of the committee.
The primary duties of the Remuneration and Appraisal Committee are to develop
remuneration and appraisal policies of our Directors, evaluate the performance, make
recommendations on the remuneration packages of our Directors and senior management and
evaluate and make recommendations on employee benefits, which include amongst other
things:
 establishing, reviewing and making recommendations to our Board on our policy
and structure concerning remuneration and appraisal of Directors and senior
management and on the establishment of a formal and transparent procedure for
developing policy on such remuneration and appraisal;
 determining the terms of the specific remuneration package of each Director and
members of senior management;
 reviewing and approving performance-based remuneration by reference to corporate
goals and objectives resolved by our Directors from time to time;
 reviewing and/or approving matters relating to share schemes under Chapter 17 of
the Listing Rules; and
 other duties conferred by our Board.
Nomination Committee
We have established a nomination committee with written terms of reference in
compliance with paragraph B.3 of part 2 of the Corporate Governance Code. The Nomination
Committee consists of Dr. QIAN Meifen (ځߕMr. LI Wei ( ҽਃ) and Mr. LIN Qi (ೡ),
with Dr. QIAN Meifen (ځߕbeing the chairperson of the committee.
The primary duties of the Nomination Committee are to make recommendations to our
Board in relation to the appointment and removal of Directors which includes, amongst other
things:
 reviewing the structure, size and composition of our Board on a regular basis and
making recommendations to our Board regarding any proposed changes;
DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
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 identifying, selecting or making recommendations to our Board on the selection of
individuals nominated for directorships;
 assessing the independence of independent non-executive Directors;
 making recommendations to our Board on relevant matters relating to the
appointment, re-appointment and removal of our Directors; and
 other duties conferred by our Board.
Strategy Committee
We have established a strategy committee with written terms of reference. The Strategy
Committee consists of Mr. LIN Qi (ೡ), Dr. HU Zhe (ࡪߡMr. ZHAO Yongsheng (͛),
Mr. LIU Huiyou ( ᄎึʾ) and Mr. CHEN Fei (࠭with Mr. LIN Qi (ೡ) being the
chairperson of the committee.
The primary duties of the Strategy Committee are to formulate, evaluate and facilitate
long-term development strategies and major investment decisions of our Group, which
includes, amongst other things:
 evaluating and advising on our long-term strategic plans and other significant
matters that may affect our development strategies; and
 other duties conferred by our Board.
CORPORATE GOVERNANCE
Our Company is committed to achieving high standards of corporate governance with a
view to safeguarding the interests of our Shareholders.
Code Provision A.2.1 of the Corporate Governance Code
Under paragraph C.2.1 of the Corporate Governance Code, the roles of chairman and
chief executive should be separate and should not be performed by the same individual. Mr. Lin
is the chairperson of our Board and our chief executive officer. With considerable experience
in the fuel cell industry and having served in our Group since its establishment, Mr. Lin is in
charge of the overall corporate and business strategies of our Group. Despite the fact that the
roles of the chairperson of our Board and our chief executive officer are both performed by Mr.
Lin, which constitutes a deviation from paragraph C.2.1 of the Corporate Governance Code,
our Board considers that vesting the roles of the chairperson of our Board and our chief
executive officer both in Mr. Lin is beneficial to the management of our Group. The balance
of power and authority is ensured by the operation of our Board and our senior management,
DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
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--- page 401 ---
which comprises experienced individuals. Upon Listing, our Board will comprise five
executive Directors, one non-executive Director and three independent non-executive
Directors, and therefore will have a strong independence element in its composition.
Save as disclosed above, our Company intends to comply with all applicable code
provisions under the Corporate Governance Code after the Listing.
Board Diversity
We seek to achieve board diversity through the consideration of a number of factors,
including but not limited to gender, age, cultural and educational background, ethnicity,
professional experience, skills, knowledge and length of service. We have adopted a board
diversity policy (the “ Board Diversity Policy ”) to enhance the effectiveness of our Board and
to maintain a high standard of corporate governance. Pursuant to the Board Diversity Policy,
in reviewing and assessing suitable candidates to serve as a Director, the Nomination
Committee will consider a range of diversity perspectives with reference to our Company’s
business model and specific needs, including but not limited to gender, age, language, cultural
and educational background, professional qualifications, skills, knowledge, industry, regional
experience and length of service. Furthermore, our Nomination Committee is responsible for
reviewing the diversity of our Board, reviewing the Board Diversity Policy from time to time,
developing and reviewing measurable objectives for implementing the Board Diversity Policy,
and monitoring the progress on achieving these measurable objectives in order to ensure that
the Board Diversity Policy remains effective.
Our Directors have a balanced mixed of knowledge and skills, including but not limited
to automotive manufacturing, R&D of fuel cell systems, business development, finance and
investment. They obtained degrees in various majors including software engineering,
automotive engineering, business administration, mathematics, economics and finance.
Furthermore, our Board has a relatively wide range of ages, ranging from 39 years old to 60
years old, and consists of seven male members and two female members. Our Company has
reviewed the membership, structure and composition of our Board, and is of the opinion that
the structure of our Board is reasonable, and the experience and skills of the Directors in
various aspects and fields can enable our Company to maintain a high standard of operation.
Our Company will (i) disclose the biographical details of each Director and (ii) report on
the implementation of the Board Diversity Policy (including whether we have achieved board
diversity) in its annual corporate governance report. In particular, our Company will take
opportunities to increase the proportion of female members of our Board when selecting and
recommending suitable candidates for Board appointments to help enhance gender diversity in
accordance with stakeholder expectations and recommended best practices. Our Company also
intends to promote gender diversity when recruiting staff at the mid to senior level so that our
Company will have a pipeline of female senior management and potential successors to our
Board. We believe that such merit-based selection process with reference to our Board
Diversity Policy and the nature of our business will be in the best interests of our Group and
our Shareholders as a whole.
DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
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--- page 402 ---
COMPETITION
Each of our Directors confirms that as of the Latest Practicable Date, he/she did not have
any interest in a business which competes or is likely to compete, directly or indirectly, with
our business, which focuses on the design, development, manufacturing and sales of hydrogen
fuel cell systems, hydrogen production systems and related components, as well as providing
fuel cell engineering and technical services, and requires disclosure under Rule 8.10 of the
Listing Rules.
COMPENSATION OF DIRECTORS, SUPERVISORS AND MANAGEMENT
We offer our executive Directors, employees’ representative Supervisors and senior
management members, who are also employees of our Group, emolument in the form of
salaries, bonuses, allowances and benefits in kind, performance related bonuses, share-based
payment expenses and pension scheme contributions. Our Directors’ remuneration is
determined with reference to the relevant Director’s experience and qualifications, level of
responsibility, performance and the time devoted to our business, and the prevailing market
conditions. Our independent non-executive Directors receive emolument based on their
responsibilities (including being members or the chairperson of Board committees).
The aggregate amounts of remuneration (including salaries, bonuses, allowances and
benefits in kind, performance related bonuses, share-based payment expenses and pension
scheme contributions) which were paid or payable to our Directors and Supervisors for the
three financial years ended December 31, 2021, 2022 and 2023 and the five months ended May
31, 2024 were RMB25.1 million, RMB27.0 million, RMB52.0 million and RMB44.9 million,
respectively.
It is estimated that the aggregate amount of remuneration (including salaries, bonuses,
allowances and benefits in kind, performance related bonuses, share-based payment expenses
and pension scheme contributions) payable to our Directors and Supervisors for the financial
year ending December 31, 2024 would be approximately RMB193.8 million under
arrangements in force as of the date of this prospectus.
For the three financial years ended December 31, 2021, 2022 and 2023 and the five
months ended May 31, 2024, there were four, five, three and four Directors and Supervisors
among the five highest paid individuals, respectively. The aggregate amounts of remuneration
(including salaries, bonuses, allowances and benefits in kind, performance related bonuses,
share-based payment expenses and pension scheme contributions) which were paid or payable
by our Group to our five highest paid individuals (excluding Directors and Supervisors) for the
three financial years ended December 31, 2021, 2022 and 2023 and the five months ended May
31, 2024 were RMB2.3 million, nil, RMB9.6 million and RMB8.6 million, respectively.
DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
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--- page 403 ---
During the Track Record Period, (i) no remuneration was paid to our Directors,
Supervisors or the five highest paid individuals as an inducement to join, or upon joining our
Group, (ii) no compensation was paid to, or receivable by, our Directors, past Directors,
Supervisors, past Supervisors or the five highest paid individuals for the loss of office as a
director of any member of our Group or any other office in connection with the management
of the affairs of any member of our Group, and (iii) none of our Directors and Supervisors
waived or agreed to waive any emoluments.
Except as disclosed above, no other payment has been paid, or is payable, by our Group
to our Directors, Supervisors or the five highest paid individuals of our Group during the Track
Record Period.
For additional information on Directors’ and Supervisors’ remuneration during the Track
Record Period as well as information on the five highest paid individuals, see notes 8 and 9 to
the Accountants’ Report.
DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
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--- page 404 ---
OUR SINGLE LARGEST GROUP OF SHAREHOLDERS
As of the Latest Practicable Date, Mr. Lin, an executive Director, the chairperson of our
Board and the chief executive officer of our Company, was able to exercise approximately
21.96% voting rights in our Company, through (i) 11,834,272 Shares directly held by him, and
(ii) 6,018,428 Shares held by certain ESOP Platforms (namely, Shanghai Weiqing, Shanghai
Weilan and Shanghai Weijing), each of which is a limited partnership established under the
laws of the PRC and is managed by Mr. Lin as its executive partner. Therefore, our Single
Largest Group of Shareholders (namely, Mr. Lin, Shanghai Weiqing, Shanghai Weilan and
Shanghai Weijing) comprise our single largest group of Shareholders before the completion of
the Global Offering. For background and biographical details of Mr. Lin, see “Directors,
Supervisors and Senior Management” in this prospectus. For details of Shanghai Weiqing,
Shanghai Weilan and Shanghai Weijing, see “History, Development and Corporate Structure —
Employee Incentive Platforms” in this prospectus.
Immediately upon completion of the Global Offering (assuming the Over-allotment
Option is not exercised and the options granted under the Pre-IPO Share Option Scheme are
not exercised), our Single Largest Group of Shareholders will be entitled to exercise
approximately 20.73% voting rights in our Company and will remain as our single largest
group of Shareholders. There will be no controlling shareholder of our Company under the
Listing Rules upon Listing.
INDEPENDENCE FROM OUR SINGLE LARGEST GROUP OF SHAREHOLDERS
Our Directors consider that we are capable of carrying on our business independently of
our Single Largest Group of Shareholders and their close associates after the Listing, taking
into consideration the factors below.
Management Independence
Our Board comprises nine Directors, including five executive Directors, one non-
executive Director and three independent non-executive Directors. We believe that our Board
as a whole, together with our senior management, is able to perform the managerial role in our
Group independently from our Single Largest Group of Shareholders for the following
considerations:
(a) each of our Directors is aware of his/her fiduciary duties as a Director which require,
among others, that he/she acts for the benefit of and in the best interests of our
Company and does not allow any conflict between his/her duties as a Director and
his/her personal interests;
(b) our daily management and operation decisions are primarily made by all our
executive Directors and senior management, all of whom have substantial
experience in the industry in which we are engaged and will be able to make
business decisions that are in the best interest of our Group. For details of the
industry experience of our senior management, see “Directors, Supervisors and
Senior Management” in this prospectus;
RELATIONSHIP WITH OUR SINGLE LARGEST GROUP OF SHAREHOLDERS
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--- page 405 ---
(c) we have appointed three independent non-executive Directors with a view to
bringing independent judgment to the decision-making process of our Board;
(d) in the event that there is a potential conflict of interest arising out of any transaction
to be entered into between our Group and a Director and/or his/her associate, he/she
shall abstain from voting and shall not be counted towards the quorum for the
voting; and
(e) we have adopted a series of corporate governance measures to manage conflicts of
interest, if any, between our Group and our Single Largest Group of Shareholders,
which would support our independent management. For further details, see
“ — Corporate Governance Measures” in this section.
Operational Independence
We have full rights to make all decisions on, and to carry out, our own business operations
independently. We have our own departments specializing in these respective areas which have
been in operation and are expected to continue to operate independently from our Single
Largest Group of Shareholders and their close associates. We hold the licenses, intellectual
property rights and qualifications necessary to carry on our principal business. We also have
independent access to suppliers and customers, and have sufficient capital, facilities and
employees to operate our business independently from our Single Largest Group of
Shareholders and their close associates.
Based on the above, our Directors believe that we will be able to operate independently
from our Single Largest Group of Shareholders and their close associates.
Financial Independence
We have an independent financial system. We make financial decisions according to our
own business needs, and neither our Single Largest Group of Shareholders nor their close
associates intervene with our use of funds. We have established an independent finance
department with a team of finance staff and an independent audit, accounting and financial
management system.
In addition, we have been and are capable of obtaining financing from third parties
without relying on any guarantee or security provided by our Single Largest Group of
Shareholders or their close associates. As of the Latest Practicable Date, there was no loan,
advance or guarantee provided by our Single Largest Group of Shareholders or their close
associates.
Based on the above, our Directors believe that we are capable of carrying on our business
independently of, and do not place undue reliance on, our Single Largest Group of
Shareholders and their close associates after the Listing.
RELATIONSHIP WITH OUR SINGLE LARGEST GROUP OF SHAREHOLDERS
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--- page 406 ---
CORPORATE GOVERNANCE MEASURES
Our Directors recognize the importance of good corporate governance in protecting our
Shareholders’ interests. We have adopted the following measures to safeguard good corporate
governance standards and to avoid potential conflicts of interests between our Group and our
Single Largest Group of Shareholders:
(a) under the Articles of Association, where a Shareholders’ meeting is to be held for
considering proposed transactions in which our Single Largest Group of
Shareholders or any of their respective associates is interested, our Single Largest
Group of Shareholders and their associates will not vote on the relevant resolutions
and shall not be counted in the quorum for the voting;
(b) our Company has established internal control mechanisms to identify connected
transactions. Upon Listing, if our Company enters into connected transactions with
our Single Largest Group of Shareholders or any of their associates, our Company
will comply with the applicable Listing Rules;
(c) our Board consists of a balanced composition of our executive Directors, non-
executive Director and independent non-executive Directors, with independent
non-executive Directors representing not less than one-third of our Board to ensure
that our Board is able to effectively exercise independent judgment in its
decision-making process and provide independent advice to our Shareholders. Our
independent non-executive Directors individually and collectively possess the
requisite knowledge and experience to perform their duties. They will review
whether there is any conflict of interests between our Group and our Single Largest
Group of Shareholders and provide impartial and professional advice to protect the
interests of our minority Shareholders;
(d) where our Directors reasonably request the advice of independent professionals,
such as financial advisers, for our Company, the appointment of such independent
professionals will be made at our Company’s expenses; and
(e) we have appointed Maxa Capital Limited as our compliance adviser to provide
advice and guidance to us in respect of compliance with the applicable laws in Hong
Kong and the Listing Rules, including various requirements relating to corporate
governance.
Based on the above, our Directors believe that sufficient corporate governance measures
have been put in place to manage conflicts of interests that may arise between our Group and
our Single Largest Group of Shareholders and to protect our Shareholders’ interests as a whole
after the Listing.
RELATIONSHIP WITH OUR SINGLE LARGEST GROUP OF SHAREHOLDERS
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--- page 407 ---
So far as our Directors are aware, immediately following the completion of the Global
Offering and without taking into account any H Shares which may be issued pursuant to the
exercise of the Over-allotment Option and any Domestic Shares which may be issued pursuant
to the exercise of the options granted under the Pre-IPO Share Option Scheme, the following
persons will have an interest or short position in the Shares or the underlying Shares which
would fall to be disclosed to our Company and the Hong Kong Stock Exchange under the
provisions of Divisions 2 and 3 of Part XV of the SFO or, will be, directly or indirectly,
interested in 10% or more of the nominal value of any class of share capital carrying rights to
vote in all circumstances at general meetings of our Company:
Name of Shareholder
Capacity/nature
of interest
Number of
Shares held
Approximate
percentage of
shareholding in the
relevant proportion
of Shares (1)
Approximate
percentage of
shareholding in the
total issued share
capital of our
Company (1)
(%) (%)
Mr. Lin (2) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Beneficial owner;
Interest in
controlled
corporations
18,852,700
Domestic Shares
41.45 21.89
Shanghai Weiqing (2)(3) /H1118/H1118/H1118/H1118/H1118Beneficial owner 3,652,700
Domestic Shares
8.03 4.24
Shanghai Weijun (3) /H1118/H1118/H1118/H1118/H1118/H1118/H1118Interest in controlled
corporations
3,652,700
Domestic Shares
8.03 4.24
Sinopec Capital Co., Ltd. ( ʕ
ʮ̡)
(“Sinopec Capital ”)(4) /H1118/H1118/H1118
Beneficial owner 2,912,975
H Shares
7.16 3.38
8,738,925
Domestic Shares
19.21 10.15
China Petrochemical
Corporation (ʷʈ
ʮ̡)(4) /H1118/H1118/H1118/H1118/H1118/H1118/H1118
Interest in controlled
corporations
2,912,975
H Shares
7.16 3.38
8,738,925
Domestic Shares
19.21 10.15
China Petroleum & Chemical
Corporation (ʷʈ
ʮ̡)(4) /H1118/H1118/H1118/H1118/H1118/H1118/H1118
Interest in controlled
corporations
2,912,975
H Shares
7.16 3.38
8,738,925
Domestic Shares
19.21 10.15
Ms. ZHANG Xiuying
(ߵ)H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Beneficial owner 3,863,800
H Shares
9.50 4.49
SUBSTANTIAL SHAREHOLDERS
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--- page 408 ---
Name of Shareholder
Capacity/nature
of interest
Number of
Shares held
Approximate
percentage of
shareholding in the
relevant proportion
of Shares (1)
Approximate
percentage of
shareholding in the
total issued share
capital of our
Company (1)
(%) (%)
National Manufacturing
Transformation and
Upgrade Fund Co., Ltd. ( ਷
΅
ʮ̡) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Beneficial owner 3,735,405
Domestic Shares
8.21 4.34
Ningbo Meishan Free Trade
Port Zone Pengfan Zhibin
Investment Partnership
(Limited Partnership) (ت
೼ಥਜᘄɭʘᏵҳ༟
ΥྫΆุ(Υྫ))
(“Pengfan Zhibin ”)
(5)(6) /H1118/H1118
Beneficial owner 3,000,000
H Shares
7.38 3.48
Ms. LIANG Lanyin ( ૑ᚆ
ত)(5) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Interest in controlled
corporations
4,001,000
H Shares
9.84 4.64
Shenzhen Qianhai Chunyang
Asset Management Co.,
Ltd. (ජ༟ପ၍
ʮ̡)( “ Chunyang
Capital ”)
(6) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Interest in controlled
corporations
5,539,497
H Shares
13.62 6.43
Shenzhen Chunyang
Chuangxian Information
Consulting Partnership
(Limited Partnership) ( ଉέ
ፔ༔ΥྫΆุ
(Υྫ))
(6) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Interest in controlled
corporations
5,539,497
H Shares
13.62 6.43
Mr. FU Junru (ν)(6) /H1118/H1118/H1118Interest in controlled
corporations
5,539,497
H Shares
13.62 6.43
Huiyang Jingneng Investment
Management (Beijing) Co.,
Ltd. (ԯঐҳ༟၍ଣ(̏
ԯ)ʮ̡)
(7) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Interest in controlled
corporations
2,574,000
H Shares
6.33 2.99
Mr. LU Qingping ( ኁ૶̻)(7) /H1118Interest in controlled
corporations
2,574,000
H Shares
6.33 2.99
Ningbo Trustbridge II Equity
Investment Partnership
(Limited Partnership) (ت
ᛆҳ༟ΥྫΆุ
(Υྫ)) (“ Trustbridge
II”)
(8) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Beneficial owner 2,191,700
H Shares
5.39 2.54
SUBSTANTIAL SHAREHOLDERS
– 398 –


--- page 409 ---
Name of Shareholder
Capacity/nature
of interest
Number of
Shares held
Approximate
percentage of
shareholding in the
relevant proportion
of Shares (1)
Approximate
percentage of
shareholding in the
total issued share
capital of our
Company (1)
(%) (%)
Ningbo Trustbridge
Investment Management
Partnership (Limited
Partnership) (ҳ༟
၍ଣΥྫΆุ(Υ
ྫ))
(8) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Interest in controlled
corporations
2,191,700
H Shares
5.39 2.54
Yimeng Co., Ltd. (΅
ʮ̡)(8) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Interest in controlled
corporations
2,191,700
H Shares
5.39 2.54
Shanghai Trustbridge New
Economy Equity
Investment Management
Partnership (Limited
Partnership) (อ຾
ᛆҳ༟၍ଣΥྫΆุ
(Υྫ))
(8) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Interest in controlled
corporations
2,922,300
H Shares
7.19 3.39
Shanghai Trustbridge
Investment Management
Co., Ltd. (ҳ༟၍
ʮ̡)
(8)/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Interest in controlled
corporations
2,922,300
H Shares
7.19 3.39
Zhengzhou Spruce
Automotive Industry Equity
Investment Fund (Limited
Partnership) ( ቍψථӄӛԓ
ږ(Υ
ྫ)) (“ Zhengzhou
Spruce ”)
(9) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Beneficial owner;
Interest held
jointly with
another person
4,994,961
H Shares
12.29 5.80
Yutong Bus Co., Ltd.
(ʮ̡)
(“Yutong Bus ”)(9) /H1118/H1118/H1118/H1118/H1118/H1118
Beneficial owner;
Interest held
jointly with
another person
4,994,961
H Shares
12.29 5.80
Mr. WAN Jingzhao
(ຬ౻๫)(9) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Beneficial owner;
Interest held
jointly with
another person
4,994,961
H Shares
12.29 5.80
Zhengzhou Yunshan
Investment Management
Co., Ltd. ( ቍψථӄҳ༟၍
ʮ̡)
(9)/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Interest in controlled
corporations
4,994,961
H Shares
12.29 5.80
SUBSTANTIAL SHAREHOLDERS
– 399 –


--- page 410 ---
Name of Shareholder
Capacity/nature
of interest
Number of
Shares held
Approximate
percentage of
shareholding in the
relevant proportion
of Shares (1)
Approximate
percentage of
shareholding in the
total issued share
capital of our
Company (1)
(%) (%)
Lhasa Centennial Deyu
Industrial Co., Ltd. (ᔜϵ
ʮ̡)(9) /H1118/H1118/H1118
Interest in controlled
corporations
4,994,961
H Shares
12.29 5.80
Zhengzhou Yutong Group
Co., Ltd. ( ቍψρஷණྠϞ
ʮ̡)(9) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Interest in controlled
corporations
4,994,961
H Shares
12.29 5.80
Zhengzhou Tongtai Zhihe
Enterprise Management
Center (Limited
Partnership) ( ቍψஷइқΥ
Άุ၍ଣʕː(Υ
ྫ))
(9) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Interest in controlled
corporations
4,994,961
H Shares
12.29 5.80
Zhengzhou Tongtai Hezhi
Management Consulting
Co., Ltd. ( ቍψஷइΥ౽၍
ʮ̡)
(9) /H1118/H1118/H1118/H1118/H1118/H1118
Interest in controlled
corporations
4,994,961
H Shares
12.29 5.80
Mr. TANG Yuxiang ( ಷ͗
ୂ)(9) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Interest in controlled
corporations
4,994,961
H Shares
12.29 5.80
Lhasa Deyu Xinrong
Industrial Co., Ltd. (ᔜᅃ
ʮ̡)(9) /H1118/H1118/H1118
Interest in controlled
corporations
4,994,961
H Shares
12.29 5.80
FAW Jiefang Automotive Co.,
Ltd. (ʮ
̡)(10) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Beneficial owner 3,600,000
Domestic Shares
7.92 4.18
FAW Jiefang Group Co., Ltd.
(ʮ
̡)(10) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Interest in controlled
corporations
3,600,000
Domestic Shares
7.92 4.18
Notes:
(1) The calculation is based on the total number of 45,482,153 Domestic Shares in issue and 40,657,138 H
Shares (assuming the Over-allotment Option is not exercised and the options granted under the Pre-IPO
Share Option Scheme are not exercised) in issue upon Listing.
(2) The 12,834,272 Domestic Shares Mr. Lin beneficially holds include 1,000,000 Domestic Shares, which
is the maximum number of Domestic Shares which Mr. Lin is entitled to receive pursuant to the exercise
of options granted to him under the Pre-IPO Share Option Scheme, subject to the terms and conditions
of these options. Mr. Lin is the executive partner of Shanghai Weilan, Shanghai Weiqing and Shanghai
Weijing and is responsible for their respective management. As such, under the SFO, Mr. Lin is deemed
to be interested in the 6,018,428 Domestic Shares held by Shanghai Weilan, Shanghai Weiqing and
Shanghai Weijing.
SUBSTANTIAL SHAREHOLDERS
– 400 –


--- page 411 ---
(3) As of the date of this prospectus, Shanghai Weijun held approximately 54.18% partnership interest in
Shanghai Weiqing as one of its limited partners. As such, under the SFO, Shanghai Weijun is deemed
to be interested in the 3,652,700 Domestic Shares held by Shanghai Weiqing.
(4) As of the Latest Practicable Date, Sinopec Capital was held as to 51% by China Petrochemical
Corporation (ʮ̡) and 49% by China Petroleum & Chemical Corporation ( ʕ਷
ʮ̡) (which is a non-wholly owned subsidiary of China Petrochemical Corporation
and listed on the Stock Exchange (stock code: 386) and the Shanghai Stock Exchange (stock code:
600028)), respectively. China Petrochemical Corporation is wholly owned by the State-owned Assets
Supervision and Administration Commission (ึ). As such, under the
SFO, each of China Petrochemical Corporation and China Petroleum & Chemical Corporation is deemed
to be interested in the 2,912,975 H Shares and 8,738,925 Domestic Shares held by Sinopec Capital.
(5) As of the Latest Practicable Date, Ms. LIANG Lanyin ( ૑ᚆত) held approximately 99.81% partnership
interest in Pengfan Zhibin as its sole limited partner and approximately 99.78% partnership interest in
Ningbo Meishan Free Trade Port Zone Jinglong Baoluo Investment Partnership (Limited Partnership)
(೼ಥਜԯඤᘒᖯҳ༟ΥྫΆุ(Υྫ)) as its sole limited partner. As such, under the
SFO, Ms. LIANG Lanyin is deemed to be interested in the 4,001,000 H Shares held by Pengfan Zhibin
and Ningbo Meishan Free Trade Port Zone Jinglong Baoluo Investment Partnership (Limited
Partnership).
(6) Chunyang Capital is the general partner of each of Pengfan Zhibin, Shenzhen Chunyang Songteng
Venture Capital Partnership (Limited Partnership) (ජ཰ᙜ௴ุҳ༟ΥྫΆุ(Υྫ)) and
Ningbo Meishan Free Trade Port Zone Jinglong Baoluo Investment Partnership (Limited Partnership)
(೼ಥਜԯඤᘒᖯҳ༟ΥྫΆุ(Υྫ)). Shenzhen Chunyang Hongxin Venture Capital
Partnership (Limited Partnership) (௴ุҳ༟ΥྫΆุ(Υྫ)) is managed by its
general partner, Shenzhen Qianhai Chunyang Venture Capital Partnership (Limited Partnership) ( ଉέ
ජ௴ุҳ༟ΥྫΆุ(Υྫ)), whose general partner is Chunyang Capital.
As of the Latest Practicable Date, Chunyang Capital was held as to 80% by Shenzhen Chunyang
Chuangxian Information Consulting Partnership (Limited Partnership) (ፔ༔ΥྫΆ
ุ(Υྫ)) whose general partner is Mr. FU Junru (ν).
As such, under the SFO, each of Chunyang Capital, Shenzhen Chunyang Chuangxian Information
Consulting Partnership (Limited Partnership) and Mr. FU Junru is deemed to be interested in the
5,539,497 H Shares held by Pengfan Zhibin, Shenzhen Chunyang Songteng Venture Capital Partnership
(Limited Partnership), Ningbo Meishan Free Trade Port Zone Jinglong Baoluo Investment Partnership
(Limited Partnership) and Shenzhen Chunyang Hongxin Venture Capital Partnership (Limited
Partnership).
(7) Each of Ningbo Huiqing Jingnuo Venture Capital Partnership (Limited Partnership) (౉૶ԯፕ௴ุ
ҳ༟ΥྫΆุ(Υྫ)) and Ningbo Luping Jingneng Venture Capital Partnership (Limited
Partnership) (ኁ̻ԯঐ௴ุҳ༟ΥྫΆุ(Υྫ)) is managed by its general partner, Huiyang
Jingneng Investment Management (Beijing) Co., Ltd. (ԯঐҳ༟၍ଣ(̏ԯ)ʮ̡), which is
wholly owned by Mr. LU Qingping ( ኁ૶̻). As such, under the SFO, each of Huiyang Jingneng
Investment Management (Beijing) Co., Ltd. and Mr. LU Qingping is deemed to be interested in the
2,574,000 H Shares held by Ningbo Huiqing Jingnuo Venture Capital Partnership (Limited Partnership)
and Ningbo Luping Jingneng Venture Capital Partnership (Limited Partnership).
(8) Trustbridge II is managed by its general partner, Ningbo Trustbridge Investment Management
Partnership (Limited Partnership) (ҳ༟၍ଣΥྫΆุ(Υྫ)), whose general partner is
Shanghai Trustbridge New Economy Equity Investment Management Partnership (Limited Partnership)
(ᛆҳ༟၍ଣΥྫΆุ(Υྫ)), whose general partner is Shanghai Trustbridge
Investment Management Co., Ltd. (ʮ̡). As of the Latest Practicable Date,
Trustbridge II was held as to approximately 98.96% by Yimeng Co., Ltd. (ʮ̡) as its sole
limited partner.
Besides, Shanghai Trustbridge New Economy Equity Investment Management Partnership (Limited
Partnership) is the general partner of Ningbo Trustbridge New Economy II Equity Investment
Partnership (Limited Partnership) (ᛆҳ༟ΥྫΆุ(Υྫ)).
SUBSTANTIAL SHAREHOLDERS
– 401 –


--- page 412 ---
As such, under the SFO, each of Ningbo Trustbridge Investment Management Partnership (Limited
Partnership) and Yimeng Co., Ltd. is deemed to be interested in the 2,191,700 H Shares held by
Trustbridge II, and each of Shanghai Trustbridge New Economy Equity Investment Management
Partnership (Limited Partnership) and Shanghai Trustbridge Investment Management Co., Ltd. is
deemed to be interested in the 2,922,300 H Shares held by Trustbridge II and Ningbo Trustbridge New
Economy II Equity Investment Partnership (Limited Partnership).
(9) Zhengzhou Spruce, Yutong Bus and Mr. WAN Jingzhao ( ຬ౻๫) beneficially hold 3,363,798 H Shares,
1,494,162 H Shares and 137,001 H Shares, respectively. As confirmed by Zhengzhou Spruce, Yutong
Bus and Mr. WAN Jingzhao, they are parties acting in concert in exercising Shareholders’ rights
pertaining to our Company. As such, under the SFO, each of Zhengzhou Spruce, Yutong Bus and Mr.
WAN Jingzhao is interested in the respective H Shares they beneficially hold and is deemed to be
interested in the H Shares held by the other two parties.
Besides, Zhengzhou Spruce is managed by its general partner, Zhengzhou Yunshan Investment
Management Co., Ltd. (ʮ̡), which was wholly owned by Lhasa Centennial
Deyu Industrial Co., Ltd. (ʮ̡), which was wholly owned by Zhengzhou Yutong
Group Co., Ltd. (ʮ̡), which was in turn held as to 85% by Zhengzhou Tongtai
Zhihe Enterprise Management Center (Limited Partnership) ( ቍψஷइқΥΆุ၍ଣʕː(Υྫ)),
whose general partner is Zhengzhou Tongtai Hezhi Management Consulting Co., Ltd. ( ቍψஷइΥ౽၍
ʮ̡), which was in turn held as to 52% by Mr. TANG Yuxiang ( ಷ͗ୂ) as of the Latest
Practicable Date. Further, as of the Latest Practicable Date, Zhengzhou Spruce was held as to
approximately 79.84% by Lhasa Deyu Xinrong Industrial Co., Ltd. (ʮ̡)a st h e
largest limited partner.
Besides, Yutong Bus was held as to approximately 37.70% directly by Zhengzhou Yutong Group Co.,
Ltd. as of the Latest Practicable Date.
As such, under the SFO, (i) each of Zhengzhou Yunshan Investment Management Co., Ltd., Lhasa
Centennial Deyu Industrial Co., Ltd. and Lhasa Deyu Xinrong Industrial Co., Ltd. is deemed to be
interested in the H Shares in Zhengzhou Spruce is interested and is deemed to be interested, and (ii) each
of Zhengzhou Yutong Group Co., Ltd., Zhengzhou Tongtai Zhihe Enterprise Management Center
(Limited Partnership), Zhengzhou Tongtai Hezhi Management Consulting Co., Ltd. and Mr. TANG
Yuxiang is deemed to be interested in the H Shares in Zhengzhou Spruce and Yutong Bus are interested
and are deemed to be interested.
(10) FAW Jiefang Automotive Co., Ltd. (ʮ̡) is a wholly-owned subsidiary of FAW
Jiefang Group Co., Ltd. (ʮ̡), which is listed on the Shenzhen Stock Exchange
(stock code: 000800). As such, under the SFO, FAW Jiefang Group Co., Ltd. is deemed to be interested
in the 3,600,000 Domestic Shares held by FAW Jiefang Automotive Co., Ltd..
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, Supervisors and Substantial Shareholders — 1.
Disclosure of Interests” 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 (assuming the Over-allotment Option
is not exercised and the options granted under the Pre-IPO Share Option Scheme are not
exercised), 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
– 402 –


--- page 413 ---
This section presents certain information regarding our share capital prior to and upon the
completion of the Global Offering.
BEFORE THE GLOBAL OFFERING
As of the Latest Practicable Date, the registered share capital of our Company was
RMB81,311,371 comprising 81,311,371 Domestic Shares with a nominal value of RMB1.00
each.
UPON COMPLETION OF THE GLOBAL OFFERING
Immediately upon completion of the Global Offering, assuming the Over-allotment
Option is not exercised and without taking into account any Domestic Shares which may be
issued pursuant to the exercise of the options granted under the Pre-IPO Share Option Scheme,
the share capital of our Company will be as follows:
Description of Shares Number of Shares
Approximate
percentage of
the total issued
share capital
(%)
Domestic Shares in issue (note) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111845,482,153 52.80
H Shares to be converted from
Domestic Shares (note) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111835,829,218 41.59
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/H11184,827,920 5.60
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/H111886,139,291 100.00
Immediately upon completion of the Global Offering, assuming the Over-allotment
Option is fully exercised and without taking into account any Domestic Shares which may be
issued pursuant to the exercise of the options granted under the Pre-IPO Share Option Scheme,
the share capital of our Company will be as follows:
Description of Shares Number of Shares
Approximate
percentage of
the total issued
share capital
(%)
Domestic Shares in issue (note) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111845,482,153 52.36
H Shares to be converted from
Domestic Shares (note) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111835,829,218 41.25
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/H11185,552,100 6.39
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/H111886,863,471 100.00
Note: For details of the identities of the Shareholders whose Domestic Shares will be converted into H Shares
upon Listing, see “History, Development and Corporate Structure — Capitalization of Our Company”
in this prospectus.
SHARE CAPITAL
– 403 –


--- page 414 ---
SHARE CLASSES
Upon completion of the Global Offering and conversion of 35,829,218 Domestic Shares
into H Shares, our Shares will consist of Domestic Shares and H Shares. Both Domestic Shares
and H Shares are ordinary shares in the share capital of our Company. Apart from certain
qualified domestic institutional investors in the PRC, certain qualified PRC investors under the
Shanghai-Hong Kong Stock Connect and the Shenzhen-Hong Kong Stock Connect, and other
persons who are entitled 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
or traded among legal and natural persons of the PRC. On the other hand, Domestic Shares can
only be subscribed for by and traded between legal or natural PRC persons, qualified foreign
institutional investors and foreign strategic investors, and may only be subscribed for and
transferred in Renminbi.
Domestic Shares and H Shares are regarded as one class of shares under our Articles of
Association, and Domestic Shares and H Shares will rank pari passu with each other in all
other respects and, in particular, will rank equally for all dividends or distributions declared,
paid or made after the date of this prospectus. Other than cash, dividends could also be paid
in the form of shares or a combination of cash and shares.
CONVERSION OF OUR DOMESTIC SHARES INTO H SHARES
All our Domestic Shares are not listed or traded on any stock exchange. The holders of
our Domestic Shares may, at their own option, authorize us to apply to the CSRC for
conversion of their respective Domestic Shares to H Shares. After the conversion of Domestic
Shares, such converted Shares may be listed or traded on an overseas stock exchange, provided
that 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 the filing procedure with the CSRC shall have been completed. The listing of
such converted Shares on the Hong Kong Stock Exchange will also require the approval of the
Hong Kong Stock Exchange. In addition, such conversion, trading and listing shall in all
respects 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.
Based on the procedures for the conversion of our Domestic Shares into H Shares as
disclosed in this section, we can apply for the listing of all or any portion of our Domestic
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.
SHARE CAPITAL
– 404 –


--- page 415 ---
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 procedure will need to
be completed in order to effect the conversion: the relevant Domestic Shares will be withdrawn
from the Domestic Share register and we will re-register such Shares on our H Share register
maintained in Hong Kong and instruct the H Share Registrar to issue H Share certificates.
Registration on our H Share register will be conditional on (a) our H Share Registrar lodging
with the Hong Kong Stock Exchange a letter confirming the proper entry of the relevant H
Shares on the H Share register of members and the due dispatch of H Share certificates; and
(b) the admission of the H Shares to trade on the Hong Kong Stock Exchange in compliance
with the Listing Rules, 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.
TRANSFER OF SHARES ISSUED PRIOR TO LISTING DATE
Pursuant to the PRC Company Law, our Shares issued prior to the Listing shall not be
transferred within one year from the Listing Date.
REGISTRATION OF SHARES NOT LISTED ON THE OVERSEAS STOCK
EXCHANGE
According to the Guidelines for the “Full Circulation” Program for Domestic Unlisted
Shares of H-Share Listed Companies ( H΅͡ሗ“ஷ”ˏ‘)
announced by the CSRC, the domestic shareholders of Domestic Shares shall handle share
transfer registration business in accordance with the relevant business rules of the China
Securities Depository and Clearing Corporation Limited. Further, H-share companies should
submit the relevant status reports to the CSRC within 15 days after the transfer registration
with the China Securities Depository and Clearing Corporation Limited of the Domestic Shares
involved in the application is completed.
CIRCUMSTANCES UNDER WHICH A GENERAL MEETING IS REQUIRED
For details of circumstances under which a Shareholders’ general meeting is required, see
“7 General Provisions of General Meetings” in Appendix V to this prospectus.
SHARE CAPITAL
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THE CORNERSTONE PLACING
We have entered into a cornerstone investment agreement (the “ Cornerstone Investment
Agreement ”) with Jiujiang Economic Development Zone Dingchuang Equity Investment
Center (Limited Partnership) (ᛆҳ༟ʕː(Υྫ)) (“ Jiujiang
Dingchuang ”), pursuant to which Jiujiang Dingchuang has agreed to, subject to certain
conditions, subscribe or cause its designated entities to subscribe, at the Offer Price for such
number of Offer Shares (rounded down to the nearest whole board lot of 20 H Shares) that may
be purchased for an aggregate amount of RMB300 million (equivalent to approximately
HK$324.8 million, calculated based on the currency translation of RMB0.92371 to HK$1.00)
(exclusive of brokerage, the SFC transaction levy, the AFRC transaction levy and the Stock
Exchange trading fee) (the “ Cornerstone Placing ”).
At the Offer Price of HK$145.00 per Share (being the low-end of the indicative Offer
Price range), the number of Offer Shares to be subscribed for by Jiujiang Dingchuang would
be 2,239,840 Offer Shares, representing approximately 46.39% of the Offer Shares to be issued
pursuant to the Global offering and approximately 2.60% of our total issued share capital
immediately upon completion of the Global Offering (assuming the Over-allotment Option is
not exercised and the options granted under the Pre-IPO Share Option Scheme are not
exercised).
At the Offer Price of HK$155.00 per Share (being the mid-point of the indicative Offer
Price range), the number of Offer Shares to be subscribed for by Jiujiang Dingchuang would
be 2,095,320 Offer Shares, representing approximately 43.40% of the Offer Shares to be issued
pursuant to the Global offering and approximately 2.43% of our total issued share capital
immediately upon completion of the Global Offering (assuming the Over-allotment Option is
not exercised and the options granted under the Pre-IPO Share Option Scheme are not
exercised).
At the Offer Price of HK$165.00 per Share (being the high-end of the indicative Offer
Price range), the number of Offer Shares to be subscribed for by Jiujiang Dingchuang would
be 1,968,340 Offer Shares, representing approximately 40.77% of the Offer Shares to be issued
pursuant to the Global offering and approximately 2.29% of our total issued share capital
immediately upon completion of the Global Offering (assuming the Over-allotment Option is
not exercised and the options granted under the Pre-IPO Share Option Scheme are not
exercised).
Our Company is of the view that the Cornerstone Placing will help to raise the profile of
our Company and to signify that such investor has confidence in our business and prospects.
Our Company became acquainted with Jiujiang Dingchuang through our business network.
The Cornerstone Placing will form part of the International Offering and Jiujiang
Dingchuang will not subscribe for any Offer Shares under the Global Offering (other than
pursuant to the Cornerstone Investment Agreement). The Offer Shares to be subscribed for by
Jiujiang Dingchuang will rank pari passu in all respects with the other fully paid Shares in
CORNERSTONE PLACING
– 406 –


--- page 417 ---
issue following the completion of the Global Offering and will be counted towards the public
float of our Company under Rule 8.08 of the Listing Rules. Immediately following the
completion of the Global Offering, Jiujiang Dingchuang will not become a substantial
shareholder of our Company or have any Board representation in our Company. Other than a
guaranteed allocation of the relevant Offer Shares at the Offer Price, Jiujiang Dingchuang does
not have any preferential rights in the Cornerstone Investment Agreement compared with other
public Shareholders.
To the best knowledge of our Company, (i) Jiujiang Dingchuang is an Independent Third
Party; (ii) Jiujiang Dingchuang is not accustomed to take instructions from our Company, our
Directors, Supervisors, chief executive, substantial Shareholders, existing Shareholders, our
subsidiaries or any of their respective close associates in relation to the acquisition, disposal,
voting or other disposition of Shares registered in its name or otherwise held by it; and (iii) the
subscription of the relevant Offer Shares by Jiujiang Dingchuang is not financed by our
Company, our Directors, Supervisors, chief executive, substantial Shareholders, existing
Shareholders, our subsidiaries or any of their respective close associates.
As confirmed by Jiujiang Dingchuang, its subscription under the Cornerstone Placing
would be financed by its own internal resources. None of Jiujiang Dingchuang and its
controlling entities is listed on any stock exchange. Jiujiang Dingchuang has confirmed that all
necessary approvals have been obtained with respect to the Cornerstone Placing. There is no
side arrangement or agreement between our Company and Jiujiang Dingchuang, nor any direct
or indirect benefit conferred on Jiujiang Dingchuang by virtue of or in relation to the Global
Offering, other than a guaranteed allocation of the relevant Offer Shares at the Offer Price.
The number of Offer Shares to be subscribed for by Jiujiang Dingchuang may be affected
by reallocation of the Offer Shares between the International Offering and the Hong Kong
Public Offering in the event of over-subscription under the Hong Kong Public Offering as
described in the paragraph headed “Structure of the Global Offering — The Hong Kong Public
Offering — Reallocation” in this prospectus. Details of the actual number of Offer Shares to
be allocated to Jiujiang Dingchuang will be disclosed in the allotment results announcement of
our Company to be published on or around December 5, 2024.
Jiujiang Dingchuang has agreed that the Sole Sponsor (for itself and on behalf of the
Underwriters) may defer the delivery of all or any part of the Offer Shares it has subscribed
for to a date later than the Listing Date. Such delayed delivery arrangement is in place to
facilitate the over-allocation in the International Offering. Nevertheless, Jiujiang Dingchuang
has agreed to pay for the relevant Offer Shares that it has subscribed for before Listing. As
such, there will be no deferred settlement of the investment amount for the Offer Shares to be
subscribed for by Jiujiang Dingchuang pursuant to the Cornerstone Investment Agreement. If
there is no over-allocation in the International Offering, delayed delivery will not take place.
CORNERSTONE PLACING
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--- page 418 ---
The following table sets forth details of the Cornerstone Placing:
Assuming the
Over-allotment Option
is not exercised and the
options granted under the
Pre-IPO Share Option
Scheme are not exercised
Assuming the
Over-allotment Option
is fully exercised and the
options granted under the
Pre-IPO Share Option
Scheme are not exercised
Cornerstone Investor
Total
Investment
Amount (1)
Number of
Offer
Shares (2)
Approximate
percentage of
the Offer
Shares
Approximate
percentage of
the total
issued share
capital of our
Company
Approximate
percentage of
the Offer
Shares
Approximate
percentage of
the total
issued share
capital of our
Company
(RMB in
million)
Based on the Offering Price of HK$145.00 (being the low-end of the indicative Offer Price range)
Jiujiang
Dingchuang /H1118/H1118/H1118/H1118300 2,239,840 46.39% 2.60% 40.34% 2.58%
Based on the Offering Price of HK$155.00 (being the mid-point of the indicative Offer Price range)
Jiujiang
Dingchuang /H1118/H1118/H1118/H1118300 2,095,320 43.40% 2.43% 37.74% 2.41%
Based on the Offering Price of HK$165.00 (being the high-end of the indicative Offer Price range)
Jiujiang
Dingchuang /H1118/H1118/H1118/H1118300 1,968,340 40.77% 2.29% 35.45% 2.27%
Notes:
(1) Exclusive of brokerage, the SFC transaction levy, the AFRC transaction levy and the Stock Exchange trading
fee, and to be converted to Hong Kong dollars based on the exchange rate of RMB0.92371 to HK$1.00.
(2) Rounded down to the nearest whole board lot of 20 H Shares.
THE CORNERSTONE INVESTOR
Jiujiang Dingchuang is a limited partnership established in the PRC in April 2024 with
registered capital of RMB2,500,000,000. Jiujiang Dingchuang is an investment fund managed
by Jiujiang Dinghui Hongying Fund Management Co., Ltd. (ʮ̡)
(“Dinghui Hongying ”) as its executive partner and is principally engaged in private equity
investment.
CORNERSTONE PLACING
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--- page 419 ---
Dinghui Hongying is a limited company established in the PRC. As of the Latest
Practicable Date, Dinghui Hongying was indirectly held as to 55% by Jiujiang State-owned
Investment Holding Group Co., Ltd. (ʮ̡)( “ Jiujiang
Investment Holding Group ”) and as to 45% by Jiujiang City development Group Co., Ltd. ( ɘ
ʮ̡)( “ Jiujiang City Development Group ”), which in turn was held
as to 90% by Jiujiang Investment Holding Group. Jiujiang Investment Holding Group is wholly
owned by Jiujiang State-owned Assets Supervision and Administration Committee ( ɘϪ̹਷
ึ).
As of the Latest Practicable Date, Jiujiang Dingchuang had two limited partners, being (i)
Jiujiang Industrial Investment Guidance Fund Partnership (Limited Partnership) ( ɘϪ̹ʈุ
ΥྫΆุ(Υྫ)) (“ Jiujiang Industrial Investment Fund ”), which
held 50% partnership interest in Jiujiang Dingchuang, and (ii) Jiujiang Economic Development
Zone Innovative Industry Development Guidance Fund (Limited Partnership) ( ɘϪ຾කਜ௴อ
ږ(Υྫ)) (“ Jiujiang Innovative Development Fund ”), which held
49.96% partnership interest in Jiujiang Dingchuang. Jiujiang Industrial Investment Fund is a
limited partnership established in the PRC and is also managed by Dinghui Hongying as its
executive partner. As of the Latest Practicable Date, Jiujiang Industrial Investment Fund had
three limited partners, all of which were indirectly wholly owned by Jiujiang State-owned
Assets Supervision and Administration Committee. Jiujiang Innovative Development Fund is
a limited partnership established in the PRC and is managed by Jiujiang Kuntai Equity
Investment Fund Management Co., Ltd. (ʮ̡)a si t s
executive partner. As of the Latest Practicable Date, Jiujiang Kuntai Equity Investment Fund
Management Co., Ltd. was held as to 45% by Jiujiang Fuhe Construction Investment Group
Co., Ltd. (ʮ̡) as its largest shareholder, which is a wholly-
owned subsidiary of Jiujiang City Development Group. As of the Latest Practicable Date,
Jiujiang Innovative Development Fund had two limited partners, being (i) Jiujiang Fuhe
Construction Investment Group Co., Ltd., which held 50% partnership interest in Jiujiang
Innovative Development Fund, and (ii) Jiujiang Economic Development Finance Enterprise
Management Co., Ltd. (ʮ̡), which held 49.9% partnership
interest in Jiujiang Innovative Development Fund and was wholly owned by Jiujiang Economic
and Technology Development Zone Finance and Monetary Bureau (݁
ፄ҅).
For the purpose of the cornerstone investment, Jiujiang Dingchuang will, through its
wholly-owned subsidiary, DINGCHUANG HONGKONG INVESTMENT LIMITED ( ཻ௴(࠰
ಥ)ʮ̡), subscribe for and hold such number of Offer Shares under the relevant
Cornerstone Investment Agreement.
CORNERSTONE PLACING
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--- page 420 ---
CLOSING CONDITIONS
The obligation of Jiujiang Dingchuang to subscribe for the Offer Shares under the
respective Cornerstone Investment Agreement is subject to, among other things, the following
closing conditions:
(i) the Underwriting Agreements being entered into and having become effective and
unconditional (in accordance with their respective original terms or as subsequently
waived or varied by agreement of the parties thereto) by no later than the time and
date as specified in the Underwriting Agreements, and neither of the Underwriting
Agreements having been terminated;
(ii) the Offer Price having been agreed according to the price determination agreement
to be signed among the parties thereto in connection with the Global Offering;
(iii) the Stock Exchange having granted the listing of, and permission to deal in, the H
Shares (including the H Shares to be subscribed for by Jiujiang Dingchuang) as well
as other applicable approvals and waivers, and such approvals, waivers or
permissions having not been revoked prior to the commencement of dealings in the
H Shares on the Stock Exchange;
(iv) that no law shall have been enacted or promulgated prohibiting the consummation
of the transactions contemplated in the Global Offering or in the Cornerstone
Investment Agreement, and there shall be no order or injunction from any
governmental authority or a court of competent jurisdiction in effect precluding or
prohibiting consummation of such transactions contemplated in the Global Offering
or in the Cornerstone Investment Agreement; and
(v) that the representations, warranties, undertakings, acknowledgements and
confirmations of Jiujiang Dingchuang under the Cornerstone Investment Agreement
are accurate and true in all respects and not misleading as of the date of the
Cornerstone Investment Agreement and as of the closing of the Cornerstone Placing,
and there is no material breach of the Cornerstone Investment Agreement on the part
of Jiujiang Dingchuang.
RESTRICTIONS ON DISPOSALS BY THE CORNERSTONE INVESTOR
Jiujiang Dingchuang has agreed that it will not, whether directly or indirectly, at any time
during the period of six months following the Listing Date (the “ Lock-up Period ”), dispose
of any of the Offer Shares it has subscribed for pursuant to the relevant Cornerstone Investment
Agreement, save for certain limited circumstances, such as transfers to any of its wholly-owned
subsidiaries which will be bound by the same obligations of Jiujiang Dingchuang, including the
Lock-up Period restriction.
CORNERSTONE PLACING
– 410 –


--- page 421 ---
You should read the following discussion and analysis relating to our Group in
conjunction with our consolidated financial information included in “Appendix I —
Accountants’ Report” to this prospectus, together with the accompanying notes. Our
consolidated financial information has been prepared in accordance with IFRS, which
may differ in material aspects from generally accepted accounting principles in other
jurisdictions. You should read the entire Accountants’ Report and not merely rely on the
information contained in this section.
The following discussion and analysis contain forward-looking statements that
reflect the current views with respect to future events and financial performance. These
statements are based on assumptions and analysis made by us in light of our experience
and perception of historical trends, current conditions and expected future developments,
as well as other factors that we believe are appropriate under the circumstances.
However , whether the actual outcome and developments will meet our expectations and
predictions depends on a number of risks and uncertainties over which we do not have
control. For details, see “Forward-looking Statements” and “Risk Factors” in this
prospectus.
OVERVIEW
We are a leading hydrogen technology company in China. We have proven track record
in policy-driven projects, as well as noteworthy achievements in market-driven projects. Our
established presence in the domestic hydrogen market is complemented by our successful and
constant expansion into overseas markets, with a growing revenue contribution in overseas
markets. We focus on the design, development, manufacturing and sales of hydrogen fuel cell
systems, hydrogen production systems and related components, as well as providing fuel cell
engineering and technical services, enabling us to provide one-stop solution for hydrogen
production and end-use applications. Our comprehensive product and service portfolio,
covering the entire hydrogen industrial chain — from upstream hydrogen generation to
downstream applications in vehicles and machinery, enables us to achieve the synergies among
hydrogen and electricity, therefore forming a new business model of
“electricity-hydrogen-electricity”. Since our inception, we have continued to improve our
hydrogen fuel cell technology to develop products with enhanced performance, long lifespan,
great environmental adaptability and cost-effectiveness. We ranked the first in the hydrogen
fuel cell system market in China, in terms of the sales power output of hydrogen fuel cell
systems in 2023, with a market share of 23.8%. In terms of the total sales power output of
hydrogen fuel cell systems that have been used for heavy-duty trucks in 2023, we ranked the
first in the hydrogen fuel cell system market in China, with a market share of 42.4%.
FINANCIAL INFORMATION
–4 1 1–


--- page 422 ---
During the Track Record Period, we sold fuel cell systems with different rated power.
These hydrogen fuel cell systems were mainly sold to fuel cell commercial vehicle
manufacturers and some fuel cell stack manufacturers, with the end customers including,
among others, bus companies, logistics companies, freight transportation companies, public
transportation companies, engineering and construction companies, etc. Based on our technical
expertise and experience in the application of fuel cells in various end-use scenarios, we also
offer components including hydrogen supply systems, fuel cell engine accessories, among
others, and integrate them with our fuel cell systems to deliver comprehensive solutions to our
customers. Leveraging our extensive engineering and technical expertise in hydrogen fuel
cells, we also offered professional and tailored engineering application development services,
including customized design and development of fuel cell systems, calibration and related
assessment services and others. Furthermore, in August 2023, we started to launch products
used for high purity hydrogen production, such as proton-exchange membrane
water electrolysis hydrogen production systems, hydrogen production power sources, and
electrodes for alkaline electrolysis cells, which are mainly sold to hydrogen production
facilities and hydrogen production system manufacturers, allowing us to realize the
synergies among hydrogen and electricity, therefore forming a new business model of
“electricity-hydrogen-electricity”.
As of May 31, 2024, our fuel cell systems had powered over 5,900 fuel cell vehicles on
the road across China, and reducing carbon emissions by around 116,851 tons. Up to May 31,
2024, accumulated mileage operated by fuel cell vehicles powered by fuel cell systems we sold
amounted to around 210 million kilometers. Moreover, we have received numerous scientific
research project awards, led several major national scientific research projects, and contributed
to national and industry standards. We have also established solid long-term partnerships with
commercial vehicle manufacturers in China such as Yutong Group ( ρஷ) and FAW Jiefang ( ɓ
׳along with good business relationships with renowned international enterprises in
hydrogen fuel cell industry, such as Schaeffler Group in Germany and Toyota Motor in Japan.
Through continuous technology development and product iterations, we have achieved a
steady development during the Track Record Period. Our revenue increased by 15.4% from
RMB524.1 million in 2021 to RMB604.6 million in 2022, and further increased by 48.1% to
RMB895.3 million in 2023. For the five months ended May 31, 2024, our revenue amounted
to RMB12.5 million, representing a decrease compared to the same period in 2023, mainly
driven by the seasonality and fluctuations in customer demands for application of fuel cell
systems and components based on their vehicle production schedules. Accordingly, we
recorded gross profit of RMB61.8 million, RMB49.8 million and RMB179.6 million for 2021,
2022 and 2023, respectively, and gross loss of RMB24.2 million for the five months ended May
31, 2024. For the same periods, we incurred net loss of RMB654.3 million, RMB546.1 million,
RMB577.5 million and RMB409.4 million, respectively. For more information on our adjusted
net loss (non-IFRS measure), see “— Non-IFRS Measure” in this section.
FINANCIAL INFORMATION
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--- page 423 ---
MAJOR FACTORS AFFECTING OUR RESULTS OF OPERATIONS
Our results of operations have been, and are expected to continue to be, affected by a
number of factors, which primarily include the following:
PRC Government’s Policies Supporting the Hydrogen Industry
We primarily engage in the design, development, manufacture, and sales of hydrogen fuel
cell systems, hydrogen production systems, and related components, as well as providing fuel
cell engineering and technical services. As a market player in emerging markets, business
development in this industry is highly driven by policy, particularly government awards,
subsidies or government sponsored projects that directly promote market demand.
In recent years, the PRC government and industry associations have implemented a series
of favorable policies to support the hydrogen industry, including the fuel cell vehicle industry
and the hydrogen production industry. For example, the PRC government established five
demonstration city clusters in 2021 in addition to other initiatives to pilot and incentivize fuel
cell vehicle adoption among market participants. Also, according to the 14th Five Year Plan
(“ɤ̬ʞ”஝ྌ) issued in June 2022, large-scale production and application of hydrogen from
renewable energy received further support from favorable policies. For details, see “Industry
Overview” in this prospectus.
We anticipate that these favorable policies and development plans will continue to drive
the growth of the hydrogen industry, consequently boosting the sales of our hydrogen fuel cell
systems, hydrogen production systems and components, thereby enhancing our revenue and
profitability. Nonetheless, the evolving nature of China’s regulatory framework and
governmental policies regarding fuel cell vehicles and hydrogen production introduces
inherent limitations and uncertainties beyond our control. Moreover, the Chinese government
may continuously adjust and modify these policies. Any alterations to advantageous industry
policies (such as awards or other economic incentives) by relevant government departments
due to policy changes, fiscal tightening, or other reasons, or any reduction in guidance
supporting the demand for fuel cell vehicles, could potentially weaken the market demand for
hydrogen fuel cell systems and components. In such circumstances, this could adversely impact
our business, financial condition, and operational performance.
Competition and Pricing
Competition within the hydrogen fuel cell system market and our pricing strategies
significantly influence our financial performance. Key determinants of our competitiveness in
this market encompass research and development capabilities, product quality, customer
relationships, marketing and distribution channels, competitive pricing, brand recognition, and
after-sales services. We believe that our competitive advantage is derived from our robust
research and development capabilities, the quality of our competitively priced products and
services, strong customer relationships, extensive sales, marketing, and service networks, as
well as substantial brand recognition. However, intensified competition or an inability to
sustain this advantage may adversely affect our operational performance.
FINANCIAL INFORMATION
– 413 –


--- page 424 ---
Our pricing strategies directly influence our revenue, gross margins, and overall
operational performance. When setting prices for our products, we consider various factors
such as prevailing market conditions, production costs, longevity of business relationships,
government incentive policies, and anticipated profit margins.
During the Track Record Period, the average selling price of our hydrogen fuel cell
systems has shown a general downward trend. This trend, confirmed by Frost & Sullivan,
aligns with industry patterns and is primarily attributed to factors such as product
commercialization, advancements in technological capabilities, and improvements in cost-
efficiency. For details, see “— Description of Selected Components of Consolidated
Statements of Profit or Loss — Revenue” in this section.
Research and Development and Product Upgrades
The hydrogen fuel cell system market is characterized by ongoing technological
development, the evolving nature of industry and national standards, an expanding array of
product types, shifting customer demands, frequent introductions and enhancements of new
products. If our competitors adopt new technologies, introduce new product types, establish
new industry and national standards, changes in customer demand, or changes in government
policies and regulations, our existing products may become obsolete, lose market appeal, or
decrease our competitive advantage. Our success hinges upon our ability to refine our existing
product offerings to address evolving customer needs, adapt to technological and competitive
developments, align with emerging industry standards, efficiently execute R&D initiatives, and
timely introduce new products.
We prioritize R&D efforts that we believe hold substantial potential, focusing our R&D
endeavors on core technologies related to hydrogen fuel cell systems, fuel cell stacks and
membrane electrode assemblies, as well as hydrogen production systems. In 2021, 2022 and
2023, our research and development expenses amounted to RMB230.9 million, RMB198.7
million, and RMB220.9 million, respectively, accounting for 44.1%, 32.9%, and 24.7% of our
revenues for the respective periods. For the five months ended May 31, 2024, our research and
development expenses amounted to RMB90.3 million, representing 721.0% of our revenue for
the same period, mainly due to the seasonality nature of our business where we generally
deliver our products to our customers in the second half of a year, and thus have relatively low
revenue in the first half of the year. As of the Latest Practicable Date, we were in the process
of upgrading existing product models and developing new products. We also aim to
continuously optimize the performance of existing products through ongoing R&D efforts. As
the market evolves, there is a continual need to enhance the specifications of our products. Our
ability to design and develop new products to meet evolving demands has been, and will
continue to be, crucial to our survival in this market. Therefore, we anticipate continued
substantial investments in R&D, particularly in designing and developing cost-competitive
hydrogen fuel cell systems, components and hydrogen production systems.
FINANCIAL INFORMATION
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--- page 425 ---
Ability to Collect Trade Receivables
We typically grant credit terms to our customers, which are negotiated based on various
factors such as business relationship and customer credentials. As of December 31, 2021, 2022,
2023 and the five months ended May 31, 2024, our trade and bills receivables and contract
assets (net of impairment) represented 47.8%, 36.7%, 50.0% and 51.4%, respectively, of our
total assets as of the same dates. According to Frost & Sullivan, in China’s fuel cell vehicle
industry, commercial vehicle manufacturers usually sell their vehicles before they receive
government subsidies, charging customers a price net of applicable subsidies. These subsidies
from the government typically involve lengthy processing times. Consequently, commercial
vehicle manufacturers might face working capital constraints due to this timing gap, ultimately
affecting the settlement of our trade receivables.
We expect the improvements in the turnover days of our trade receivables to gradually
occur as the industry matures. According to Frost & Sullivan, recent government policies
indicate that government subsidies are expected to arrive more promptly and consistently in the
near future, thereby accelerating customer payments. For example, the 2021 subsidy allocated
for demonstrative application of fuel cell vehicles in Shanghai was distributed by the
government in December 2023, indicating that subsidy disbursement for the fuel cell
demonstration city clusters has been progressing favorably. We received the first disbursement
of RMB141.1 million in December 2023 on behalf of our customers which will be distributed
to these customers later and we will also be paid off, which will ultimately enhance our trade
receivables collection. In addition to Shanghai, several provinces, including Hebei and
Zhejiang, have issued notices on the advancement of the 2024 budget for energy conservation
and emission reduction grants, which include the annual incentives for the demonstration
application of fuel cell vehicles. Moreover, we anticipate controlling existing discrepancies by
implementing ongoing, effective measures to manage receivable and payable cycles,
maintaining robust operational cash flows, negotiating favorable terms with new and existing
customers, and implementing measures detailed in “— Discussion of Certain Selected Items
from the Consolidated Statements of Financial Position — Trade and Bills Receivables and
Contract Assets” in this section. As we continue to grow, we plan to engage in negotiations with
customers for more favorable terms.
Cost of Raw Materials
Our cost of sales primarily comprises the expenses incurred in acquiring raw materials,
which consist of raw materials for fuel cell systems, such as fuel cell stacks, air compressors
and controllers, as well as raw materials for fuel cell vehicles, such as hydrogen supply systems
and fuel cell engine accessories. The costs associated with raw materials accounted for
approximately 87.0%, 83.2%, 87.6% and 29.3% of our total costs of sales for 2021, 2022 and
2023 and the five months ended May 31, 2024, respectively. The proportion of raw material
costs within our total cost of sales decreased significantly in the first five months of 2024, as
the reduced sales volume required fewer raw materials in this period, while other costs like
employee salaries, depreciation and amortization did not decline proportionately. We face
inherent risks associated with fluctuations in the prices of these materials. Any volatility in the
supply and pricing of raw materials could significantly impact our costs of sales and
operational performance.
FINANCIAL INFORMATION
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--- page 426 ---
For 2021, 2022, 2023 and the five months ended May 31, 2024, the average costs of sales
per kW of our fuel cell systems were approximately RMB3,070.1, RMB2,448.7, RMB1,893.8
and RMB23,142.3, respectively. This downward trend during the period from 2021 to 2023 is
attributed to (i) decreased production costs driven by our efforts to develop key components
in-house and to enhance domestic sourcing of raw materials; (ii) technological advancements;
and (iii) increasing maturity of the supply chain. We have established stable partnership with
reliable domestic suppliers, which enabled us to maintain a stable supply of raw materials at
competitive prices, and helped us to ensure our capability to produce and deliver quality
products in a timely manner in response to our customers’ demand. In the future, we anticipate
that the average costs of sales per kW of our fuel cell systems will continue to decline with the
future advancements of the technology, the increasing improvement of the domestic fuel cell
raw material supply system, and the higher degree of our self-development, self-production and
localization of key components. The increase in the first five months of 2024 was primarily due
to the seasonality of our business that resulted in low sales volume and production in the first
five months of the year, while costs of sales such as employee benefit expense and depreciation
and amortization did not decline proportionately during the same period.
BASIS OF PREPARATION
Our historical financial information has been prepared in accordance with International
Financial Reporting Standards (“ IFRSs ”), which comprise all standards and interpretations
approved by the International Accounting Standards Board (the “ IASB”). All IFRSs effective
for the accounting period commencing from January 1, 2023, together with the relevant
transitional provisions, have been early adopted by us in the preparation of the historical
financial information throughout the Track Record Period.
The historical financial information has been prepared under the historical cost
convention, except for derivative financial instrument, structured deposits, private equity fund
and equity investments which have been measured at fair value.
MATERIAL ACCOUNTING POLICIES AND ESTIMATES
A summary of our material accounting policies and estimates are set forth in note 2.3 and
note 3 to the Accountants’ Report in Appendix I to this prospectus. The estimates and
judgments we use in applying our accounting policies have a significant impact on our
financial position and operating results. Some of the accounting policies require us to apply
estimates and judgments on matters that are inherently uncertain. Set forth below are
discussions of the accounting policies applied in preparing our financial information that we
believe are most dependent on the application of these estimates and judgments and, in
addition, certain other accounting policies that we believe are material to an understanding of
our financial information.
FINANCIAL INFORMATION
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Revenue Recognition
Revenue From Contracts With Customers
Revenue from contracts with customers is recognized when control of goods or services
is transferred to the customers at an amount that reflects the consideration to which we expect
to be entitled in exchange for those goods or services.
When the contract contains a financing component which provides the customer with a
significant benefit of financing the transfer of goods or services to the customer, 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 consideration in a contract includes a variable amount, the amount of
consideration is estimated to which we will be entitled in exchange for transferring the goods
or services to the customer. The variable consideration is estimated at contract inception and
constrained until it is highly probable that a significant revenue reversal in the amount of
cumulative revenue recognized will not occur when the associated uncertainty with the variable
consideration is subsequently resolved.
(a) Sale of hydrogen fuel cell systems, components and hydrogen production systems
We manufacture and sell hydrogen fuel cell systems, components and hydrogen
production systems in the market. Revenue from sales of hydrogen fuel cell systems,
components and hydrogen production systems is recognized at the point in time when control
of the products has transferred, being when the products are delivered to the customer, and
there is no unfulfilled obligation that could affect the customer’s acceptance of the products.
Delivery occurs when the products have been shipped to the specific location, the risks of
obsolescence and loss have been transferred to the customer, and either the customer has
accepted the products in accordance with the sales contract, the acceptance provisions have
lapsed, or we have objective evidence that all criteria for acceptance have been satisfied.
Certain sales contracts have back-to-back terms that the settlement of accounts
receivables from the customer associated with the customer’s receipt of subsidies from
government, which give rise to variable consideration.
(b) Provision of fuel cell engineering and technical services and others
We recognize revenue from the fuel cell engineering and technical services at a point in
time when the relevant services are rendered and acknowledged for receipt by the customers.
Contract costs include contract fulfilment costs. Costs incurred for provision of fuel cell
engineering and technical services are recognized as contract fulfilment costs, which is
recognized as the cost of sales when recognizing revenue. If the carrying amount of the
FINANCIAL INFORMATION
– 417 –


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contract costs is higher than the remaining consideration expected to be obtained by rendering
of the service net of the estimated cost to be incurred, we make provision for impairment on
the excess portion and recognizes it as asset impairment losses.
Revenue from provision of separate after-sales services is recognized over the scheduled
period on a straight-line basis because the customer simultaneously receives and consumes the
benefits provided by us.
Other Income
Interest income is recognized 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.
Property, Plant and Equipment and Depreciation
Property, plant and equipment, other than construction in progress, are stated at cost less
accumulated depreciation and any impairment losses. The cost of an item of property, plant and
equipment comprises its purchase price and any directly attributable costs of bringing the asset
to its working condition and location for its intended use.
Expenditure incurred after items of property, plant and equipment have been put into
operation, such as repairs and maintenance, is normally charged to the statement of profit or
loss in the period in which it is incurred. In situations where the recognition criteria are
satisfied, the expenditure for a major inspection is capitalized in the carrying amount of the
asset as a replacement. Where significant parts of property, plant and equipment are required
to be replaced at intervals, we recognize such parts as individual assets with specific useful
lives and depreciates them accordingly.
Depreciation is calculated on the straight-line basis to write off the cost of each item of
property, plant and equipment to its residual value over its estimated useful life. The principal
annual rates used for this purpose are as follows:
Buildings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183% to 5%
Leasehold improvements /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Over the shorter of the lease terms and
16%
Vehicles /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111819% to 25%
Machinery /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189% to 33%
Office equipment and electronic devices /H1118/H1118/H11189% to 33%
FINANCIAL INFORMATION
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Where parts of an item of property, plant and equipment have different useful lives, the
cost of that item is allocated on a reasonable basis among the parts and each part is depreciated
separately. Residual values, useful lives and the depreciation method are reviewed, and
adjusted if appropriate, at least at each financial year end.
An item of property, plant and equipment including any significant part initially
recognized is derecognized upon disposal or when no future economic benefits are expected
from its use or disposal. Any gain or loss on disposal or retirement recognized in the statement
of profit or loss in the year the asset is derecognized is the difference between the net sales
proceeds and the carrying amount of the relevant asset.
Construction in progress is stated at cost less 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
useful lives of intangible assets are assessed to be either finite or indefinite. Intangible assets
with finite lives are subsequently amortized over the useful economic life and assessed for
impairment whenever there is an indication that the intangible asset may be impaired. The
amortization period and the amortization method for an intangible asset with a finite useful life
are reviewed at least at each of the financial year end.
Software
Purchased software is stated at cost less any impairment losses and is amortized on the
straight-line basis over its estimated useful lives of 5 to 10 years, which is mainly determined
by reference to the licensed period of the purchased software.
Patents and Licences
Purchased patents and licences are stated at cost less any impairment losses and are
amortized on the straight-line basis over their estimated useful lives of 5 years, which is mainly
determined by reference to the period during which such assets is expected to bring economic
benefits to the Group.
Research and Development Costs
All research costs are charged to the statement of profit or loss as incurred.
FINANCIAL INFORMATION
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Impairment of Non-Financial Assets
We assessed whether any indication of impairment for all non-financial assets existed at
the end of each reporting period in accordance with IAS 36 Impairment of Assets. As we made
losses throughout the Track Record Period, impairment test at the end of each reporting period
was carried out. The carrying amount of non-financial assets included property, plant and
equipment, right-of-use assets and intangible assets at the end of each of Relevant Periods and
represents RMB559.8 million, RMB535.4 million and RMB544.7 million, respectively.
For impairment testing purpose, the carrying amount was compared to the recoverable
amount defined by value in use. Based on the assessment result, except historical ceased
production assets which management already provide impairment on an individual basis, value
in use is greater than carrying amounts of non-financial assets, hence, no impairment was
recognized.
Inventories
Inventories are stated at the lower of cost and net realizable value. Cost is determined on
the weighted average basis and, in the case of work in progress and finished goods, comprises
direct materials, direct labor and an appropriate proportion of overheads. Net realizable value
is based on estimated selling prices less any estimated costs to be incurred to completion and
disposal.
Investments and Other Financial Assets
Initial Recognition and Measurement
Financial assets are classified, at initial recognition, as subsequently measured at
amortized cost, fair value through other comprehensive income, and fair value through profit
or loss.
The classification of financial assets at initial recognition depends on the financial asset’s
contractual cash flow characteristics and our business model for managing them. With the
exception of trade receivables that do not contain a significant financing component or for
which we have applied the practical expedient of not adjusting the effect of a significant
financing component, we initially measure a financial asset 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 we have 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.
FINANCIAL INFORMATION
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In order for a financial asset to be classified and measured at amortized cost or fair value
through other comprehensive income, it needs to give rise to cash flows that are solely
payments of principal and interest (“ SPPI”) on the principal amount outstanding. Financial
assets with cash flows that are not SPPI are classified and measured at fair value through profit
or loss, irrespective of the business model.
Our business model for managing financial assets refers to how it manages its financial
assets in order to generate cash flows. The business model determines whether cash flows will
result from collecting contractual cash flows, selling the financial assets, or both. Financial
assets classified and measured at amortized 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 recognized on the
trade date, that is, the date that we commit to purchase or sell the asset.
Subsequent Measurement
The subsequent measurement of financial assets depends on their classification as
follows:
Financial Assets at Amortized Cost (Debt Instruments)
Financial assets at amortized cost are subsequently measured using the effective interest
method and are subject to impairment. Gains and losses are recognized in the statement of
profit or loss when the asset is derecognized, modified or impaired.
Financial Assets at Fair V alue 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 recognized in the
statement of profit or loss and computed in the same manner as for financial assets measured
at amortized cost. The remaining fair value changes are recognized in other comprehensive
income. Upon derecognition, the cumulative fair value change recognized in other
comprehensive income is recycled to the statement of profit or loss.
FINANCIAL INFORMATION
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Financial Assets Designated at Fair V alue Through Other Comprehensive Income (Equity
Investments)
Upon initial recognition, we can elect to classify irrevocably its equity investments as
equity investments designated at fair value through other comprehensive income when they
meet the definition of equity under IAS 32 Financial Instruments: Presentation and are not
held for trading. The classification is determined on an instrument-by-instrument basis.
Gains and losses on these financial assets are never recycled to the statement of profit or
loss. Dividends are recognized as other income in the statement of profit or loss when the right
of payment has been established, except when we benefit from such proceeds as a recovery of
part of the cost of the financial asset, in which case, such gains are recorded in other
comprehensive income. Equity investments designated at fair value through other
comprehensive income are not subject to impairment assessment.
Financial Assets at Fair V alue 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 recognized in the statement of profit or loss.
This category includes equity investments which we had not irrevocably elected to
classify at fair value through other comprehensive income. Dividends on the equity
investments are also recognized as other income in the statement of profit or loss when the
right of payment has been established.
A derivative embedded in a hybrid contract, with a financial liability or non-financial
host, is separated from the host and accounted for as a separate derivative if the economic
characteristics and risks are not closely related to the host; a separate instrument with the same
terms as the embedded derivative would meet the definition of a derivative; and the hybrid
contract is not measured at fair value through profit or loss. Embedded derivatives are
measured at fair value with changes in fair value recognized in the statement of profit or loss.
Reassessment only occurs if there is either a change in the terms of the contract that
significantly modifies the cash flows that would otherwise be required or a reclassification of
a financial asset out of the fair value through profit or loss category.
A derivative embedded within a hybrid contract containing a financial asset host is not
accounted for separately. The financial asset host together with the embedded derivative is
required to be classified in its entirety as a financial asset at fair value through profit or loss.
FINANCIAL INFORMATION
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Share-Based Payments
Several employee incentive schemes are operated for the purpose of providing incentives
and rewards to eligible participants who contribute to the success of our operations. Our
employees (including directors) receive remuneration in the form of share-based payments,
whereby employees render services in exchange for equity instruments (“ equity-settled
transactions ”). The cost of equity-settled transactions with employees is measured by
reference to the fair value at the date at which they are granted. The fair value is determined
by a third-party valuer based on a recent transaction price. Further details are contained in note
34 to the Accountants’ Report in Appendix I to this prospectus.
The cost of equity-settled transactions is recognized 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 recognized 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 our best estimate of the number of equity instruments
that will ultimately vest. The charge or credit to the statement of profit or loss for a period
represents the movement in the cumulative expense recognized as at the beginning and end of
that period.
Service and non-market performance conditions are not taken into account when
determining the grant date fair value of awards, but the likelihood of the conditions being met
is assessed as part of our best estimate of the number of equity instruments that will ultimately
vest. Market performance conditions are reflected within the grant date fair value. Any other
conditions attached to an award, but without an associated service requirement, are considered
to be non-vesting conditions. Non-vesting conditions are reflected in the fair value of an award
and lead to an immediate expensing of an award unless there are also service and/or
performance conditions.
For awards that do not ultimately vest because non-market performance and/or service
conditions have not been met, no expense is recognized. 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
recognized as if the terms had not been modified, if the original terms of the award are met.
In addition, an expense is recognized 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.
FINANCIAL INFORMATION
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Where an equity-settled award is cancelled, it is treated as if it had vested on the date of
cancellation, and any expense not yet recognized for the award is recognized immediately. This
includes any award where non-vesting conditions within the control of either the Group or the
employee are not met. However, if a new award is substituted for the cancelled award, and is
designated as a replacement award on the date that it is granted, the cancelled and new awards
are treated as if they were a modification of the original award, as described in the previous
paragraph.
Provision for Expected Credit Losses on Trade Receivables and Commercial Acceptance
Bills Receivables, Other Receivables and A Financial Guarantee Obligation
Provision for impairment of trade receivables is made based on an assessment of expected
credit losses (“ ECLs”) on trade receivables. The assessment of expected credit losses requires
management’s judgement and estimates. Trade receivables relating to customers with known
financial difficulties or significant doubt on collection are assessed individually for impairment
allowance. The remaining trading receivables are grouped based on aging of bills of various
customer segments with similar loss patterns and collectively assessed for impairment
allowance.
Under the collective approach, we use a provision matrix to calculate ECLs for trade
receivables. The provision rates are based on aging analysis of customers that have similar loss
patterns. The provision matrix is initially based on our historical observed default rates. We
will calibrate the matrix to adjust the historical credit loss experience with forward-looking
information. At each reporting date, the historical observed default rates are updated and
changes in the forward-looking estimates are analyzed.
The assessment of the correlation among historical observed default rates, forecast
economic conditions and ECLs is a significant estimate. The amount of ECLs is sensitive to
changes in circumstances and forecast economic conditions. Our historical credit loss
experience and forecast of economic conditions may also not be representative of a customer’s
actual default in the future.
The information about the ECLs on our trade receivables is disclosed in note 22 to the
Accountants’ Report in Appendix I to this prospectus.
Provision was mainly made for our financial guarantee obligation in respect of
borrowings of our joint venture, namely Guangdong Guohong Refire Energy Technology Co.,
Ltd. (ʮ̡)( “ Guohong Refire ”). The amount represented
management’s best estimate of loss that a default of the associated enterprise will cause to the
Group. The loss provision was measured as either 12-month expected credit losses or lifetime
expected credit losses, depending on whether there has been a significant increase in credit risk
since initial recognition.
FINANCIAL INFORMATION
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DESCRIPTION OF SELECTED COMPONENTS OF CONSOLIDATED STATEMENTS
OF PROFIT OR LOSS
The following table sets forth our consolidated statements of profit or loss for the periods
indicated:
Y ear Ended December 31, Five Months Ended May 31,
2021 2022 2023 2023 2024
RMB’000 % RMB’000 % RMB’000 % RMB’000 % RMB’000 %
(unaudited)
Revenue /H1118/H1118/H1118/H1118/H1118/H1118/H1118524,109 100.0 604,648 100.0 895,278 100.0 88,068 100.0 12,521 100.0
Cost of sales /H1118/H1118/H1118/H1118/H1118(462,324) (88.2) (554,825) (91.8) (715,662) (79.9) (92,033) (104.5) (36,722) (293.3)
– Cost of sales of
goods and
services /H1118/H1118/H1118/H1118/H1118/H1118(414,653) (79.1) (472,712) (78.2) (683,897) (76.4) (75,563) (85.8) (28,246) (225.6)
– Impairment losses
on inventories /H1118/H1118/H1118(47,671) (9.1) (82,113) (13.6) (31,765) (3.5) (16,470) (18.7) (8,476) (67.7)
Gross profit /H1118/H1118/H1118/H1118/H111861,785 11.8 49,823 8.2 179,616 20.1 (3,965) (4.5) (24,201) (193.3)
Other income and
gains /H1118/H1118/H1118/H1118/H1118/H1118/H111853,950 10.3 59,792 9.9 59,825 6.7 15,421 17.5 19,532 156.0
Selling and
marketing
expenses /H1118/H1118/H1118/H1118/H1118(90,475) (17.3) (102,826) (17.0) (134,833) (15.1) (36,702) (41.7) (43,076) (344.0)
Administrative
expenses /H1118/H1118/H1118/H1118/H1118(218,227) (41.6) (242,695) (40.1) (339,670) (37.9) (103,914) (118.0) (196,575) (1,570.0)
Research and
development
expenses /H1118/H1118/H1118/H1118/H1118(230,891) (44.1) (198,688) (32.9) (220,880) (24.7) (99,498) (113.0) (90,281) (721.0)
Fair value gains or
losses on financial
assets at fair value
through profit or
loss, net /H1118/H1118/H1118/H1118/H1118/H1118436 0.1 881 0.1 (3,120) (0.3) (18) (0.0) (2,171) (17.3)
Fair value loss on a
derivative financial
instrument /H1118/H1118/H1118/H1118/H1118(607) (0.1) (19,681) (3.3) ––––––
Impairment losses on
financial assets
and a financial
guarantee
obligation, net /H1118/H1118/H1118(144,636) (27.6) (15,459) (2.6) (63,965) (7.1) (18,881) (21.4) (41,455) (331.1)
Other expenses /H1118/H1118/H1118(23,363) (4.5) (6,156) (1.0) (4,960) (0.6) (672) (0.8) (2,542) (20.3)
Finance costs /H1118/H1118/H1118/H1118(50,058) (9.6) (49,019) (8.1) (47,926) (5.4) (18,345) (20.8) (24,906) (198.9)
Share of losses of:
A joint venture /H1118/H1118/H1118(5,750) (1.1) (18,750) (3.1) ––––––
Associates /H1118/H1118/H1118/H1118/H1118/H1118(2,466) (0.5) (2,695) (0.4) (3,855) (0.4) (2,680) (3.0) (5,721) (45.7)
Loss before tax /H1118/H1118/H1118(650,302) (124.1) (545,473) (90.2) (579,768) (64.8) (269,254) (305.7) (411,396) (3,285.6)
Income tax
credit/(expense) /H1118/H1118(3,990) (0.8) (626) (0.1) 2,237 0.2 2,551 2.9 1,965 15.7
FINANCIAL INFORMATION
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Y ear Ended December 31, Five Months Ended May 31,
2021 2022 2023 2023 2024
RMB’000 % RMB’000 % RMB’000 % RMB’000 % RMB’000 %
(unaudited)
Loss for the
year/period /H1118/H1118/H1118/H1118(654,292) (124.8) (546,099) (90.3) (577,531) (64.5) (266,703) (302.8) (409,431) (3,270.0)
Loss attributable to:
Owners of the
parent /H1118/H1118/H1118/H1118/H1118/H1118/H1118(572,802) (109.3) (505,966) (83.7) (529,472) (59.1) (247,137) (280.6) (394,115) (3,147.6)
Non-controlling
interests /H1118/H1118/H1118/H1118/H1118/H1118(81,490) (15.5) (40,133) (6.6) (48,059) (5.4) (19,566) (22.2) (15,316) (122.3)
NON-IFRS MEASURE
To supplement our consolidated financial statements, which are presented in accordance
with IFRS, we also use adjusted net loss (non-IFRS measure) as an additional non-IFRS
measure, which is not required by, or presented in accordance with, IFRS.
We believe the presentation of this non-IFRS measure when shown in conjunction with
the corresponding IFRS measures provides useful information to investors and management in
facilitating a comparison of our operating performance from year to year and period to period
by eliminating potential impacts of certain items. However, our presentation of adjusted net
loss (non-IFRS measure) may not be comparable to similarly titled measures presented by
other companies. The use of this non-IFRS measure has limitations as an analytical tool, and
you should not consider it in isolation from, or as a substitute for an analysis of, our results
of operations or financial condition as reported under IFRS.
We define “adjusted net loss (non-IFRS measure)” as loss for the year/period adjusted by
adding back share-based payment and listing expenses. Share-based payment was non-cash in
nature, representing the employee incentive scheme through which we offered share awards to
our employees. For more information, see note 34 to the Accountants’ Report in Appendix I to
this prospectus. The following table reconciles our adjusted net loss (non-IFRS measure) for
the years/periods:
Y ear Ended December 31,
Five Months Ended
May 31,
2021 2022 2023 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Loss for the year/period /H1118/H1118/H1118/H1118/H1118/H1118/H1118(654,292) (546,099) (577,531) (266,703) (409,431)
Adjustment:
Share-based payment expenses /H1118/H1118/H111831,326 27,094 87,066 19,123 117,484
Listing expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 19,084 – 9,003
Adjusted net loss (non-IFRS
measures) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(622,966) (519,005) (471,381) (247,580) (282,944)
FINANCIAL INFORMATION
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Revenue
During the Track Record Period, we generated revenue primarily from the (i) sales of
hydrogen fuel cell systems and components; (ii) provision of fuel cell engineering and
technical services; (iii) sales of hydrogen production systems and related components, and (iv)
others, which primarily included provision of after-sales services. In 2021, 2022, 2023 and the
five months ended May 31, 2023 and 2024, our revenue amounted to RMB524.1 million,
RMB604.6 million, RMB895.3 million, RMB88.1 million and RMB12.5 million, respectively.
The following table sets forth a breakdown of our revenue by business activity for the periods
indicated:
Y ear Ended December 31, Five Months Ended May 31,
2021 2022 2023 2023 2024
RMB’000 % RMB’000 % RMB’000 % RMB’000 % RMB’000 %
(unaudited)
Sales of hydrogen
fuel cell systems
and components
– Hydrogen fuel cell
systems /H1118/H1118/H1118/H1118/H1118/H1118/H1118452,725 86.4 423,265 70.0 637,176 71.2 52,996 60.2 7,091 56.6
– Components
(1) /H1118/H1118/H111861,017 11.6 150,297 24.9 220,082 24.6 32,700 37.1 1,897 15.1
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118513,742 98.0 573,562 94.9 857,258 95.8 85,696 97.3 8,987 71.8
Provision of fuel cell
engineering and
technical services /H1118 7,251 1.4 26,473 4.4 23,444 2.6 – – 966 7.7
Sales of hydrogen
production systems
and related
components /H1118/H1118/H1118/H1118/H1118– – – – 7,681 0.9 – – – –
Others
(2) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,116 0.6 4,613 0.8 6,895 0.8 2,372 2.7 2,568 20.5
Total revenue /H1118/H1118/H1118/H1118524,109 100.0 604,648 100.0 895,278 100.0 88,068 100.0 12,521 100.0
Notes:
(1) Components mainly included hydrogen supply systems, fuel cell engine accessories, energy storage
systems and others for fuel cell vehicles, and DC-to-DC boost converters, hydrogen circulation systems
and others for fuel cell systems.
(2) Others mainly included provision of after-sales services.
During the Track Record Period, 98.1% of our total revenue in 2021, 2022, 2023 and the
five months ended May 31, 2024, was generated from Mainland China, with 1.9% generated
from overseas areas.
Sales of Hydrogen Fuel Cell Systems and Components
During the Track Record Period, our largest revenue contributor was the sales of
hydrogen fuel cell systems and components, accounting for 98.0%, 94.9%, 95.8%, 97.3% and
71.8% of our total revenue in 2021, 2022, 2023 and the five months ended May 31, 2023 and
2024, respectively.
FINANCIAL INFORMATION
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Sales of Hydrogen Fuel Cell Systems
During the Track Record Period, we sold fuel cell systems with different rated power,
including fuel cell systems equipped with fuel cell stacks provided by our Group and
third-party suppliers. The following table sets forth a breakdown of our revenue from sales of
hydrogen fuel cell systems by producer of fuel cell stack manufacturer for the periods
indicated:
Y ear Ended December 31, Five Months Ended May 31,
2021 2022 2023 2023 2024
RMB’000 % RMB’000 % RMB’000 % RMB’000 % RMB’000 %
(unaudited)
Fuel cell systems
equipped with fuel
cell stacks
provided by:
– Our Group /H1118/H1118/H1118/H1118/H1118320,563 70.8 308,565 72.9 473,893 74.4 34,201 64.5 6,285 88.6
– Third party
suppliers /H1118/H1118/H1118/H1118/H1118/H1118132,163 29.2 114,701 27.1 163,283 25.6 18,795 35.5 806 11.4
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118452,725 100.0 423,265 100.0 637,176 100.0 52,996 100.0 7,091 100.0
For 2021, 2022, 2023 and the five months ended May 31, 2023 and 2024, we recognized
revenue of RMB452.7 million, RMB423.3 million, RMB637.2 million, RMB53.0 million and
RMB7.1 million from sales of hydrogen fuel cell systems, which accounted for 86.4%, 70.0%,
71.2%, 60.2% and 56.6% of our total revenue, respectively.
Our hydrogen fuel cell systems are typically equipped with our in-house manufactured
fuel cell stacks, as well as some fuel cell stacks procured from third-party suppliers. We
launched Caven Series in 2016. Since 2020, we have launched more series with greater
working efficiency, environment adaptability and service life, namely Prisma Series, which are
all equipped with our in-house developed fuel cell stacks. In addition, during the Track Record
Period, in offering customized fuel cell product solutions to cater to specific needs from
relevant customers, we sold customized hydrogen fuel cell systems that incorporated fuel cell
stacks designated and/or provided by relevant customers. Furthermore, upon requests, we may
provided certain types of subsystems, such as air supply subsystems, hydrogen management
subsystems, cooling subsystems, to our customers. For further information, see “Business —
Our Business — Hydrogen Fuel Cell Systems and Components Business Segment — Hydrogen
Fuel Cell Systems” in this prospectus. During the Track Record Period, a majority of our sales
of hydrogen fuel cell systems derived from sales of hydrogen fuel cell systems equipped with
our in-house manufactured fuel cell stacks.
FINANCIAL INFORMATION
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The fluctuations in sales of hydrogen fuel cell systems were primarily caused by changes
in sales volume and average selling price of our hydrogen fuel cell systems. The following
table sets forth a breakdown of our sales volume, sales power output and average selling price
of our hydrogen fuel cell systems for the periods indicated:
Y ear Ended December 31,
Five Months Ended
May 31,
2021 2022 2023 2023 2024
(unaudited)
Sales volume (unit)
Fuel cell systems equipped with
fuel cell stacks provided by:
– Our Group /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118639 790 1,234 85 11
– Third party suppliers /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118507 456 668 152 2
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,146 1,246 1,902 237 13
Sales power output (kW)
Fuel cell systems equipped with
fuel cell stacks provided by:
– Our Group /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111869,155 82,958 158,916 9,010 943
– Third party suppliers /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111846,438 49,757 83,410 12,060 160
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118115,593 132,715 242,326 21,070 1,103
Average selling price
(RMB per kW)
Fuel cell systems equipped with
fuel cell stacks provided by:
– Our Group /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,635 3,720 2,982 3,796 6,665
– Third party suppliers /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,846 2,305 1,958 1,558 5,038
Overall /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,917 3,189 2,629 2,515 6,429
The hydrogen fuel cell industry, propelled by collective efforts from both upstream and
downstream participants, has witnessed remarkable advancements in product performance,
technological capabilities, and cost efficiency over recent years. This progress, coupled with
increased procurement of domestic produced raw materials and components, resulted in a
downward trajectory in the prices of hydrogen fuel cell systems throughout the Track Record
Period, according to Frost & Sullivan.
FINANCIAL INFORMATION
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We have been at the forefront, driving advancements within the hydrogen fuel cell
industry. We have independently developed and realized mass-production of hydrogen fuel cell
systems, fuel cell stacks, MEAs, and bipolar plates. The increased adoption of proprietary
components and domestic procured raw materials and components, along with our enhanced
technology and capabilities, enable us to lower selling prices of our hydrogen fuel cell systems,
enhancing market competitiveness of our hydrogen fuel cell products. As a result, the average
selling price for our hydrogen fuel cell systems decreased from RMB3,917/kW for 2021 to
RMB3,189/kW for 2022, and further decreased to RMB2,629/kW for 2023.
During the period from 2021 to 2023, the sales volume of our hydrogen fuel cell systems
generally maintained an upward growth trend, with a total sales power output amounting to
115,593kW, 132,715kW and 242,326kW for 2021, 2022, and 2023, respectively. Key factors
contributing to this growth include (i) our continuous research and development initiatives
enhancing product performance and reliability, (ii) the increased downstream demand driven
by the favorable supportive policies, including but not limited to, the establishment for five
demonstration city clusters proposed by the PRC government in 2021, (iii) our deliberate
efforts to drive down costs, including in-house production of core components such as MEAs
and bipolar plates, enabling us to offer high-quality, high-performance fuel cell systems at
more competitive prices, helping to attract more customers and drive the growth in sales
volume, (iv) sustained collaborations with both new and existing customers, such as Yutong
Group and FAW Jiefang, and (v) our expansion of product portfolio and applications to address
diversified marketed need, which further reinforced our market position.
We generally deliver our products to our customers in the second half of a year. According
to Frost & Sullivan, the production and sales of fuel cell vehicles in China are seasonal, and
our business is also affected by such seasonality. For more information, see “Business —
Seasonality” in this prospectus. For the five months ended May 31, 2024, the sales volume of
our hydrogen fuel cell systems decreased, with the total sales power output amounting to
1,103kW. The average selling price for our hydrogen fuel cell systems increased to
RMB6,429/kW for the five months ended May 31, 2024. Due to the aforesaid seasonality of
our business, we only had a smaller number of hydrogen fuel cell system delivered during the
first five months of 2024. These small-scale orders were priced higher than the large-volume
sales. Furthermore, these orders were primarily intended for buses or overseas markets, where
prices tend to be higher than those for trucks or domestic markets. As a result, we had a low
sales volume and a relatively high average selling price for our hydrogen fuel cell systems in
the five months ended May 31, 2024.
FINANCIAL INFORMATION
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The following table sets forth a breakdown of our revenue from sales of hydrogen fuel
cell systems by location of end-user customers for the periods indicated:
Y ear Ended December 31, Five Months Ended May 31,
2021 2022 2023 2023 2024
RMB’000 % RMB’000 % RMB’000 % RMB’000 % RMB’000 %
(unaudited)
Mainland China
– Fuel cell vehicle
demonstration city
clusters
(1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118357,853 79.0 305,046 72.1 407,527 64.0 30,773 58.1 – –
– Others (2) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111889,715 19.8 110,839 26.2 213,275 33.5 21,467 40.5 6,285 88.6
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118447,568 98.9 415,886 98.3 620,802 97.4 52,240 98.6 6,285 88.6
Overseas (3) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,158 1.1 7,380 1.7 16,374 2.6 756 1.4 806 11.4
Total revenue /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118452,725 100.0 423,265 100.0 637,176 100.0 52,996 100.0 7,091 100.0
Notes:
(1) Demonstration city clusters include Shanghai city cluster, Beijing-Tianjin-Hebei city cluster,
Guangdong city cluster, Henan city cluster, Hebei city cluster.
(2) Other regions in Mainland China mainly included Gansu, Shanxi, Shaanxi and Hubei.
(3) Overseas regions mainly included Hong Kong, Germany, and Japan.
Our sales outside of fuel cell vehicle demonstration city clusters experienced year-over-
year increase during the Track Record Period. This was mainly attributable to the high
reliability and stability of our products and our strong commercialization capability, indicating
that our products have been recognized and commercially applied in regional markets that do
not enjoy national subsidies for fuel cell demonstration application as demonstration city
clusters do.
Sales of Components
We have developed and produced various types of Components for Fuel Cell Systems for
incorporation into our hydrogen fuel cell systems sold to customers, including but not limited
to fuel cell stacks, MEAs and bipolar plates, hydrogen circulation systems, DC-to-DC boost
converters and fuel cell controllers. We sold a few stand-alone fuel cell stacks and DC-to-DC
boost converters to our customers. In addition, leveraging our expertise and extensive
experience in the application of fuel cells across multiple end-user scenarios, we offer a wide
range of Components for Fuel Cell Vehicles, including hydrogen supply systems, fuel cell
engine accessories, among others. These components, when integrated with our fuel cell
systems, form comprehensive solutions delivered to our customers, aiding customers in
optimizing fuel cell applications within their specific end-user scenarios.
FINANCIAL INFORMATION
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--- page 442 ---
When purchasing fuel cell systems from us, our customers generally raise specific
demands in relation to expected end-user application scenarios of relevant systems, which
carry diversified and distinctive features, particular those in relation to fuel cell systems used
in long-distance heavy-duty logistics. These demands typically are associated with specific
ranges of power output, as well as expectations on cost efficiency and reliability. To cater to
these customized demands, we not only provide tailored fuel cell systems with specific power
outputs, but also configure accompanying components, particularly, those that work integrated
with fuel cell system and whose function attributes to overall performance results of relevant
vehicles or products under the specified end-user application scenarios. During the Track
Record Period, the Components for Fuel Cell Vehicles we configure for our customers came
from external suppliers, such as hydrogen fuel cell engine accessories and hydrogen supply
systems, while the Components for Fell Cell Systems are manufactured in house, including fuel
cell stacks and DC-to-DC boost converters.
For 2021, 2022, 2023 and the five months ended May 31, 2023 and 2024, we recognized
revenue of RMB61.0 million, RMB150.3 million, RMB220.1 million, RMB32.7 million and
RMB1.9 million from sales of components, which accounted for 11.6%, 24.9%, 24.6%, 37.1%
and 15.1% of our total revenue, respectively. The increase in revenue from sales of components
from 2021 to 2023 was attributable to the rise in customer requests for these components within
our product solutions, reflecting our customers’ growing trust and confidence in our
capabilities and our commitment to providing comprehensive product solutions that precisely
meet our customers’ needs. The decrease in revenue from sales of components for the five
months ended May 31, 2024 was driven by fluctuations in customers’ demand for applying
various components, which are influenced by their vehicle production schedules.
The following table sets forth a breakdown of our revenue from sales of components by
product type for the periods indicated:
Y ear Ended December 31, Five Months Ended May 31,
2021 2022 2023 2023 2024
RMB’000 % RMB’000 % RMB’000 % RMB’000 % RMB’000 %
(unaudited)
Components for Fuel Cell
Vehicles
– Hydrogen supply
systems (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111840,641 66.6 90,911 60.5 148,662 67.5 11,840 36.2 342 18.0
– Energy storage systems /H1118/H1118 – – 4,510 3.0 23,767 10.8 11,910 36.4 – –
– Fuel cell engine
accessories (2) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189,486 15.5 39,657 26.4 17,440 7.9 6,314 19.3 192 10.1
– Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,867 6.3 7,878 5.2 12,177 5.5 673 2.1 538 28.4
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111853,994 88.5 142,957 95.1 202,045 91.8 30,738 94.0 1,072 56.5
Components for Fuel Cell
Systems (3)
– Fuel cell stacks /H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 1,096 0.7 13,932 6.3 1,513 4.6 255 13.4
– DC-to-DC boost
converters /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,873 6.3 3,618 2.4 976 0.4 426 1.3 375 19.8
– Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,150 5.2 2,626 1.7 3,129 1.4 23 0.1 195 10.3
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187,023 11.5 7,340 4.9 18,037 8.2 1,963 6.0 825 43.5
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111861,017 100.0 150,297 100.0 220,082 100.0 32,700 100.0 1,897 100.0
FINANCIAL INFORMATION
– 432 –


--- page 443 ---
Notes:
(1) Hydrogen supply systems mainly included hydrogen storage cylinders and accessories for hydrogen
storage systems.
(2) Fuel cell engine accessories mainly included complete sets of accessories for use in conjunction with
engines in fuel cell vehicles.
(3) The fuel cell stacks and DC-to-DC boost converters sold were developed and manufactured by our
Group.
Our revenue from sales of components increased significantly from RMB61.0 million in
2021 to RMB150.3 million in 2022, mainly attributable to (i) an increase of RMB50.3 million
from sales of hydrogen supply systems. The increase was driven by a rise in sales volume from
274 units to 851 units in response to the increased customers’ requests for these components,
which we offered together with fuel cell systems within our product solutions. This reflects our
customers’ growing trust and confidence in our capabilities, as well as our commitment to
providing comprehensive product solutions that precisely meet their needs. The rise in sales
volume of hydrogen supply systems was partially offset by a decrease in average selling price
from RMB148,324 per unit to RMB106,829 per unit, because in 2022, a larger proportion of
the hydrogen supply systems we sold were for lower payload trucks, which require smaller
hydrogen storage capacity and fewer hydrogen cylinders, and as a result, the unit price for
these hydrogen supply systems is typically lower; and (ii) an increase of RMB30.2 million
from sales of fuel cell engine accessories, driven by a rise in sales volume from 299 units to
1,185 units to meet customers’ increasing demand. The average selling price for fuel cell
engine accessories also slightly increased from RMB31,725 to RMB33,466 per unit, mainly
due to changes in product mix as customers had varying needs for different accessories, which
had different unit prices.
Our revenue from sales of components increased by 46.4% from RMB150.3 million in
2022 to RMB220.1 million in 2023, mainly attributable to (i) an increase of RMB57.8 million
from sales of hydrogen supply systems, with sales volume rising from 851 units to 1,072 units
to meet growing customer demand, coupled with a higher average selling price from
RMB106,829 per unit to RMB138,677 per unit due to the change in mix of the types of
hydrogen supply systems. In 2022, we sold a higher proportion of hydrogen supply systems for
lower payload trucks, which require smaller hydrogen storage capacity and fewer cylinders,
resulting in a lower unit price for those systems; (ii) an increase of RMB19.3 million from sales
of energy storage systems, due to an increase in sales volume from 100 units to 317 units in
response to customers’ demands, combined with an increase in average selling price from
RMB45,100 per unit to RMB74,974 per unit as the energy storage systems sold in 2023
included more for higher payload trucks which typically had a higher unit price; and (iii) an
increase of RMB12.8 million from sales of fuel cell stacks, stemming from a surge in sales
volume from 3 units to 105 units. This was because we began selling fuel cell stacks as
standalone products to external customers in 2022, and the sales volume of these products rose
in response to the increased requests from our customers in 2023. The growth in sales volume
was partially offset by a decrease in average selling price from RMB365,381 per unit to
RMB132,681 per unit, as the sales in 2022 consisted of three units of products only, whose
pricing was not comparable to large volume sales in 2023.
FINANCIAL INFORMATION
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--- page 444 ---
Our revenue from sales of components amounted to RMB1.9 million for the five months
ended May 31, 2024, representing a decrease from RMB32.7 million for the same period in
2023, mainly attributable to (i) a decrease of RMB11.5 million from sales of hydrogen supply
systems, with sales volume decreasing from 91 units to two units, and (ii) a decrease of
RMB11.9 million from sales of energy storage systems, with sales volume decreasing from 167
units to nil. These decreases were primarily driven by fluctuations in customers’ demands for
applying various components, which were influenced by their vehicle production schedules.
Although the volume of components delivered in the first five months of 2024 was relatively
small, the aggregate contract value of the components we delivered to customers in June 2024
exceeded RMB70 million.
Provision of Fuel Cell Engineering and Technical Services
We also provide comprehensive fuel cell engineering and technical services catering to
our customers’ specific engineering needs. During the Track Record Period, our revenue from
provision of fuel cell engineering and technical services amounted to RMB7.3 million,
RMB26.5 million, RMB23.4 million, nil and RMB1.0 million, representing 1.4%, 4.4%, 2.6%,
nil and 7.7% of our total revenue in 2021, 2022, 2023 and the five months ended May 31, 2023
and 2024, respectively. Revenue from sales of fuel cell engineering and technical services
fluctuated during the Track Record Period mainly due to the factor that such sales were driven
by customers’ demands in relation to application of fuel cell systems, which is still at an early
stage of development.
Sales of Hydrogen Production Systems and Related Components
In August 2023, we started to launch products used for high purity hydrogen production,
such as proton-exchange membrane water electrolysis hydrogen production systems, hydrogen
production power sources, and electrodes for alkaline electrolysis cells, which are mainly sold
to hydrogen production facilities and hydrogen production system manufacturers. In 2023 and
the five months ended May 31, 2024, our revenue from sales of hydrogen production systems
and related components amounted to RMB7.7 million and nil, respectively, representing 0.9%
and nil of our total revenue in the same periods.
Others
During the Track Record Period, our revenue from others mainly represented after-sales
service fees. During the Track Record Period, our revenue from others amounted to RMB3.1
million, RMB4.6 million, RMB6.9 million, RMB2.4 million and RMB2.6 million, representing
0.6%, 0.8%, 0.8%, 2.7% and 20.5% of our total revenue in 2021, 2022, 2023 and the five
months ended May 31, 2023 and 2024, respectively. Revenue from others continued to grow
primarily due to an increase in demand for our after-sales services as a result of the increased
number of fuel cell vehicles in operation equipped with our fuel cell systems, which was in line
with the growth in sales of our fuel cell systems.
FINANCIAL INFORMATION
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--- page 445 ---
Cost of Sales
Our cost of sales primarily consists of raw materials, depreciation and amortization of our
production facilities and other fixed assets used in our production process, employee benefit
expense, and impairment losses on inventories. The following table sets forth a breakdown of
our cost of sales by nature for the periods indicated:
Y ear Ended December 31, Five Months Ended May 31,
2021 2022 2023 2023 2024
RMB’000 % RMB’000 % RMB’000 % RMB’000 % RMB’000 %
(unaudited)
Cost of sales of goods and services
Raw materials
– Fuel cell stacks produced by
our Group /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118181,754 43.8 133,066 28.1 177,866 26.0 24,981 33.1 1,329 4.7
– Hydrogen supply systems /H1118/H1118/H1118/H1118/H1118/H1118/H111838,273 9.2 89,544 18.9 146,837 21.5 11,676 15.5 315 1.1
– Fuel cell stacks from external
suppliers /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111846,367 11.2 38,841 8.2 64,553 9.4 – – 995 3.5
– Energy storage systems /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 0.0 3,260 0.7 23,355 3.4 11,670 15.4 – –
– Fuel cell engine accessories /H1118/H1118/H1118/H1118/H11188,190 2.0 34,100 7.2 14,411 2.1 5,498 7.3 196 0.7
– Air compressors and controllers /H1118/H1118/H111822,474 5.4 19,467 4.1 21,641 3.2 889 1.2 158 0.6
– Humidifiers /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111813,567 3.3 18,043 3.8 21,373 3.1 862 1.1 180 0.6
– DC-to-DC boost converters /H1118/H1118/H1118/H1118/H1118/H111818,467 4.5 18,043 3.8 29,410 4.3 771 1.0 479 1.7
– Hydrogen circulation pumps /H1118/H1118/H1118/H1118/H11188,738 2.1 6,961 1.5 7,361 1.1 646 0.9 158 0.6
– Other raw materials /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111822,915 5.5 32,000 6.8 92,585 13.5 1,692 2.2 4,451 15.8
Subtotal of raw materials /H1118/H1118/H1118/H1118/H1118/H1118/H1118360,745 87.0 393,326 83.2 599,392 87.6 58,685 77.7 8,261 29.2
Depreciation and amortization /H1118/H1118/H1118/H1118/H111815,284 3.7 24,936 5.3 24,768 3.6 5,939 7.9 8,356 29.6
Employee benefit expense /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111815,859 3.8 20,044 4.2 25,434 3.7 4,041 5.3 4,375 15.5
Others
(1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111822,765 5.5 34,405 7.3 34,304 5.0 6,898 9.1 7,254 25.7
Subtotal of cost of sales of goods
and services /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118414,653 100.0 472,712 100.0 683,897 100.0 75,563 100.0 28,246 100.0
Impairment losses on inventories /H1118/H1118/H111847,671 82,113 31,765 16,470 8,476
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118462,324 554,825 715,662 92,033 36,722
Note:
(1) Others mainly included rental costs, utilities, and repair and maintenance fees.
FINANCIAL INFORMATION
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--- page 446 ---
In 2021, 2022, 2023 and the five months ended May 31, 2023 and 2024, our cost of sales
was RMB462.3 million, RMB554.8 million, RMB715.7 million, RMB92.0 million and
RMB36.7 million, respectively, accounting for 88.2%, 91.8%, 79.9%, 104.5% and 293.3% of
our total revenue for the same periods, respectively.
Cost of raw materials has been the largest component of our cost of sales during the Track
Record Period, which consisted of raw materials for fuel cell systems, such as fuel cell stacks,
air compressors and controllers, as well as raw materials for fuel cell vehicles, such as
hydrogen supply systems and fuel cell engine accessories. Our cost of raw materials increased
by 9.0% from RMB360.7 million for 2021 to RMB393.3 million for 2022, and further
increased by 52.4% to RMB599.4 million in 2023. The continue increase in cost of raw
materials was in line with our increased sales of hydrogen fuel cell systems and components.
For the five months ended May 31, 2024, our costs of raw materials decreased to RMB8.3
million, from RMB58.7 million for the same period in 2023, primarily due the relatively low
sales volume of fuel cell systems and components in the first five months of 2024.
The impairment losses on inventories increased by 72.2% from RMB47.7 million in 2021
to RMB82.1 million in 2022, primarily attributable to the rapid product iterations towards
high-output fuel cell systems and the decline in market prices. In particular, we made a
substantial provision for impairment losses on inventories for hydrogen fuel cell systems with
rated powers of below 60kW in 2022, considering the market conditions and industry trend.
The impairment losses on inventories decreased by 61.3% to RMB31.8 million in 2023.
Additionally, the impairment losses on inventories decreased to RMB8.5 million for the five
months ended May 31, 2024 from RMB16.5 million for the same period in 2023. This
continued reduction mainly resulted from our efforts to optimize inventories by exercising
cautious control over inventory growth and actively liquidating slow-moving inventories, as
well as the adequate provision we made for fuel cell systems with relatively low rated power
in 2022. For more information, see “— Discussion of Certain Selected Items from the
Consolidated Statements of Financial Position — Inventories” in this section.
The following table sets forth a breakdown of our cost of sales by business activity for
the periods indicated:
Y ear Ended December 31, Five Months Ended May 31,
2021 2022 2023 2023 2024
RMB’000 % RMB’000 % RMB’000 % RMB’000 % RMB’000 %
(unaudited)
Sales of hydrogen fuel cell
systems and components
– Hydrogen fuel cell systems /H1118/H1118354,881 85.6 324,978 68.7 458,911 67.1 44,896 59.4 25,526 90.4
– Components (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111854,871 13.2 137,693 29.1 206,969 30.3 30,196 40.0 1,263 4.5
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118409,752 98.8 462,670 97.9 665,880 97.4 75,092 99.4 26,789 94.8
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Y ear Ended December 31, Five Months Ended May 31,
2021 2022 2023 2023 2024
RMB’000 % RMB’000 % RMB’000 % RMB’000 % RMB’000 %
(unaudited)
Provision of fuel cell
engineering and technical
services /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,393 1.1 9,182 1.9 8,238 1.2 – – 339 1.2
Sales of hydrogen production
systems and related
components /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – – 6,410 0.9 – – – –
Others
(2) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118508 0.1 859 0.2 3,369 0.5 471 0.6 1,118 4.0
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118414,653 100.0 472,712 100.0 683,897 100.0 75,563 100.0 28,246 100.0
Impairment losses on
inventories /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111847,671 82,113 31,765 16,470 8,476
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118462,324 554,825 715,662 92,033 36,722
Notes:
(1) Components mainly included hydrogen supply systems, fuel cell engine accessories, energy storage
systems and others for fuel cell vehicles, and DC-to-DC boost converters, hydrogen circulation systems
and others for fuel cell systems.
(2) Others mainly included provision of after-sales services.
Sensitivity Analysis
The following table hypothesizes the impact of increase or decrease in the average selling
price per kW of our hydrogen fuel cell systems on our profit or loss before taxation, while all
other factors remain unchanged:
Impact on pretax loss
Y ear Ended December 31,
Five Months
Ended May 31,
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Hypothetical
fluctuations in
average selling price
per kW
Increase of 5% /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111822,636 21,163 31,859 355
Decrease of 5% /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(22,636) (21,163) (31,859) (355)
Increase of 10% /H1118/H1118/H1118/H1118/H1118/H1118/H111845,273 42,327 63,718 709
Decrease of 10% /H1118/H1118/H1118/H1118/H1118/H1118/H1118(45,273) (42,327) (63,718) (709)
Increase of 20% /H1118/H1118/H1118/H1118/H1118/H1118/H111890,545 84,653 127,435 1,418
Decrease of 20% /H1118/H1118/H1118/H1118/H1118/H1118/H1118(90,545) (84,653) (127,435) (1,418)
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A sensitivity analysis on the price fluctuations in cost of raw materials during the Track
Record Period sets forth below illustrates the hypothetical effects on our net profit or loss
before taxation based on the respective historical year-over-year fluctuations of our cost of
raw materials during the Track Record Period with all other variables remaining constant.
Impact on pretax loss
Y ear Ended December 31,
Five Months
Ended May 31,
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Hypothetical
fluctuations in cost of
raw materials
Increase of 5% /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(18,037) (19,666) (29,970) 413
Decrease of 5% /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111818,037 19,666 29,970 (413)
Increase of 10% /H1118/H1118/H1118/H1118/H1118/H1118/H1118(36,075) (39,333) (59,939) 826
Decrease of 10% /H1118/H1118/H1118/H1118/H1118/H1118/H111836,075 39,333 59,939 (826)
Increase of 20% /H1118/H1118/H1118/H1118/H1118/H1118/H1118(72,149) (78,665) (119,878) 1,652
Decrease of 20% /H1118/H1118/H1118/H1118/H1118/H1118/H111872,149 78,665 119,878 (1,652)
Gross Profit and Gross Profit Margin
Our gross profit represents our revenue less cost of sales, and our gross profit margin
represents our gross profit divided by our revenue, expressed as a percentage. The following
table sets forth a breakdown of our gross profit and gross profit margin by business activity for
the periods indicated:
Y ear Ended December 31, Five Months Ended May 31,
2021 2022 2023 2023 2024
Gross
Profit
Gross
Profit
Margin
Gross
Profit
Gross
Profit
Margin
Gross
Profit
Gross
Profit
Margin
Gross
Profit
Gross
Profit
Margin
Gross
Profit
Gross
Profit
Margin
RMB’000 % RMB’000 % RMB’000 % RMB’000 % RMB’000 %
(unaudited)
Sales of hydrogen fuel
cell systems and
components
– Hydrogen fuel cell
systems /H1118/H1118/H1118/H1118/H1118/H1118/H111897,845 21.6 98,288 23.2 178,265 28.0 8,100 15.3 (18,435) (260)
– Components
(1) /H1118/H1118/H1118/H11186,146 10.1 12,604 8.4 13,113 6.0 2,504 7.7 633 33.4
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118103,991 20.2 110,891 19.3 191,378 22.3 10,604 12.4 (17,802) (198.1)
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Y ear Ended December 31, Five Months Ended May 31,
2021 2022 2023 2023 2024
Gross
Profit
Gross
Profit
Margin
Gross
Profit
Gross
Profit
Margin
Gross
Profit
Gross
Profit
Margin
Gross
Profit
Gross
Profit
Margin
Gross
Profit
Gross
Profit
Margin
RMB’000 % RMB’000 % RMB’000 % RMB’000 % RMB’000 %
(unaudited)
Provision of fuel cell
engineering and
technical services /H1118/H11182,858 39.4 17,291 65.3 15,206 64.9 – N/A 627 64.9
Sales of hydrogen
production systems
and related
components /H1118/H1118/H1118/H1118/H1118/H1118– N/A – N/A 1,271 16.5 – N/A – N/A
Others
(2) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,608 83.7 3,754 81.4 3,526 51.1 1,901 80.2 1,450 56.5
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118109,456 20.9 131,936 21.8 211,381 23.6 12,505 14.2 (15,725) (126.0)
Impairment losses on
inventories /H1118/H1118/H1118/H1118/H1118/H1118(47,671) (82,113) (31,765) (16,470) (8,476)
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111861,785 11.8 49,823 8.2 179,616 20.1 (3,965) (4.5) (24,201) (193.3)
Notes:
(1) Components mainly included hydrogen supply systems, fuel cell engine accessories, energy storage
systems and others for fuel cell vehicles, and DC-to-DC boost converters, hydrogen circulation systems
and others for fuel cell systems.
(2) Others mainly included provision of after-sales services.
In 2021, 2022 and 2023, our gross profit was RMB61.8 million, RMB49.8 million and
RMB179.6 million, respectively, and our gross profit margin was 11.8%, 8.2% and 20.1%,
respectively. The decline in gross profit margin for 2022 was primarily as a result of the
heightened impairment in 2022. This was further due to increased impairment losses on
inventories as a result of the rapid product iterations toward high-output fuel cell systems and
the decline in market prices, as elaborated below.
In 2020, we achieved mass production of high-output fuel cell systems with a rated power
of 110KW for heavy-duty truck applications. Subsequently, we introduced fuel cell systems
with rated powers ranging from 130KW, 160-180KW and 220KW, all applicable to heavy-duty
truck scenarios. Our revenue generated from heavy-duty truck applications showed a
year-on-year increase, reaching RMB279 million, RMB291 million and RMB549 million in
2021, 2022 and 2023, respectively. According to Frost & Sullivan, currently, the power of
hydrogen fuel cell systems on heavy-duty trucks typically range from 110 kW to 240kW, a
significant increase from the previous typical power range of below 50 kW before 2020.
Despite the iterations towards high-output systems, as the industry has matured, market prices
FINANCIAL INFORMATION
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have declined due to technological advancements and localized raw material supply, which had
a negative impact on the revenue growth. The reduction in revenue due to the decline in prices
for hydrogen fuel cell systems, which represents the difference between the average selling
prices of the previous and current years, multiplied by the sales power output for the current
year, amounts to RMB96.6 million in 2022 and RMB135.7 million in 2023. Meanwhile, the
increase in revenue due to the rise in sales power output for the hydrogen fuel cell systems,
which represents the difference between the sales power output of the previous and current
years, multiplied by the average selling prices for the current year, amounts to RMB54.6
million in 2022 and RMB288.2 million in 2023.
Despite the significant revenue contribution from high-output fuel cell systems during the
Track Record Period, the combination of rapid product iterations and the price decline has led
to impairment losses on our inventories, which in turn affected our gross profit and gross profit
margin. In particular, in 2022, we made a substantial provision for hydrogen fuel cell systems
with a rated power of below 60kW, considering the less favorable market conditions for
low-output models amidst the industry’s shift towards high-output fuel cell systems. We also
made provisions on other inventories, primarily in response to price fluctuations associated
with the overall decline in market prices. In 2021, 2022 and 2023, we recorded impairment
losses on inventories of RMB47.7 million, RMB82.1 million and RMB31.8 million,
respectively, affecting the gross profit margin by 9.1%, 13.6%, and 3.5%.
Sales of Hydrogen Fuel Cell Systems and Components
Our gross profit for sales of hydrogen fuel cell systems and components increased by
6.6% from RMB104.0 million for 2021 to RMB110.9 million for 2022, with the gross profit
margin decreasing slightly from 20.2% to 19.3%. The increase in gross profit was mainly due
to the fact that the increase in sales of fuel cell systems and components outpacing the increase
in relevant cost of sales as a result of our efforts to control cost. The slight decrease in gross
profit margin was primary attributed to the increased proportion of revenue generated from
sales of components, which generally had lower profit margin than fuel cell systems. The gross
profit margin for sales of fuel cell systems increased from 21.6% to 23.2%, as we continued
to seek domestic sourcing of high-quality raw materials and increased application of
proprietary key components in our fuel cell systems resulting in continuous optimization of
costs associated therein. The gross profit margin for sales of components decreased from 10.1%
to 8.4% mainly due to changes in the mix of components sold in the respective periods, where
the choice of components was mainly determined by the specific needs of respective customers
and different types of components generally carry different margins.
Our gross profit for sales of hydrogen fuel cell systems and components increased by
72.6% from RMB110.9 million for 2022 to RMB191.4 million for 2023, with the gross profit
margin increasing from 19.3% to 22.3%. Such increase was mainly due to the growth in sales
volume of fuel cell systems which had higher profit margin compared to components, as well
as the rise in gross margin of fuel cell systems as a result of our efforts to enhance cost
efficiency.
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For the five months ended May 31, 2024, we recorded a gross loss of RMB24.2 million
with a negative margin, mainly attributable to the gross loss of RMB17.8 million from sales
of hydrogen fuel cell systems and components. This was primarily because our revenue was
relatively small in the first five months of 2024 due to the seasonality and fluctuations in our
customers’ demands for application of fuel cell systems and components, which were in
relation to their vehicle production schedules, while costs of sales such as employee benefit
expense and depreciation and amortization did not decline proportionately during the same
period.
The following table sets forth a breakdown of gross profit and gross profit margin for
sales of hydrogen fuel cell systems by product type for the periods indicated:
Y ear Ended December 31, Five Months Ended May 31,
2021 2022 2023 2023 2024
Gross
Profit
Gross
Profit
Margin
Gross
Profit
Gross
Profit
Margin
Gross
Profit
Gross
Profit
Margin
Gross
Profit
Gross
Profit
Margin
Gross
Profit
Gross
Profit
Margin
RMB’000 % RMB’000 % RMB’000 % RMB’000 % RMB’000 %
(unaudited)
Fuel cell systems
equipped with fuel
cell stacks
provided by:
– Third party
suppliers /H1118/H1118/H1118/H1118/H1118/H111851,375 38.9 19,698 17.2 40,347 24.7 6,024 32.1 484 60.0
– Our Group /H1118/H1118/H1118/H1118/H111846,469 14.5 78,590 25.5 137,918 29.1 2,076 6.1 (18,919) (301.0)
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111897,845 21.6 98,288 23.2 178,265 28.0 8,100 15.3 (18,435) (260.0)
In 2021, the gross profit margin for fuel cell systems equipped with fuel cell stacks
provided by third-party suppliers was higher than those equipped with our in-house
manufactured fuel cell stacks, primarily because in 2021, most of the fuel cell systems
equipped with in-house manufactured fuel cell stacks incorporated our first-generation fuel cell
stacks, Polaris series, which used imported MEAs and bipolar plates and had relatively high
manufacturing costs. In 2022 and 2023, we were able to increase the use of our newer and more
cost-effective in-house manufactured fuel cell stacks, which incorporated our in-house
developed core components like MEAs and bipolar plates. We also strengthened our supply
chain management, including the use of more domestically sourced raw materials. This allowed
us to achieve a year-over-year improvement in the gross profit margin of our fuel cell systems
equipped with in-house manufactured stacks, which then surpassed the gross profit margin of
the systems equipped with fuel cell stacks provided by third-party suppliers in 2022 and 2023.
FINANCIAL INFORMATION
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The following table sets forth a breakdown of our gross profit and gross profit margin
from sales of components by product type for the periods indicated:
Y ear Ended December 31, Five Months Ended May 31,
2021 2022 2023 2023 2024
Gross
Profit
Gross
Profit
Margin
Gross
Profit
Gross
Profit
Margin
Gross
Profit
Gross
Profit
Margin
Gross
Profit
Gross
Profit
Margin
Gross
Profit
Gross
Profit
Margin
RMB’000 % RMB’000 % RMB’000 % RMB’000 % RMB’000 %
(unaudited)
Components for
Fuel Cell Vehicles
– Hydrogen supply
systems /H1118/H1118/H1118/H1118/H1118/H1118/H11182,368 5.8 1,367 1.5 1,825 1.2 164 1.4 27 7.9
– Energy storage
systems /H1118/H1118/H1118/H1118/H1118/H1118/H1118– N/A 1,250 27.7 411 1.7 240 2.0 – N/A
– Fuel cell engine
accessories /H1118/H1118/H1118/H1118/H11181,295 13.7 5,558 14.0 3,029 17.4 816 12.9 (4) (2.2)
– Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,467 37.9 2,518 32.0 4,103 33.7 356 53.0 200 37.1
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,130 9.5 10,692 7.5 9,369 4.6 1,577 5.1 222 20.7
Components for
Fuel Cell Systems
– Fuel cell stacks /H1118/H1118 – N/A 618 56.4 3,004 21.6 169 39.6 224 59.7
– DC-to-DC boost
converters /H1118/H1118/H1118/H1118/H1118505 13.0 893 24.7 314 32.2 753 49.7 91 35.7
– Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118511 16.2 401 15.3 426 13.6 6 26.1 96 49.3
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,016 14.5 1,912 26.0 3,744 20.8 928 47.3 411 49.8
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,146 10.1 12,604 8.4 13,113 6.0 2,505 7.7 633 33.4
During the period from 2021 to 2023, our gross profit from sales of components
experienced a continued increase, rising from RMB6.1 million in 2021 to RMB12.6 million in
2022, and further climbing to RMB13.1 million in 2023. This continued growth was primarily
driven by the rapid expansion in sales of components as a result of the growing customer
demand for these specific components, which we offer together with fuel cell systems within
our product solutions, reflecting the enhanced customers’ trust and recognition in our
capabilities to offer comprehensive solutions. The gross profit margin for sales of components
declined from 10.1% in 2021 to 8.4% in 2022, mainly due to the decline in the gross margin
of hydrogen supply systems, which was caused by intensified competition and greater price
transparency in the market as the industry developed. The gross profit margin decreased further
to 6.0% in 2023, primarily due to changes in our product mix. Specifically, hydrogen supply
systems and energy storage systems made up a higher proportion of our total sales of
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components in 2023. Hydrogen supply systems had a relatively lower profit margin compared
to other components, and the profit margin for energy storage systems decreased in 2023
resulting from fluctuations in certain raw material prices.
Our gross profit for sales of components decreased from RMB2.5 million for the five
months ended May 31, 2023 to RMB0.6 million for the five months ended May 31, 2024,
mainly due to the decrease in sales volume of components because such sales were driven by
customers’ demands for applying various components, which were influenced by their vehicle
production schedules. Our gross profit margin increased from 7.7% for the five months ended
May 31, 2023 to 33.4% for the five months ended May 31, 2024, mainly due to changes in our
product mix, including an increased proportion of fuel cell stacks in our total sales of
components, which had a relatively higher profit margin.
Provision of Fuel Cell Engineering and Technical Services
Our gross profit margin for the provision of fuel cell engineering and technical services
increased from 39.4% in 2021 to 65.3% in 2022, and then remained relatively stable at 64.9%
in 2023. Our gross profit margin for the provision of fuel cell engineering and technical
services amounted to 64.9% for the five months ended May 31, 2024. The fluctuations in these
gross profit margins were mainly due to the changes in service mix, mainly driven by specific
customer demand in the relevant years. Our fuel cell engineering and technical services are
highly customized based on individual customer requirements, and different projects can have
varying profit margin profiles. In this business segment, we offer not only standalone technical
services such as testing, technical development and training, but also engineering solutions that
include both technical development and the delivery of equipment like prototypes, which
typically have lower margins compared to pure technical services. The relatively lower gross
profit margin in 2021 was mainly attributable to such engineering solutions that involved both
technical development and equipment delivery accounting for a higher proportion of the
overall service mix, compared to 2022 and 2023.
Others
Our gross profit margin for others decreased from 83.7% in 2021 to 81.4% in 2022, and
further to 51.1% in 2023, and also decreased from 80.2% for the five months ended May 31,
2023 to 56.5% for the five months ended May 31, 2024, which mainly arose from our provision
of after-sale services purchased separately from customers. For after-sales services, we
recognize revenue on a straight-line basis over the service period as the customer
simultaneously receives and consumes the benefits provided by us. However, the associated
costs are recorded as they are actually incurred, which tends to happen unevenly over the
service period. This mismatch between the timing of revenue recognition and actual cost
incurrence is the main reason behind the fluctuations in the gross profit margin for this business
segment. For example, in 2023, the relatively lower gross profit margin for others was mainly
due to the increased service costs actually incurred based on the customers’ demands during
that period.
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Other Income and Gains
Our other income and gains primarily consist of (i) government grants and subsidies we
received and recognized during the respective period primarily for engaging in research and
development projects, which vary from year to year; (ii) interest income from bank deposits,
(iii) investment income from structured deposits; (iv) deemed disposal in equity of associates
resulting from capital injection by other shareholders of the relevant associates; (v) gain on
disposal of scrap materials; and (vi) gain on disposal of an associate. The following table sets
forth a breakdown of our other income and gains for the periods indicated:
Y ear Ended December 31,
Five Months
Ended May 31,
2021 2022 2023 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Other income
Government grants and
subsidies /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111832,178 34,286 39,446 7,866 14,494
Interest income /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187,472 18,021 16,166 6,673 2,500
Investment income from
structured deposits /H1118/H1118/H1118/H1118/H1118/H1118– 920 1,269 495 –
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,105 1,054 229 51 1,050
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111840,755 54,281 57,110 15,085 18,044
Gains
Gain on deemed disposal in
equity of associates /H1118/H1118/H1118/H1118/H1118/H11186,234 3,59 4–––
Gain on disposal of scrap
materials /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111824 1,917 665 296 538
Gain on disposal of an
associate /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,937 – 2,010 – 950
Gain on a lease term
termination /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 40 40 –
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111813,195 5,511 2,715 336 1,488
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111853,950 59,792 59,825 15,421 19,532
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Selling and Marketing Expenses
Our selling and marketing expenses primarily consist of (i) employee benefit expense,
including share-based payment expenses and salaries, wages and bonuses paid to our sales and
marketing personnel, (ii) after-sales service fees as detailed below, (iii) advertising and
promotion fees, and (iv) vehicle data analysis and announcement fees, which represent
expenses of analyzing fuel cell vehicle data for the purpose of improving after-sales services,
as well as expenses of certification for new vehicle models. The following table sets forth a
breakdown of our selling and marketing expenses for the periods indicated:
Y ear Ended December 31, Five Months Ended May 31,
2021 2022 2023 2023 2024
RMB’000 % RMB’000 % RMB’000 % RMB’000 % RMB’000 %
(unaudited)
Employee benefit expense /H1118/H1118/H1118/H111838,305 42.3 50,709 49.3 54,584 40.5 19,429 53.0 25,288 58.0
After-sales service fees /H1118/H1118/H1118/H1118/H111811,936 13.2 13,978 13.6 18,842 14.0 2,358 6.0 1,222 3.0
Advertising and promotion
fees /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111816,427 18.2 14,912 14.5 16,715 12.4 4,608 13.0 7,147 17.0
Vehicle data analysis and
announcement fees /H1118/H1118/H1118/H1118/H1118/H111812,707 14.0 11,947 11.6 18,347 13.6 3,182 9.0 2,910 7.0
Entertainment expenses /H1118/H1118/H1118/H1118/H11182,865 3.2 2,821 2.7 6,682 5.0 1,501 4.0 1,257 3.0
Others (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188,235 9.1 8,460 8.2 19,663 14.6 5,624 15.0 5,252 12.0
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111890,475 100.0 102,826 100.0 134,833 100.0 36,702 100.0 43,076 100.0
Note:
(1) Others mainly included depreciation and amortization, rental expenses and property management fees.
After-sale service fees represent provisions we made on warranties for our hydrogen fuel
cell systems and components. In general, we made provisions based on 1.5% of the revenue
generated from the sales of our hydrogen fuel cell systems and components. This is intended
to cover projected costs associated with repairing our hydrogen fuel cell systems and
components under warranties. Historically, the actually incurred warranties of products for
which warranty periods have passed were about 1.5% of the accrued warranties. Taking into
account the historical warranty expenses incurred, as well as our estimates of repair and
after-sales service requirements, our Directors are of the view that the provision level for
product warranties as of December 31, 2021, 2022, 2023 and May 31, 2024 was sufficient.
FINANCIAL INFORMATION
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Administrative Expenses
Our administrative expenses mainly consist of (i) employee benefit expense, including
share-based payment expenses and salaries, wages and bonuses paid to our administrative
personnel, (ii) office and traveling expenses, (iii) depreciation and amortizations, (iv)
professional service fees, mainly in relation to our previous A-Share listing application and
human resources related consultation; and (v) listing expenses in relation to the Global
Offering. The following table sets forth a breakdown of our administrative expenses for the
periods indicated:
Y ear Ended December 31, Five Months Ended May 31,
2021 2022 2023 2023 2024
RMB’000 % RMB’000 % RMB’000 % RMB’000 % RMB’000 %
(unaudited)
Employee benefit expense /H1118/H1118/H1118/H1118136,028 62.3 148,831 61.3 205,174 60.4 64,327 62.0 135,763 69.0
Office and traveling expenses /H111832,636 15.0 33,519 13.8 44,703 13.2 17,642 17.0 22,013 11.0
Depreciation and amortization /H111815,946 7.3 31,015 12.8 32,262 9.5 12,730 12.0 17,061 9.0
Professional service fees /H1118/H1118/H1118/H111820,463 9.4 18,087 7.5 21,174 6.2 6,194 6.0 8,780 4.0
Listing expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – – 19,084 5.6 – – 9,003 5.0
Others (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111813,153 6.0 11,242 4.6 17,273 5.1 3,021 3.0 3,955 2.0
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118218,227 100.0 242,695 100.0 339,670 100.0 103,914 100.0 196,575 100.0
Note:
(1) Others mainly included entertainment expenses, conference fees, and taxes and surcharges.
FINANCIAL INFORMATION
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--- page 457 ---
Research and Development Expenses
Our research and development expenses primarily consist of (i) employee benefit
expense, including share-based payment expenses and salaries, wages and bonuses paid to our
research and development personnel, (ii) depreciation and amortization, (iii) raw material
expenses that primarily result from research and development projects for product iterations
and refinement, (iv) outsourced development and analysis expenses, which mainly arise from
the outsourced development of air compressors and humidifiers, and our vehicle data analysis
for the purpose of product refinement and upgrades, and (v) mold development and testing
expenses. The following table sets forth a breakdown of our research and development
expenses for the periods indicated:
Y ear Ended December 31, Five Months Ended May 31,
2021 2022 2023 2023 2024
RMB’000 % RMB’000 % RMB’000 % RMB’000 % RMB’000 %
(unaudited)
Employee benefit expense /H1118/H1118/H1118/H1118102,367 44.3 99,098 49.9 117,521 53.2 50,229 50.0 61,927 69.0
Depreciation and amortization /H111826,202 11.3 28,137 14.2 38,331 17.4 14,823 15.0 16,032 18.0
Raw materials expenses /H1118/H1118/H1118/H111871,045 30.8 36,583 18.4 33,352 15.1 19,384 19.0 4,644 5.0
Outsourced development and
analysis expenses /H1118/H1118/H1118/H1118/H1118/H1118/H11189,091 3.9 13,287 6.7 12,776 5.8 5,248 5.0 2,848 3.0
Mold development and testing
expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111810,655 4.6 9,671 4.9 4,466 2.0 1,548 2.0 741 1.0
Others (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111811,531 5.0 11,912 6.0 14,434 6.5 8,266 8.0 4,089 5.0
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118230,891 100.0 198,688 100.0 220,880 100.0 99,498 100.0 90,281 100.0
Note:
(1) Others mainly included utilities, office expenses and miscellaneous maintenance fees for research
laboratories.
Fair Value Gains or Losses on Financial Assets at Fair Value Through Profit or Loss, Net
During the Track Record Period, our fair value gains or losses on financial assets at fair
value through profit or loss mainly represented fair value changes in our investments in
structured deposits and private equity funds. We recorded net fair value gains of RMB0.4
million and RMB0.9 million in 2021 and 2022, respectively, on financial assets at fair value
through profit or loss, but had net fair value losses of RMB3.1 million and RMB2.2 million on
financial assets at fair value through profit or loss in 2023 and the five months ended May 31,
2024, respectively.
We have implemented a robust internal control mechanism to safeguard our exposure to
investment risks, and followed a rigorous process for making investment decisions in line with
our internal policies.
FINANCIAL INFORMATION
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--- page 458 ---
Prior to making any investment, we conduct meticulous assessments and evaluations
involving relevant departments and personnel. This process ensures a careful examination of
investment opportunities and due and careful consideration of a number of factors, including
but not limited to our overall financial condition, market and investment conditions, economic
developments, investment cost, duration of investment and the expected returns and potential
risks of such investment.
Our annual plans and investment proposals should be approved by Board of Directors.
Additionally, any investment exceeding 5% of our total assets must receive prior approval from
the Board of Directors before it can proceed. Our capital operation department conducts a
review, following approval from the head of the relevant business department, to determine if
the investment should be presented at the Board of Directors or shareholders’ meeting. In cases
where approval from the Board or shareholders is required, the investment proposal undergoes
careful deliberation and scrutiny during these meetings. Additionally, it must obtain approvals
from our finance, legal, management, and chief executive officer before execution. These
stringent measures are in place to ensure comprehensive evaluation and financial oversight.
After we make investments, our finance department is responsible for ensuring that the
investments are properly recorded in our financial statements and monitoring the performance
of our investments.
After Listing, we may continue to make investments with a relatively low level of risk and
a short maturity period in accordance with our internal policies and measures, and such
investments will be subject to the compliance with the requirements under Chapter 14 of the
Listing Rules.
Fair Value Loss on A Derivative Financial Instrument
During the Track Record Period, our fair value loss on a derivative financial instrument
mainly derived from our derivative financial instruments that presented our obligation to buy
back shares of Guohong Refire as detailed in “— Discussion on Certain Selected Items from
Consolidated Statements of Financial Position — Derivative Financial Instruments” below in
this section. We recorded fair value loss on a derivative financial instrument of RMB0.6
million, RMB19.7 million, nil and nil, respectively, in 2021, 2022, 2023 and the five months
ended May 31, 2024.
Impairment Losses on Financial Assets and a Financial Guarantee Obligation, Net
Our net impairment losses on financial assets and a financial guarantee obligation
primarily represent the net loss allowance for ECLs on trade receivables, bills receivables and
other receivables and the changes in our financial guarantee obligation from financial
guarantee we made to a joint venture. For details of the financial guarantee obligation, see “—
Discussion of Certain Selected Items from the Consolidated Statements of Financial Position
— Provision” in this section. In 2021, 2022, 2023 and the five months ended May 31, 2024,
we recorded net impairment losses on financial assets and a financial guarantee obligation of
RMB144.6 million, RMB15.5 million, RMB64.0 million and RMB41.5 million, respectively.
For more information on impairment review, see “— Discussion of Certain Selected Items from
the Consolidated Statements of Financial Position — Trade and Bills Receivables and Contract
Assets” in this section.
FINANCIAL INFORMATION
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Other Expenses
Our other expenses represent impairment loss and disposal loss of long-term fixed assets,
donation expenses, and exchange gains and losses. We recorded other expenses of RMB23.4
million, RMB6.2 million, RMB5.0 million and RMB2.5 million, respectively, in 2021, 2022,
2023 and the five months ended May 31, 2024.
Finance Costs
Our finance costs consist of interest expenses on our bank and other borrowings and lease
liabilities. The following table sets forth a breakdown of our finance costs for the periods
indicated:
Y ear Ended December 31,
Five Months
Ended May 31,
2021 2022 2023 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Interest on interest-
bearing bank and
other borrowings /H1118/H111845,280 44,862 43,373 16,841 23,740
Interest on lease
liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,778 4,157 4,553 1,504 1,166
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111850,058 49,019 47,926 18,345 24,906
Share of Losses of A Joint Venture and Associates
We recorded share of losses of a joint venture and associates of RMB8.2 million,
RMB21.4 million, RMB3.9 million and RMB5.7 million, respectively, in 2021, 2022, 2023 and
the five months ended May 31, 2024. For details, see note 16 and note 17 to the Accountants’
Report in Appendix I to this prospectus.
Income Tax Credit/(Expense)
Income tax credit/(expense) primarily represent our total current income tax and deferred
income tax credit/(charges) under the relevant income tax rules and regulations in the
jurisdictions where we operate. In 2021 and 2022, we recorded income tax expense of RMB4.0
million and RMB0.6 million, respectively. In 2023 and the five months ended May 31, 2024,
we recorded income tax credit of RMB2.2 million and RMB2.0 million, respectively, which
was mainly due to (i) losses incurred by our certain subsidiaries; and (ii) additional deductible
allowances for research and development expenses.
FINANCIAL INFORMATION
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--- page 460 ---
Certain of our subsidiaries had been subject to PRC enterprise income tax at a preferential
tax rate of 15% given their accreditations as “High and New Technology Enterprise” during the
relevant period. Additionally, certain of our subsidiaries have applied the Small-Scaled
Minimal Profit Corporate Income Tax Preferential Policy announced by the State Taxation
Administration of the PRC. For more information, see note 10 to the Accountants’ Report in
Appendix I to this prospectus.
RESULTS OF OPERATIONS
Five Months Ended May 31, 2024 Compared to Five Months Ended May 31, 2023
Revenue
Our revenue decreased by 85.8% from RMB88.1 million for the five months ended May
31, 2023 to RMB12.5 million for the five months ended May 31, 2024, primarily attributable
to decreases in revenue from sales of hydrogen fuel cell products and systems, partially offset
by an increase in revenue from provision of fuel cell engineering and technical services.
Sales of Hydrogen Fuel Cell Products and Systems. Our revenue from sales of hydrogen
fuel cell products and systems decreased by 89.5% from RMB85.7 million for the five months
ended May 31, 2023 to RMB9.0 million for the five months ended May 31, 2024. This was
mainly due to a decrease in the sales volume of fuel cell systems and components driven by
fluctuations in timing of order deliveries. Our main customers, fuel cell vehicle manufacturers,
generally place orders with us after assessing their production and sales plans. These plans are
influenced by various factors, including the kick-off of related government award projects,
which typically occurs in the second half of the year. As a result, large-scale orders and
deliveries of our fuel cell systems and components are usually concentrated in the second half
of the year. Given the relatively fewer orders delivered in the first half of the year, fluctuations
in the timing of individual order deliveries may have a greater impact on our revenue during
this period. In the first five months of 2024, we delivered only 11 fuel cell systems, down from
85 in the same period in 2023. Nonetheless, we had orders for 60 fuel cell system that were
not yet delivered by May 2024, with an aggregate contract value of over RMB21 million.
Additionally, in June 2024, we received orders for over 80 fuel cell systems placed by our
customers, with an aggregate contract value of over RMB29 million, and we also delivered 30
fuel cell systems to our customers, with an aggregate contract value of over RMB16 million.
The decrease in sales volume of components was due to the fact that such sales were driven
by fluctuations in customers’ demand for applying various components, which are influenced
by their vehicle production schedules. Although the volume of components delivered in the
first five months of 2024 was relatively small, the aggregate contract value of the components
we delivered to customers in June 2024 exceeded RMB70 million. For detailed analysis on
fluctuation of our sales volume and average selling prices, see “— Description of Selected
Components of Consolidated Statements of Profit or Loss — Revenue — Sales of Hydrogen
Fuel Cell Systems and Components” in this section.
FINANCIAL INFORMATION
– 450 –


--- page 461 ---
Provision of Fuel Cell Engineering and Technical Services. Our revenue from provision
of fuel cell engineering and technical services increased from nil for the five months ended
May 31, 2023 to RMB1.0 million for the five months ended May 31, 2024. The fluctuation in
revenue from provision of fuel cell engineering and technical services was mainly due to the
customized nature of these services, as they were provided to cater to our customers’ specific
engineering demands.
Cost of Sales
Our cost of sales decreased by 60.1% from RMB92.0 million for the five months ended
May 31, 2023 to RMB36.7 million for the five months ended May 31, 2024, mainly attributable
to the decrease in raw materials as a result of our decreased sales of hydrogen fuel cell systems
and components as well as the decrease in impairment losses on inventories.
Gross Profit and Gross Profit Margin
As a result of the cumulative effect of the factors described above, we recorded a gross
loss of RMB24.2 million with a negative gross margin of 193.3% for the five months ended
May 31, 2024, compared to the gross loss of RMB4.0 million and negative gross margin of
4.5% for the five months ended May 31, 2023. The gross loss and negative margin in the five
months ended May 31, 2024 were mainly because our revenue was relatively small in the first
five months of 2024 due to the seasonality and fluctuations in our customers’ demands for
application of fuel cell systems and components, which were in relation to their vehicle
production schedules, while costs of sales such as employee benefit expense and depreciation
and amortization did not decline proportionately during the same period.
For more information, see “— Description of Selected Components of Consolidated
Statements of Profit or Loss — Gross Profit and Gross Profit Margin” in this section.
Other Income and Gains
Our other income and gains increased by 26.7% from RMB15.4 million for the five
months ended May 31, 2023 to RMB19.5 million for the five months ended May 31, 2024,
mainly due to an increase in government grants and subsidies, as we secured certain new
government subsidies programs primarily related to research and development of fuel cell
systems.
Selling and Marketing Expenses
Our selling and marketing expenses increased by 17.4% from RMB36.7 million for the
five months ended May 31, 2023 to RMB43.1 million for the five months ended May 31, 2024.
This increase was primarily due to increased employee benefit expense as we granted options
to employees under our share incentive scheme in January 2024.
FINANCIAL INFORMATION
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Administrative Expenses
Our administrative expenses increased by 89.2% from RMB103.9 million for the five
months ended May 31, 2023 to RMB196.6 million for the five months ended May 31, 2024,
primarily due to an increase in employee benefit expense as we granted options to employees
under our share incentive scheme in January 2024.
Research and Development Expenses
Our research and development expenses decreased by 9.3% from RMB99.5 million for
the five months ended May 31, 2023 to RMB90.3 million for the five months ended May 31,
2024, mainly because in 2023, we had more R&D projects in the prototype testing and
verification stage, which required a higher consumption of raw materials.
Fair V alue Losses on Financial Assets at Fair V alue Through Profit or Loss, Net
Our net fair value losses on financial assets at fair value through profit or loss increased
significantly from RMB18.0 thousand for the five months ended May 31, 2023 to RMB2.2
million for the five months ended May 31, 2024, mainly due to fair value changes in our
investments in structured deposits and private equity funds.
Fair V alue Loss on A Derivative Financial Instrument
Our fair value loss on a derivative financial instrument remained at nil for the five months
ended May 31, 2023 and 2024, respectively.
Impairment Losses on Financial Assets, Net
Our net impairment losses on financial assets increased by 119.6% from RMB18.9 million
for the five months ended May 31, 2023 to RMB41.5 million for the five months ended May
31, 2024, mainly due to changes in aging of our trade receivables.
Other Expenses
Our other expenses increased significantly from RMB0.7 million for the five months
ended May 31, 2023 to RMB2.5 million for the five months ended May 31, 2024, mainly due
to disposal loss of long-term fixed assets.
Finance Costs
Our finance costs increased from RMB18.3 million for the five months ended May 31,
2023 to RMB24.9 million for the five months ended May 31, 2024, primarily attributable to
an increase in the average balance of our bank loans during the same period.
FINANCIAL INFORMATION
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--- page 463 ---
Share of Losses of A Joint V enture and Associates
Our share of losses of a joint venture and associates increased significantly from RMB2.7
million from the five months ended May 31, 2023 to RMB5.7 million for the five months ended
May 31, 2024, mainly due to certain of our associates operating in the upstream or downstream
of our industry, which were in an early stage of development.
Income Tax Credit
Our income tax credit decreased by 23.0% from RMB2.6 million for the five months
ended May 31, 2023 to RMB2.0 million for the five months ended May 31, 2024, primarily due
to a decrease in deferred tax credit.
Loss for the Period
As a result of the above, our loss for the period increased by 53.5% from RMB266.7
million for the five months ended May 31, 2023 to RMB409.4 million for the five months
ended May 31, 2024.
Y ear Ended December 31, 2023 Compared to Y ear Ended December 31, 2022
Revenue
Our revenue increased by 48.1% from RMB604.6 million in 2022 to RMB895.3 million
in 2023, primarily attributable to increases in revenue from sales of hydrogen fuel cell systems
and components, partially offset by an decrease in revenue from provision of fuel cell
engineering and technical services.
Sales of Hydrogen Fuel Cell Systems and Components. Our revenue from sales of
hydrogen fuel cell systems and components increased by 49.5% from RMB573.6 million in
2022 to RMB857.3 million in 2023, primarily attributable to the increases in sales volume of
fuel cell systems and components. In 2023, our customers resumed normal business operation
following the ease of anti-pandemic measures, leading to a rebound in their demand for our
products. This, coupled with our continued efforts to expand markets, resulted in a significant
increase in sales volume of our hydrogen fuel cell systems and components in 2023. In
particular, in September 2023, we launched a pioneer project, with its first phase involving a
one-time order for a large volume of fuel cell systems and hydrogen supply systems,
contributing RMB162.6 million to our total revenue in 2023. As this project progresses, we
may receive new orders in the future. For detailed analysis on fluctuation of our sales volume
and average selling prices, see “— Description of Selected Components of Consolidated
Statements of Profit or Loss — Revenue — Sales of Hydrogen Fuel Cell Systems and
Components” in this section.
FINANCIAL INFORMATION
– 453 –


--- page 464 ---
Provision of Fuel Cell Engineering and Technical Services. Our revenue from provision
of fuel cell engineering and technical services decreased by 11.7% from RMB26.5 million in
2022 to RMB23.4 million in 2023, mainly due to the changes in service mix. The fuel cell
engineering and technical services we offered in 2022 was mainly related to our customized
design and development of production lines for an engine manufacturer, which had been
completed in 2022. Our fuel cell engineering and technical services provided in 2023 mainly
included research and development support for a vehicle manufacturer based in Japan in the
domain of hydrogen-powered vehicles.
Cost of Sales
Our cost of sales increased by 29.0% from RMB554.8 million in 2022 to RMB715.7
million in 2023, mainly attributable to the increase in raw materials as a result of our increased
sales of hydrogen fuel cell systems and components, which was partially offset by the decrease
in impairment losses on inventories.
Gross Profit and Gross Profit Margin
As a result of the cumulative effect of the factors described above, our gross profit
increased significantly from RMB49.8 million in 2022 to RMB179.6 million in 2023, and gross
profit margin increased significantly from 8.2% in 2022 to 20.1% in 2023. In 2023, the increase
in gross profit and gross profit margin was mainly attributed to a decrease in impairment losses
on inventories resulting from our inventory management efforts, sufficient provision made for
fuel cell systems with relatively low rated power in 2022, and the mass production of our
new-generation fuel cell stacks and related systems in 2023 that contributed to the increase in
gross profit margin for fuel cell systems equipped with our in-house manufactured fuel cell
stacks.
For more information, see “— Description of Selected Components of Consolidated
Statements of Profit or Loss — Gross Profit and Gross Profit Margin” in this section.
Other Income and Gains
Our other income and gains remained stable at RMB59.8 million in 2022 to RMB59.8
million in 2023.
Selling and Marketing Expenses
Our selling and marketing expenses increased by 31.1% from RMB102.8 million in 2022
to RMB134.8 million in 2023. This increase was primarily due to (i) increased after-sales
service fees resulted from the increased sales of our hydrogen fuel cell systems and
components; and (ii) increased employee benefit expense caused by an increase in our general
salary level.
FINANCIAL INFORMATION
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Administrative Expenses
Our administrative expenses increased by 40.0% from RMB242.7 million in 2022 to
RMB339.7 million in 2023, primarily due to an increase in employee benefit expense mainly
as a result of our grant of shares to employees under our employee incentive scheme in April
2023.
Research and Development Expenses
Our research and development expenses increased by 11.2% from RMB198.7 million in
2022 to RMB220.9 million in 2023, primarily due to an increase in employee benefit expense
as we increased the salary level to attract talents and we granted shares to employees under our
employee incentive scheme in April 2023.
Fair V alue Gains or Losses on Financial Assets at Fair V alue Through Profit or Loss, Net
In 2023, we recorded net fair value losses of RMB3.1 million on financial assets at fair
value through profit or loss, compared to net fair value gains of RMB0.9 million on financial
assets at fair value through profit or loss in 2022. The change was mainly due to fluctuations
in the fair value of our investments in private equity funds.
Fair V alue Loss on A Derivative Financial Instrument
Our fair value loss on a derivative financial instrument decreased significantly from
RMB19.7 million in 2022 to nil in 2023, as our derivative financial instruments at fair value
through profit or loss was settled in June 2023. For details, see “— Discussion of Certain
Selected Items From the Consolidated Statements of Financial Position — Derivative Financial
Instruments” in this section.
Impairment Losses on Financial Assets and a Financial Guarantee Obligation, Net
Our net impairment losses on financial assets and a financial guarantee obligation
increased significantly from RMB15.5 million in 2022 to RMB64.0 million in 2023, mainly
due to the increased provision for impairment losses on trade receivables. This was further
caused by the increase in gross carrying amount of trade receivables as a result of our increased
revenue and prolonged settlement. For more information, see “— Discussion of Certain
Selected Items from the Consolidated Statements of Financial Position — Trade and Bills
Receivables and Contract Assets” in this section.
Other Expenses
Our other expenses decreased by 19.4% from RMB6.2 million in 2022 to RMB5.0 million
in 2023, mainly attributable to the disposal loss of long-term fixed assets.
FINANCIAL INFORMATION
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--- page 466 ---
Finance Costs
Our finance costs remained relatively stable at RMB49.0 million and RMB47.9 million
in 2022 and 2023, respectively.
Share of Losses of A Joint V enture and Associates
Our share of losses of a joint venture and associates decreased significantly from
RMB21.4 million in 2022 to RMB3.9 million in 2023, mainly due to the decreased losses of
a joint venture, Guohong Refire.
Income Tax Credit
We recorded income tax expense of RMB0.6 million in 2022 and income tax credit of
RMB2.2 million in 2023, primarily due to an increase in deferred tax expenses.
Loss for the Y ear
As a result of the above, our loss for the period increased slightly from RMB546.1 million
in 2022 to RMB577.5 million in 2023.
Y ear Ended December 31, 2022 Compared to Y ear Ended December 31, 2021
Revenue
Our revenue increased by 15.4% from RMB524.1 million in 2021 to RMB604.6 million
in 2022, primarily due to increases in revenue from the sale of hydrogen fuel cell systems and
components as well as revenue from the provision of fuel cell engineering and technical
services.
Sales of Hydrogen Fuel Cell Systems and Components. Our revenue from sales of
hydrogen fuel cell systems and components increased by 11.6% from RMB513.7 million in
2021 to RMB573.6 million in 2022, mainly due to the increases in sales volume of our
hydrogen fuel cell systems and components. The rise in sales volume of our fuel cell systems
was further attributable to, among others, our research and development initiatives to improve
product performance, our continuous efforts to reduce costs and selling prices, and to facilitate
commercialization. The increase in sales volume of components was attributable to the
enhanced customers’ request for specific components, which we offer together with fuel cell
systems within our product solutions, reflecting the enhanced customers’ trust and recognition
in our capabilities to offer comprehensive solutions. The increases in sales volume was
partially offset by an decrease in the average selling price of our fuel cell systems, as a result
of our efforts to drive technological advances and cost efficiencies that enabled us to offer
more competitive pricing. For detailed analysis on fluctuation of our sales volume and average
selling prices, see “— Description of Selected Components of Consolidated Statements of
Profit or Loss — Revenue — Sales of Hydrogen Fuel Cell Systems and Components” in this
section.
FINANCIAL INFORMATION
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Provision of Fuel Cell Engineering and Technical Services. Our revenue from provision
of fuel cell engineering and technical services increased significantly from RMB7.3 million in
2021 to RMB26.5 million in 2022, with fluctuations mainly driven by specific customer
demand in the relevant years. In 2022, we fulfilled a substantial order involving the tailored
design and development of production lines for an engine manufacturer, contributing
significantly to this growth.
Cost of Sales
Our cost of sales increased by 20.0% from RMB462.3 million in 2021 to RMB554.8
million in 2022, mainly attributable to the increase in raw materials in line with our increased
sales of hydrogen fuel cell systems and components, as well as the increase in impairment
losses on inventories.
Gross Profit and Gross Profit Margin
As a result of the cumulative effect of the factors described above, our gross profit
decreased by 19.4% from RMB61.8 million in 2021 to RMB49.8 million in 2022, and gross
profit margin decreased from 11.8% in 2021 to 8.2% in 2022. The decrease in gross profit and
margin was mainly caused by the increase in impairment losses on inventories incurred as a
result of the rapid product iterations towards high-output fuel cell systems and the decline in
market prices along with the technology advancement.
For more information, see “— Description of Selected Components of Consolidated
Statements of Profit or Loss — Gross Profit and Gross Profit Margin” in this section.
Other Income and Gains
Our other income and gains increased by 10.8% from RMB54.0 million in 2021 to
RMB59.8 million in 2022, mainly caused by the increase in interest income as a result of our
increased bank deposits and purchase of structured deposits after we received capital injection
from shareholders in 2022.
Selling and Marketing Expenses
Our selling and marketing expenses increased by 13.7% from RMB90.5 million in 2021
to RMB102.8 million in 2022, primarily due to the increase in employee benefit expense
resulting from our raising of general salary level.
Administrative Expenses
Our administrative expenses increased by 11.2% from RMB218.2 million in 2021 to
RMB242.7 million in 2022, primarily due to (i) increased depreciation and amortization as a
result of our office decoration in 2022, and (ii) increased employee benefit expense attributable
to the rise in our general salary level.
FINANCIAL INFORMATION
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Research and Development Expenses
Our research and development expenses decreased by 13.9% from RMB230.9 million in
2021 to RMB198.7 million in 2022, mainly due to a higher cost of raw materials for R&D
activities in 2021 when we tested and validated our in-house developed MEAs prior to mass
production and completed the development of fuel cell systems with a rated power of 120kW
to 130kW and corresponding fuel cell stacks.
Fair V alue Gains on Financial Assets at Fair V alue Through Profit or Loss, Net
Our net fair value gains on financial assets at fair value through profit or loss increased
significantly from RMB0.4 million in 2021 to RMB0.9 million in 2022, mainly attributable to
fair value changes in our investments in private equity funds.
Fair V alue Loss on A Derivative Financial Instrument
Our fair value loss on a derivative financial instrument increased significantly from
RMB0.6 million for 2021 to RMB19.7 million for 2022, primarily due to an increase in
derivative financial instruments at fair value through profit or loss in relation to our obligation
to buy back shares of Guohong Refire. For details, see “— Discussion of Certain Selected
Items from the Consolidated Statements of Financial Position — Derivative Financial
Instruments” in this section.
Impairment Losses on Financial Assets and a Financial Guarantee Obligation, Net
Our net impairment losses on financial assets and a financial guarantee obligation
decreased significantly from RMB144.6 million to RMB15.5 million, mainly due to a higher
net loss allowance on trade receivables in 2021 as we made full provisions on trade receivables
due from a third-party customer who experienced financial difficulties to settle our payment.
The relevant trade receivables originated from transactions that occurred before the Track
Record Period. Following the awareness of this customer’s deteriorating financial condition,
we have ceased conducting business with it. For more information, see “— Discussion of
Certain Selected Items from the Consolidated Statements of Financial Position — Trade and
Bills Receivables and Contract Assets” in this section.
Other Expenses
Our other expenses decreased by 73.7% from RMB23.4 million in 2021 to RMB6.2
million in 2022, mainly due to a decrease in impairment losses on fixed assets.
FINANCIAL INFORMATION
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Finance Costs
Our finance costs remained relatively stable at RMB50.1 million and RMB49.0 million
in 2021 and 2022, respectively.
Share of Losses of A Joint V enture and Associates
Our share of losses of a joint venture and associates increased significantly from RMB8.2
million in 2021 to RMB21.4 million in 2022, mainly attributable to certain of our associates
operating in the upstream or downstream of our industry, which were in an early stage of
development.
Income Tax Expense
Our income tax expense decreased significantly from RMB4.0 million in 2021 to RMB0.6
million in 2022, primarily because the government subsidies received in 2021 were subject to
taxation, resulting a higher tax expenses in 2021.
Loss for the Y ear
As a result of the above, our loss for the year decreased by 16.5% from RMB654.3 million
in 2021 to RMB546.1 million in 2022.
LIQUIDITY AND CAPITAL RESOURCES
Overview
Our primary working capital needs have been, and are expected to continue to be, funding
our research and development, construction of our manufacturing facilities, procurement of
raw materials and other general corporate needs. Historically, we financed our operations and
other capital requirements primarily using cash generated from our operations, bank and other
borrowings and funds raised from equity financings.
We expect to fund our future working capital and other cash requirements with cash
generated from operations, net proceeds from the Global Offering, bank and other borrowings,
as well as equity financing when necessary. Any significant decrease in demand for, or pricing
of, our products, or a significant decrease in the availability of bank loans or other financing
may adversely impact our liquidity.
As of May 31, 2024, we had cash and cash equivalents of RMB435.7 million. Taking into
account the net proceeds from the Global Offering and the financial resources available to us,
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.
FINANCIAL INFORMATION
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Cash Flows
The following table sets forth our consolidated statements of cash flows for the periods
indicated:
Y ear Ended December 31,
Five Months
Ended May 31,
2021 2022 2023 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Operating cash flow before
movements in working
capital /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(285,804) (243,384) (232,644) (154,104) (167,382)
Changes in working
capital /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(486,887) (490,968) (498,312) (284,790) 20,863
Interest received and
income tax paid /H1118/H1118/H1118/H1118/H1118/H1118/H11184,480 6,291 12,551 4,751 2,465
Net cash flows used in
operating activities /H1118/H1118/H1118/H1118/H1118(768,211) (728,061) (718,405) (434,143) (144,054)
Net cash flows from/(used
in) investing activities /H1118/H1118(185,465) (560,340) 116,804 79,724 (75,302)
Net cash flows from/(used
in) financing activities /H1118/H1118368,354 2,088,391 181,412 132,552 (5,523)
Net (decrease)/increase in
cash and cash
equivalents /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(585,322) 799,990 (420,189) (221,867) (224,879)
Cash and cash equivalents
at the beginning of the
year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118862,206 276,220 1,079,456 1,079,456 664,510
Effect of foreign exchange
rate changes, net /H1118/H1118/H1118/H1118/H1118/H1118(664) 3,246 5,243 980 (3,921)
Cash and cash
equivalents at
end of year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118276,220 1,079,456 664,510 858,569 435,710
FINANCIAL INFORMATION
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Net Cash Flows Used in Operating Activities
For the five months ended May 31, 2024, net cash used in our operating activities was
RMB144.1 million, primarily attributable to our loss before tax of RMB411.4 million, as
adjusted for non-cash and non-operating items, which mainly included (i) share-based payment
expenses of RMB117.5 million, (ii) net impairment losses on financial assets and a financial
guarantee obligation of RMB41.5 million, and (iii) depreciation of property, plant and
equipment of RMB37.4 million, partially offset by government grants and subsidies of
RMB4.3 million credited to the statement of profit or loss during the period. The amount was
further adjusted by decrease in movements in working capital of RMB20.9 million, and interest
received of RMB2.5 million. The decrease in movements in working capital primarily included
(i) a RMB74.2 million decrease in prepayments, other receivables and other assets,
(ii) a RMB24.4 million in increase in other payables and accruals, and (iii) a RMB21.4 million
increase in contract liabilities, partially offset by a RMB105.0 million increase in inventories.
In 2023, net cash used in our operating activities was RMB718.4 million, primarily
attributable to our loss before tax of RMB579.8 million, as adjusted for non-cash and
non-operating items, which mainly included (i) depreciation of property, plant and equipment
of RMB92.8 million, (ii) share-based payment expenses of RMB87.1 million, and (iii) net
impairment losses of RMB64.0 million on financial assets and a financial guarantee obligation,
partially offset by (i) interest income of RMB16.2 million, and (ii) government grants and
subsidies of RMB11.4 million credited to the statement of profit or loss during the period. The
amount was further adjusted by decrease in movements in working capital of RMB498.3
million, interest received of RMB15.0 million and income tax paid of RMB2.4 million. The
decrease in movements in working capital primarily included (i) a RMB527.5 million increase
in trade and bills receivables, and (ii) a RMB128.8 million increase in prepayments, other
receivables and other assets, partially offset by (i) a RMB84.5 million increase in trade and
bills payables, and (ii) a RMB59.2 million decrease in restricted cash.
In 2022, net cash used in our operating activities was RMB728.1 million, primarily
attributable to our loss before tax of RMB545.5 million, as adjusted for non-cash and
non-operating items, which mainly included (i) write-down of inventories to net realizable
value of RMB82.1 million, (ii) depreciation of property, plant and equipment of RMB78.4
million, and (iii) finance costs of RMB49.0 million, partially offset by (i) interest income of
RMB18.0 million, and (ii) government grants and subsidies of RMB11.8 million credited to the
statement of profit or loss during the year. The amount was further adjusted by decrease in
movements in working capital of RMB491.0 million, interest received of RMB15.9 million and
income tax paid of RMB9.6 million. The decrease in movements in working capital primarily
included (i) a RMB353.8 million increase in trade and bills receivables due to our increased
sales of products, and (ii) a RMB99.1 million increase in inventories as we procured more raw
materials to meet the increasing market demand for our products, partially offset by (i) a
RMB23.8 million increase in other payables and accruals, and (ii) a RMB10.8 million increase
in deferred income.
FINANCIAL INFORMATION
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In 2021, net cash used in our operating activities was RMB768.2 million, primarily
attributable to our loss before tax of RMB650.3 million, as adjusted for non-cash and
non-operating items, which mainly included (i) net impairment losses on financial assets and
a financial guarantee obligation of RMB144.6 million, (ii) depreciation of property, plant and
equipment of RMB61.4 million, and (iii) finance costs of RMB50.1 million, partially offset by
(i) government grants and subsidies of RMB8.2 million credited to the statement of profit or
loss during the year, and (ii) interest income of RMB7.5 million. The amount was further
adjusted by decrease in movements in working capital of RMB486.9 million, interest received
of RMB7.5 million and income tax paid of RMB3.0 million. The decrease in movements in
working capital primarily included (i) a RMB476.7 million increase in trade and bills
receivables driven by our sales in 2021, and (ii) a RMB109.6 million increase in inventories
in line with our increased production, partially offset by (i) a RMB51.7 million decrease in
prepayments, other receivables and other assets, and (ii) a RMB29.9 million increase in other
payables and accruals.
In view of our operating cash outflows during the Track Record Period, we expect to
improve our cash flow positions by consistently refining working capital efficiency. This
initiative involves optimizing our organizational structure to heighten operational efficiency
and reduce operating expenses. By focusing our product and project resources, we aim to
increase the return on investment in projects. Moreover, we are endeavoring to fortify supply
management. This includes continually seeking to source more quality raw materials and
components domestically, as well as increase the level of in-house development and production
of key components, thereby driving down our costs. As our business continues to expand, we
anticipate scaling up our purchases from suppliers, enabling us to negotiate more favorable
terms. Furthermore, we may select to use bills payables and supply chain finance products to
settle with our suppliers, allowing us to extend the payment period for our suppliers and
optimize our working capital. In addition, we will also enhance our efforts on collecting
overdue trade receivables, and optimize inventory control to improve our production planning
and inventory turnover days. For more information, see “— Discussion of Certain Selected
Items from the Consolidated Statements of Financial Position — Trade and Bills Receivables
and Contract Assets” and “— Discussion of Certain Selected Items from the Consolidated
Statements of Financial Position — Inventories” in this section.
Net Cash Flows From/(Used in) Investing Activities
For the five months ended May 31, 2024, net cash used in investing activities was
RMB75.3 million, primarily the result of (i) investments in associates of RMB39.0 million, and
(ii) purchases of items of property, plant, equipment and leasehold land of RMB23.7 million,
partially offset by proceeds from disposal of items of property, plant and equipment of RMB1.8
million.
FINANCIAL INFORMATION
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--- page 473 ---
In 2023, net cash generated from investing activities was RMB116.8 million, primarily
the result of (i) maturity of financial assets at fair value through profit or loss of RMB337.1
million, and (ii) disposal of time deposits of RMB53.3 million, partially offset by (i) purchases
of items of property, plant and equipment of RMB143.2 million, and (ii) investments in
financial assets at fair value through profit or loss of RMB41.0 million.
In 2022, net cash used in investing activities was RMB560.3 million, primarily the result
of (i) investments in financial assets at fair value through profit or loss of RMB1,175.0 million,
and (ii) purchase of items of property, plant and equipment of RMB122.0 million, partially
offset by maturity of financial assets at fair value through profit or loss of RMB840.1 million.
In 2021, net cash used in investing activities was RMB185.5 million, primarily the result
of (i) purchases of items of property, plant and equipment of RMB154.8 million, (ii)
investments in associates of RMB12.0 million, (iii) purchase of other intangible assets of
RMB11.8 million, partially offset by disposal of an associate of RMB10.0 million.
Net Cash Flows from Financing Activities
For the five months ended May 31, 2024, net cash used in financing activities was
RMB5.5 million, primarily the result of (i) repayment of interest-bearing bank and other
borrowings of RMB103.2 million, (ii) interest paid of RMB13.0 million and (iii) lease
payments of RMB10.7 million, partially offset by proceeds from interest-bearing bank and
other borrowings of RMB113.0 million.
In 2023, net cash generated from financing activities was RMB181.4 million, primarily
the result of proceeds from interest-bearing bank and other borrowings of RMB561.1 million,
partially offset by repayment of interest-bearing bank and other borrowings of RMB265.4
million and payments of factoring deposits of RMB60.0 million.
In 2022, net cash generated from financing activities was RMB2,088.4 million, primarily
attributable to capital injection of (i) RMB2,182.8 million from the Company’s shareholders
capital injection, and (ii) proceeds from interest-bearing bank and other borrowings of
RMB624.0 million, partially offset by repayment of interest-bearing bank and other
borrowings of RMB693.6 million.
In 2021, net cash from financing activities was RMB368.4 million, primarily the result of
proceeds from interest-bearing bank and other borrowings of RMB636.1 million, partially
offset by repayment of interest-bearing bank and other borrowings of RMB236.7 million.
FINANCIAL INFORMATION
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--- page 474 ---
Net Current Assets
The following table sets forth our current assets and current liabilities as of the dates
indicated:
As of December 31,
As of
May 31,
As of
September 30,
2021 2022 2023 2024 2024
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
CURRENT ASSETS
Inventories /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118259,968 276,934 239,872 336,364 362,916
Trade and bills
receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118923,550 1,265,529 1,583,395 1,618,631 1,555,712
Prepayments, other
receivables and other
assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118100,794 102,513 296,268 218,691 245,635
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– 335,797 – – –
Time deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 52,086 – – –
Restricted cash /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 59,902 746 28 29
Cash and cash equivalents /H1118276,220 1,079,456 664,510 435,710 397,057
Total current assets /H1118/H1118/H1118/H1118/H11181,560,532 3,172,217 2,784,791 2,609,424 2,561,349
CURRENT LIABILITIES
Trade and bills payables /H1118/H1118561,533 566,255 650,741 626,013 727,868
Other payables and
accruals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111878,665 102,416 141,315 174,717 122,648
Contract liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H111820,206 15,069 12,740 35,552 21,413
Derivative financial
instrument /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 37,423 – – –
Interest-bearing bank and
other borrowings /H1118/H1118/H1118/H1118/H1118/H1118654,317 269,079 470,443 811,044 1,028,843
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111815,418 15,523 18,921 19,738 20,600
Tax payable /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111811,138 3,447 1,056 1,104 697
Deferred income /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,029 – 963 932 963
Provision /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111829,356 18,855 21,080 21,102 21,512
Total current liabilities /H1118/H11181,373,662 1,028,067 1,317,259 1,690,202 1,944,545
NET CURRENT
ASSETS /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118186,870 2,144,150 1,467,532 919,222 616,805
FINANCIAL INFORMATION
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As of December 31, 2021, 2022 and 2023 and May 31 and September 30, 2024, the net
current assets amounted to RMB186.9 million, RMB2,144.2 million, RMB1,467.5 million,
RMB919.2 million and RMB616.8 million, respectively.
Our net current assets decreased by 32.9% from RMB919.2 million as of May 31, 2024
to RMB616.8 million as of September 30, 2024, mainly attributable to (i) an increase in
interest-bearing bank and other borrowings, (ii) an increase in trade and bills payables due to
our increased procurement of raw materials for order deliveries, and (iii) a decrease in trade
and bills receivables.
Our net current assets decreased by 37.4% from RMB1,467.5 million as of December 31,
2023 to RMB919.2 million as of May 31, 2024, mainly attributable to (i) a decrease in cash
and cash equivalents, (ii) a decrease in prepayments, other receivables and other assets, and
(iii) an increase in interest-bearing bank and other borrowings.
Our net current assets decreased by 31.6% from RMB2,144.2 million as of December 31,
2022 to RMB1,467.5 million as of December 31, 2023, mainly attributable to (i) a decrease in
cash and cash equivalents, (ii) a decrease in financial assets at fair value through profit or loss
due to the maturity of our investments in structured deposits issued by banks in Mainland
China.
Our net current assets increased significantly from RMB186.9 million as of December 31,
2021 to RMB2,144.2 million as of December 31, 2022, mainly attributable to (i) a significant
increase in cash and cash equivalents as we received capital injection from shareholders in
2022, (ii) an increase in financial assets at fair value through profit or loss due to our purchase
of structured deposits issued by banks in Mainland China, and (iii) an increase in trade and bills
receivables in line with our sales growth.
DISCUSSION OF CERTAIN SELECTED ITEMS FROM THE CONSOLIDATED
STATEMENTS OF FINANCIAL POSITION
Property, Plant and Equipment
The following sets forth a breakdown of balances of our property, plant and equipment
as of the dates indicated:
As of December 31,
As of
May 31,
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Buildings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111856,484 60,381 61,648 60,553
Machinery /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118223,215 237,915 263,173 264,520
Office equipment and
electronic devices /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111811,253 9,186 7,855 6,025
Vehicles /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118824 746 1,898 1,603
Leasehold improvements /H1118/H1118/H1118/H1118111,161 97,547 80,092 68,978
Construction in progress /H1118/H1118/H1118/H111818,547 11,509 38,135 28,970
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118421,484 417,284 452,801 430,649
FINANCIAL INFORMATION
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Our property, plant and equipment primarily consist of machinery, leasehold
improvements, buildings and construction in progress. Our property, plant and equipment
remained relatively stable at RMB421.5 million and RMB417.3 million as of December 31,
2021 and 2022, respectively. Our property, plant and equipment increased by 8.5% from
RMB417.3 million as of December 31, 2022 to RMB452.8 million as of December 31, 2023,
mainly due to our upgraded production line for fuel cell systems, increased self-production
capacity in our plant in Changshu, increased purchases of production and testing equipment to
facilitate our manufacture and R&D activities. Our property, plant and equipment decreased
slightly from RMB452.8 million as of December 31, 2023 to RMB430.6 million as of May 31,
2024, mainly attributable to decreases in leasehold improvements and construction in progress
as a result of depreciation and amortization.
Right-of-use Assets
The following table sets forth the breakdown of our right-of-use assets as of the dates
indicated:
As of December 31,
As of
May 31,
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Land-use rights /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111822,124 21,659 21,194 59,119
Lease of plant and properties /H1118 82,566 66,211 48,225 41,237
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118104,690 87,870 69,419 100,356
Our land-use rights represent land transfer fee paid for land lots in Changshu, Jiangsu.
The lease of plant and properties mainly includes office and factory buildings under leases,
which are used for daily operations. Our right-of-use assets decreased by 16.1% from
RMB104.7 million as of December 31, 2021 to RMB87.8 million as of December 31, 2022,
decreased by 21.0% to RMB69.4 million as of December 31, 2023, which was mainly due to
amortization of the related assets. Our right-of-use assets increased by 44.6% from RMB69.4
million as of December 31, 2023 to RMB100.4 million as of May 31, 2024, primarily due to
our purchase of land during the first five months of 2024.
Other Intangible Assets
The table below sets forth a breakdown of our other intangible assets as of the dates
indicated:
As of December 31,
As of
May 31,
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Software /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111819,598 27,035 21,063 18,407
Patents and licenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,154 2,688 1,222 5,041
Construction in progress /H1118/H1118/H1118/H11189,832 478 171 –
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111833,584 30,201 22,456 23,448
FINANCIAL INFORMATION
– 466 –


--- page 477 ---
Our other intangible assets included software, patents and licenses and construction in
progress. Our other intangible assets decreased by 10.1% from RMB33.6 million as of
December 31, 2021 to RMB30.2 million as of December 31, 2022, mainly due to a decrease
in construction in progress, patents and licenses resulting from amortization, which was
partially offset by an increase in software. Our other intangible assets decreased by 25.6% from
RMB30.2 million as of December 31, 2022 to RMB22.5 million as of December 31, 2023,
mainly due to the amortization of software. As of May 31, 2024, our other intangible assets
amounted to RMB23.4 million, which remained relatively stable compared to December 31,
2023.
Investments In Associates
Our investments in associates increased by 52.5% from RMB51.6 million as of December
31, 2021 to RMB78.7 million as of December 31, 2022, and further increased by 26.5% to
RMB99.5 million as of December 31, 2023. Our investments in associates further increased by
31.7% from RMB99.5 million as of December 31, 2023 to RMB131.1 million as of May 31,
2024. The continued increase was mainly due to our continuous investments in the upstream
and downstream participants in our industry to capitalize on potential synergies in business
development.
Inventories
Our inventories primarily consist of raw materials, work in progress and finished goods.
The following table sets forth a breakdown of our inventories as of the dates indicated:
As of December 31,
As of
May 31,
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Raw materials /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118175,630 212,380 175,710 218,847
Work in progress /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111812,267 4,639 12,993 24,744
Finished goods /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118145,716 185,357 166,784 195,192
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118333,613 402,376 355,487 438,783
Less: provision for
impairment losses on
inventories /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(73,645) (125,442) (115,615) (102,419)
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118259,968 276,934 239,872 336,364
Our inventories increased slightly by 6.5% from RMB260.0 million as of December 31,
2021 to RMB276.9 million as of December 31, 2022, which was attributable to the increases
in raw materials and finished goods. Our inventories decreased by 13.4% from RMB276.9
million as of December 31, 2022 to RMB239.9 million as of December 31, 2023 due to the
decreases in raw materials and finished goods. Our inventories increased by 40.2% from
RMB239.9 million as of December 31, 2023 to RMB336.4 million as of May 31, 2024, mainly
attributable to the seasonality nature of our business, where the first half of the year tend to be
a stocking-up period characterized by lower sales volumes, in anticipation of higher demand
in the latter half of the year.
FINANCIAL INFORMATION
– 467 –


--- page 478 ---
Our raw materials increased by 20.9% from RMB175.6 million as of December 31, 2021
to RMB212.4 million as of December 31, 2022, mainly due to the increasing demand for raw
materials as a result of the increased sales of our products and the growing proportion of
proprietary components used in our fuel cell systems. Our raw materials decreased by 17.3%
from RMB212.4 million as of December 31, 2022 to RMB175.7 million as of December 31,
2023, mainly as a result of our proactive measures in optimizing procurement processes and
achieving greater inventory control. Our raw materials increased by 24.6% from RMB175.7
million as of December 31, 2023 to RMB218.8 million as of May 31, 2024, mainly affected
by the aforesaid seasonality of our business.
Our finished goods increased by 27.2% from RMB145.7 million as of December 31, 2021
to RMB185.4 million as of December 31, 2022, which was in line with the increased sales
volume of our products. Our finished goods decreased by 10.0% from RMB185.4 million as of
December 31, 2022 to RMB166.8 million as of December 31, 2023, mainly due to our diligent
efforts in managing inventory levels. Our finished goods increased by 17.0% from RMB166.8
million as of December 31, 2023 to RMB195.2 million as of May 31, 2024, mainly affected
by the aforesaid seasonality of our business.
Our provision for impairment losses on inventories increased by 70.3% from RMB73.6
million as of December 31, 2021 to RMB125.4 million as of December 31, 2022, mainly due
to the rapid product iterations towards high-output fuel cell systems and the decline in market
prices. Our provision for impairment losses on inventories decreased by 7.8% from RMB125.4
million as of December 31, 2022 to RMB115.6 million as of December 31, 2023, and further
to RMB102.4 million as of May 31, 2024, primarily due to our efforts to optimize inventories
by exercising cautious control over inventory growth and actively liquidating slow-moving
inventories as well as the adequate provision we made for fuel cell systems with relatively low
rated power in 2022.
As of September 30, 2024, approximately RMB122.9 million, or 36.5% of our inventories
as of May 31, 2024, had been subsequently sold or utilized.
Inventory Turnover Days
The following table sets out the inventory turnover days for the periods indicated:
Y ear Ended December 31,
Five Months Ended
May 31,
2021 2022 2023 2024
Average inventory
turnover days (1) /H1118/H1118/H1118/H1118/H1118210 242 193 1,622
Note:
(1) Average inventory turnover days equal to the average cost of inventory at the beginning and the end of
the relevant period divided by cost of sales for such period and multiplied by 365 days in 2021, 2022
and 2023 and by 150 days for the five months ended May 31, 2024, respectively.
FINANCIAL INFORMATION
– 468 –


--- page 479 ---
In 2021, 2022, 2023 and five months ended May 31, 2024, our average inventory turnover
days were 210 days, 242 days, 193 days and 1,622 days, respectively. The increase in inventory
turnover days in 2022 was primarily due to an increase in inventories in anticipation of an
increase in our sales of fuel cell systems and components, based on the overall market
condition and development of the industry and orders on hands. The decrease in inventory
turnover days in 2023 was mainly caused by our increased sales of hydrogen fuel cell systems
and components in 2023 which led to increased cost of sales, as well as our improvement in
inventory management. The increase in inventory turnover days in the five months ended May
31, 2024 was mainly caused by the seasonality nature of our business. Specifically, the first
half of the year is typically a stocking-up period with higher inventory levels in anticipation
of stronger demand later in the year, while the revenue and cost of sales are generally lower
during this period. For more information, see “Business — Seasonality” in this prospectus.
Inventory Aging Analysis
The following table sets forth the aging analysis of our inventories net of provision for
impairment losses as of the dates indicated:
As of May 31, 2024
Within
180 days
181 days-
1 year 1-2 years
More than
2 years Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Raw materials /H1118/H1118/H1118/H1118/H1118/H1118102,491 13,172 35,469 13,546 164,678
Work in progress /H1118/H1118/H1118/H111824,74 4––– 24,744
Finished goods /H1118/H1118/H1118/H1118/H1118115,040 8,321 19,197 4,384 146,942
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118242,275 21,493 54,666 17,930 336,364
As of December 31, 2023
Within
180 days
181 days-
1 year 1-2 years
More than
2 years Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Raw materials /H1118/H1118/H1118/H1118/H111847,650 14,080 26,055 30,123 117,908
Work in progress /H1118/H1118/H1118/H111812,99 2––– 12,992
Finished goods /H1118/H1118/H1118/H1118/H111873,985 11,175 17,396 6,416 108,972
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118134,627 25,255 43,451 36,539 239,872
FINANCIAL INFORMATION
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--- page 480 ---
As of December 31, 2022
Within
180 days
181 days-
1 year 1-2 years
More than
2 years Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Raw materials /H1118/H1118/H1118/H1118/H1118110,833 14,591 30,836 2,652 158,912
Work in progress /H1118/H1118/H1118/H11184,279 347 12 – 4,638
Finished goods /H1118/H1118/H1118/H1118/H111892,866 4,388 13,474 2,656 113,384
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118207,978 19,326 44,322 5,308 276,934
As of December 31, 2021
Within
180 days
181 days-
1 year 1-2 years
More than
2 years Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Raw materials /H1118/H1118/H1118/H1118/H1118/H1118113,166 11,721 11,374 2,294 138,555
Work in progress /H1118/H1118/H1118/H111810,023 1,745 499 – 12,267
Finished goods /H1118/H1118/H1118/H1118/H111877,493 18,822 11,862 969 109,146
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118200,682 32,288 23,735 3,263 259,968
Inventory Management
We have implemented comprehensive inventory management policies and measures to
monitor our inventory levels and prevent inventory obsolesces. Specifically,
 When determining our inventory level, in addition to confirmed customer orders, we
also take our expectations of market demand into consideration. As confirmed by
Frost & Sullivan, productions beyond confirmed customer orders in anticipation of
estimated demand are in line with the industry practice. We estimated the market
demand mainly through (i) the assessment of national and local hydrogen fuel
cell-related goals published in the government papers or policies that set out the
specific quantities of fuel cell vehicles required for government programs, as well
as monitoring the related demand fluctuations, (ii) the expectation of growth in
demand as the average product prices decline, (iii) the information gathered by our
sales teams in different regions from the local customers, such as fuel cell vehicle
manufactures, on their estimated demand for fuel cell vehicles in the coming year,
(iv) analyzing past sales data to identify demand trends and patterns, and (v) taking
into account economic conditions such as the growth of our downstream industry in
the previous year.
FINANCIAL INFORMATION
– 470 –


--- page 481 ---
 To ensure effective inventory management, we have established specific practices to
align our inventories with product production and business execution. This includes
conducting regular reviews and updates of our product catalogue, sales forecast, and
sales and operations planning (“ S&OP”) and ensure the alignment across them. We
also hold regular S&OP meetings to facilitate efficient and consistent
communication among our sales, R&D and production teams. Additionally, we
employ the MRPII (Manufacturing Resources Planning II) method to minimize
response cycles in forecasting, orders, planning, production, and delivery processes.
To further optimize inventory, we have implemented Non-Conformance Notices
(NCN) and Engineering Change Notices (ECN) management systems to minimize
slow-moving parts and mitigate the risk of dead stock.
 In addition, we conduct regular monthly and yearly stocktaking and inventory
analysis to find out inventory trends, balance inventory levels, to avoid slow-moving
parts or dead stock. We have implemented an incoming inspection process and an
inventory risk tracing management system to ensure that all incoming materials are
carefully examined and monitored to mitigate potential risks. To further enhance
quality control, we have established inventory standards that require regular quality
inspections for high-risk items in storage. Moreover, we adhere to stringent
outbound inspection standards to meet our customers’ quality requirements upon
product delivery.
We believe that these internal policies and measures on inventory management help us
better plan raw material procurement, prevent inventory obsolesces and deliver our products to
meet customer demand in a timely manner without straining our liquidity.
Recoverability of Inventories
Our inventories are primarily aged one year or less. Inventories aged over one year mainly
include finished goods, which consist primarily of fuel cell systems and fuel cell stacks, and
raw materials, such as hydrogen circulation pumps, air compressors and controllers. Both raw
materials and finished goods generally have no validity period. They can still be used in
production or for sales even they are aged over a year. Our raw materials in stock as a whole
are still used for production.
In addition, in recent year, the government has continued to introduce supportive policies
for the fuel cell vehicle industry. This indicates that the end market for fuel cell vehicles is
expected to have a relatively large growth potential. After analyzing the potential market and
customer demand, we anticipate significant sales in the future.
As a result of the above, we have not identified any recoverability issue with respect to
our inventories aged over one year.
FINANCIAL INFORMATION
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--- page 482 ---
Sufficiency of Impairment Provision of Inventories
Provision for impairment losses on inventories is made when the net realizable value of
inventories falls below the cost or any of the inventories is identified as obsolete. We consider
the actual usage of inventories in history and consider market factors such as technology
iteration to identify obsolete products on each balance sheet date, which high impairment
provision will be made. The remaining inventories shall be measured based on the lower of the
net realizable value and the cost and the amounts of the cost excess net realizable value shall
be recognized as the provision for inventory impairment. In addition, we have optimized and
will continue to optimize our inventory management, liquidate slow-moving inventories
through market analysis and identification of appropriate market opportunities for such
inventories. In particular,
 For finished products with limited market presence, an individual assessment and
provision are conducted. During the Track Record Period, we performed individual
assessments for certain hydrogen fuel cell systems with a rated power of below
60KW, primarily used in urban logistics and public transport vehicles. After sales of
these models in 2021, we assessed the subsequent market demand and determined
that the market conditions were less favorable. Accordingly, we made a provision for
impairment of 50% of the inventories for these models as of December 31, 2021. As
of December 31, 2022, we further made a full provision based on the net realizable
value of these models, considering that no orders were received for these inventories
in 2022.
 Raw materials and work-in-progress inventories are reviewed at the end of the
reporting period to compare their carrying amounts with their net realizable values.
The net realizable values of finished goods and work-in-progress are calculated
based on the estimated selling prices and estimated product sales expenses. If the
carrying amount is lower than the net realizable value, a provision for inventory
decline is made. General materials like membrane electrodes and electronic
components are monitored for any price fluctuation risks, while specific raw
materials for certain models are assessed based on the estimated product selling
prices, estimated processing costs, and sales expenses. Additionally, during the
year-end inventory count, any defective or obsolete items are identified, and
provisions for inventory decline are made accordingly.
Based on the above and considering our measures to manage inventory and prevent
inventory obsolesce as detailed in the paragraphs headed “— Inventory Management” in this
section, our Directors are of the view that sufficient provision for impairment losses on
inventories has been made.
FINANCIAL INFORMATION
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--- page 483 ---
Trade and Bills Receivables and Contract Assets
The following table sets forth a breakdown of our trade and bills receivables and contract
assets as of the dates indicated:
As of December 31, As of May 31,
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Current:
Trade receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,270,484 1,590,683 1,974,948 2,018,777
Commercial acceptance bills
receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,077 62,102 25,258 70,034
Bank acceptance notes /H1118/H1118/H1118/H1118/H1118/H1118/H11187,323 2,611 30,083 26,788
1,281,884 1,655,396 2,030,289 2,115,599
Less: provision for impairment
losses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(358,334) (389,867) (446,894) (496,968)
923,550 1,265,529 1,583,395 1,618,631
Non-current:
Trade receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118284,724 264,897 417,537 314,940
Contract assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 31,380 17,382
Less: provision for impairment
losses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(15,039) (10,273) (14,199) (6,044)
269,685 254,624 434,718 326,278
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,193,235 1,520,153 2,018,113 1,944,909
Our trade and bills receivables and contract assets increased by 27.4% from RMB1,193.2
million as of December 31, 2021 to RMB1,520.2 million as of December 31, 2022, and further
increased by 32.8% to RMB2,018.1 million as of December 31, 2023, primarily caused by (i)
the increases in our sales of hydrogen fuel cell systems and components and provision of fuel
cell engineering and technical services, (ii) the working capital constraints of downstream
customers as elaborated below, since there is usually a relatively long time gap between the
sale of a vehicle and the receipt of a subsidy by our downstream customer under the current
governmental policy, and (iii) an increase in contract assets, representing retention receivables
that are consideration withheld by customers and recoverable after the completion of the
warranty period of the relevant contracts. It is common practice within the industry to withhold
a certain percentage of the contract consideration to ensure that we fulfill our product quality
commitments. As of May 31, 2024, our trade and bills receivables and contract assets amounted
to RMB1,944.9 million, which remained relatively stable compared to December 31, 2023.
FINANCIAL INFORMATION
– 473 –


--- page 484 ---
According to Frost & Sullivan, China’s fuel cell vehicle industry is still in the early stages
of development and is highly affected by government subsidy policies. Hydrogen fuel cell
commercial vehicle manufacturers typically sell and charge prices to customers after deducting
applicable subsidies at the time of sale before receiving government subsidies. Commercial
vehicle manufacturers can collect the relevant subsidies from the government, but this usually
takes a lengthy period of time. The period between when hydrogen fuel cell commercial vehicle
manufacturers sell their vehicles and when they can collect the full amount of qualified
subsidies is typically more than two years. Commercial vehicle manufacturers, namely our
downstream customers, may face working capital constraints affected by such time gap. This
leads to general capital constraints in the fuel cell vehicle industry, which, coupled with the
fact that hydrogen fuel cell commercial vehicle manufacturers have strong bargaining power
given our industry is still in the early stages of development, ultimately resulting in prolonged
settlement of our trade receivables.
Despite the above, as the industry matures and the commercial application of hydrogen
fuel cells increases, the impact of government subsidies on downstream customers’ settlements
is expected to decrease. In addition, we expect our settlements to improve as our downstream
customers begin collecting subsidies for vehicles that have satisfied the relevant requirements.
For further information, see “— Recoverability of Trade and Bills Receivables” in this section.
In addition to wire transfer, our customers would settle our invoices by bills. Such bills,
once received by us, may be held to their maturity dates to receive their full value, or endorsed
by us to settle our payables to suppliers. During the Track Record Period, our bills receivables
included commercial acceptance bills receivables and bank acceptance notes. Our bills
receivables increased significantly from RMB11.4 million as of December 31, 2021 to
RMB64.7 million as of December 31, 2022, primarily due to the increase in settlement by our
customers through bills. Our bills receivables decreased by 14.5% from RMB64.7 million as
of December 31, 2022 to RMB55.3 million as of December 31, 2023, primarily due to the
redemption of bills by us. Our bills receivables increased by 75.0% from RMB55.3 million as
of December 31, 2023 to RMB96.8 million as of May 31, 2024 primarily attributable to the
increase in settlement by our customers through bills.
As of December 31, 2021, 2022 and 2023 and May 31, 2024, our provision for
impairment losses on trade receivables, commercial acceptance bills receivables amounted to
RMB373.4 million, RMB400.1 million and RMB461.1 million and RMB503.0 million,
respectively. The increase in such provision for impairment losses was primarily due to (i)
prolonged settlement, as discussed above, from certain customers to which we made provision
for and increased the respective ECL rate accordingly, (ii) the increase in trade receivables
along with the growth in revenue during the Track Record Period and (iii) impairment
provision for trade receivables due from certain customers who faced financial difficulties to
settle our payments. Bank acceptance notes that are measured at fair value through other
comprehensive income are considered as having very low credit risk and the loss allowance is
assessed to be minimal. Except for some individual provisions, we perform impairment
analysis using a provision matrix to measure ECLs for trade receivables and commercial
acceptance bills receivables from the customers with similar credit risks. For further
information of impairment analysis for trade receivables and commercial acceptance bills
receivables, see note 22 to the Accountants’ Report in Appendix I to this prospectus.
As of September 30, 2024, approximately RMB164.0 million, or 6.7% of our trade and
bills receivables as of May 31, 2024, had been subsequently settled. As of September 30, 2024,
none of our contract assets as of May 31, 2024 had been subsequently certified.
FINANCIAL INFORMATION
– 474 –


--- page 485 ---
Trade Receivables Turnover Days
The following table sets out the trade receivables turnover days for the periods indicated:
Y ear Ended December 31,
2021 2022 2023
Trade receivables turnover days (1) /H1118/H1118/H1118/H1118/H1118909 1,029 866
Note:
(1) Trade receivables turnover days equal to the average balance of trade receivables at the beginning and
the end of the relevant period divided by revenue for such period and multiplied by 365 days in 2021,
2022 and 2023, respectively. The trade receivables turnover days for the five months ended May 31,
2024 are not representative of our collection speed due to the seasonal nature of our business, with our
revenue typically concentrated in the second half of the year.
In 2021, 2022 and 2023, our trade receivables turnover days were 909 days, 1,029 days
and 866 days, respectively. The increase in trade receivables turnover days in 2022 was
primarily due to our increased sales and the prolonged settlement by certain of our customers
as discussed above, which resulted in the increase of the average balance of our trade
receivables. The decrease in trade receivables turnover days in 2023 was mainly due to our
successful collection of certain long-standing trade receivables, particularly after the relevant
government subsidies were disbursed in late 2023. Due to the seasonality nature of our
business, where our revenue base was relatively low in the first half of the year, the trade
receivables turnover days for the five months ended May 31, 2024 does not offer an authentic
representation of our collection speed. In the first five months of 2024, we collected certain
outstanding trade receivable, and the balance of our trade receivables as of May 31, 2024
decreased compared to the end of 2023.
Trade and Bills Receivables and Contract Assets Aging Analysis
The following table sets forth an aging analysis of trade receivables and commercial
acceptance bills receivables and contract assets, based on the past due information and net of
provision for impairment losses as of the dates indicated:
As of December 31, As of May 31,
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Current /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118650,086 893,979 1,137,834 684,272
Within 1 year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118239,938 316,959 519,188 751,905
1 to 2 years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118102,659 135,392 128,430 322,340
2 to 3 years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118190,345 19,952 72,735 23,516
3 to 4 years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,884 151,260 4,168 28,088
4 to 5 years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 125,675 108,000
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,185,912 1,517,542 1,988,030 1,918,121
FINANCIAL INFORMATION
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--- page 486 ---
As of December 31, 2023, the trade receivables under the “4-5 years” time band in the
aging analysis mainly included the trade receivable due from the Third Largest Trade Debtor
as detailed in “— Trade Receivables Due From Major Trade Debtors” in this section. The Third
Largest Trade Debtor is a reputable fuel cell vehicle operator in China. These trade receivable
arose from our sales transactions with a vehicle manufacturer, rather than the Third Largest
Trade Debtor, which occurred prior to the Track Record Period. According to the relevant
tripartite set-off agreements, the Third Largest Trade Debtor assumes the payment obligations
to us for such trade receivable. Additionally, we obtained a commitment from the vehicle
manufacturer that the vehicle manufacturer committed to pay us the remaining unpaid amount
when the Third Largest Trade Debtor cannot settle its trade payable.
Between 2022 and 2023, although the aging of this trade receivable due from the Third
Largest Trade Debtor increased from the “3-4 years” time band to the “4-5 years” time band,
the corresponding ECL rate did not experience a significant change. As discussed above, we
have obtained a commitment from the relevant vehicle manufacturer to pay the remaining
amount when the Third Largest Trade Debtor cannot settle its trade payable. This vehicle
manufacturer is a state-owned company listed on the A-share market, whose credit risk is much
lower than other “4 to 5 years” non-prominent clients. The impairment provision of this trade
receivable was assessed on a forward-looking basis for the expected credit loss. Since this
vehicle manufacturer has retained the ultimate responsibility for the settlement of this trade
receivable and has no significant change in its credit risk, there is no significant change in the
ECL rate from “3 to 4 years” as of December 31, 2022 to “4 to 5 years” as of December 31,
2023. For details of impairment analysis including ECL rates on trade receivables, see note 22
to the Accountants’ Report in Appendix I to this prospectus.
The long-standing trade receivable under the “4-5 years” time band from the Third
Largest Trade Debtor was mainly because the relevant government subsidies had not been
received as of December 31, 2023. We have maintained communication with the trade debtor,
and worked closely with the vehicle manufacturer to facilitate the disbursement of subsidies.
As of September 30, 2024, a portion of the relevant subsidies had been disbursed, and
RMB30.6 million in trade receivables was collected from the Third Largest Trade Debtor in
2024. Considering the above, as well as the business and financial conditions of the Third
Largest Trade Debtor and the vehicle manufacturer who retains the ultimate responsibility for
the settlement of this trade receivable, the Directors are of the view that these trade receivables
under the “4-5 years” time band are recoverable.
As of December 31, 2021, 2022 and 2023 and May 31, 2024, our bills receivables
consisted of bank acceptance notes and commercial acceptance bills receivables, which were
all aged less than one year. The table sets forth the aging analysis of our trade receivables
before impairment, presented based on the invoice date as follows:
As of December 31, As of May 31,
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Within one year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118645,227 729,818 949,343 879,283
One to two years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118395,165 422,385 560,675 575,518
Two to three years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118486,055 263,606 274,511 315,685
Over three years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111828,761 439,772 607,956 563,230
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,555,208 1,855,581 2,392,485 2,333,717
FINANCIAL INFORMATION
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We negotiate credit period with our customers based on various factors such as business
relationship and customer credentials. We have a back-to-back payment arrangement with a
customer during the Track Record Period, under which the customer will settle the procurement
payment for fuel cell systems used in government award application projects for government
awards only after the customer receives the corresponding award. For further information of
the back-to-back payment arrangement, as well as the credit term of our five largest customers
during the Track Record Period and our general credit terms with our customers, see “Business
— Customers, Sales and Pricing — Major Customers” in this prospectus. Bills which we
received are generally with a maturity period of less than one year. In addition, we have closely
communicated with our customers to expedite the settlement and shorten the turnover days.
Moreover, we may implement additional measures such as requesting for prepayment subject
to evaluation on our existing and potential new customers’ credit standing.
Trade Receivables Due From Major Trade Debtors
The prolonged settlement of our trade receivables is mainly influenced by the time gap
between selling hydrogen fuel cell vehicles and receiving government subsidies. China’s fuel
cell vehicle industry is in its early stages and is highly impacted by government subsidy
policies, according to Frost & Sullivan. Manufacturers of hydrogen fuel cell vehicles usually
sell vehicles to customers at adjusted prices after deducting applicable subsidies, expecting to
receive government subsidies later. However, collecting these subsidies often takes a
significant amount of time, usually exceeding two years. This, along with the vehicle
manufacturers’ strong bargaining power in industry’s early development phase, contributed to
the extended settlement of our trade receivables.
For government subsidies for hydrogen fuel cell vehicles, the local government in
different regions in China may implement their own policies under the support of national
government initiatives. In the case of Shanghai, according to the relevant policies issued by the
local government, the application should be submitted by a consortium led by fuel cell system
companies, known as the “Demonstration Application Consortium ( ͪᇍᏐ͜ᑌΥ᜗)”.
Consequently, in Shanghai, we formed certain consortiums with other industry players and
took the lead in applying for relevant cash awards. Such cash awards are entitled to vehicle
manufacturers. We, as the leading entity of these consortiums, will receive the cash awards on
behalf of vehicle manufacturers, namely our customers, and then distribute such cash awards
to them. This allowed us to actively participate in the application of cash awards for customers
based in Shanghai, and get a direct and comprehensive understanding of the application
progress. To ensure customers settle outstanding trade receivables once they receive
government subsidies, we will actively communicate with vehicle manufacturers to reach a
consensus on the distribution of subsidies and collection of outstanding receivables before
transferring the subsidies to the vehicle manufacturers. Additionally, we may utilize paper bank
drafts to efficiently complete the settlement process with customers, including the distribution
of subsidies and collection of trade receivables in a single on-site meeting, thereby increasing
the certainty of receivables collection.
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As of May 31, 2024, in accordance with the relevant government policies, we had applied
for and expected to apply for government subsidies on behalf of eight of our total 59 customers
that had purchased our fuel cell systems, with the relevant trade receivables amounting to
RMB354.7 million, RMB644.2 million, RMB828.6 million and RMB828.6 million as of
December 31, 2021, 2022 and 2023 and May 31, 2024, which represented 22.8%, 34.7%,
34.6% and 35.5% of our total trade receivables as of the same dates. The first batch of subsidies
under the aforementioned policies was disbursed by the government in Shanghai in December
2023. Accordingly, we had received government subsidies totaling RMB282.2 million on
behalf of four customers as of May 31, 2024, including RMB141.1 million received in
December 2023 and another RMB141.1 million received in February 2024. We have distributed
these subsidies to the four customers, and were paid off to settle RMB202.6 million in trade
receivables from these customers, of which RMB107.1 million, or 52.9%, was settled through
the use of paper bank drafts. As of the Latest Practicable Date, there was no historical dispute
involving non-settlement of trade receivables despite the receipt of government subsidies by
the customers.
However, for customers in other regions like Beijing and Henan, the government requires
subsidies to be applied for by a consortium led by a vehicle manufacturer, or by vehicle
manufacturers without involving fuel cell system companies. As a result, in areas outside of
Shanghai, we do not directly participate in the subsidy application process for hydrogen fuel
cell vehicles, nor do we receive and distribute government subsidies on behalf of customers in
those regions. For subsidies applied by these customers, we obtain knowledge of the subsidy
application through direct communication with relevant customers and through public
channels. After a careful assessment of the relevant government policies and continuous
monitoring of subsidy disbursements, our Directors remain an overall optimistic outlook
regarding the future receipt of subsidies by the relevant customers. For more information, see
“Business — Customers, Sales and Pricing — Involvement in Application Projects For “Award
in Lieu of Subsidy” in this prospectus.
During the Track Record Period, we had seven major trade debtors (“ Seven Major Trade
Debtors ”) that accounted for our five largest trade receivables as of December 31, 2021, 2022
and 2023 and the five months ended May 31, 2024, measured by gross trade receivables. As
of May 31, 2024, the gross trade receivables due from the Seven Major Trade Debtors in
aggregate amounted to RMB1,499.9 million, representing over half of our total gross trade
receivables. These major trade debtors include five vehicle manufacturers and two hydrogen
fuel cell vehicle operators. They are mainly publicly listed companies or their subsidiaries,
state-owned enterprises, and/or reputable companies.
 For three out of these Seven Major Trade Debtors, the relevant subsidy applications
are mainly based on the policies issued by the local government in Shanghai. We
formed consortiums with vehicle manufacturers, including these three trade debtors,
as well as other industry players, and took the lead in applying for relevant cash
awards. The eligibility criteria for such cash awards mainly include mileage and
technical requirements, such as the rated power of the fuel cell system, freeze start
temperature, power density for the fuel cell stack, and rated power density for fuel
cell system. To the best knowledge of the Directors, all of the relevant vehicles
produced by these three trade debtors meet the aforesaid technical requirements, and
some of these vehicles have already met the mileage criteria. For the vehicles that
have met the mileage criteria, we, as the leading entity of the consortiums, have
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received the first batch of cash awards on behalf of the vehicle manufacturers,
confirming the relevant vehicles’ eligibility for the subsidies. We have distributed
the cash awards we received on behalf of these three trade debtors to them, and then
these trade debtors paid us to settle certain trade and bills receivables.
 For the remaining four out of these Seven Major Trade Debtors, the relevant subsidy
application was conducted by the vehicle manufacturers and did not involve us. We
keep communication with the vehicle manufacturers, namely our customers, mainly
through phone calls and offline visits, as well as pay attention to the public
announcements issued by the government, obtain information relating to the subsidy
application. The eligibility criteria for such subsidies mainly include mileage and
technical requirements such as the rated power of the fuel cell system. Based on our
communication with relevant vehicle manufacturers and/or public announcements
issued by the government, a portion of the vehicles have met both the technical and
mileage criteria and received the government’s approval for the subsidies.
We have made sufficient provision for impairment losses on trade receivables during the
Track Record Period, after considering the trade debtors’ business operation condition and
payment history, in accordance with the applicable accounting policies. As of May 31, 2024,
the aggregate provision we made for the trade receivables due from the Seven Major Trade
Debtors amounted to RMB385.0 million, and as a result, the net trade receivables due from the
Seven Major Trade Debtors were RMB1,114.9 million. In particular, as of May 31, 2024, the
gross trade receivable due from the fifth largest trade debtor amounted to RMB118.1 million
as of May 31, 2024, all arising from transactions prior to the Track Record Period. In 2021, due
to the financial difficulties of this debtor, we made a full provision for the relevant trade
receivables. Following the awareness of its deteriorating financial condition, we have ceased
conducting business with this company. As a result, the net trade receivable due from this trade
debtor was nil as of December 31, 2023. For further information on provision, see “—
Sufficiency of Impairment Provision of Trade and Bills Receivables” in this section.
As the industry matures, government subsidy policies are expected to be implemented
more swiftly, according to Frost & Sullivan. After a careful assessment of the relevant
government policies and continuous monitoring of subsidy disbursements, and also taking into
account the quality of our customers, as well as our measures to monitor trade receivables, we
believe that our outstanding trade receivables are recoverable. For further information, see “—
Recoverability of Trade and Bills Receivables” in this section.
Our third largest trade debtor (the “ Third Largest Trade Debtor ”) in terms of gross trade
receivables as of May 31, 2024 is a vehicle operator, with the gross trade receivable due from
it amounting to RMB283.7 million as of May 31, 2024. We have not sold any goods or services
to this Third Largest Trade Debtor. This trade receivable arose from our previous sales
transactions with a vehicle manufacturer before the Track Record Period and a tripartite set-off
arrangement.
FINANCIAL INFORMATION
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In 2019, we entered into agreements with this Third Largest Trade Debtor and the vehicle
manufacturer who purchased hydrogen fuel cell systems from us and had trade payables to us.
According to these agreements, the vehicle manufacturer would offset its trade receivables due
from the Third Largest Trade Debtor against its payables due to us, with the Third Largest
Trade Debtor then assuming the payment obligations to us. The Third Largest Trade Debtor
shall settle our trade receivables within 90 days after receipt of V AT invoice. We decided to
enter into the tripartite set-off agreement after careful evaluating the business and financial
conditions and industry background of the vehicle manufacturer and the Third Largest Trade
Debtor. Additionally, to provide an additional layer of assurance to us regarding the collection
of the outstanding receivable, the vehicle manufacturer, namely the expected recipient of the
relevant government subsidies, issued a confirmation letter to us in 2021, committing to pay
us the remaining unpaid amount when the Third Largest Trade Debtor cannot settle its trade
payables. As of May 31, 2024, the provision for the trade receivables due from the Third
Largest Trade Debtor was RMB177.7 million, and as a result, the net trade receivable due from
the Third Largest Trade Debtor was RMB106.0 million.
In addition to the tripartite arrangement involving the Third Largest Trade Debtor, our
trade receivables due from the fourth largest trade debtor as of May 31, 2024 also arose from
similar tripartite arrangements that we entered into in December 2023 and February 2024,
where the fourth largest trade debtor, a vehicle operator, agreed to make payment directly to
us on behalf of the vehicle manufacturers for the hydrogen fuel cell systems and components
we sold to the vehicle manufacturers. The total amount to be paid by this vehicle operator
under the tripartite arrangements was RMB154.0 million, of which RMB16.2 million had been
settled as of May 31, 2024.
Recoverability of Trade and Bills Receivables
We meticulously monitor the recoverability of outstanding trade receivables. Our finance
department conducts monthly reconciliations, preparing an aging analysis of trade and bills
receivables to proactively identify potential risks and implement appropriate collection
methods. Through internal assessments, we issue collection notices to customers with
significant outstanding amounts and higher risk factors. For such customers, our finance
department and sales department shall take immediate actions for recovery, such as contacting
sales managers for payment collection, offsetting customer arrears from accounts payable, or
requesting prepayment before shipment.
We have in place credit risk management policies and measures, including credit
evaluation for new and existing customers, to provide adequate assurance with respect to the
effective management of our credit risk. Specifically,
 before entering into any sales contracts, we evaluate the credit quality and
associated risks of potential customers;
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--- page 491 ---
 for new customers, we gather basic information, establish customer profiles, assess
their business operations, financial standing, and creditworthiness, including
materials provided by the potential customers and information we obtain from third
parties or public channels such as annual reports of publicly listed companies, to
conduct a thorough evaluation of credit risks;
 before entering into new sales contracts with new and existing customers, we
conduct internal order review. Based on specific circumstances, we determine the
credit terms and obtain approval from relevant departments, including the operations
and financial management department, sales center, and capital operations
department, as well our chief executive officer; and
 for existing customers, we actively update credit assessments based on information
obtained through public channels and regular communication with them,
considering their business operations and financial performance. Before we enter
into new sales contracts with them, we take into account various factors including
their business and financial conditions, payment records and outstanding
receivables, if any.
Our sales team closely monitors changes in customers’ creditworthiness and fundamental
conditions, ensuring real-time tracking of changes in creditworthiness and conducting
forward-looking forecasts for collection of trade receivable on a monthly basis. Building upon
this, our finance team updates historical expected default rates quarterly to make provisions for
impairment accordingly. When a payment is due, we take further appropriate follow-up
measures based on our previous assessment. These measures may include continuous
communications with our customers, demanding due payments periodically and initiating legal
actions when necessary. Our sales team is responsible for following up with our customers
periodically regarding trade receivables, and closely monitors the progress and outcome of
such follow-ups. They are also responsible for notifying customers to make timely payments
until receive internal confirmation that such payments have been duly made. Our finance team
reviews the aging of trade receivables on a monthly basis and communicate with our sales team
who will follow up with our customers as needed. If the outstanding payments cannot be
recovered after exhausting all proper measures, our sales team will notify our finance team,
who, together with other relevant departments, will review and record impairment provisions
for the overdue payments when necessary. For further information of our impairment provision
of trade and bills receivables, see “— Sufficiency of Impairment Provision of Trade and Bills
Receivables” in this section.
In addition, we collaborate closely with our customers, including downstream fuel cell
vehicle manufacturers, to facilitate their access to government subsidies. Our efforts mainly
include proactive communication and coordination, providing technical support during
installation and ongoing after-sales assistance, as well as assisting customers in preparing and
submitting application materials to meet subsidy requirements. Additionally, we continuously
monitor the status of government subsidy disbursement to facilitate the timely collection of our
trade receivables.
FINANCIAL INFORMATION
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Our Directors are of the view that our trade and bills receivables are recoverable through
our aforesaid measures to monitor and control trade and bills receivables, and after taking into
consideration (i) the quality of our customers, which include listed companies and their
subsidiaries, state-owned enterprises and other top players in their respective industry, and (ii)
the fact that the long aging and turnover days of our trade receivables are mainly associated
with the processing required for granting government subsidies to our downstream customers.
As the industry matures, government subsidy policies are expected to be implemented more
swiftly, according to Frost & Sullivan. For example, the 2021 subsidy allocated for
demonstrative application of fuel cell vehicles in Shanghai was distributed by the government
in December 2023, indicating that subsidy disbursement for the fuel cell demonstration city
clusters has been progressing favorably. We received the first disbursement of RMB141.1
million in December 2023 on behalf of our customers which later have been distributed to these
customers and we were paid off, to settle certain trade and bills receivables.
Measures to Narrow the Gap of Turnover Days of Trade Receivables and Trade Payables
We have implemented a series of cash flow and liquidity management policies and
measures to reduce the gap between turnover days of trade receivables and trade payables.
Specifically,
 We have established a budget management mechanism to ensure effective financial
control. Our finance department initiates the preparation of the financial budget for
the following year, which includes a comprehensive financial plan. Before being
disseminated to various departments, this annual budget should receive approval
from the Board of Directors. The annual budget includes a well-defined trade
receivable collection schedule, which is regularly updated. Our finance department
conducts monthly aging analysis of trade receivables and maintains communication
with the sales department to stay informed about any relevant changes. Additionally,
we update our annual budget for trade payables based on sales forecasts and
production schedules, ensuring alignment with our operational needs.
 Our sales team evaluates the creditworthiness of potential customers during the
initial stages of negotiating sales contracts. We collect relevant financial data and
establish customer profiles, including payment records and any outstanding
amounts. After the sale, our sales team maintains continuous communication with
the finance team and customers, and when necessary, reminds customers of any
outstanding payments through written notices and letters.
 We have sought increased purchases from local suppliers rather than overseas
suppliers, which can reduce the lead time for obtaining raw materials and offer
longer payment terms. We also explore various supply chain finance methods, such
as supply chain factoring that we started to use in 2023. As our business expands,
we expect increased purchases from suppliers, which may allow us to negotiate
favorable terms with suppliers, including extended payment periods and flexible
payment methods. Furthermore, by promoting healthy competition among suppliers,
we aim to secure longer payment terms and lower prices.
FINANCIAL INFORMATION
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 When selecting customers and projects, we carefully considers the potential time for
collecting trade receivable. Projects with shorter payment cycles and stronger
customers’ financial capabilities are given priority.
Through these measures, we have reduced the gap between turnover days of trade
receivables and trade payables in 2023 compared to the data in 2022. Based on our historical
turnover days of trade receivables and trade payables, we expect this gap to continue in the
short term. However, we expect it to gradually decrease primarily due to: (i) the
aforementioned measures we have implemented, (ii) as the industry matures, our suppliers are
able to shorten the delivery time of raw materials, and (iii) according to Frost & Sullivan, the
disbursement of government subsidies tends to be timely and stable in the future and
market-driven sales of hydrogen fuel cell systems will increase in the market, which is
expected to accelerate our customers’ payments.
Sufficiency of Impairment Provision of Trade and Bills Receivables
We believe that the provisions made for impairment of trade and bills receivables during
the Track Record Period were adequate after considering our customers’ business operation
condition and payment history, and based on the following:
 we closely review the balances of trade and bills receivables on an ongoing basis and
assess the collectability of overdue balances. In particular, our finance department
routinely analyzes the aging profile of trade and bills receivables to proactively
identify potential risks to implement appropriate collection methods. Our finance
department also determines varying percentages of impairment provisions for trade
and bills receivables at different aging categories, making impairment provisions
quarterly. In addition, we monitor the collections of trade and bills receivables and
retrospectively review the accounting estimate of prior periods to identify any
material discrepancies. Where the accounting estimate is different from our original
estimate, such difference will be reflected in the carrying amounts of trade and bills
receivables and thus the impairment loss in the period in which such estimate is
adjusted; and
 we formulate the impairment provision policy according to IFRS 9 and group trade
receivables and commercial acceptance bills receivables based on shared credit risk
characteristics and estimate the expected credit loss rate of trade receivables and
commercial acceptance bills receivables on a collective basis based on historical
credit loss experiences, with adjustment for forward-looking information such as
gross domestic product and producer price index. We apply the simplified approach
in calculating expected credit losses which requires lifetime expected credit losses
to be recognized from the initial recognition of the receivables. Generally, for trade
receivables past due over five years, we consider that we are unlikely to receive the
outstanding contractual amounts and will provide full impairment provision for
these receivables.
FINANCIAL INFORMATION
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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, As of May 31,
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Current:
Prepayment of government
subsidies /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 113,100 –
Prepayments to suppliers /H1118/H1118/H1118/H1118/H1118/H111828,362 54,992 60,444 77,402
Other tax recoverable /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111826,498 17,139 17,812 31,581
Prepaid expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111839,803 21,942 16,346 15,538
Deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,725 9,722 88,657 93,343
Listing expenditures /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 3,893 4,938
Due from related parties /H1118/H1118/H1118/H1118/H1118/H1118522 500 642 –
Advances to employees /H1118/H1118/H1118/H1118/H1118/H1118/H1118386 174 301 351
102,296 104,469 301,195 223,153
Non-current:
Other tax recoverable /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187,506 8,262 13,285 18,146
Prepayments for long-term
assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111812,037 54,910 54,607 31,951
19,543 63,172 67,892 50,097
Less: Impairment allowance /H1118/H1118/H1118(1,502) (1,956) (4,927) (4,462)
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118120,337 165,685 364,160 268,788
Our prepayments, other receivables and other assets increased by 37.7% from RMB120.3
million as of December 31, 2021 to RMB165.7 million as of December 31, 2022, primarily due
to (i) an increase in prepayments to suppliers for raw materials in anticipation of the increased
sales, and (ii) an increase in other long term assets mainly due to increased purchase of
specialized equipment, which was partially offset by decreases in prepaid expenses and other
tax recoverable.
Our prepayments, other receivables and other assets increased significantly from
RMB165.7 million as of December 31, 2022 to RMB364.2 million as of December 31, 2023
primarily due to (i) an increase in prepayment of government subsidies. In particular, we
applied on behalf of certain customers, who are manufacturers of hydrogen fuel cell vehicles,
for subsidies with the local government, in line with relevant policies and implementation
rules. By the end of 2023, we had obtained approval from the government confirming the
certainty of the applicable amount of government subsidies (the “ 2023 Certified Amount ”),
but only received a portion of the 2023 Certified Amount, which relevant customers are entitled
to obtain. Upon requests from relevant customers to obtain the full amount of the 2023
Certified Amount as early as possible, we had, after taking into account various factors like (i)
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the disbursement of such subsidies having been officially confirmed by the government,
making the risks associated with the loss of such amount remote, and (ii) our long-standing
cooperative relationship with these customers with strategic value, including their commitment
to promote the utilization of hydrogen energy for mutual benefits as proven by the successful
track record of collaborative efforts, made a prepayment in the amount of RMB113.1 million
to three customers in December 2023. Subsequently, in February 2024, we received the full
amount of the 2023 Certified Amount from the government, and since then, the above
mentioned prepayment has been fully settled. As advised by our PRC Legal Adviser, the
prepayment of subsidies to customers did not constitute a violation of the General Lending
Provisions, because instead of the intent or purpose to provide financing support or conduct
financing business, we made the payment in advance when the government’s approval
confirming the certainty of the 2023 Certified Amount was received, and merely changing the
payment order will not be considered an act of private lending subject to the General Lending
Provisions. We did not make any similar prepayment of subsidies to any other customers during
the Track Record Period; (ii) an increase in deposits as a result of our use of certain funds as
security for future factoring arrangements to settle payments with suppliers. In 2023, we
entered into a supplier finance arrangement with a third-party factoring company. Under this
arrangement, our suppliers can apply to have their accounts receivable from us factored by this
factoring company. For such suppliers, the factoring company will directly pay the suppliers
the full amount of their accounts receivable from us, and in turn, the suppliers’ corresponding
accounts receivable from us will be transferred to the factoring company. This grants the
factoring company the right to collect the payment directly from us when the due date arrives.
We will then make the payment to factoring company, rather than the original suppliers. The
cooperation period of this supplier finance arrangement is two years. The total credit limit
offered by the factoring company is RMB200 million, secured by our deposit of RMB60
million; and (iii) an increase in prepayments to suppliers resulting from our purchase of raw
materials to meet the expected sales increase, which was partially offset by a decrease in
prepaid expenses.
Our prepayments, other receivables and other assets decreased by 26.2% from RMB364.2
million as of December 31, 2023 to RMB268.8 million as of May 31, 2024, primarily due to
a decrease in prepayment of government subsidies, as we received the full amount of the
prepaid subsidies in February 2024.
As of September 30, 2024, approximately RMB81.6 million, or 30.3% of our
prepayments, other receivables and other assets as of May 31, 2024 had been subsequently
settled.
For more information on our prepayments, other receivables and other assets, see note 23
to the Accountants’ Report in Appendix I to this prospectus.
FINANCIAL INFORMATION
– 485 –


--- page 496 ---
Trade and Bills Payables
Our trade and bills payables primarily relate to payments we owe to our suppliers. The
following table sets forth a breakdown of our trade and bills payable as of the dates indicated:
As of December 31, As of May 31,
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Trade payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118561,533 503,212 632,969 589,655
Bills payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 63,043 17,772 36,358
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118561,533 566,255 650,741 626,013
Our trade and bills payables remained relatively stable at RMB561.5 million and
RMB566.3 million as of December 31, 2021 and 2022, respectively. Our trade and bills
payables increased by 14.9% from RMB566.3 million as of December 31, 2022 to RMB650.7
million as of December 31, 2023, mainly because we procured more raw materials in
anticipation of increased sales orders in 2023. Our trade and bills payables amounted to
RMB626.0 million, which remained relatively stable compared to December 31, 2023.
As of September 30, 2024, approximately RMB116.1 million, or 18.5% of our trade and
bills payables as of May 31, 2024, had been subsequently settled.
Trade and Bills Payables Turnover Days
The following table sets out the trade and bills payables turnover days for the periods
indicated:
Y ear Ended December 31,
Five Months Ended
May 31,
2021 2022 2023 2024
Trade and bills payables
turnover days (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118501 435 325 3,390
Note:
(1) Trade and bills payables turnover days equal to the average balance of trade and bills payables at the
beginning and the end of the relevant period divided by cost of sales for such period and multiplied by
365 days in 2021, 2022 and 2023 and by 150 days for the five months ended May 31, 2024, respectively.
FINANCIAL INFORMATION
– 486 –


--- page 497 ---
In 2021, 2022, 2023 and the five months ended May 31, 2024, our trade and bills payables
turnover days were 501 days, 435 days, 325 days and 3,390 days, respectively. The decrease
in trade and bills payables turnover days in 2022 was primarily due to the increased scale of
our procurement while our trade and bills payables remained stable. The further decrease in
trade and bills payables turnover days in 2023 was because the growth of cost of sales outpaced
the increase in the average balance of trade and bills payables due to our settlement of certain
long aging trade payables. The increase in trade and bills payables turnover days in the five
months ended May 31, 2024 was mainly due to the seasonality nature of our business as our
revenue and cost of sales are generally lower in the first half of the year. For more information,
see “Business — Seasonality” in this prospectus.
Trade and Bills Payables Aging Analysis
The table below sets forth an aging analysis of our trade and bills payables based on the
invoice date as of the dates indicated:
As of December 31, As of May 31,
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Within 1 year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118386,201 390,707 447,319 445,871
1 to 2 years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111858,024 69,947 113,317 75,577
2 to 3 years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111881,813 16,653 25,801 27,766
Over 3 years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111835,495 88,948 64,304 76,799
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118561,533 566,255 650,741 626,013
During the Track Record Period and up to the Latest Practicable Date, our Director
confirm that we had no material default in payment of any trade and bills payables. As of the
Latest Practicable Date, to the best knowledge of our Directors, none of the outstanding
balances of our trade and bills payables were in dispute. For the credit term of our five largest
suppliers during the Track Record Period and our general credit terms with our suppliers, see
“Business — Our Suppliers — Major Suppliers” in this prospectus.
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, As of May 31,
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Payroll and welfare payable /H1118/H1118/H1118/H111849,027 68,448 40,295 21,817
Other tax payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111826,110 29,858 27,839 5,380
Government grants /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,910 2,910 26,360 64,272
Collection on behalf of others /H1118/H1118 – – 28,628 56,056
Listing expenditures payable /H1118/H1118/H1118 – – 11,624 15,634
Due to third parties /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 5,059
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118618 1,200 6,569 6,499
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111878,665 102,416 141,315 174,717
FINANCIAL INFORMATION
– 487 –


--- page 498 ---
Our other payables and accruals increased by 30.2% from RMB78.7 million as of
December 31, 2021 to RMB102.4 million as of December 31, 2022, mainly due to the increase
in payroll and welfare payable as a result of the rise in the number of employees and general
salary level.
Our other payables and accruals increased by 38.0% from RMB102.4 million as of
December 31, 2022 to RMB141.3 million as of December 31, 2023, mainly caused by the
increases in collection on behalf of others and government grants.
Our other payables and accruals increased by 23.6% from RMB141.3 million as of
December 31, 2023 to RMB174.7 million as of May 31, 2024, primarily due to increases in
collection on behalf of others and government grants.
As of September 30, 2024, approximately RMB72.9 million, or 41.7% of our other
payables and accruals as of May 31, 2024, had been subsequently settled.
Provision
The following table sets forth a breakdown of our non-current and current provision as
of the dates indicated:
As of December 31, As of May 31,
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Current:
Product warranties /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111817,596 18,855 21,080 21,102
Financial guarantee obligation /H1118/H111811,760 – – –
29,356 18,855 21,080 21,102
Non-current:
Product warranties /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111818,544 19,913 21,219 21,307
Excess deficit /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,750 – – –
24,294 19,913 21,219 21,307
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111853,650 38,768 42,299 42,409
Our provision increased by 9.1% from RMB38.8 million as of December 31, 2022 to
RMB42.3 million as of December 31, 2023, reflecting the increased provision for product
warranties in line with our sales growth. The provision for product warranties represents
provision made for estimated warranty claims in respect of products sold which are still under
warranty at the end of the period. These claims are normally expected to be settled according
to the terms of sales contract. As of May 31, 2024, our provision remained relatively stable at
RMB42.3 million.
Our provision decreased by 27.7% from RMB53.7 million as of December 31, 2021 to
RMB38.8 million as of December 31, 2022, mainly due to (i) the decrease in financial
guarantee obligation as a result of the repayment of relevant loan that we provided financial
guarantee for as detailed in “— Indebtedness — Financial Guarantee” in this section, and (ii)
the decrease in excess deficit detailed below.
FINANCIAL INFORMATION
– 488 –


--- page 499 ---
We recorded a provision on excess deficit of RMB5.8 million as of December 31, 2021,
which was related to our investments in a joint venture, Guohong Refire. In 2021, we were
required to subscribe shares of RMB89.1 million as capital contributions in Guohong Refire
pursuant to the articles of association of Guohong Refire, and we had subscribed shares of
RMB4.9 million as of December 31, 2021. While we had not subscribed the full amount,
pursuant to the PRC Company Law and the articles of association of Guohong Refire,
shareholders of Guohong Refire shall bear liabilities of Guohong Refire which could not be
covered and repaid by Guohong Refire’s own realizable assets, as limited by the registered
capital they have subscribed for. As a result, the residual liabilities of Guohong Refire were to
be borne by its shareholders (including our Company) up to the limit of remaining capital
contribution which has not been paid up and in proportion to their respective shareholdings, the
portion of which our Company shall bear were recorded as provision for excess deficit
accordingly. Consequently, we recorded a provision on excess deficit as of December 31, 2021.
In 2022 and 2023, we made capital injection of RMB24.5 million and RMB38.1 million into
Guohong Refire, respectively. Since the loss borne was less than the carrying amount of capital
injection in 2022 and 2023 and the first five months of 2024, the provision on excess deficit
decreased to nil as of December 31, 2022 and 2023 and May 31, 2024. For more information
on excess deficit, see note 32 to the Accountants’ Report in Appendix I to this prospectus.
Derivative Financial Instrument
During the Track Record Period, we recorded derivative financial instrument of RMB17.7
million, RMB37.4 million, nil and nil as of December 31, 2021, 2022 and 2023 and May 31,
2024, respectively. Our derivative financial instrument represented the obligation to buy back
shares of Guohong Refire. Our derivative financial instrument increased from RMB17.7
million as of December 31, 2021 to RMB37.4 million as of December 31, 2022 mainly due to
our increased obligation to buy back shares of Guohong Refire from our determination of such
an obligation’s fair value using discounted cash flow method based on the financial
performance of Guohong Refire for 2022. By June 2023, the derivative financial instrument
had been settled with cash consideration of RMB38.1 million. As a result, our derivative
financial instrument was nil as of December 31, 2023 and May 31, 2024. For more information,
see note 29 to the Accountants’ Report in Appendix I to this prospectus.
Guohong Refire is a limited liability company established in the PRC in October 2016.
Leveraging the business layout of Sino-Synergy Hydrogen Energy Technology (Jiaxing) Co.,
Ltd. (Ҧ(ྗጳ)ʮ̡)( “ Sino-Synergy ”) in the field of fuel cell stacks and
the technologies and experience of our Company in design and development of fuel cell
systems, and in view of the strategic development of the hydrogen energy industry driven by
the local governments in Foshan and Yunfu, Guangdong Province, our Company and
Sino-Synergy decided to jointly promote the integrated production of fuel cell systems and
established Guohong Refire with initial registered capital of RMB10,000,000, among which
RMB5,100,000 was subscribed for by Sino-Synergy (representing 51% equity interest in
Guohong Refire) and RMB4,900,000 was subscribed for by our Company (representing 49%
equity interest in Guohong Refire). Historically, Guohong Refire primarily served as a
hydrogen fuel cell system production base where Sino-Synergy sold 9SSL fuel cell stacks it
manufactured under a license granted to it by Ballard Power Systems Inc. to Guohong Refire
for the production and sales of hydrogen fuel cell systems by Guohong Refire.
FINANCIAL INFORMATION
– 489 –


--- page 500 ---
Sino-Synergy is a joint stock company with limited liability established in the PRC and
listed on the Stock Exchange (stock code: 9663). It is principally engaged in R&D, production
and sales of hydrogen fuel cell stacks and hydrogen fuel cell systems. We historically
purchased fuel cell stacks and related components for our R&D and production from and sold
our fuel cell systems to Sino-Synergy and its subsidiaries during the ordinary course of
business under normal commercial terms and on arm’s length basis. As of the Latest Practicable
Date, other than the joint investment in Guohong Refire, certain after-sale maintenance
services from Sino-Synergy in relation to fuel cell stacks and related components it previously
supplied, and certain after-sale maintenance services to Sino-Synergy in relation to the fuel cell
systems we previously supplied, there was no other business transactions between our Group
and Sino-Synergy or its subsidiaries. Further, Guangdong Hongyun Hydrogen Energy
Technology Co., Ltd. (ʮ̡)( “ Hongyun Hydrogen Energy ”), a
substantial shareholder of Sino-Synergy, was our Shareholder from our establishment in
September 2015 to April 2017, and we historically collaborated with Hongyun Hydrogen
Energy on a project in respect of R&D of fuel cell light buses from 2016 to 2017. For details
relating to the shareholding of Hongyun Hydrogen Energy in our Company, see “History,
Development and Corporate Structure — Establishment and Development of Our Company —
(2) Major Shareholding Changes of Our Company Before Conversion into Joint Stock Limited
Company” in this prospectus. Save as disclosed in this section, to the best knowledge of our
Directors, there is no other past or present relationship (family, business, employment, trust,
financing or otherwise) between (i) our Group and (ii) Sino-Synergy, its existing substantial
shareholders, directors or senior management, or any of their respective associates.
In December 2018, our Company, Sino-Synergy, Guohong Refire and Yunfu Rongda
Asset Management Co., Ltd. (ʮ̡)( “ Yunfu Rongda ”) entered into
an investment agreement, pursuant to which (i) Sino-Synergy, our Company and Yunfu Rongda
agreed to subscribe for the increased registered capital of Guohong Refire of RMB87,630,000,
RMB84,190,000 and RMB77,840,260, respectively, at par value, (ii) Yunfu Rongda was
granted a right to withdraw its investment in Guohong Refire on or after June 30, 2020, our
Company and Sino-Synergy are required to agree on such capital withdrawal in proportion to
the shareholdings of 49% and 51%, respectively, and Yunfu Rongda may choose to withdraw
its investment through capital reduction where Guohong Refire shall return the investment fund
to Yunfu Rongda or through equity transfers where our Company and Sino-Synergy shall
jointly undertake the registered capital of Guohong Refire held by Yunfu Rongda in proportion
to the shareholdings of 49% and 51%, respectively, (iii) Yunfu Rongda was entitled to a fixed
post-tax return rate at 1.5% per annum but not entitled to any dividend or residual return from
Guohong Refire, and (iv) Yunfu Rongda was entitled to appoint a director who would not be
involved in daily operation and management of Guohong Refire, and shall only be responsible
for monitoring and managing project funds. Upon completion of the capital increase of
Guohong Refire in December 2018, Guohong Refire was held as to approximately 35.71% by
Sino-Synergy, 34.31% by our Company and 29.98% by Yunfu Rongda. Yunfu Rongda is a
limited liability company established in the PRC and an Independent Third Party. It is
principally engaged in investments in public utilities, urban infrastructure and key projects. As
of the Latest Practicable Date, Yunfu Rongda was a wholly-owned subsidiary of Yunfu Xinda
Urban Construction Investment Co., Ltd. (ʮ̡), which was
ultimately controlled by the People’s Government of Yunfu Municipality (ִ݁.)
Yunfu Rongda was granted such withdrawal right as its investment in Guohong Refire was
funded by “Special Fund for Development of Advanced Equipment Manufacturing on the West
FINANCIAL INFORMATION
– 490 –


--- page 501 ---
Coast of Pearl River” (ږwhich, pursuant to relevant rules
and polices issued by the Department of Economy and Information Technology of Guangdong
Province (ʷᝂ) (formerly known as the Committee of Industry and
Information Technology of Guangdong Province (ึ)) and the local
government of Yunfu, Guangdong Province, require such investment to be made in the form of
an investment with a pre-determined return rate coupled with a withdrawal right. The above
investment arrangements were made, taking into consideration (i) the fact that Foshan and
Yunfu, Guangdong Province, were two key cities in the PRC at the relevant time where the
development of the fuel cell automotive industry with notable market size was encouraged, and
(ii) the background of Yunfu Rongda, which could share its networks with industry players and
insights on the overall local development and subsidy policies.
In December 2020, our Company, Guohong Refire, Sino-Synergy and Yunfu Rongda
entered into a supplemental agreement, pursuant to which the expiry date for Yunfu Rongda to
exercise its withdrawal right was extended to June 30, 2023. In April 2023, Yunfu Rongda
exercised its withdrawal right through equity transfers, and our Company and Sino-Synergy
entered into equity transfer agreements with Yunfu Rongda, respectively, pursuant to which our
Company and Sino-Synergy agreed to acquire from Yunfu Rongda the registered capital of
Guohong Refire of RMB38,141,727 and RMB39,698,533, respectively, at respective
considerations of RMB38,141,727 and RMB39,698,533. Following the completion of the
aforementioned transfers in December 2023, Guohong Refire has been held as to
approximately 51% by Sino-Synergy and 49% by our Company since then.
Since the establishment of Guohong Refire, Sino-Synergy and our Company have been
shareholders of Guohong Refire with de facto shareholdings of approximately 51% and 49%,
respectively, after taking into account the arrangements pertaining to Yunfu Rongda’s
investment in Guohong Refire during the period when Yunfu Rongda was a registered
shareholder of Guohong Refire, and Guohong Refire has been operated and managed under the
joint control of Sino-Synergy and our Company based on the following reasons:
 Control at board level: (i) Prior to the investment by Yunfu Rongda in December
2018, pursuant to the then prevailing articles of association of Guohong Refire,
Sino-Synergy had the right to appoint three directors and our Company had the right
to appoint two directors, and a board resolution of Guohong Refire shall only be
passed upon approval by at least two-thirds of the directors; (ii) during the period
from December 2018 to December 2023 when Yunfu Rongda was a registered
shareholder of Guohong Refire, pursuant to the then prevailing articles of
association of Guohong Refire, Sino-Synergy had the right to appoint three
directors, our Company had the right to appoint two directors and Yunfu Rongda had
the right to appoint one director who would not be involved in daily operation and
management of Guohong Refire and shall only be responsible for monitoring and
managing project funds, and a board resolution of Guohong Refire shall only be
passed upon approval by at least two-thirds of the directors; and (iii) following the
exit of Yunfu Rongda as a registered shareholder of Guohong Refire in December
2023, each of Sino-Synergy and our Company has the right to appoint two directors,
and a board resolution of Guohong Refire shall only be passed upon approval by at
least two-thirds of the directors.
FINANCIAL INFORMATION
– 491 –


--- page 502 ---
 De facto control with respect to approval for transactions: The senior management
of Guohong Refire has comprised, among others, its general manager (whom our
Company has the right to nominate) and deputy general manager (whom Sino-
Synergy has the right to nominate). As such, through the substantial influence that
can be exerted on the senior management of Guohong Refire by both Sino-Synergy
and our Company, each of Sino-Synergy and our Company has certain degree of
control over the daily operation and management of Guohong Refire. Further, in
terms of the approval and settlement procedures for any financial transaction, any
payment shall be subject to the joint approvals by the respective finance personnel
nominated by our Company and Sino-Synergy, the absence of any of which would
result in failure of such payment.
Since 2020, we have mastered the manufacturing of hydrogen fuel cell stacks and has
established our own manufacturing plant for hydrogen fuel cell systems, and to the best
knowledge of our Company, Sino-Synergy has expanded into the hydrogen fuel cell system
market for commercial vehicles and various downstream applications beyond the transit market
such that it has shifted from primarily selling hydrogen fuel cell stacks to the mass production
and sales of hydrogen fuel cell systems that incorporated its own hydrogen fuel cell stacks.
Therefore, our Directors and directors of Sino-Synergy believe that the purpose for which
Guohong Refire was established had been fulfilled, and Guohong Refire has gradually ceased
to have substantive business operation since then. As of the Latest Practicable Date, Guohong
Refire had no substantive business operation except for sales of its existing inventory, and our
Company has been in discussions with Sino-Synergy on liquidating Guohong Refire. In the
event where Guohong Refire is to be liquidated, no additional impairment provision will be
required since (i) our obligation to pay for the remaining subscribed but unpaid registered
capital of Guohong Refire was not due as of the Latest Practicable Date, and under such
circumstances, we only need to make additional provisions when Guohong Refire has a net
liability position, (ii) we already recognized provisions for Guohong Refire’s liability due to
us which had been recorded as other receivables and deemed by us to be unrecoverable, and
(iii) all other liabilities for which Guohong Refire is liable could be covered and repaid by
Guohong Refire’s own realizable assets.
During the Track Record Period, we entered into transactions with Guohong Refire during
the ordinary course of business under normal commercial terms and on arm’s length basis,
primarily for sales of our products (such as fuel cells, fuel cell systems and related
components), and purchases of components for our R&D and production (such as fuel cell
stacks). Further, to support the development and operation of Guohong Refire, we, together
with Sino-Synergy, provided a financial guarantee in connection with a loan of Guohong Refire
in the amount of RMB250 million in 2017, and we also provided a loan of RMB5 million to
Guohong Refire in 2018. Both loans were repaid in full by Guohong Refire as of the Latest
Practicable Date. Besides, pursuant to the articles of association of Guohong Refire, our
Company has had the right to nominate or appoint two directors, one supervisor and certain
senior management of Guohong Refire, and therefore, certain employees of our Group held or
hold such positions at Guohong Refire as nominated or appointed by our Company. Save as
disclosed in this section, to the best knowledge of our Directors, there is no other past or
present relationship (family, business, employment, trust, financing or otherwise) between (i)
our Group and (ii) Guohong Refire, its existing substantial shareholders, directors or senior
management, or any of their respective associates.
FINANCIAL INFORMATION
– 492 –


--- page 503 ---
INDEBTEDNESS
The following table sets forth the breakdown of our indebtedness as of the dates
indicated:
As of December 31,
As of
May 31,
As of
September 30,
2021 2022 2023 2024 2024
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
Interest-bearing bank
and other
borrowings:
– Current
(1) /H1118/H1118/H1118/H1118/H1118/H1118654,317 269,079 470,443 811,044 1,028,843
– Non-current (2) /H1118/H1118/H1118403,736 729,091 833,025 512,923 351,439
Lease liabilities:
– Current /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111815,418 15,523 18,921 19,738 20,600
– Non-current /H1118/H1118/H1118/H1118/H111875,294 60,863 42,483 32,093 29,134
Financial guarantee /H1118/H111811,760 – – – –
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,160,525 1,074,556 1,364,872 1,375,798 1,430,016
Notes:
(1) As of December 31, 2021, the current portion of the interest-bearing bank and other borrowings included
RMB40.2 million due to related parties, which had been settled in 2022.
(2) As of December 31, 2021, the non-current portion of the interest-bearing bank and other borrowings
included RMB80.0 million due to related parties, which had been settled in 2022.
FINANCIAL INFORMATION
– 493 –


--- page 504 ---
Interest-Bearing Bank and Other Borrowings
The following table sets forth the breakdown of our interest-bearing bank and other
borrowings, categorized by current and non-current classifications, as well as the security
status, as of the dates indicated.
As of December 31,
As of
May 31,
As of
September 30,
2021 2022 2023 2024 2024
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
Current:
Bank loans –
unsecured /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118452,434 180,150 36,840 138,756 274,027
Current portion of
long-term bank
loans – secured /H1118/H1118/H1118– 15,129 20,095 20,818 25,648
Current portion of
long-term bank
loans – unsecured /H1118/H111813,379 73,800 192,032 215,540 305,562
Current portion of
long-term other
borrowings –
secured /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118188,504 – 180,000 393,533 382,302
Current portion of
long-term other
borrowings – sale
leaseback –
secured /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 41,476 42,397 41,304
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118654,317 269,079 470,443 811,044 1,028,843
Non-current:
Bank loans – secured /H1118 – 77,500 57,500 57,500 45,000
Bank loans –
unsecured /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111820,000 258,066 469,900 384,000 257,850
Other borrowings –
sale leaseback –
secured /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 82,840 71,423 48,589
Other borrowings –
secured /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118383,736 393,525 222,785 – –
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118403,736 729,091 833,025 512,923 351,439
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,058,053 998,170 1,303,468 1,323,967 1,380,282
FINANCIAL INFORMATION
– 494 –


--- page 505 ---
The following table sets forth the breakdown of our interest-bearing bank and other
borrowings based on maturity terms in the relevant agreements as of the date indicated.
As of December 31,
As of
May 31,
As of
September 30,
2021 2022 2023 2024 2024
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
Bank loans
repayable:
Within one year /H1118/H1118/H1118/H1118/H1118465,813 269,079 248,967 375,113 605,237
In the second year /H1118/H1118/H111813,333 130,266 321,400 403,700 276,100
In the third to fifth
years, inclusive /H1118/H1118/H11186,667 195,300 203,500 35,300 26,750
Beyond five years /H1118/H1118/H1118 – 10,000 2,500 2,500 –
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118485,813 604,645 776,367 816,613 908,087
Other borrowings
repayable:
Within one year /H1118/H1118/H1118/H1118/H1118188,504 – 221,476 435,931 423,607
In the second year /H1118/H1118/H1118 – 180,000 264,205 41,420 41,420
In the third to fifth
years, inclusive /H1118/H1118/H1118383,736 213,525 41,420 30,003 7,168
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118572,240 393,525 527,101 507,354 472,195
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,058,053 998,170 1,303,468 1,323,967 1,380,282
As of December 31, 2021, 2022 and 2023 and May 31 and September 30, 2024, our total
interest-bearing bank and other borrowings amounted to RMB1,058.1 million, RMB998.2
million, RMB1,303.5 million, RMB1,324.0 million and RMB1,380.3 million, respectively. We
generally borrow loans to supplement our working capital requirements and finance our capital
expenditures.
As of December 31, 2021, 2022 and 2023 and May 31 and September 30, 2024,
RMB485.8 million, RMB512.0 million, RMB698.8 million, RMB738.3 million and RMB837.4
million of our interest-bearing bank and other borrowings were unsecured, and RMB572.2
million, RMB486.2 million, RMB604.7 million, RMB585.7 million and RMB542.8 million of
our interest-bearing bank and other borrowings were secured by guarantee from the Company
or its subsidiary, or pledge of our right-of-use assets, property, plant and equipment or equity
interests in a subsidiary.
FINANCIAL INFORMATION
– 495 –


--- page 506 ---
As of December 31, 2021, 2022 and 2023 and May 31 and September 30, 2024, we had
other borrowings totaling RMB572.2 million, RMB393.5 million, RMB527.1 million,
RMB507.4 million and RMB472.2 million, respectively. Specifically, we legally transferred
48.97% equity interests in Foshan Nanhai Cunqiu Equity Investment Co., Ltd. (“ Nanhai
Cunqiu ”), an insignificant subsidiary pursuant to Rule 14A.09 of the Listing Rules, as
collateral to an Independent Third Party, Guangdong Nanhai Industry Group Co., Ltd. Under
this arrangement, our subsidiary, Nanhai Cunqiu, received an external funding of RMB220.5
million, and we are obliged to buy back the related equity interests in Nanhai Cunqiu at a fixed
amount upon 2025. The fixed amount equals the RMB220.5 million received by Nanhai
Cunqiu, plus interest expenses calculated based on the loan prime rate (LPR) announced by the
PBOC on the applicable date. As of December 31, 2021, 2022 and 2023 and May 31 and
September 30, 2024, the balance of the borrowing in relation to the above arrangement,
including accrued interest payable, amounted to RMB233.7 million, RMB243.5 million,
RMB252.8 million, RMB256.4 million and RMB259.3 million, respectively. In addition, as of
December 31, 2021, 2022 and 2023 and May 31 and September 30, 2024, we also had other
borrowings of RMB150.0 million, RMB150.0 million, RMB150.0 million, RMB137.1 million
and RMB123.1 million, respectively, from an Independent Third Party in connection with the
implementation of a funding support project agreed upon by the Management Committee of
Changshu High-tech Industrial Development Zone and us, with a maturity date in 2024.
Furthermore, as of December 31, 2023 and May 31 and September 30, 2024, we had other
borrowings of RMB124.3 million, RMB113.8 million and RMB89.9 million, respectively, from
an Independent Third Party in relation to our sale and leaseback of certain machinery and
equipment, with a maturity date in 2026.
As of December 31, 2021, 2022 and 2023 and May 31 and September 30, 2024, we had
bank loans amounting to RMB485.8 million, RMB604.6 million, RMB776.4 million,
RMB816.6 million and RMB908.1 million, respectively. These loans were provided by
commercial banks in the PRC. For more information, including interest rates, maturity profile
and the carrying amount of pledged assets of our interest-bearing bank and other borrowings,
see note 30 to the Accountants’ Report in Appendix I to this prospectus.
Our Directors confirm that as of the Latest Practicable Date, there was no material
covenant on any of our outstanding debt and there was no material breach of any covenant
during the Track Record Period and up to the Latest Practicable Date. Our Directors further
confirm that our Group did not experience any material difficulty in obtaining or renewing
bank loans, or did we experience any default in payment of bank loans and other borrowings
during the Track Record Period and up to the Latest Practicable Date.
FINANCIAL INFORMATION
– 496 –


--- page 507 ---
Lease Liabilities
Our lease liabilities were primarily related to leases for our office buildings, factory
buildings and employee dormitories. The following table sets forth a breakdown of our lease
liabilities as of the dates indicated:
As of December 31,
As of
May 31,
As of
September 30,
2021 2022 2023 2024 2024
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
Current /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111815,418 15,523 18,921 19,738 20,600
Non-current /H1118/H1118/H1118/H1118/H1118/H1118/H111875,294 60,863 42,483 32,093 29,134
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111890,712 76,386 61,404 51,831 49,734
Our lease liabilities decreased by 15.8% from RMB90.7 million as of December 31, 2021
to RMB76.4 million as of December 31, 2022, and further decreased by 19.6% to RMB61.4
million as of December 31, 2023. Our lease liabilities further deceased by 15.6% to RMB51.8
million as of May 31, 2024, and further to RMB49.7 million as of September 30, 2024. The
continued decrease in lease liabilities was mainly due to our lease payments and amortization.
Financial Guarantee
In 2017, Guohong Refire signed an agreement with one of its subsidiary and a third party
lender, pursuant to which the subsidiary of Guohong Refire obtained a borrowing of RMB250.0
million from the third party lender with a fixed interest rate of 6.8% per annum and a term of
maturity of three years to support the development of Guohong Refire and its subsidiary. The
shareholders of Guohong Refire at that time, including our Company, signed a guarantee
contract with the third party lender, pursuant to which we provided guarantee according to our
shareholding ratio in Guohong Refire for all debts arising from the obligation of the loan
agreement until September 18, 2020, a date which was later extended to December 31, 2022.
As of December 31, 2021, we recognized loss allowance of RMB11.8 million for the gross
amount of financial guarantee obligation of RMB24.5 million. In December 2022, Guohong
Refire has fulfilled the repayment obligation, and our guarantee obligation was released
accordingly.
As of September 30, 2024, we had unutilized banking facilities of RMB348.4 million,
which were committed and unrestricted. These banking facilities have been approved and
formally confirmed by the relevant banks in the associated agreements and/or confirmation
letters. They can only be canceled in rare circumstances, such as bankruptcy or liquidation,
which we consider unlikely to occur. Therefore, our Directors and our PRC Legal Adviser are
of the view that these banking facilities are highly certain. The expiration dates for these credit
facilities, indicating the end of the periods specified in the relevant agreements during which
FINANCIAL INFORMATION
– 497 –


--- page 508 ---
we can apply to utilize the credit facilities and withdraw funds, range from December 2024 to
August 2025. The specific borrowing periods will be detailed in separate loan agreements
established under these credit facilities, which will be one year or more from the date of fund
withdrawal. Typically, upon expiration, we will seek to renew these credit facilities. Given our
strong relationship with the banks and our historical track record of contract compliance with
no defaults and successful renewals, Directors are of the view that the likelihood of continued
cooperation with these banks is high.
Save as disclosed in this “Financial Information” section, we did not have any bank and
other loan, or any loan capital issued and outstanding or agreed to be issued, bank overdraft,
borrowing or similar indebtedness, liabilities under acceptance (other than normal trade bills)
or acceptance credits, debentures, mortgages, charges, hire purchases or finance lease
commitments, guarantees or other material contingent liabilities as of September 30, 2024 for
our indebtedness statement. Our Directors confirm that there has not been any material change
in our indebtedness since September 30, 2024 up to the date of this prospectus.
CAPITAL EXPENDITURES
Our capital expenditures primarily consist of expenditures for purchase of property, plant
and equipment and software. In 2021, 2022, 2023 and the five months ended May 31, 2024,
we incurred capital expenditures of RMB166.6 million, RMB126.5 million, RMB144.1 million
and RMB24.2 million, respectively. The following table sets forth our capital expenditures for
the periods indicated:
Y ear Ended December 31, As of May 31,
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Payments of property, plant and
equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118154,765 122,003 142,120 23,703
Payments of software /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111811,810 4,497 1,932 564
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118166,575 126,500 144,052 24,267
FINANCIAL INFORMATION
– 498 –


--- page 509 ---
We expect to incur additional capital expenditures in 2024 primarily for acquisition of
property, plant and equipment. We expect to finance such capital expenditures through
operating cash flows. We may adjust our capital expenditures for any given period according
to our development plans or in light of market conditions and other factors we believe to be
appropriate.
CONTRACTUAL OBLIGATIONS
As of December 31, 2021, 2022 and 2023 and May 31, 2024, we had capital commitments
of RMB35.4 million, RMB63.4 million and RMB51.8 million and RMB37.8 million,
respectively, primarily in connection with the acquisition of property, plant and equipment. In
addition, as of December 31, 2021, 2022 and 2023 and May 31, 2024, we had commitments
of RMB103.2 million, RMB80.7 million and RMB99.1 million and RMB97.9 million,
respectively, in relation to our capital injection obligation to a joint venture, associates and
other unlisted investments.
Other than the transactions described above, as of the Latest Practicable Date, we had no
other material contractual commitments.
CONTINGENT LIABILITIES
Pursuant to agreements entered into between the Group and FAW Jiefang in December
2023 and February 2024, we have offered a guarantee that FAW Jiefang will receive
government subsidies of RMB206,360,000 and RMB180,880,000 before December 31, 2025
and December 31, 2024, respectively, for hydrogen fuel cell vehicles embedded with our
products. According to the subsidy policy, such subsidies can be applied and received once the
criteria are fulfilled. The guaranteed amount under these agreements equals to the relevant
subsidies FAW Jiefang is anticipated to receive. The revenue we generated from selling
relevant products to FAW Jiefang amounted to RMB346.3 million. As of May 31, 2024, the
corresponding outstanding trade receivables due from FAW Jiefang was RMB391.4 million.
The management of the Group considers that it is highly probable for FAW Jiefang to
receive such subsidies. In addition, for the amount that criteria has been fulfilled, the
application process has already been taken with the government, and for the remaining amount,
the management of the Group considers that it would be highly probable for FAW Jiefang to
fulfill the criteria in forthcoming periods. Accordingly, the guarantee provision is assessed to
be minimal as of December 31, 2023 and May 31, 2024.
Save as disclosed above, as of December 31, 2021, 2022 and 2023 and May 31, 2024, we
did not have any material contingent liabilities. We confirm that as of the Latest Practicable
Date, there had been no material changes or arrangements to our contingent liabilities.
OFF-BALANCE SHEET ARRANGEMENTS
As of the Latest Practicable Date, we had not entered into any off-balance sheet
transactions.
FINANCIAL INFORMATION
– 499 –


--- page 510 ---
KEY FINANCIAL RATIOS
The following table sets forth certain of our key financial ratios as of the dates or for the
periods indicated:
As of or for the Y ear Ended December 31,
As of or for the
Five Months
Ended May 31,
2021 2022 2023 2024
Gross profit margin (1) /H1118/H1118/H111811.8% 8.2% 20.1% (193.3)%
Current ratio (2) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181.1 3.1 2.1 1.5
Quick ratio (3) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11180.9 2.8 1.9 1.3
Gearing ratio (4) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182.1 0.5 0.7 0.9
Notes:
(1) Calculated by dividing gross profit by revenue for the period multiplied by 100%.
(2) Calculated by dividing total current assets by total current liabilities as of the end of the period.
(3) Calculated by dividing total current assets minus inventories by total current liabilities as of the end of
the period.
(4) Calculated by dividing total interest-bearing bank and other borrowings and lease liabilities divided by
total equity as of the end of the period multiplied by 100%.
Gross Profit Margin
For the analysis on the gross profit margin, see “— Results of Operations — Gross Profit
and Gross Profit Margin” in this section.
Current Ratio
Our current ratio increased from 1.1 as of December 31, 2021 to 3.1 as of December 31,
2022, primarily attributable to (i) an increase in trade and bills receivables due to our sales
growth and the prolonged settlement by certain of our customers, and (ii) an increase in cash
and cash equivalents as a result of capital injection from our Shareholders in 2022. Our current
ratio decreased to 2.1 as of December 31, 2023, and further to 1.5 as of May 31, 2024. The
continued decrease was mainly due to (i) a decrease in cash and cash equivalent and (ii) an
increase in interest-bearing bank and other borrowings to supplement our working capital
needs and finance our capital expenditures.
Quick Ratio
Similar to the reasons for the changes in our current ratio as disclosed above, our quick
ratio increased from 0.9 as of December 31, 2021 to 2.8 as of December 31, 2022, and then
decreased to 1.9 as of December 31, 2023, and further to 1.3 as of May 31, 2024.
FINANCIAL INFORMATION
– 500 –


--- page 511 ---
Gearing Ratio
Our gearing ratio decreased from 2.1 as of December 31, 2021 to 0.5 as of December 31,
2022 primarily due to capital injection from our Shareholders in 2022. Our gearing ratio
increase slightly to 0.7 as of December 31, 2023, and further decreased to 0.9 as of May 31,
2024, mainly caused by the increase in our interest-bearing bank and other borrowings.
RELATED PARTY TRANSACTIONS
We enter into transactions with our related parties from time to time. During the Track
Record Period, our related party transactions primarily included (i) sales of goods or services
to associates of RMB15.3 million in 2022 and RMB26.0 million in 2023, (ii) provision of
rental services to associates of RMB1.0 million, RMB0.9 million and RMB0.2 million in 2021,
2022 and 2023, respectively, (iii) purchase of goods or services from associates of RMB19.4
million, RMB11.1 million, RMB15.1 million and RMB0.1 million in 2021, 2022 and 2023 and
the five months ended May 31, 2024, respectively, (iv) purchase of property, plant and
equipment from an associate of RMB3.9 million in 2023, (v) purchase of goods and services
from our joint venture, Guohong Refire, amounting to RMB2.6 million, RMB0.3 million and
RMB10.6 million in 2021, 2022 and 2023, respectively, (vi) repayment of borrowings obtained
from entities controlled by an entity with significant influence over the Group, which amounted
to RMB29.5 million in 2021 and RMB123.8 million in 2022, and (vii) repayment for
borrowings granted to key management personnel amounting to RMB2.5 million in 2021 and
RMB0.1 million in 2022.
As of May 31, 2024, the outstanding balances of our transactions with related parties were
all trade related in nature, including trade receivables of RMB48.4 million, prepayments and
trade payables of RMB0.9 million. For details of the related party transactions, see note 41 to
the Accountants’ Report in Appendix I to this prospectus. Our Directors believe that the related
party transactions were carried out on an arm’s length basis and will not distort our results
during the Track Record Period or make such results not reflective of our future performance.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS
We are exposed to a variety of financial risks, including interest rate risk, foreign
exchange risk, credit risk and liquidity risk. Details of the risk to which we are exposed are set
out in note 44 of the Accountants’ Report in Appendix I to this prospectus.
DIVIDEND
No dividend has been paid or declared by our Company during the Track Record Period.
We currently do not have any specific dividend policy nor any pre-determined dividend payout
ratio. The declaration and payment of any dividends in the future will be determined by our
Board and subject to our Articles of Association and the PRC Company Law, and will depend
on a number of factors, including our financial performance and business operation, capital
requirements and contractual restrictions. No dividend shall be declared or payable except out
of our profits and reserves lawfully available for distribution. As confirmed by our PRC Legal
FINANCIAL INFORMATION
– 501 –


--- page 512 ---
Adviser, according to the PRC law, any future net profit that we make will have to be first
applied to make up for our historically accumulated losses, after which we will be obliged to
allocate at least 10% of our net profit to our statutory common reserve fund until the
cumulative amount of the reserve fund has reached more than 50% of our registered capital.
We will therefore only be able to declare dividends after (i) all our historically accumulated
losses from prior fiscal years have been made up for; and (ii) we have allocated sufficient net
profit to our statutory common reserve fund as described above. Based on the above, and
considering that we incurred accumulated losses as of May 31, 2024, we are not able to pay
any dividend before we have made up for such accumulated losses.
DISTRIBUTABLE RESERVES
As of May 31, 2024, we did not have any distributable reserves.
LISTING EXPENSES
Based on the mid-point of our indicative price range and assuming the Over-allotment
Option is not exercised, the listing expenses to be borne by us are estimated to be
approximately RMB76.1 million and are expected to represent approximately 11.0% of the
gross proceeds of the Global Offering, comprising of (i) underwriting-related expenses,
including underwriting commission and other expenses, of RMB31.1 million; and (ii)
non-underwriting-related expenses of RMB45.0 million, including (a) fees and expenses of
legal advisers and reporting accountant of RMB26.0 million; and (b) other fees and expenses
of RMB19.0 million.
During the Track Record Period, we incurred listing expenses of RMB33.0 million, of
which RMB28.1 million was charged to our consolidated income statements for the year ended
December 31, 2023, while the listing expenses directly attributable to the issue of shares of
RMB4.9 million was recognized in the consolidated statement of financial position as of
December 31, 2023 and is expected to be accounted for as a deduction in equity upon
completion of the Global Offering. We expect to incur additional listing expenses of RMB43.1
million (assuming the Over-allotment Option is not exercised and based on the mid-point of
our indicative Offer Price range) will be incurred by us, approximately RMB12.1 million of
which is expected to be charged to our consolidated statements of profit or loss, and
approximately RMB31.0 million of which is expected to be recognized as a deduction from
equity upon the Listing. The listing expenses above are the latest practicable estimate for
reference only, and the actual amount may differ from this estimate.
UNAUDITED PRO FORMA STATEMENT OF ADJUSTED NET TANGIBLE ASSETS
The following unaudited pro forma adjusted consolidated net tangible assets attributable
to the owners of the Company has been prepared in accordance with Rule 4.29 of the Listing
Rules to illustrate the effect of the Global Offering on our consolidated net tangible assets
attributable to owners of the Company as of May 31, 2024 as if the Global Offering had taken
place on May 31, 2024.
FINANCIAL INFORMATION
– 502 –


--- page 513 ---
The unaudited pro forma statement of adjusted consolidated net tangible assets
attributable to owners of the Company has been prepared for illustrative purposes only and
because of its hypothetical nature, it may not give a true picture of the financial position of the
Group as of May 31, 2024 or any future dates following the Global Offering.
Consolidated net
tangible assets
attributable to
owners of the
Company as of
May 31, 2024 (1)
Estimated net
proceeds from
the Global
Offering (2)
Unaudited
pro forma
adjusted
consolidated
net tangible
assets (3)
Unaudited pro forma
adjusted net tangible assets
attributable to owners of
the Company per Share (4)
RMB’000 RMB’000 RMB’000 RMB HK$
Based on an Offer Price
Of HK$145.00 per Share /H1118/H1118/H1118 1,517,897 600,634 2,118,531 24.59 26.62
Based on an Offer Price
Of HK$155.00 per Share /H1118/H1118/H1118 1,517,897 643,219 2,161,116 25.09 27.16
Based on an Offer Price
Of HK$165.00 per Share /H1118/H1118/H1118 1,517,897 685,805 2,203,702 25.58 27.69
Notes:
(1) The consolidated net tangible assets attributable to owners of the Company as of May 31, 2024 is extracted
from Accountants’ Report to this prospectus, which is based on the unaudited consolidated total equity of the
Company as of May 31, 2024 of approximately RMB1,461.19 million. The amount of unaudited consolidated
net tangible assets attributable to the owners of the Company as of May 31, 2024 excludes other intangible
assets of RMB23.45 million and non-controlling interests of RMB(80.16) million.
(2) The estimated net proceeds from the Global Offering are based on the Offer Price of HK$145.00 per Share or
HK$155.00 per Share or HK$165.00 per Share, after deduction of the underwriting fees and other related
expenses payable by the Company (excluding the listing expense that have been charged to profit or loss during
the Track Record Period) and does not take into account of any Shares which may be issued upon the exercise
of the Over-allotment Option. The estimated net proceeds from the Global Offering are converted from Hong
Kong dollars into Renminbi at an exchange rate of HK$1.0 to RMB0.92371.
(3) The unaudited pro forma adjusted consolidated net tangible assets per Share is calculated based on total
86,139,291 Shares in issue after the completion of the Global Offering, representing the aggregate of the H
Shares to be converted from Domestic Shares, the Domestic Shares in issue, and the 4,827,920 H Shares to
be issued pursuant to the Global Offering, and does not take into account of any Shares which may be issued
upon the exercise of the Over-allotment Option.
(4) For the purpose of this unaudited pro forma statement of adjusted consolidated net tangible assets, the balances
stated in Renminbi are converted into Hong Kong dollars at an exchange rate of HK$1 to RMB0.92371. No
representation is made that the Hong Kong dollar amounts have been, could have been or may be converted
to Renminbi, or vice versa, at that rate or any other rates or at all.
(5) No adjustment has been made to reflect any trading result or other transactions of the Group entered into
subsequent to May 31, 2024.
FINANCIAL INFORMATION
– 503 –


--- page 514 ---
NO MATERIAL ADVERSE CHANGE
Our Directors confirm that up to the date of this prospectus, there had been no material
adverse change in our financial, operational or prospects since May 31, 2024, being the date
of our latest reviewed financial statements, and there is no event since May 31, 2024 that would
materially affect the information as set out in the Accountants’ Report set out in Appendix I to
this prospectus.
DISCLOSURE UNDER RULES 13.13 TO 13.19 OF THE LISTING RULES
Our Directors have confirmed 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
– 504 –


--- page 515 ---
FUTURE PLANS AND PROSPECTS
See “Business — Our Strategies” in this prospectus for a detailed description of our future
plans.
USE OF PROCEEDS
We estimate that we will receive net proceeds from the Global Offering of approximately
HK$665.9 million, after deducting underwriting commissions, fees and estimated expenses
payable by us in connection with the Global Offering, and assuming an Offer Price of
HK$155.00 per Share, which is the mid-point of the indicative Offer Price range stated in this
prospectus. If the Offer Price is set at HK$165.00 per Share, which is the high end of the
indicative Offer Price range, the net proceeds from the Global Offering will increase by
approximately HK$46.2 million. If the Offer Price is set at HK$145.00 per Share, which is the
low end of the indicative Offer Price range, the net proceeds from the Global Offering will
decrease by approximately HK$46.3 million.
Assuming an Offer Price at the mid-point of the indicative Offer Price range, we currently
intend to apply these net proceeds for the following purposes:
(1) 74.5%, or approximately HK$495.9 million, will be allocated to fund our R&D
activities and production capacity expansion of our hydrogen fuel cell systems.
Specifically,
(a) 4.9%, or approximately HK$32.7 million, will be allocated to fund the R&D
activities (including but not limited to costs in relation to equipment upgrading
and acquirement, raw material procurement, product development and testing
and staff) for power-efficient and cost-effective hydrogen fuel cell systems and
related key components. Specifically,
(i) 2.9%, or approximately HK$19.1 million, will be used to develop the
next-generation fuel cell stacks with reduced cost and extended lifespan,
which we believe could help us to stay at the forefront among industry
peers;
(ii) 0.2%, or approximately HK$1.0 million, will be used to develop the
next-generation high power fuel cell systems that focus on higher power
output, lower cost, lower hydrogen consumption and stronger
environmental adaptability to meet the demand in commercial vehicle
market. We believe our next-generation high power fuel cell systems with
above features could help us maintain our technological advantages; and
(iii) 1.9%, or approximately HK$12.6 million, will be used to develop
high-efficiency stationary power generation fuel cell stacks, focusing on
the advancement of core technology of PEM stationary power generation
fuel cell stacks and related key components, which we believe will drive
the improvements in the performance, efficiency, and reliability of our
stationary power generation fuel cell stacks;
FUTURE PLANS AND USE OF PROCEEDS
– 505 –


--- page 516 ---
The following table sets forth our proposed allocation of net proceeds and the
corresponding allocation basis for our R&D activities for power-efficient and cost-effective
hydrogen fuel cell systems and related key components:
Allocation basis Net proceeds to be used
(in HK$ million)
The next-
generation fuel
cell stacks
with reduced
cost and
extended
lifespan
The next-
generation
high power
fuel cell
systems
High-efficiency
stationary
power
generation fuel
cell stacks
Equipment upgrading,
acquirement and
installation /H1118/H1118/H1118/H1118/H1118/H1118
The allocation is based on the types and
amount of equipment needs for the
related R&D activities
17.8 0.4 11.3
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118The allocation is based on our estimated
miscellaneous costs for the related
R&D activities
1.3 0.6 1.3
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118 19.1 1.0 12.6
(b) 69.6%, or approximately HK$463.2 million, will be allocated to expand our
production capacity of components for hydrogen fuel cell systems.
Specifically,
(i) 48.1%, or approximately HK$320.4 million, will be used to pay the
expenses for the construction of production facilities for fuel cell stacks
and MEAs, with a designed annual production capacity of approximately
20,000 units of fuel cell stacks and six million pieces of MEAs,
respectively; and
(ii) 21.4%, or approximately HK$142.8 million, will be used to pay the
expenses for the construction of production facilities for bipolar plates.
We intend to purchase and install equipment and machinery for
manufacturing and testing of bipolar plates with a designed annual
production capacity of approximately three million pieces of bipolar
plates.
(2) 15.3%, or approximately HK$101.9 million, will be allocated to fund our production
capacity expansion of our hydrogen production systems. Specifically,
(a) 7.2%, or approximately HK$47.7 million, will be used to fund the production
expansion of PEM water electrolysis hydrogen production systems. We intend
to optimize our production facilities and equipment to enhance the production
capability of our self-developed PEM water electrolysis hydrogen production
systems with reliable performance, in order to meet the market needs;
FUTURE PLANS AND USE OF PROCEEDS
– 506 –


--- page 517 ---
(b) 4.9%, or approximately HK$32.5 million, will be used to fund the production
expansion of ALK electrode. We expect to upgrade our production facilities
and equipment to enhance the production capability of ALK electrode; and
(c) 3.3%, or approximately HK$21.7 million, will be used to fund the development
of hydrogen production power sources. We expect to optimize our production
facilities and acquire equipment to enhance the production capability of
hydrogen production power sources.
(3) 7.7%, or approximately HK$51.3 million, will be used for the expansion of our
overseas market footprint. We currently intend to expand our presence in Europe,
Americas, and other regions. We believe our expected expansion in overseas market
is commensurate with our past business strategies. Our previous investment
arrangements, such as establishing a R&D base in Vancouver, Canada and setting up
an office in Stuttgart, Germany have indicated our investment layout in the overseas
markets. These efforts are aimed at paving the way for our future development in
overseas market. Specifically,
(a) 5.8%, or approximately HK$38.9 million, will be used to support the provision
of after-sales services for our overseas market. We intend to establish
after-sales service offices to offer services for the target market and form
after-sales service teams consisting of seasoned technicians who are familiar
with the local market and language; and
(b) 1.9%, or approximately HK$12.4 million, will be used for team building to
support our overseas market expansion. We expect to recruit around 30
personnel over a period of five years with various functions to ensure the
ordered expansion, including selling and marketing, product solution design
and etc.
(4) 2.5%, or approximately HK$16.9 million, will be used for our working capital and
general corporate purposes.
FUTURE PLANS AND USE OF PROCEEDS
– 507 –


--- page 518 ---
The table below sets forth the expected implementation timetable of our planned use of
our proceeds:
Y ear Ending December 31,
2024 2025 2026 2027 2028 Total
(HK$ in million)
R&D activities and
production capacity
expansion of our hydrogen
fuel cell systems /H1118/H1118/H1118/H1118/H1118/H1118/H1118– 149.7 92.8 149.7 103.6 495.9
R&D activities power-efficient
and cost-effective hydrogen
fuel cell systems and
related key components /H1118/H1118/H1118 – 32.7 – – – 32.7
– next-generation fuel cell
stacks with reduced cost
and extended lifespan /H1118/H1118/H1118/H1118– 19.1 – – – 19.1
– next-generation high power
fuel cell systems /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 1 . 0––– 1 . 0
– high-efficiency stationary
power generation fuel cell
stacks /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 12.6 – – – 12.6
Expansion of our production
capacity of components for
hydrogen fuel cell systems /H1118 – 117.1 92.8 149.7 103.6 463.2
– construction of production
facilities for fuel cell stacks
and MEAs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 80.6 65.0 110.3 64.6 320.4
– construction of production
facilities for bipolar plates /H1118 – 36.5 27.8 39.5 39.0 142.8
Production capacity
expansion of our hydrogen
production systems /H1118/H1118/H1118/H1118/H1118– 54.2 39.0 8.7 – 101.9
– production expansion of
PEM water electrolysis
hydrogen production
systems /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 25.0 22.7 – – 47.7
– production expansion of
ALK electrode /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 7.6 16.2 8.7 – 32.5
– development of hydrogen
production power sources /H1118/H1118 – 21.7 – – – 21.7
FUTURE PLANS AND USE OF PROCEEDS
– 508 –


--- page 519 ---
Y ear Ending December 31,
2024 2025 2026 2027 2028 Total
(HK$ in million)
Expansion of our overseas
market footprint /H1118/H1118/H1118/H1118/H1118/H1118/H11181.3 6.4 10.5 14.8 18.3 51.3
– provision of after-sales
services for overseas
market /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 3.9 7.8 11.7 15.6 38.9
– team building /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181.3 2.5 2.7 3.1 2.8 12.4
Working capital and general
corporate purposes /H1118/H1118/H1118/H1118/H1118– 4.2 4.2 4.2 4.2 16.9
Total by year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181.3 214.6 146.5 177.4 126.2 665.9
If the Over-allotment Option is exercised in full, the net proceeds that we will receive will
be approximately HK$773.2 million, assuming an Offer Price of HK$155.00 per Share (being
the mid-point of the indicative Offer Price range). We intend to apply the additional net
proceeds to the above purposes in the proportions stated above.
The above allocation of the net proceeds from the Global Offering will be adjusted in the
event that the Offer Price is fixed at a higher or lower level compared to the mid-point of the
indicative Offer Price range stated in this prospectus. If the Offer Price is fixed at HK$165.00
per Share, being the high end of the stated Offer Price range, our net proceeds will be (i)
increased by approximately HK$46.2 million, assuming the Over-allotment Option is not
exercised; or (ii) increased by approximately HK$53.0 million, assuming the Over-allotment
Option is exercised in full. In such circumstances, we currently intend to use such additional
proceeds to increase the net proceeds applied for the same purposes as set out above on a pro
rata basis. If the Offer Price is fixed at HK$145.00 per Share being the low end of the stated
Offer Price range, our net proceeds will be (i) decreased by approximately HK$46.3 million,
assuming the Over-allotment Option is not exercised; or (ii) decreased by approximately
HK$53.0 million, assuming the Over-allotment Option is exercised in full. In such
circumstances, we currently intend to reduce the net proceeds applied for the same purposes
as set out above on a pro rata basis.
To the extent that the net proceeds are not immediately applied to the above purposes, we
will only hold such funds in short-term interest-bearing accounts at licensed commercial banks
and/or other authorized financial institutions (as defined under the SFO or applicable laws and
regulations in other jurisdictions). We will issue an appropriate announcement if there is any
material change to the above proposed use of proceeds.
FUTURE PLANS AND USE OF PROCEEDS
– 509 –


--- page 520 ---
HONG KONG UNDERWRITERS
China International Capital Corporation Hong Kong Securities Limited
CMB International Capital Limited
BNP Paribas Securities (Asia) Limited
China Galaxy International Securities (Hong Kong) Co., Limited
ABCI Securities Company Limited
BOCI Asia Limited
China Merchants Securities (HK) Co., Limited
Livermore Holdings Limited
Soochow Securities International Brokerage Limited
Tiger Brokers (HK) Global Limited
UNDERWRITING
This prospectus is published solely in connection with the Hong Kong Public Offering.
The Hong Kong Public Offering is fully underwritten by the Hong Kong Underwriters on a
conditional basis. The International Offering is expected to be fully underwritten by the
International Underwriters. If, for any reason, the Offer Price is not agreed between the Joint
Overall Coordinators (for themselves and on behalf of the Underwriters) and our Company, the
Global Offering will not proceed and will lapse.
The Global Offering comprises the Hong Kong Public Offering of initially 482,800 Hong
Kong Offer Shares and the International Offering of initially 4,345,120 International Offer
Shares, subject, in each case, to reallocation on the basis as described in the section headed
“Structure of the Global Offering” as well as to the Over-allotment Option (in the case of the
International Offering).
UNDERWRITING ARRANGEMENTS AND EXPENSES
The Hong Kong Public Offering
Hong Kong Underwriting Agreement
Pursuant to the Hong Kong Underwriting Agreement, our Company is offering the Hong
Kong Offer Shares for subscription on the terms and conditions set out in this prospectus and
the Hong Kong Underwriting Agreement at the Offer Price.
Subject to (a) the Stock Exchange granting approval for the listing of, and permission to
deal in, the H Shares to be issued pursuant to the Global Offering (including the H Shares
which may be issued pursuant to the exercise of the Over-allotment Option and the H Shares
to be converted from Domestic Shares) as mentioned herein on the Main Board of the Stock
Exchange and such approval not subsequently having been revoked prior to the commencement
of trading of the H Shares on the Stock Exchange and (b) certain other conditions set out in
the Hong Kong Underwriting Agreement, the Hong Kong Underwriters have agreed severally
UNDERWRITING
– 510 –


--- page 521 ---
but not jointly to procure subscribers for, or themselves to subscribe for, their respective
applicable proportions of the Hong Kong Offer Shares being offered which are not taken up
under the Hong Kong Public Offering on the terms and conditions set out in this prospectus and
the Hong Kong Underwriting Agreement.
The Hong Kong Underwriting Agreement is conditional on, among other things, the
International Underwriting Agreement having been executed and becoming unconditional and
not having been terminated in accordance with its terms.
Grounds for Termination
If any of the events set out below occurs at any time prior to 8:00 a.m. on the Listing Date,
the Sole Sponsor in its absolute discretion may, by giving notice to our Company, terminate the
Hong Kong Underwriting Agreement with immediate effect:
(a) there develops, occurs, exists or comes into force:
(i) any event or circumstance, or series of events or circumstances (whether or not
in continuation), in the nature of force majeure (including, without limitation,
any acts of government, declaration of a national, regional or international
emergency or war, calamity, crisis, epidemic, pandemic, outbreaks, escalation,
mutation or aggravation of diseases (including, without limitation, COVID-19,
Severe Acute Respiratory Syndrome (SARS), swine or avian flu, H5N1, H1N1,
H7N9, Ebola virus, Middle East respiratory syndrome), economic sanctions,
strikes, labour disputes, lock-outs, other industrial actions, fire, explosion,
flooding, earthquake, tsunami, volcanic eruption, civil commotion, riots,
rebellion, public disorder, acts of war, outbreak or escalation of hostilities
(whether or not war or state of emergency is declared), acts of God or acts of
terrorism (whether or not responsibility has been claimed), paralysis in
government operations, severe interruptions or delay in transportation) in or
affecting Hong Kong, the PRC, the United States, the United Kingdom, Japan,
Canada, Singapore or the European Union (any member thereof) or any other
jurisdiction relevant to our Group (each a “ Relevant Jurisdiction ” and
collectively, the “ Relevant Jurisdictions ”);
(ii) any change or development involving a prospective change, or any event or
circumstance or series of events or circumstances resulting or likely to result
in or representing 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 matters
or conditions, equity securities or exchange control or any monetary or trading
settlement system or other financial markets (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 of the
Relevant Jurisdictions;
UNDERWRITING
–5 1 1–


--- page 522 ---
(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 New
York Stock Exchange, the NASDAQ Global Market, the London Stock
Exchange, the Shanghai Stock Exchange, the Shenzhen Stock Exchange or the
Tokyo Stock Exchange;
(iv) any general moratorium on commercial banking activities in or affecting Hong
Kong (imposed by the Financial Secretary or the Hong Kong Monetary
Authority or other competent authority), New York (imposed at the U.S.
Federal or New York State level or by any other competent authority), London,
the PRC, the European Union (or any member thereof) or any of the other
Relevant Jurisdictions (declared by the relevant authorities) or any disruption
in commercial banking or foreign exchange trading or securities settlement or
clearance services, procedures or matters in or affecting any of the Relevant
Jurisdictions;
(v) any new law or regulation or any change or development involving a
prospective change in existing laws or regulations or any change or
development involving a prospective change in the interpretation or
application thereof by any court or any competent authority in or affecting any
of the Relevant Jurisdictions;
(vi) the withdrawal of trading privileges, in whatever form, directly or indirectly,
by, or for, any of the Relevant Jurisdictions or relevant to the business
operations of our Company or any member of our Group;
(vii) any change or development involving a prospective change or amendment in
or affecting taxation or foreign exchange control, currency exchange rates or
foreign investment regulations (including, without limitation, a material
devaluation of the Hong Kong dollar or RMB against any foreign currencies or
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 affecting an investment in the
Offer Shares;
(viii) other than with the prior written consent of the Sole Sponsor and the Joint
Overall Coordinators, the issue or requirement to issue by our Company of a
supplement or amendment to this prospectus, the final offering circular or
other documents in connection with the offer and sale of the Offer Shares
pursuant to the Companies (Winding Up and Miscellaneous Provisions)
Ordinance or the Listing Rules or upon any requirement or request of the Stock
Exchange, the CSRC and/or the SFC;
UNDERWRITING
– 512 –


--- page 523 ---
(ix) any valid demand by creditors for repayment of indebtedness or an order or
petition for the winding up or liquidation of any member of our Group or any
composition or arrangement made by any member of our Group with its
creditors or a scheme of arrangement entered into by any member of our Group
or any resolution for the winding-up of any member of our Group or the
appointment of a provisional liquidator, receiver or manager over all or part of
the assets or undertaking of any member of our Group or anything analogous
thereto occurring in respect of any member of our Group;
(x) any chief executive officer, chief financial officer, any Director, Supervisors or
any member of the senior management of our Company as named in this
prospectus is vacating his or her office;
(xi) any litigation, dispute, legal action or claim or regulatory or administrative
investigation or action being threatened, instigated or announced against any
member of our Group or any Director or senior management of our Company
as named in this prospectus or any member of the Single Largest Group of
Shareholders;
(xii) any contravention by any member of our Group or any Director or any member
of the senior management of our Company as named in this prospectus of any
applicable laws and regulations or the Listing Rules, the Companies
Ordinance, the Companies (Winding Up and Miscellaneous Provisions)
Ordinance and the PRC Company Law;
(xiii) any non-compliance of this prospectus or the CSRC filings (or any other
documents used in connection with the contemplated subscription and sale of
the Offer Shares) or any aspect of the Global Offering with applicable laws and
regulations (including, without limitation, the Listing Rules, the Companies
Ordinance, the Companies (Winding Up and Miscellaneous Provisions)
Ordinance and the CSRC Rules (as defined in the Hong Kong Underwriting
Agreement)); or
(xiv) any change or prospective change or development, or a materialisation of, any
of the risks set out in the section headed “Risk Factors” in this prospectus,
which, individually or in the aggregate, in the sole and absolute opinion of the Sole
Sponsor:
(i) has or will or may have a material adverse effect or any development involving
a prospective material adverse effect, on or affecting 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, taken as a whole;
UNDERWRITING
– 513 –


--- page 524 ---
(ii) has or will have or may have a material adverse effect on the success or
marketability of the Global Offering or the level of applications or the
distribution of the Offer Shares under the Hong Kong Public Offering or the
level of interest under the International Offering;
(iii) makes or will make or is likely to make it inadvisable, inexpedient,
impracticable or incapable for the Hong Kong Public Offering and/or the
International 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 Offer-Related Documents (as defined below); or
(iv) has or will or may have the effect of making any material part of the Hong
Kong Underwriting Agreement (including underwriting) incapable of
performance in accordance with its terms or preventing the processing of
applications and/or payments pursuant to the Global Offering or pursuant to
the underwriting thereof; or
(b) there has come to the notice of the Sole Sponsor that:
(i) any statement contained in any of the Hong Kong Public Offering Documents
(as defined in the Hong Kong Underwriting Agreement), and/or any notices,
announcements, advertisements, communications or other documents
(including any announcement, circular, document or other communication
pursuant to the Hong Kong Underwriting Agreement) issued or used by or on
behalf of our Company in connection with the Hong Kong Public Offering
(including any supplement or amendment thereto (the “ Offer-Related
Documents ”) but excluding information relating to the Underwriters) was,
when it was issued, or has become, untrue, incorrect, inaccurate, incomplete in
any material respects or misleading or deceptive, or that any estimate, forecast,
expression of opinion, intention or expectation contained in any of such
documents is not fair and honest and based on reasonable grounds or
reasonable assumptions with reference to the facts and circumstances then
subsisting;
(ii) any matter has arisen or has been discovered which would, had it arisen or been
discovered immediately before the date of this prospectus, constitute a material
omission from, or misstatement in, any of the Offer-Related Documents;
(iii) there is a breach of, or any event or circumstance rendering untrue, incorrect,
incomplete or misleading in any respect, any of the warranties given by our
Company or any member of the Single Largest Group of Shareholders in the
Hong Kong Underwriting Agreement or the International Underwriting
Agreement, as applicable;
(iv) there is a breach of any of the obligations imposed upon our Company or any
member of the Single Largest Group of Shareholders under the Hong Kong
Underwriting Agreement or the International Underwriting Agreement, as
applicable;
UNDERWRITING
– 514 –


--- page 525 ---
(v) there is an event, act or omission which gives or is likely to give rise to any
liability of our Company or any member of the Single Largest Group of
Shareholders pursuant to the indemnities given by any of them under the Hong
Kong Underwriting Agreement;
(vi) there is any material adverse effect or any development involving a prospective
material adverse effect, on or affecting 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, taken as a whole;
(vii) the approval of the Stock Exchange of the listing of, and permission to deal in,
the H Shares in issue and to be issued pursuant to the Global Offering
(including pursuant to any exercise of the Over-allotment Option) is refused or
not granted, other than subject to customary conditions, on or before the
Listing Date, or if granted, the approval is subsequently withdrawn, cancelled,
qualified (other than by customary conditions), revoked or withheld;
(viii) any person named as an expert in this prospectus (other than the Sole Sponsor)
has withdrawn its consent to the issue of this prospectus with the inclusion of
its reports, letters and/or legal opinions (as the case may be) and references to
its name included in the form and context in which it respectively appears;
(ix) our Company withdraws this prospectus (and/or any other documents issued or
used in connection with the Global Offering) or the Global Offering;
(x) there is a prohibition on our Company for whatever reason from offering,
allotting, issuing or selling any of the Offer Shares (including pursuant to any
exercise of the Over-allotment Option) pursuant to the terms of the Global
Offering;
(xi) any Director, Supervisor or member of senior management of our Company as
named in this prospectus is being charged with an indictable offence or is
prohibited by operation of law or otherwise disqualified from taking part in the
management of a company; or
(xii) a material portion of the orders placed or confirmed in the bookbuilding
process, or of the investment commitment made by any cornerstone investor
under agreement signed with such cornerstone investor, have been withdrawn,
terminated or cancelled.
UNDERWRITING
– 515 –


--- page 526 ---
Undertaking to the Stock Exchange pursuant to the Listing Rules
Pursuant to 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 Listing Date (whether or not such issue of Shares or securities, or sale or
transfer of treasury shares will be completed within six months from the Listing Date), except
(a) pursuant to the Global Offering or the Over-allotment Option, (b) pursuant to the Pre-IPO
Share Option Scheme, or (c) under any of the circumstances provided under Rule 10.08 of the
Listing Rules.
Undertakings pursuant to the Hong Kong Underwriting Agreement
Undertaking by our Company
Pursuant to the Hong Kong Underwriting Agreement, the Company has undertaken to the
Joint Overall Coordinators, the Joint Global Coordinators, the Sole Sponsor, 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 the Company pursuant to the Global Offering
(including pursuant to any exercise of the Over-allotment Option) and the issue of any Shares
pursuant to the Pre-IPO Share Option Scheme), without the prior written consent of the Sole
Sponsor and unless in compliance with the requirements of 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 ”):
(i) offer, allot, issue, sell, accept subscription for, contract or agree to allot, issue or
sell, assign, mortgage, charge, pledge, hypothecate, lend, grant or sell any option,
warrant, right or contract to purchase, purchase any option or contract to sell, agree
to grant any option, right or warrant to purchase or subscribe for, or otherwise
transfer or dispose of, or agree to transfer or dispose of or create any Encumbrance
(as defined under the Hong Kong Underwriting Agreement) over, either directly or
indirectly, conditionally or unconditionally, any legal or beneficial interest in any H
Shares or other securities of our Company, or any interests in any of the foregoing
(including, but not limited to, any securities that are convertible into or exercisable
or exchangeable for, or that represent the right to receive, or any warrants or other
rights to purchase, any H Shares or other securities of our Company, or deposit any
H Shares or other securities of our Company, as applicable, with a depository in
connection with the issue of depository receipts); or
(ii) enter into any swap or other arrangement that transfers to another, in whole or in
part, any of the economic consequences of ownership (legal or beneficial) of any H
Shares or other securities of our Company, or any interest in any of the foregoing
UNDERWRITING
– 516 –


--- page 527 ---
(including, without limitation, any securities that are convertible into or
exchangeable or exercisable for, or that represent the right to receive, or any
warrants or other rights to purchase, any H Shares or other securities of the
Company); or
(iii) enter into or effect any transaction with the same economic effect as any transaction
described in (i) and (ii) above; or
(iv) offer to or contract to or agree to announce, or publicly disclose that the Company
will or may enter into any such transaction described in (i), (ii) and (iii) above,
in each case, whether any such transaction described in (i), (ii) and (iii) above is to be settled
by delivery of the H Shares or other securities of our Company, in cash or otherwise (whether
or not the issue of such Shares or other securities of our Company will be completed within
the First Six-Month Period).
In the event that, during the period of six months immediately following the First
Six-Month Period (the “ Second Six-Month Period ”), the Company enters into any of the
transactions specified in (i), (ii) and (iii) above or offers or agrees or contracts to, or
announces, or publicly discloses, any intention to, enter into any such transactions, our
Company shall take all reasonable steps to ensure that it will not create a disorderly or false
market in the H Shares or other securities of our Company. Each member of the Single Largest
Group of Shareholders undertakes to each of the Sole Sponsor, the Joint Overall Coordinators,
the Joint Global Coordinators, the Joint Bookrunners, the Joint Lead Managers, the Capital
Market Intermediaries and the Hong Kong Underwriters to procure that our Company will
comply with such undertakings.
Undertaking by our Single Largest Group of Shareholders
Each member of the Single Largest Group of Shareholders hereby irrevocably undertakes
to each of our Company, the Joint Overall Coordinators, the Joint Global Coordinators, the
Sole Sponsor, the Capital Market Intermediaries and the Hong Kong Underwriters that, without
the prior written consent of the Sole Sponsor and unless in compliance with the requirements
of the Listing Rules:
(a) during the First Six-Month Period, he/it will not, and he/it will procure that the
relevant registered holder(s) will not: (i) offer, pledge, charge, 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, grant or agree to grant any option, right or warrant to
purchase or subscribe for, lend or otherwise transfer or dispose of or create an
encumbrance over, either directly or indirectly, conditionally or unconditionally, any
H Shares or other securities of our Company or any interest in any of the foregoing
(including, but not limited to, any securities that are convertible into or
exchangeable or exercisable for, or that represent the right to receive, or any
UNDERWRITING
– 517 –


--- page 528 ---
warrants or other rights to purchase, any H Shares or other securities of our
Company) beneficially owned by him/it as at the Listing Date (the “ Locked-up
Securities ”); 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 (iii) enter into any transaction with the same economic
effect as any transaction described in (i) or (ii) above; or (iv) offer to or contract to
or agree to or publicly disclose that the Single Largest Group of Shareholders will
or may enter into any transaction described in (i), (ii) or (iii) above,
in each case, whether any such transaction described in (i), (ii) or (iii) above is to
be settled by delivery of such H Shares or other securities of our Company, in cash
or otherwise (whether or not the settlement or delivery of such H Shares or other
securities will be completed within the First Six-Month Period);
(b) during the First Six-Month Period and the Second Six-Month Period, each member
of the Single Largest Group of Shareholders will: (i) if and when he/it or the relevant
registered holder(s) pledges or charges any Locked-up Securities pursuant to
paragraph (a) above, immediately inform our Company and the Sole Sponsor in
writing of such pledge or charge together with the number of Locked-up Securities
so pledged or charged; and (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 and the Sole Sponsor in writing of such indications.
Our Company has undertaken to each of the Sole Sponsor, the Joint Overall Coordinators,
the Hong Kong Underwriters and the Capital Market Intermediaries that upon receiving such
information in writing from the Single Largest Group of 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.
Hong Kong Underwriters’ Interests in our Company
Save for their respective obligations under the Hong Kong Underwriting Agreement, as
of the Latest Practicable Date, none of the Hong Kong Underwriters was interested, legally or
beneficially, directly or indirectly, in any H Shares or any securities of our Company or had any
right or option (whether legally enforceable or not) to subscribe for or purchase, or to nominate
persons to subscribe for or purchase, any H Shares or any securities of our Company.
UNDERWRITING
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Following the completion of the Global Offering, the Hong Kong Underwriters and their
affiliated companies may hold a certain portion of the H Shares as a result of fulfilling their
respective obligations under the Underwriting Agreements.
The International Offering
International Underwriting Agreement
In connection with the International Offering, our Company and each member of our
Single Largest Group of Shareholders expect to enter into the International Underwriting
Agreement with the Joint Overall Coordinators and the International Underwriters on or around
the Price Determination Date. Under the International Underwriting Agreement and subject to
the Over-allotment Option, the International Underwriters would, subject to certain conditions
set out therein, agree severally but not jointly to procure subscribers for, or themselves to
subscribe for, their respective applicable proportions of the International Offer Shares initially
being offered pursuant to the International Offering. It is expected that the International
Underwriting Agreement may be terminated on similar grounds to the Hong Kong
Underwriting Agreement. Potential investors should note that in the event that the International
Underwriting Agreement is not entered into or terminated, the Global Offering will not
proceed. See “Structure of the Global Offering — The International Offering” in this
prospectus.
Over-allotment Option
Our Company is expected to grant the Over-allotment Option to the International
Underwriters, exercisable by the Stabilizing Manager (for itself and on behalf of the
International Underwriters) at any time from the date of the International Underwriting
Agreement until 30 days after the last day for lodging applications under the Hong Kong Public
Offering, pursuant to which our Company may be required to issue up to an aggregate of
724,180 H Shares, representing not more than 15% of the number of the Offer Shares initially
available under the Global Offering, at the Offer Price, to cover over-allocations in the
International Offering, if any. See “Structure of the Global Offering — Over-allotment Option”
for further details.
Commissions and Expenses
The Underwriters and the Capital Market Intermediaries will receive an underwriting
commission of 3.00% of the aggregate Offer Price of all the Offer Shares (including any Offer
Shares to be issued pursuant to the exercise of the Over-allotment Option) (the “ Fixed Fee ”),
out of which they will pay any sub-underwriting commissions and other fees.
UNDERWRITING
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Our Company may, at our sole and absolute discretion, pay to one or more Underwriters
or the Capital Market Intermediaries an incentive fee of up to 1.5% of the aggregate Offer Price
of all the Offer Shares (including any Offer Shares to be issued pursuant to the exercise of the
Over-allotment Option) (the “ Discretionary Fee ”). The ratio of the Fixed Fee and the
Discretionary Fee payable to all Underwriters is therefore approximately 60:40.
For any unsubscribed Hong Kong Offer Shares reallocated to the International Offering,
the underwriting commission will not be paid to the Hong Kong Underwriters but will instead
be paid, at the rate applicable to the International Offering, to the relevant International
Underwriters.
The aggregate underwriting commissions payable by our Company to the Underwriters in
relation to the Global Offering (assuming an Offer Price of HK$155.00 per Offer Share (which
is the mid-point of the Offer Price range), the full payment of the discretionary incentive fee
and the full exercise of the Over-allotment Option) will be approximately HK$38.73 million.
The aggregate underwriting commissions and incentive fees together with the Stock
Exchange listing fees, the AFRC transaction levy, the SFC transaction levy and the Stock
Exchange trading fee, legal and other professional fees and printing and all other expenses
relating to the Global Offering are estimated to be approximately HK$87.36 million (assuming
an Offer Price of HK$155.00 per Offer Share (which is the mid-point of the Offer Price range),
the full payment of the discretionary incentive fee and the full exercise of the Over-allotment
Option) and will be paid by our Company.
Sole Sponsor’s Fee
An amount of US$1,000,000 is payable by our Company as sponsor fee to the Sole
Sponsor.
Indemnity
Our Single Largest Group of Shareholders has agreed to indemnify the Hong Kong
Underwriters for certain losses which they may suffer or incur, including losses arising from
their performance of their obligations under the Hong Kong Underwriting Agreement and any
breach by any of our Company and our Single Largest Group of Shareholders of the Hong
Kong Underwriting Agreement.
ACTIVITIES BY SYNDICATE MEMBERS
The underwriters of the Hong Kong Public Offering and the International Offering
(together, the “ Syndicate Members ”) and their affiliates may each individually undertake a
variety of activities (as further described below) which do not form part of the underwriting or
stabilizing process.
UNDERWRITING
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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, loan financing, 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, co-investments and/or instruments
of or with 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 Company’s loans and other debt.
In relation to the H Shares, the activities of the Syndicate Members and their affiliates
could include acting as agent for buyers and sellers of the H Shares, entering into transactions
with those buyers and sellers in a principal capacity, including as a lender to initial purchasers
of the H Shares (which financing may be secured by the H Shares) in the Global Offering,
proprietary trading in the H Shares, and entering into over the counter or listed derivative
transactions or listed or unlisted securities transactions (including issuing securities such as
derivative warrants listed on a stock exchange) which have as their underlying assets, assets
including the H Shares. Such transactions may be carried out as bilateral agreements or trades
with selected counterparties. Those activities may require hedging activity by those entities
involving, directly or indirectly, the buying and selling of the H Shares, which may have a
negative impact on the trading price of the H Shares. All such activities could occur in Hong
Kong and elsewhere in the world and may result in the Syndicate Members and their affiliates
holding long and/or short positions in the H Shares, in baskets of securities or indices including
the H Shares, in units of funds that may purchase the H Shares, or in derivatives related to any
of the foregoing.
In relation to issues by Syndicate Members or their affiliates of any listed securities
having the H Shares as their underlying securities, whether on the Stock Exchange or on any
other stock exchange, the rules of the stock exchange may require the issuer of those securities
(or one of its affiliates or agents) to act as a market maker or liquidity provider in the security,
and this will also result in hedging activity in the H Shares in most cases.
All such activities may occur both during and after the end of the stabilizing period
described in the section headed “Structure of the Global Offering”. Such activities may affect
the market price or value of the H Shares, the liquidity or trading volume in the H Shares and
the volatility of the price of the H Shares, and the extent to which this occurs from day to day
cannot be estimated.
UNDERWRITING
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It should be noted that when engaging in any of these activities, the Syndicate Members
will be subject to certain restrictions, including the following:
(a) the Syndicate Members (other than the Stabilizing Manager or its affiliates or any
person acting for it) must not, in connection with the distribution of the Offer
Shares, effect any transactions (including issuing or entering into any option or other
derivative transactions relating to the Offer Shares), whether in the open market or
otherwise, with a view to stabilizing or maintaining the market price of any of the
Offer Shares at levels other than those which might otherwise prevail in the open
market; and
(b) the Syndicate Members must comply with all applicable laws and regulations,
including the market misconduct provisions of the SFO, including the provisions
prohibiting insider dealing, false trading, price rigging and stock market
manipulation.
Certain of the Syndicate Members or their respective affiliates have provided from time
to time, and expect to provide in the future, investment banking, loan financing and other
services to our Company and each of its affiliates for which such Syndicate Members or their
respective affiliates have received or will receive customary fees and commissions.
In addition, the Syndicate Members or their respective affiliates may provide financing to
investors to finance their subscriptions of Offer Shares in the Global Offering.
SOLE SPONSOR’S INDEPENDENCE
The Sole Sponsor satisfies the independence criteria set out in Rule 3A.07 of the Listing
Rules.
UNDERWRITING
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THE GLOBAL OFFERING
This prospectus is published in connection with the Hong Kong Public Offering as part
of the Global Offering. China International Capital Corporation Hong Kong Securities Limited
is the Sole Sponsor and the Joint Overall Coordinator of the Global Offering.
The Listing of the H Shares on the Stock Exchange is sponsored by the Sole Sponsor. The
Sole Sponsor has made an application on behalf of our Company to the Stock Exchange for the
listing of, and permission to deal in, the H Shares to be issued as mentioned in this prospectus.
4,827,920 Offer Shares (subject to reallocation and the Over-allotment Option) will
initially be made available under the Global Offering comprising:
(a) the Hong Kong Public Offering of initially 482,800 H Shares (subject to
reallocation) in Hong Kong as described in “— The Hong Kong Public Offering” in
this section below; and
(b) the International Offering of initially 4,345,120 H Shares (subject to reallocation
and the Over-allotment Option) outside the United States (including to professional
and institutional investors within Hong Kong) in offshore transactions in 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 5.60% of the enlarged issue share capital
of our Company immediately after completion of the Global Offering, assuming the
Over-allotment Option is not exercised. If the Over-allotment Option is exercised in full, the
Offer Shares will represent approximately 6.39% of the enlarged issued share capital of our
Company immediately following the completion of the Global Offering and the issue of Offer
Shares pursuant to the Over-Allotment Option.
References in this prospectus to applications, application monies or the procedure for
applications relate solely to the Hong Kong Public Offering.
STRUCTURE OF THE GLOBAL OFFERING
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THE HONG KONG PUBLIC OFFERING
Number of Offer Shares Initially Offered
Subject to reallocation as mentioned below, our Company is initially offering 482,800
H Shares (subject to reallocation) for subscription by the public in Hong Kong at the Offer
Price, representing approximately 10.00% of the total number of Offer Shares initially
available under the Global Offering. Subject to reallocation as mentioned below, the number
of Offer Shares initially offered under the Hong Kong Public Offering, subject to any
reallocation of Offer Shares between the International Offering and the Hong Kong Public
Offering, will represent approximately 0.56% of the enlarged issued share capital of our
Company immediately following the completion of the Global Offering (assuming the
Over-allotment Option is not exercised).
The Hong Kong Public Offering is open to members of the public in Hong Kong as well
as to institutional and professional investors. 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
“— Conditions of the Global Offering” in this section below.
Allocation
Allocation of Offer Shares to investors under the Hong Kong Public Offering will be
based solely on the level of valid applications received under the Hong Kong Public Offering.
The basis of allocation may vary, depending on the number of Hong Kong Offer Shares validly
applied for by applicants. Such allocation could, where appropriate, consist of balloting, which
could mean that some applicants may receive a higher allocation than others who have applied
for the same number of Hong Kong Offer Shares, and those applicants who are not successful
in the ballot may not receive any Hong Kong Offer 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 into two pools: pool A and pool B (with any odd lot being allocated to pool A).
Pool A will initially comprise 241,400 Hong Kong Offer Shares and pool B will initially
comprise 241,400 Hong Kong Offer Shares, both of which are available on a fair basis to
successful applicants. 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 price of
HK$5 million (excluding the brokerage, the AFRC transaction levy, the SFC 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 price of more than HK$5 million (excluding the brokerage, the AFRC
transaction levy, the SFC transaction levy and the Stock Exchange trading fee payable) and up
to the total value in pool B.
STRUCTURE OF THE GLOBAL OFFERING
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--- page 535 ---
Investors should be aware that applications in pool A and applications in pool B may
receive different allocation ratios. If any Hong Kong Offer Shares in one (but not both) of the
pools are unsubscribed, such unsubscribed Hong Kong Offer Shares will be transferred to the
other pool to satisfy demand in that other pool and be allocated accordingly. For the purpose
of the immediately preceding paragraph only, the “price” for Hong Kong Offer Shares means
the price payable on application therefor (without regard to the Offer Price as finally
determined). Applicants can only receive an allocation of Hong Kong Offer Shares from either
pool A or pool B and not from both pools. Multiple or suspected multiple applications under
the Hong Kong Public Offering and any application for more than 241,400 Hong Kong Offer
Shares (being approximately 50% of the total number of Offer Shares initially available under
the Hong Kong Public Offering) is liable to be rejected.
Reallocation
The allocation of the Offer Shares between the Hong Kong Public Offering and the
International Offering is subject to reallocation. Paragraph 4.2 of Practice Note 18 of the
Listing Rules requires a clawback mechanism to be put in place which would have the effect
of increasing 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 if certain
prescribed total demand levels are reached.
If the International Offering is fully subscribed or oversubscribed and the number of Offer
Shares validly applied for under the Hong Kong Public Offering represents (a) 15 times or
more but less than 50 times, (b) 50 times or more but less than 100 times, and (c) 100 times
or more of the total number of Offer Shares initially available under the Hong Kong Public
Offering, then Offer Shares will be reallocated to the Hong Kong Public Offering from the
International Offering. As a result of such reallocation, the total number of Offer Shares
available under the Hong Kong Public Offering will be increased to 1,448,380 Offer Shares (in
the case of (a)), 1,931,180 Offer Shares (in the case of (b)), and 2,413,960 Offer Shares (in the
case of (c)), representing 30%, 40% and 50% of the total number of Offer Shares initially
available under the Global Offering, respectively (before any exercise of the Over-allotment
Option), reallocation being referred to in this prospectus as “Mandatory Reallocation”.
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 Joint Overall
Coordinators deem appropriate.
In addition to any mandatory reallocation required as described above, the Offer Shares
to be offered in the Hong Kong Public Offering and the Offer Shares to be offered in the
International Offering may, in certain circumstances, be reallocated between these offerings at
the discretion of the Joint Overall Coordinators. The Joint Overall Coordinators may, according
to the relevant Listing Rules and the Guide for New Listing Applicants, reallocate Offer Shares
initially allocated for the International Offering to the Hong Kong Public Offering to satisfy
valid applications under the Hong Kong Public Offering. In particular, if (i) the International
STRUCTURE OF THE GLOBAL OFFERING
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--- page 536 ---
Offering is not fully subscribed and the Hong Kong Public Offering is fully subscribed or
oversubscribed; or (ii) the International Offering is fully subscribed or oversubscribed and the
Hong Kong Public Offering is fully subscribed or oversubscribed with the number of Offer
Shares validly applied for in the Hong Kong Public Offering representing less than 15 times
of the number of Offer Shares initially available for subscription under the Hong Kong Public
Offering, the Joint Overall Coordinators have the authority to reallocate International Offer
Shares originally included in the International Offering to the Hong Kong Public Offering in
such number as it deems appropriate, provided that in accordance with paragraph 9 of Chapter
4.14 of the Guide for New Listing Applicants, (i) the number of International Offer Shares
reallocated to the Hong Kong Public Offering should not exceed 482,800 Offer Shares,
increasing the total number of Offer Shares available under the Hong Kong Public Offering to
965,600 Offer Shares, representing approximately 20% of the Offer Shares initially available
under the Global Offering; and (ii) the final Offer Price should be fixed at the bottom end of
the indicative Offer Price range (i.e. HK$145.00 per Offer Share) stated in this prospectus.
If the Hong Kong Public Offering is not fully subscribed for, the Joint Overall
Coordinators have the authority to reallocate all or any unsubscribed Hong Kong Offer Shares
to the International Offering, in such proportions as the Joint Overall Coordinators deem
appropriate.
Details of any reallocation of the Offer Shares between the Hong Kong Public Offering
and the International Offering will be disclosed in the results announcement which is expected
to be published on Thursday, December 5, 2024.
Applications
Each applicant under the Hong Kong Public Offering will be required to give an
undertaking and confirmation in the application submitted by him that he and any person(s) for
whose benefit he is making the application has not applied for or taken up, or indicated an
interest for, and will not apply for or taken up, or indicated an interest for, any International
Offer Shares under the International Offering. Such applicant’s application is liable to be
rejected if such undertaking and/or confirmation is/are breached and/or untrue (as the case may
be) or if he has been or will be placed or allocated International Offer Shares under the
International Offering.
Applicants under the Hong Kong Public Offering are required to pay, on application, the
maximum Offer Price of HK$165.00 per Offer Share in addition to the brokerage, the AFRC
transaction levy, the SFC transaction levy and the Stock Exchange trading fee payable on each
Offer Share, amounting to a total of HK$3,333.28 for one board lot of 20 Shares. If the Offer
Price, as finally determined in the manner described in the paragraph headed “— Pricing and
Allocation” in this section below, is less than the maximum Offer Price of HK$165.00 per
Offer Share, appropriate refund payments (including the brokerage, the AFRC transaction levy,
the SFC transaction levy and the Stock Exchange trading fee attributable to the surplus
application monies) will be made to successful applicants, without interest. See “How to Apply
for Hong Kong Offer Shares” for further details.
STRUCTURE OF THE GLOBAL OFFERING
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--- page 537 ---
THE INTERNATIONAL OFFERING
Number of International Offer Shares initially offered
The International Offering will consist of an offering of initially 4,345,120 H Shares
being offered by our Company and representing 90% of the total number of Offer Shares
initially available under the Global Offering (subject to reallocation and the Over-allotment
Option). The number of Offer Shares initially offered under the International Offering, subject
to any reallocation of Offer Shares between the International Offering and the Hong Kong
Public Offering, will represent approximately 5.04% of the total Shares in issue immediately
following the completion of the Global Offering (assuming the Over-allotment Option is not
exercised).
Allocation
The International Offering will include selective marketing of H Shares to institutional
and professional investors and other investors anticipated to have a sizeable demand for such
Offer Shares in Hong Kong and other jurisdictions outside the United States in reliance on
Regulation S. Professional investors generally include brokers, dealers, companies (including
fund managers) whose ordinary business involves dealing in shares and other securities and
corporate entities that regularly invest in shares and other securities. Allocation of Offer Shares
pursuant to the International Offering will be effected in accordance with the “book-building”
process described in the paragraph headed “— 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 H Shares and/or hold or sell its
H Shares after the Listing. Such allocation is intended to result in a distribution of the H Shares
on a basis which would lead to the establishment of a solid professional and institutional
shareholder base to the benefit of our Company and the Shareholders as a whole.
The Joint 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 Joint Overall Coordinators so as to allow it to identify the relevant
applications under the Hong Kong Public Offering and to ensure that they are excluded from
any allocation of Offer Shares under the Hong Kong Public Offering.
Reallocation
The total number of Offer Shares to be issued pursuant to the International Offering may
change as a result of the clawback arrangement described in the paragraph headed “— The
Hong Kong Public Offering — Reallocation” in this section above, the exercise of the
Over-allotment Option in whole or in part and/or any reallocation of unsubscribed Offer Shares
originally included in the Hong Kong Public Offering.
STRUCTURE OF THE GLOBAL OFFERING
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--- page 538 ---
OVER-ALLOTMENT OPTION
In connection with the Global Offering, our Company is expected to grant the
Over-allotment Option to the International Underwriters, exercisable by the Stabilizing
Manager (for itself and on behalf of the International Underwriters).
Pursuant to the Over-allotment Option, the International Underwriters will have the right,
exercisable by the Stabilizing Manager (for itself and on behalf of the International
Underwriters) at any time from the date of the International Underwriting Agreement until 30
days after the last day for lodging applications under the Hong Kong Public Offering, to require
our Company to issue up to an aggregate of 724,180 H Shares, representing not more than 15%
of the total number of Offer Shares initially available under the Global Offering, at the Offer
Price under the International Offering to cover over-allocations in the International Offering,
if any.
If the Over-allotment Option is exercised in full, the additional Offer Shares to be issued
pursuant thereto will represent approximately 0.83% of the total Shares in issue immediately
following the completion of the Global Offering and the issue of Offer Shares pursuant to the
Over-allotment Option. If the Over-allotment Option is exercised, an announcement will be
made.
STABILIZATION
Stabilization is a practice used by underwriters in some markets to facilitate the
distribution of securities. To stabilize, the underwriters may bid for, or purchase, the securities
in the secondary market during a specified period of time, to retard and, if possible, prevent
a decline in the initial public market price of the securities below the offer price. Such
transactions may be effected in all jurisdictions where it is permissible to do so, in each case
in compliance with all applicable laws and regulatory requirements, including those of Hong
Kong. In Hong Kong, the price at which stabilization is effected is not permitted to exceed the
Offer Price.
In connection with the Global Offering, the Stabilizing Manager (or its affiliates or any
person acting for it), on behalf of the Underwriters, may over-allocate or effect transactions
with a view to stabilizing or supporting the market price of the H Shares at a level higher than
that which might otherwise prevail for a limited period after the Listing Date. However, there
is no obligation on the Stabilizing Manager (or its affiliates or any person acting for it) to
conduct any such stabilizing action. Such stabilizing action, if taken: (a) will be conducted at
the absolute discretion of the Stabilizing Manager (or its affiliates or any person acting for it)
and in what the Stabilizing Manager reasonably regards as the best interest of our Company;
(b) may be discontinued at any time; and (c) is required to be brought to an end within 30 days
of the last day for lodging applications under the Hong Kong Public Offering.
STRUCTURE OF THE GLOBAL OFFERING
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Stabilization action permitted in Hong Kong pursuant to the Securities and Futures (Price
Stabilizing) Rules of the SFO includes: (a) over-allocating for the purpose of preventing or
minimizing any reduction in the market price of the H Shares, (b) selling or agreeing to sell
the H Shares so as to establish a short position in them for the purpose of preventing or
minimizing any reduction in the market price of the H Shares, (c) purchasing, or agreeing to
purchase, the H Shares pursuant to the Over-allotment Option in order to close out any position
established under paragraph (a) or (b) above, (d) purchasing, or agreeing to purchase, any of
the H Shares for the sole purpose of preventing or minimizing any reduction in the market price
of the H Shares, (e) selling or agreeing to sell any H Shares in order to liquidate any position
established as a result of those purchases and (f) offering or attempting to do anything as
described in paragraph (b), (c), (d) or (e) above.
Specifically, prospective applicants for and investors in the Offer Shares should note that:
(a) the Stabilizing Manager (or its affiliates or any person acting for it) may, in
connection with the stabilizing action, maintain a long position in the H Shares;
(b) there is no certainty as to the extent to which and the time or period for which the
Stabilizing Manager (or its affiliates or any person acting for it) will maintain such
a long position;
(c) liquidation of any such long position by the Stabilizing Manager (or its affiliates or
any person acting for it) and selling in the open market may have an adverse impact
on the market price of the H Shares;
(d) no stabilizing action can be taken to support the price of the H Shares for longer than
the stabilization period, which will begin on the Listing Date, and is expected to
expire on the 30th day after the last day for lodging applications under the Hong
Kong Public Offering. After this date, when no further stabilizing action may be
taken, demand for the H Shares, and therefore the price of the H Shares, could fall;
(e) the price of the H Shares cannot be assured to stay at or above the Offer Price by
the taking of any stabilizing action; and
(f) stabilizing bids or transactions effected in the course of the stabilizing action may
be made at any price at or below the Offer Price and can, therefore, be done at a
price below the price paid by applicants for, or investors in, the Offer Shares.
In order to effect stabilization actions, the Stabilizing Manager will arrange cover of up
to an aggregate of 724,180 H Shares, representing up to 15% of the initial Offer Shares,
through delayed delivery arrangements with investors who have been allocated Offer Shares in
the International Offering. The delayed delivery arrangements (if specifically agreed by an
investor) relate only to the delay in the delivery of the Offer Shares to such investor and the
Offer Price for the Offer Shares allocated to such investor will be fully paid before the Listing
Date.
STRUCTURE OF THE GLOBAL OFFERING
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--- page 540 ---
Both the size of such cover and the extent to which the Over-allotment Option can be
exercised will depend on whether arrangements can be made with investors such that a
sufficient number of H Shares can be delivered on a delayed basis. If no investor in the
International Offering agrees to the delayed delivery arrangements, no stabilizing actions will
be undertaken by the Stabilizing Manager and the Over-allotment Option will not be exercised.
Our Company will ensure or procure that an announcement in compliance with the
Securities and Futures (Price Stabilizing) Rules of the SFO will be made within seven days of
the expiration of the stabilization period.
Over-Allocation
Following any over-allocation of H Shares in connection with the Global Offering, the
Stabilizing Manager (or its affiliates or any person acting for it) may cover such over-
allocations by exercising the Over-allotment Option in full or in part, by using H Shares
purchased by the Stabilizing Manager (or its affiliates or any person acting for it) in the
secondary market at prices that do not exceed the Offer Price, or by a combination of these
methods.
PRICING AND ALLOCATION
Pricing for the Offer Shares for the purpose of the various offerings under the Global
Offering will be fixed on the Price Determination Date, which is expected to be on or about
Wednesday, December 4, 2024 and, in any event, no later than 12:00 noon on Wednesday,
December 4, 2024, by agreement between the Joint Overall Coordinators (for themselves and
on behalf of the Underwriters) and our Company, and the number of Offer Shares to be
allocated under the various offerings will be determined shortly thereafter.
The Offer Price will not be more than HK$165.00 per Offer Share and is expected to be
not less than HK$145.00 per Offer Share, unless otherwise announced, as further explained
below. Applicants under the Hong Kong Public Offering must pay, on application, the
maximum Offer Price of HK$165.00 per Offer Share plus brokerage of 1.0%, AFRC
transaction levy of 0.00015%, SFC transaction levy of 0.0027% and Stock Exchange trading
fee of 0.00565%, amounting to a total of HK$3,333.28 for one board lot of 20 Shares.
Prospective investors should be aware that the Offer Price to be determined on the Price
Determination Date may be, but is not expected to be, lower than the minimum Offer
Price stated in this prospectus.
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.
STRUCTURE OF THE GLOBAL OFFERING
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The Joint Overall Coordinators (for themselves and on behalf of the Underwriters) may,
where it deems appropriate, based on the level of interest expressed by prospective investors
during the book-building process in respect of the International Offering, and with the consent
of our Company, reduce the number of Offer Shares offered and/or the Offer Price range below
that stated in this prospectus at any time on or prior to the morning of the last day for lodging
applications under the Hong Kong Public Offering. In such a case, our Company will, as soon
as practicable following the decision to make such reduction, and in any event not later than
the morning of the last day for lodging applications under the Hong Kong Public Offering,
cause to be published on the websites of our Company and the Hong Kong Stock Exchange at
www.refire.com and www.hkexnews.hk , respectively, notices of the reduction in the number
of Offer Shares being offered under the Global Offering and/or the indicative Offer Price range.
Upon the issue of such a notice and supplemental prospectus, the revised number of Offer
Shares and/or the Offer Price range will be final and conclusive and the Offer Price, if agreed
upon by the Joint Overall Coordinators (for themselves and on behalf of the Underwriters) and
our Company, will be fixed within such revised Offer Price range.
Our Company will also, as soon as practicable following the decision to make such
change, issue a supplemental prospectus or a new prospectus updating investors of the change
in the number of Offer Shares being offered under the Global Offering and/or the Offer Price,
and giving investors at least three business days to consider the new information. The
supplemental or new prospectus should include at least the following: updated (i) Offer Price
and market capitalization; (ii) listing timetable and underwriting obligations; (iii) price/earning
multiple, unaudited pro forma and adjusted net tangible assets; and (iv) use of proceeds and
working capital adequacy confirmation based on revised proceeds.
Before submitting applications for the Hong Kong Offer Shares, applicants should have
regard to the possibility that any announcement of a reduction in the number of Offer Shares
and/or the Offer Price range 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 Joint Overall Coordinators (for
themselves and on behalf of the Underwriters) and our Company, will under no circumstances
be set outside the Offer Price range as stated in this prospectus.
If there is any change to the offer size due to change in the number of Offer Shares
initially offered in the Global Offering (other than pursuant to the exercise of the Over-
allotment Option and/or reallocation mechanism as disclosed in this prospectus), or change to
the Offer Price which leads to the resulting price falling outside the indicative Offer Price
range as stated in this prospectus, or if our 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 relaunch
the offer and issue a supplemental prospectus or a new prospectus. The Global Offering must
first be canceled and subsequently relaunched on FINI pursuant to the supplemental
prospectus.
STRUCTURE OF THE GLOBAL OFFERING
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In the event of a reduction in the number of Offer Shares, the Hong Kong Offer Shares
and the International Offer Shares may be reallocated as between the Hong Kong Public
Offering and International Offering at the discretion of the Joint Overall Coordinators,
provided that the number of the initial Hong Kong Offer Shares shall not be less than 10% of
the total number of Offer Shares in the Global Offering (assuming the Over-allotment Option
is not exercised).
The final Offer Price, the level of indications of interest in the International Offering, the
level of applications in the Hong Kong Public Offering, the basis of allocations of the Hong
Kong Offer Shares and the results of allocations in the Hong Kong Public Offering are
expected to be made available through a variety of channels in the manner described in “How
to Apply for Hong Kong Offer Shares — B. Publication of Results”.
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 Joint 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 the Price Determination Date.
These underwriting arrangements, including the Underwriting Agreements, are
summarized in “Underwriting”.
CONDITIONS OF THE GLOBAL OFFERING
Acceptance of all applications for Offer Shares will be conditional on:
(a) the Stock Exchange granting approval for the listing of, and permission to deal in,
the H Shares to be issued pursuant to the Global Offering (including the H Shares
which may be issued pursuant to the exercise of the Over-allotment Option and the
H Shares to be converted from Domestic Shares) as mentioned herein on the Main
Board of the Stock Exchange and such approval not subsequently having been
revoked prior to the commencement of trading of the H Shares on the Stock
Exchange;
(b) the Offer Price having been agreed between the Joint Overall Coordinators (for
themselves and on behalf of the Underwriters) and our Company on or about the
Price Determination Date;
(c) the execution and delivery of the International Underwriting Agreement on or about
the Price Determination Date; and
STRUCTURE OF THE GLOBAL OFFERING
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--- page 543 ---
(d) the obligations of the Hong Kong Underwriters under the Hong Kong Underwriting
Agreement and the obligations of the International Underwriters under the
International Underwriting Agreement becoming and remaining unconditional and
not having been terminated in accordance with the terms of the respective
agreements,
in each case on or before the dates and times specified in the respective Underwriting
Agreements (unless and to the extent such conditions are validly waived on or before such
dates and times).
If, for any reason, the Offer Price is not agreed between the Joint Overall Coordinators
(for themselves and on behalf of the Underwriters) and our Company by 12:00 noon on
Wednesday, December 4, 2024, the Global Offering will not proceed and will lapse.
The consummation of each of the Hong Kong Public Offering and the International
Offering is conditional upon, among other things, the other offering becoming unconditional
and not having been terminated in accordance with its terms.
If the above conditions are not fulfilled or waived prior to the dates and times specified,
the Global Offering will lapse and the 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 www.refire.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 the meantime, all application monies will be held in separate bank
account(s) with the receiving bank or other bank(s) in Hong Kong licensed under the Banking
Ordinance (Chapter 155 of the Laws of Hong Kong).
H Share certificates for the Offer Shares will only become valid evidence of title at 8:00
a.m. on Friday, December 6, 2024, 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 Friday, December 6, 2024, it is expected that dealings in the H Shares
on the Hong Kong Stock Exchange will commence at 9:00 a.m. on Friday, December 6, 2024.
The H Shares will be traded in board lots of 20 Shares each and the stock code of the H
Shares will be 2570.
STRUCTURE OF THE GLOBAL OFFERING
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--- page 544 ---
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. We will not provide any printed copies of this prospectus to the public in
relation to the Hong Kong Public Offering.
This prospectus is available at the website of the Stock Exchange at
www.hkexnews.hk under the “ HKEXnews > New Listings > New Listing Information ”
section, and our website at www.refire.com . If you require a printed copy of this
prospectus, you may download and print from the website addresses above.
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.
Set out below are procedures through which you can apply for the Hong Kong Offer
Shares electronically. We will not provide any physical channels to accept any application
for the Hong Kong Offer Shares by the public.
If you are an intermediary , broker or agent , please remind your customers, clients
or principals, as applicable, that this prospectus is available online at the website addresses
above.
A. APPLICATION FOR HONG KONG OFFER SHARES
1. Who Can Apply
You 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; and
 have a Hong Kong address (for the White Form eIPO service only).
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 chief executive of our Company or any of his/her
close associates.
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--- page 545 ---
2. Application Channels
The Hong Kong Public Offering period will begin at 9:00 am on Thursday,
November 28, 2024 and end at 12:00 noon on Tuesday, December 3, 2024 (Hong Kong
time).
To apply for Hong Kong Offer Shares, you may use one of the following application
channels:
Application Channel Platform Target Investors Application Time
White Form eIPO
service /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/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 Thursday,
November 28, 2024 to
11:30 a.m.
on Tuesday, December
3, 2024. The latest
time for completing
full payment of
application monies will
be 12:00 noon on
Tuesday, December 3,
2024.
HKSCC EIPO
channel /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Your broker or custodian who
is a HKSCC Participant will
submit an EIPO application
on your behalf through
HKSCC’s FINI system in
accordance with your
instruction.
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.
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--- page 546 ---
For those applying through the White Form eIPO service, once you complete payment
in respect of any application instructions given by you or for your benefit through the White
Form eIPO service to make an application for Hong Kong Offer Shares, an actual application
shall be deemed to have been made. If you are a person for whose benefit the electronic
application instructions are given, you shall be deemed to have declared that only one set of
electronic application instructions has been given for your benefit. If you are an agent for
another person, you shall be deemed to have declared that you have only given one set of
electronic application instructions for the benefit of the person for whom you are an agent
and that you are duly authorized to give those instructions as an agent.
For the avoidance of doubt, giving an application instruction under the White Form eIPO
service more than once and obtaining different application reference numbers without effecting
full payment in respect of a particular reference number will not constitute an actual
application.
If you apply through the White Form eIPO service, you are deemed to have authorized
the White Form eIPO Service Provider to apply on the terms and conditions in this
prospectus, as supplemented and amended by the terms and conditions of the White Form
eIPO service.
By instructing your broker or custodian to apply for the Hong Kong Offer Shares on your
behalf through the HKSCC EIPO channel, you (and, if you are joint applicants, each of you
jointly and severally) are deemed to have instructed and authorized HKSCC to cause HKSCC
Nominees (acting as nominee for the relevant HKSCC Participants) to apply for Hong Kong
Offer Shares on your behalf and to do on your behalf all the things stated in this prospectus
and any supplement to it.
For those applying through HKSCC EIPO channel, an actual application will be deemed
to have been made for any application instructions given by you or for your benefit to HKSCC
(in which case an application will be made by HKSCC Nominees on your behalf) provided such
application instruction has not been withdrawn or otherwise invalidated before the closing time
of the Hong Kong Public Offering.
HKSCC Nominees will only be acting as a nominee for you and neither HKSCC nor
HKSCC Nominees shall be liable to you or any other person in respect of any actions taken by
HKSCC or HKSCC Nominees on your behalf to apply for Hong Kong Offer Shares or for any
breach of the terms and conditions of this prospectus.
HOW TO APPLY FOR HONG KONG OFFER SHARES
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--- page 547 ---
3. Information Required to Apply
You 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
 Full name(s) 2 as shown on your
identity document
 Identity document’s issuing country or
jurisdiction
 Identity document’s issuing country or
jurisdiction
 Identity document type, with order of
priority:
i. HKID card; or
ii. National identification document;
or
iii. Passport; and
 Identity document number
 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. You 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.
2. The applicant’s full name as shown on their identity document must be used. 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, 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 account holders on FINI is capped at 4 in accordance with market
practice.
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--- page 548 ---
5. If you are applying as a nominee, you must provide: (i) the full name (as shown on the identity
document), the identity document’s issuing country or jurisdiction, the identity document type; and (ii),
the identity document number, for each of the beneficial owners or, in the case(s) of joint beneficial
owners, for each joint beneficial owner. If you do not include this information, the application will be
treated as being made for your benefit.
6. If you are applying as an unlisted company and (i) the principal business of that company is dealing in
securities; and (ii) you exercise statutory control over that company, then the application will be treated
as being for your benefit and you should provide the required information in your application as stated
above.
“Unlisted company” means a company with no equity securities listed on the Stock Exchange or any
other stock exchange.
“Statutory control” means you:
 control the composition of the board of directors of the company;
 control more than half of the voting power of the company; or
 hold more than half of the issued share capital of the company (not counting any part of it which
carries no right to participate beyond a specified amount in a distribution of either profits or
capital).
For those applying through HKSCC EIPO channel, and making an application under a
power of attorney, we and the Joint Overall Coordinators, as our agent, have discretion to
consider whether to accept it on any conditions we think fit, including evidence of the
attorney’s authority.
Failing to provide any required information may result in your application being rejected.
4. Permitted Number of Hong Kong Offer Shares for Application
Board lot size : 20 H Shares
Permitted number of
Hong Kong Offer Shares
for application and
amount payable on
application/successful
allotment
: Hong Kong Offer Shares are available for application in
specified board lot sizes only. Please refer to the
amount payable associated with each specified board
lot size in the table below.
The maximum Offer Price is HK$165.00 per Share.
If you are applying through the HKSCC EIPO channel,
you are required to pre-fund your application based
on the amount specified by your broker or custodian,
as determined based on the applicable laws and
regulations in Hong Kong.
HOW TO APPLY FOR HONG KONG OFFER SHARES
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--- page 549 ---
By instructing your broker or custodian to apply for the
Hong Kong Offer Shares on your behalf through the
HKSCC EIPO channel, you (and, if you are joint
applicants, each of you jointly and severally) are
deemed to have instructed and authorized HKSCC to
cause HKSCC Nominees (acting as nominee for the
relevant HKSCC Participants) to arrange payment of
the final Offer Price, brokerage, SFC transaction levy,
the Stock Exchange trading fee and the AFRC
transaction levy by debiting the relevant nominee
bank account at the Designated Bank for your broker
or custodian.
If you are applying through the White Form eIPO
service you may refer to the table below for the
amount payable for the number of Shares you have
selected. You must pay the respective maximum
amount payable on application in full upon
application for Hong Kong Offer Shares.
No. of
Hong Kong
Offer Shares
applied for
Amount
payable (2)
on application
No. of
Hong Kong
Offer Shares
applied for
Amount
payable (2)
on application
No. of
Hong Kong
Offer Shares
applied for
Amount
payable (2)
on application
No. of
Hong Kong
Offer Shares
applied for
Amount
payable (2)
on application
HK$ HK$ HK$ HK$
20 3,333.28 400 66,665.61 6,000 999,984.16 80,000 13,333,122.00
40 6,666.56 500 83,332.01 7,000 1,166,648.18 90,000 14,999,762.26
60 9,999.84 600 99,998.41 8,000 1,333,312.20 100,000 16,666,402.50
80 13,333.13 700 116,664.82 9,000 1,499,976.23 120,000 19,999,683.00
100 16,666.40 800 133,331.22 10,000 1,666,640.26 140,000 23,332,963.50
120 19,999.68 900 149,997.62 20,000 3,333,280.50 160,000 26,666,244.00
140 23,332.96 1,000 166,664.03 30,000 4,999,920.76 180,000 29,999,524.50
160 26,666.24 2,000 333,328.06 40,000 6,666,561.00 200,000 33,332,805.00
180 29,999.52 3,000 499,992.08 50,000 8,333,201.26 220,000 36,666,085.50
200 33,332.80 4,000 666,656.10 60,000 9,999,841.50 241,400
(1) 40,232,695.64
300 49,999.21 5,000 833,320.13 70,000 11,666,481.76
(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).
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--- page 550 ---
5. Multiple Applications Prohibited
You or your joint applicant(s) shall not make more than one application for your own
benefit, except where you are a nominee and provide the information of the underlying investor
in your application as required under the paragraph headed “— A. Application for Hong Kong
Offer Shares — 3. Information Required to Apply” in this section. If you are suspected of
submitting or 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
International 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 authorise us and/or the
Joint Overall Coordinators, as our agents, to execute any documents for you and to
do on your behalf all things necessary to register any Hong Kong Offer Shares
allocated to you in your name or in the name of HKSCC Nominees as required by
the Articles of Association, and (if you are applying through the HKSCC EIPO
channel) to deposit the allotted Hong Kong Offer Shares directly into CCASS for the
credit of your designated HKSCC Participant’s stock account on your behalf;
(ii) confirm that you have read and understand the terms and conditions and application
procedures set out in this prospectus and the designated website of the White Form
eIPO service (or as the case may be, the agreement you entered into with your
broker or custodian), and agree to be bound by them;
(iii) (if you are applying through the HKSCC EIPO channel) agree to the arrangements,
undertakings and warranties under the participant agreement between your broker or
custodian and HKSCC and observe the General Rules of HKSCC and the HKSCC
Operational Procedures for giving application instructions to apply for Hong Kong
Offer Shares;
(iv) confirm that you are aware of the restrictions on offers and sales of shares set out
in this prospectus and they do not apply to you, or the person(s) for whose benefit
you have made the application;
HOW TO APPLY FOR HONG KONG OFFER SHARES
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--- page 551 ---
(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 our Company, the Sole Sponsor, the Joint Overall Coordinators, the Joint
Global Coordinators, the Joint Bookrunners, the Joint Lead Managers, the
Underwriters, the Capital Market Intermediaries, any of their respective directors,
supervisors, officers, employees, partners, agents, advisers and any other parties
involved in the Global Offering (the “ Relevant Persons ”), the H Share Registrar
and HKSCC will not be liable for any information and representations not in this
prospectus and any supplement to it;
(vii) agree to disclose the details of your application and your personal data and any other
personal data which may be required about you and the person(s) for whose benefit
you have made the application to us, the Relevant Persons, the H Share Registrar,
HKSCC, HKSCC Nominees, the Stock Exchange, the SFC and any other statutory
regulatory or governmental bodies or otherwise as required by laws, rules or
regulations, for the purposes under the paragraph headed “— G. Personal Data —
3. Purposes and 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;
(xi) agree that your application or HKSCC Nominees’ application, any acceptance of it
and the resulting contract will be governed by and construed in accordance with the
laws of Hong Kong;
HOW TO APPLY FOR HONG KONG OFFER SHARES
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--- page 552 ---
(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, chief
executives, substantial Shareholder(s) or existing shareholder(s) of our Company 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, chief
executives, substantial shareholder(s) or existing shareholder(s) of our Company or
any of its subsidiaries or any of their respective close associates in relation to the
acquisition, disposal, voting or other disposition of the Shares registered in your
name or otherwise held by you;
(xiv) warrant that the information you have provided is true and accurate;
(xv) confirm that you understand that we and the Joint 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 H Share Registrar 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 (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
– 542 –


--- page 553 ---
B. PUBLICATION OF RESULTS
Results of Allocation
You can check whether you are successfully allocated any Hong Kong Offer Shares
through:
Platform Date/Time
Applying through White Form eIPO service or HKSCC EIPO channel:
Website /H1118/H1118/H1118/H1118/H1118The designated results of allocation at
www.iporesults.com.hk
(alternatively:
www.eipo.com.hk/eIPOAllotment )
with a “search by ID” function.
24 hours, from 11:00 p.m. Thursday,
December 5, 2024 to 12:00
midnight Wednesday, December 11,
2024 (Hong Kong time)
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 provider at
www.iporesults.com.hk
(alternatively:
www.eipo.com.hk/eIPOAllotment ).
The Stock Exchange’s website at
www.hkexnews.hk and our website
at www.refire.com which will
provide links to the above
mentioned websites of the H Share
Registrar.
at or before 11:00 p.m. on Thursday,
December 5, 2024
Telephone /H1118/H1118/H1118+852 2862 8555 — the allocation
results telephone enquiry line
provided by the H Share Registrar.
between 9:00 a.m. and 6:00 p.m.,
from Friday, December 6, 2024 to
Wednesday, December 11, 2024
(Hong Kong time) on a business
day
HOW TO APPLY FOR HONG KONG OFFER SHARES
– 543 –


--- page 554 ---
For those applying through HKSCC EIPO channel, you may also check with your broker
or custodian from 6:00 p.m. on Wednesday, December 4, 2024 (Hong Kong time).
HKSCC Participants can log into FINI and review the allotment result from 6:00 p.m. on
Wednesday, December 4, 2024 (Hong Kong time) on a 24-hour basis and should report any
discrepancies on allotments to HKSCC as soon as practicable.
Allocation Announcement
We expect to announce the results of the final Offer Price, the level of indications of
interest in the International Offering, the level of applications in the Hong Kong Public
Offering and the basis of allocations of Hong Kong Offer Shares on the Stock Exchange’s
website at www.hkexnews.hk and our website at www.refire.com by no later than 11:00 p.m.
on Thursday, December 5, 2024 (Hong Kong time).
C. CIRCUMSTANCES IN WHICH YOU WILL NOT BE ALLOCATED HONG KONG
OFFER SHARES
You should note the following situations in which Hong Kong Offer Shares will not be
allocated to you or the person(s) for whose benefit you are applying for:
1. If your application is revoked:
Your application or the application made by HKSCC Nominees on your behalf may be
revoked pursuant to Section 44A(6) of the Companies (Winding Up and Miscellaneous
Provisions) Ordinance.
2. If we or our agents exercise our discretion to reject your application:
We, the Joint Overall Coordinators, the H Share Registrar and their respective agents and
nominees have full discretion to reject or accept any application, or to accept only part of any
application, without giving any reasons.
3. If the allocation of Hong Kong Offer Shares is void:
The allocation of Hong Kong Offer Shares will be void if the Stock Exchange does not
grant permission to list the Shares either:
 within three weeks from the closing date of the application lists; or
 within a longer period of up to six weeks if the Stock Exchange notifies us of that
longer period within three weeks of the closing date of the application lists.
HOW TO APPLY FOR HONG KONG OFFER SHARES
– 544 –


--- page 555 ---
4. If:
 you make multiple applications or suspected multiple applications. You may refer to
the paragraph headed “— A. Applications for Hong Kong Offer Shares — 5.
Multiple Applications Prohibited ” in this section on what constitutes multiple
applications;
 your application instruction is incomplete;
 your payment (or confirmation of funds, as the case may be) is not made correctly;
 the Underwriting Agreements do not become unconditional or are terminated;
 we or the Joint Overall Coordinators believe that by accepting your application, it
or we would violate applicable securities or other laws, rules or regulations.
5. If there is money settlement failure for allotted Shares:
Based on the arrangements between HKSCC Participants and HKSCC, HKSCC
Participants will be required to hold sufficient application funds on deposit with their
Designated Bank before balloting. After balloting of Hong Kong Offer Shares, the Receiving
Bank will collect the portion of these funds required to settle each HKSCC Participant’s actual
Hong Kong Offer Share allotment from their Designated Bank.
There is a risk of money settlement failure. In the extreme event of money settlement
failure by a HKSCC Participant (or its Designated Bank), who is acting on your behalf in
settling payment for your allotted shares, HKSCC will contact the defaulting HKSCC
Participant and its Designated Bank to determine the cause of failure and request such
defaulting HKSCC Participant to rectify or procure to rectify the failure.
However, if it is determined that such settlement obligation cannot be met, the affected
Hong Kong Offer Shares will be reallocated to the International Offering. Hong Kong Offer
Shares applied for by you through the broker or custodian may be affected to the extent of the
settlement failure. In the extreme case, you will not be allocated any Hong Kong Offer Shares
due to the money settlement failure by such HKSCC Participant. None of us, the Relevant
Persons, the H Share Registrar and HKSCC is or will be liable if Hong Kong Offer Shares are
not allocated to you due to the money settlement failure.
D. DESPATCH/COLLECTION OF H SHARE CERTIFICATES AND REFUND OF
APPLICATION MONIES
You 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).
HOW TO APPLY FOR HONG KONG OFFER SHARES
– 545 –


--- page 556 ---
No temporary document of title will be issued in respect of the 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 Friday,
December 6, 2024, (Hong Kong time), provided that the Global Offer has become
unconditional and the right of termination described in the section headed “Underwriting” has
not been exercised. Investors who trade 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
For physical share
certificates of equal or
over 100,000 Hong Kong
Offer Shares issued under
your own name /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Collection in person at
Computershare Hong Kong
Investor Services Limited
at Shops 1712- 1716, 17th
Floor, Hopewell Centre,
183 Queen’s Road East,
Wan Chai, Hong Kong
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
Time: from 9:00 a.m. to 1:00
p.m. on Friday,
December 6, 2024
(Hong Kong time)
No action by you is required
If you are an individual, you
must not authorise any
other person to collect for
you. If you are a corporate
applicant, your authorised
representative must bear a
letter of authorization from
your corporation stamped
with your corporation’s
chop.
HOW TO APPLY FOR HONG KONG OFFER SHARES
– 546 –


--- page 557 ---
White Form eIPO service HKSCC EIPO channel
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
For physical share
certificates of less than
100,000 Hong Kong Offer
Shares issued under your
own name /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Your Share certificate(s) will
be sent to the address
specified in your
application instructions by
ordinary post at your own
risk
Time: Thursday, December 5,
2024
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/H1118/H1118Friday, December 6, 2024 Subject to the arrangement
between you and your
broker or custodian
Responsible party /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118H Share Registrar Your broker or custodian
Application monies paid
through single bank
account /H1118/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
Your broker or custodian will
arrange refund to your
designated bank account
subject to the arrangement
between you and it
HOW TO APPLY FOR HONG KONG OFFER SHARES
– 547 –


--- page 558 ---
White Form eIPO service HKSCC EIPO channel
Application monies paid
through multiple bank
accounts /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Refund cheque(s) will be
despatched to the address
as specified in your
application instructions by
ordinary post at your own
risk
Except in the event of any Bad Weather Signals (as defined below) in force in Hong Kong
on the business day before the Listing Date rendering it impossible for the relevant 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 share certificates in
accordance with the contingency arrangements as agreed between them. You may refer to “—
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 Tuesday, December 3, 2024 if, there is/are:
 a No. 8 typhoon warning signal or above;
 a black rainstorm warning signal; and/or
 Extreme Conditions,
(collectively, “ Bad Weather Signals ”),
in force in Hong Kong at any time between 9:00 a.m. and 12:00 noon on Tuesday, December 3,
2024.
Instead they will open between 11:45 a.m. and 12:00 noon and/or close at 12:00 noon on
the next business day which does not have Bad Weather Signals in force at any time between
9:00 a.m. and 12:00 noon.
Prospective investors should be aware that a postponement of the opening/closing of the
application lists may result in a delay in the listing date. Should there be any changes to the
dates mentioned in the section headed “Expected Timetable” in this prospectus, an
announcement will be made and published on the Stock Exchange’s website at
www.hkexnews.hk and our website at www.refire.com of the revised timetable.
HOW TO APPLY FOR HONG KONG OFFER SHARES
– 548 –


--- page 559 ---
If a Bad Weather Signal is hoisted on Thursday, December 5, 2024, the H Share Registrar
will make appropriate arrangements for the delivery of the share certificates to the CCASS
Depository’s service counter so that they would be available for trading on Friday, December
6, 2024.
If a Bad Weather Signal is hoisted on Thursday, December 5, 2024:
 for physical H share certificates of less than 100,000 offer shares issued under your
own name, despatch will be made by ordinary post when the post office re-opens
after the Bad Weather Signal is lowered or cancelled (e.g. in the afternoon of
Thursday, December 5, 2024 or on Friday, December 6, 2024).
If a Bad Weather Signal is hoisted on Friday, December 6, 2024:
 for physical H share certificates of equal or over 100,000 offer shares issued under
your own name, you may pick them up from the H Share Registrar’s office after the
Bad Weather Signal is lowered or cancelled (e.g. in the afternoon of Friday,
December 6, 2024 or on Monday, December 9, 2024).
Prospective investors should be aware that if they choose to receive physical share
certificates issued in their own name, there may be a delay in receiving the share
certificates.
F. ADMISSION OF THE SHARES INTO CCASS
If the Stock Exchange grants the listing of, and permission to deal in, the H Shares on the
Stock Exchange and we comply with the stock admission requirements of HKSCC, the H
Shares will be accepted as eligible securities by HKSCC for deposit, clearance and settlement
in CCASS with effect from the date of commencement of dealings in the H Shares or any other
date HKSCC chooses. Settlement of transactions between Exchange Participants is required to
take place in CCASS on the second settlement day after any trading day.
All activities under CCASS are subject to the General Rules of HKSCC and HKSCC
Operational Procedures in effect from time to time.
All necessary arrangements have been made enabling the H Shares to be admitted into
CCASS.
You should seek the advice of your broker or other professional adviser for details of the
settlement arrangement as such arrangements may affect your rights and interests.
HOW TO APPLY FOR HONG KONG OFFER SHARES
– 549 –


--- page 560 ---
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.
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 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
Your 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;
HOW TO APPLY FOR HONG KONG OFFER SHARES
– 550 –


--- page 561 ---
 registering new issues or transfers into or out of the names of the holders of the
Shares including, where applicable, HKSCC Nominees;
 maintaining or updating the register of members of 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 Group;
 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 Shares and/or regulators and/or any other purposes to which
applicants and holders of the H Shares may from time to time agree.
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 advisers, receiving banks and
overseas principal share registrar;
 HKSCC or HKSCC Nominees, who will use the personal data and may transfer the
personal data to the H Share Registrar, in each case for the purposes of providing its
services or facilities or performing its functions in accordance with its rules or
procedures and operating FINI and CCASS (including where applicants for the
Hong Kong 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;
HOW TO APPLY FOR HONG KONG OFFER SHARES
– 551 –


--- page 562 ---
 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 our Company secretary, or the
H Share Registrar for the attention of the privacy compliance officer.
HOW TO APPLY FOR HONG KONG OFFER SHARES
– 552 –


--- page 563 ---
The following is the text of a report on the financial information of Shanghai REFIRE
Group Limited, prepared for the purpose of incorporation in this prospectus received from the
reporting accountants of our Company, Ernst & Young, Certified Public Accountants, Hong
Kong.
⭰㰟㛪姯⸒Ṳ⋀㈧
榀㸖毩歁㵳勘䙮怺 979噆
⤑⏋✱ᷧ⺎27㧺
Tel 曢婘: +852 2846 9888
Fax ₚ䜆: +852 2868 4432
ey.com
Ernst & Young
27/F, One Taikoo Place
979 King’s Road
Quarry Bay, Hon
g Kong
ACCOUNTANTS’ REPORT ON HISTORICAL FINANCIAL INFORMATION TO THE
DIRECTORS OF SHANGHAI REFIRE GROUP LIMITED AND CHINA
INTERNATIONAL CAPITAL CORPORATION HONG KONG SECURITIES LIMITED
Introduction
We report on the historical financial information of Shanghai REFIRE Group Limited (the
“Company”) and its subsidiaries (together, the “Group”) set out on pages I-3 to I-107, which
comprises the consolidated statements of profit or loss, statements of comprehensive income,
statements of changes in equity and statements of cash flows of the Group for each of the years
ended 31 December 2021, 2022 and 2023 and the five months ended 31 May 2024 (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 2021, 2022 and 2023 and
31 May 2024 and material accounting policies and other explanatory information (together, the
“Historical Financial Information”). The Historical Financial Information set out on pages I-3
to I-107 forms an integral part of this report, which has been prepared for inclusion in the
prospectus of the Company dated 28 November 2024 (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.
APPENDIX I ACCOUNTANTS’ REPORT
– I-1 –


--- page 564 ---
Our work involved performing procedures to obtain evidence about the amounts and
disclosures in the Historical Financial Information. The procedures selected depend on the
reporting accountants’ judgement, including the assessment of risks of material misstatement
of the Historical Financial Information, whether due to fraud or error. In making those risk
assessments, the reporting accountants consider internal control relevant to the entity’s
preparation of the Historical Financial Information that gives a true and fair view in accordance
with the basis of preparation set out in note 2.1 to the Historical Financial Information, in order
to design procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the entity’s internal control. Our work also
included evaluating the appropriateness of accounting policies used and the reasonableness of
accounting estimates made by the directors, as well as evaluating the overall presentation of
the Historical Financial Information.
We believe that the evidence we have obtained is sufficient and appropriate to provide a
basis for our opinion.
Opinion
In our opinion, the Historical Financial Information gives, for the purposes of the
accountants’ report, a true and fair view of the financial position of the Group and the Company
as at 31 December 2021, 2022 and 2023 and 31 May 2024 and of the financial performance and
cash flows of the Group for each of the Relevant Periods in accordance with the basis of
preparation set out in note 2.1 to the Historical Financial Information.
Review of interim comparative financial information
We have reviewed the interim comparative financial information of the Group which
comprises the consolidated statement of profit or loss, statement of comprehensive income,
statement of changes in equity and statement of cash flows for the five months ended 31 May
2023 and other explanatory information (the “Interim Comparative Financial Information”).
The directors of the Company are responsible for the preparation and presentation of the
Interim Comparative Financial Information in accordance with the basis of preparation set out
in note 2.1 to the Historical Financial Information. Our responsibility is to express a conclusion
on the Interim Comparative Financial Information based on our review. We conducted our
review in accordance with Hong Kong Standard on Review Engagements 2410 Review of
Interim Financial Information Performed by the Independent Auditor of the Entity issued by
the HKICPA. A review consists of making inquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other review procedures. A
review is substantially less in scope than an audit conducted in accordance with Hong Kong
Standards on Auditing and consequently does not enable us to obtain assurance that we would
become aware of all significant matters that might be identified in an audit. Accordingly, we
do not express an audit opinion. Based on our review, nothing has come to our attention that
causes us to believe that the Interim Comparative Financial Information, for the purposes of the
accountants’ report, is not prepared, in all material respects, in accordance with the basis of
preparation set out in note 2.1 to the Historical Financial Information.
APPENDIX I ACCOUNTANTS’ REPORT
– I-2 –


--- page 565 ---
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 & Y oung
Certified Public Accountants
Hong Kong
28 November 2024
APPENDIX I ACCOUNTANTS’ REPORT
– I-3 –


--- page 566 ---
I HISTORICAL FINANCIAL INFORMATION
Preparation of Historical Financial Information
Set out below is the Historical Financial Information which forms an integral part of this
accountants’ report.
The financial statements of the Group for the Relevant Periods, on which the Historical
Financial Information is based, were audited by Ernst & Young in accordance with Hong Kong
Standards on Auditing issued by the HKICPA (the “Underlying Financial Statements”).
The Historical Financial Information is presented in Renminbi (“RMB”) and all values
are rounded to the nearest thousand (RMB’000) except when otherwise indicated.
APPENDIX I ACCOUNTANTS’ REPORT
– I-4 –


--- page 567 ---
CONSOLIDATED STATEMENTS OF PROFIT OR LOSS
Y ear ended 31 December
Five months ended
31 May
Notes 2021 2022 2023 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
REVENUE 5 524,109 604,648 895,278 88,068 12,521
Cost of sales (462,324) (554,825) (715,662) (92,033) (36,722)
Cost of sales of goods and
services (414,653) (472,712) (683,897) (75,563) (28,246)
Impairment losses on inventories 21 (47,671) (82,113) (31,765) (16,470) (8,476)
Gross profit 61,785 49,823 179,616 (3,965) (24,201)
Other income and gains 5 53,950 59,792 59,825 15,421 19,532
Selling and marketing expenses (90,475) (102,826) (134,833) (36,702) (43,076)
Administrative expenses (218,227) (242,695) (339,670) (103,914) (196,575)
Research and development expenses (230,891) (198,688) (220,880) (99,498) (90,281)
Fair value gains/(losses) on
financial assets at fair value
through profit or loss, net 436 881 (3,120) (18) (2,171)
Fair value loss on a derivative
financial instrument (607) (19,681) – – –
Impairment losses on financial
assets and a financial guarantee
obligation, net (144,636) (15,459) (63,965) (18,881) (41,455)
Other expenses (23,363) (6,156) (4,960) (672) (2,542)
Finance costs 7 (50,058) (49,019) (47,926) (18,345) (24,906)
Share of losses of:
A joint venture 16 (5,750) (18,750) – – –
Associates 17 (2,466) (2,695) (3,855) (2,680) (5,721)
LOSS BEFORE TAX 6 (650,302) (545,473) (579,768) (269,254) (411,396)
Income tax (expense)/credit 10 (3,990) (626) 2,237 2,551 1,965
LOSS FOR THE YEAR/PERIOD (654,292) (546,099) (577,531) (266,703) (409,431)
Loss attributable to:
Owners of the parent (572,802) (505,966) (529,472) (247,137) (394,115)
Non-controlling interests (81,490) (40,133) (48,059) (19,566) (15,316)
(654,292) (546,099) (577,531) (266,703) (409,431)
LOSS PER SHARE
ATTRIBUTABLE TO
ORDINARY EQUITY HOLDERS
OF THE PARENT
Basic and diluted (RMB) 12 (8.81) (6.73) (6.51) (3.04) (4.85)
APPENDIX I ACCOUNTANTS’ REPORT
– I-5 –


--- page 568 ---
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Y ear ended 31 December
Five months ended
31 May
2021 2022 2023 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
LOSS FOR THE YEAR
/PERIOD (654,292) (546,099) (577,531) (266,703) (409,431)
OTHER COMPREHENSIVE
INCOME
Other comprehensive income that will
not be reclassified to profit or loss
in subsequent periods:
Equity investments designated at
fair value through other
comprehensive income:
Changes in fair value (7) 513 (3,834) (1,389) (1,254)
Income tax effect 2 (128) 958 347 –
Net other comprehensive income that
will not be reclassified to profit or
loss in subsequent periods (5) 385 (2,876) (1,042) (1,254)
Other comprehensive income that may
be reclassified to profit or loss in
subsequent periods:
Exchange differences:
Exchange differences on
translation of foreign operations (1,832) 2,491 3,673 390 (4,576)
Net other comprehensive income that
may be reclassified to profit or loss
in subsequent periods (1,832) 2,491 3,673 390 (4,576)
OTHER COMPREHENSIVE INCOME
FOR THE YEAR/PERIOD,
NET OF TAX (1,837) 2,876 797 (652) (5,830)
TOTAL COMPREHENSIVE
INCOME FOR
THE YEAR/PERIOD (656,129) (543,223) (576,734) (267,355) (415,261)
Attributable to:
Owners of the parent (574,451) (503,620) (529,577) (247,924) (399,323)
Non-controlling interests (81,678) (39,603) (47,157) (19,431) (15,938)
(656,129) (543,223) (576,734) (267,355) (415,261)
APPENDIX I ACCOUNTANTS’ REPORT
– I-6 –


--- page 569 ---
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
As at 31 December
As at
31 May
Notes 2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
NON-CURRENT ASSETS
Property, plant and equipment 13 421,484 417,284 452,801 430,649
Right-of-use assets 14 104,690 87,870 69,419 100,356
Other intangible assets 15 33,584 30,201 22,456 23,448
Investment in a joint venture 16 ––––
Investments in associates 17 51,590 78,689 99,522 131,051
Equity investments designated at
fair value through other
comprehensive income 19 17,357 19,887 47,656 46,076
Financial assets at fair value
through profit or loss 24 6,436 6,521 44,401 52,230
Trade receivables 22 269,685 254,624 403,933 309,212
Contract assets 22 – – 30,785 17,066
Prepayments, other receivables and
other assets 23 19,543 63,172 67,892 50,097
Deferred tax assets 20 9,342 10,669 12,919 14,967
Total non-current assets 933,711 968,917 1,251,784 1,175,152
CURRENT ASSETS
Inventories 21 259,968 276,934 239,872 336,364
Trade and bills receivables 22 923,550 1,265,529 1,583,395 1,618,631
Prepayments, other receivables and
other assets 23 100,794 102,513 296,268 218,691
Financial assets at fair value
through profit or loss 24 – 335,797 – –
Time deposits 25 – 52,086 – –
Restricted cash 25 – 59,902 746 28
Cash and cash equivalents 25 276,220 1,079,456 664,510 435,710
Total current assets 1,560,532 3,172,217 2,784,791 2,609,424
CURRENT LIABILITIES
Trade and bills payables 26 561,533 566,255 650,741 626,013
Other payables and accruals 27 78,665 102,416 141,315 174,717
Contract liabilities 28 20,206 15,069 12,740 35,552
Derivative financial instrument 29 – 37,423 – –
Interest-bearing bank and other
borrowings 30 654,317 269,079 470,443 811,044
Lease liabilities 14 15,418 15,523 18,921 19,738
Tax payable 11,138 3,447 1,056 1,104
Deferred income 31 3,029 – 963 932
Provision 32 29,356 18,855 21,080 21,102
Total current liabilities 1,373,662 1,028,067 1,317,259 1,690,202
NET CURRENT ASSETS 186,870 2,144,150 1,467,532 919,222
TOTAL ASSETS LESS
CURRENT LIABILITIES 1,120,581 3,113,067 2,719,316 2,094,374
continued/...
APPENDIX I ACCOUNTANTS’ REPORT
– I-7 –


--- page 570 ---
As at 31 December
As at
31 May
Notes 2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
NON-CURRENT LIABILITIES
Contract liabilities 28 5,023 4,021 13,841 12,466
Derivative financial instrument 29 17,74 2–––
Interest-bearing bank and other
borrowings 30 403,736 729,091 833,025 512,923
Lease liabilities 14 75,294 60,863 42,483 32,093
Deferred income 31 58,037 60,047 58,284 54,398
Provision 32 24,294 19,913 21,219 21,307
Total non-current liabilities 584,126 873,935 968,852 633,187
Net assets 536,455 2,239,132 1,750,464 1,461,187
EQUITY
Equity attributable to owners of
the parent
Share capital 33 64,996 81,311 81,311 81,311
Reserves 35 501,028 2,190,237 1,743,089 1,460,034
566,024 2,271,548 1,824,400 1,541,345
Non-controlling interests (29,569) (32,416) (73,936) (80,158)
Total equity 536,455 2,239,132 1,750,464 1,461,187
APPENDIX I ACCOUNTANTS’ REPORT
– I-8 –


--- page 571 ---
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
Y ear ended 31 December 2021
Attributable to owners of the parent
Share
capital
Share
premium
and other
reserve*
Share-based
payment
reserve*
Statutory
surplus
reserve*
Fair value
reserve of
financial assets
at fair value
through other
comprehensive
income*
Exchange
fluctuation
reserve*
Accumulated
losses* Total
Non-
controlling
interests Total equity
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Note 33 Note 35 Note 35 Note 35 Note 35
As at 1 January 2021 64,996 1,624,854 46,126 215 472 583 (558,395) 1,178,851 (26,380) 1,152,471
Loss for the year –––– –– (572,802) (572,802) (81,490) (654,292)
Other comprehensive income for the year:
Changes in equity investments designated at fair value
through other comprehensive income, net of tax –––– ( 5 ) – – ( 5 ) – ( 5 )
Exchange differences related to foreign operations –––– – (1,644) – (1,644) (188) (1,832)
Total comprehensive income for the year –––– ( 5 ) (1,644) (572,802) (574,451) (81,678) (656,129)
Share-based payments (note 34) – – 29,704 – – – – 29,704 1,622 31,326
Capital injection from non-controlling shareholders – 2,048 – – – – – 2,048 15,452 17,500
Acquisition of non-controlling interests – (70,128) – – – – – (70,128) 61,415 (8,713)
Appropriation to statutory surplus reserve – – – 795 – – (795) – – –
As at 31 December 2021 64,996 1,556,774 75,830 1,010 467 (1,061) (1,131,992) 566,024 (29,569) 536,455
continued/...
APPENDIX I ACCOUNTANTS’ REPORT
– I-9 –


--- page 572 ---
Y ear ended 31 December 2022
Attributable to owners of the parent
Share
capital
Share
premium
and other
reserve*
Share-based
payment
reserve*
Statutory
surplus
reserve*
Fair value
reserve of
financial assets
at fair value
through other
comprehensive
income*
Exchange
fluctuation
reserve*
Accumulated
losses* Total
Non-
controlling
interests Total equity
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Note 33 Note 35 Note 35 Note 35 Note 35
As at 1 January 2022 64,996 1,556,774 75,830 1,010 467 (1,061) (1,131,992) 566,024 (29,569) 536,455
Loss for the year –––– –– (505,966) (505,966) (40,133) (546,099)
Other comprehensive income for the year:
Changes in equity investments designated at fair value
through other comprehensive income, net of tax –––– 3 8 5– – 3 8 5– 3 8 5
Exchange differences related to foreign operations –––– – 1,961 – 1,961 530 2,491
Total comprehensive income for the year –––– 3 8 5 1,961 (505,966) (503,620) (39,603) (543,223)
Share-based payments (note 34) – – 26,343 – – – – 26,343 751 27,094
Shareholders’ capital injection 16,315 2,166,486 – – – – – 2,182,801 36,005 2,218,806
Appropriation to statutory surplus reserve – – – 393 – – (393) – – –
As at 31 December 2022 81,311 3,723,260 102,173 1,403 852 900 (1,638,351) 2,271,548 (32,416) 2,239,132
continued/...
APPENDIX I ACCOUNTANTS’ REPORT
– I-10 –


--- page 573 ---
Y ear ended 31 December 2023
Attributable to owners of the parent
Share
capital
Capital and
other
reserve*
Share-
based
payment
reserve*
Statutory
surplus
reserve*
Fair value
reserve of
financial assets
at fair value
through other
comprehensive
income*
Exchange
fluctuation
reserve*
Accumulated
losses*
Special
reserve* Total
Non-
controlling
interests Total equity
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Note 33 Note 35 Note 35 Note 35 Note 35
As at 1 January 2023 81,311 3,723,260 102,173 1,403 852 900 (1,638,351) – 2,271,548 (32,416) 2,239,132
Loss for the year –––– –– (529,472) – (529,472) (48,059) (577,531)
Other comprehensive income for the year:
Changes in fair value of equity investments at
fair value through other comprehensive
income, net of tax –––– (2,876) – – – (2,876) – (2,876)
Exchange differences related to foreign
operations –––– – 2,771 – – 2,771 902 3,673
Total comprehensive income for the year –––– (2,876) 2,771 (529,472) – (529,577) (47,157) (576,734)
Share-based payments (note 34) – – 82,620 – – – – – 82,620 4,446 87,066
Shareholders’ capital injection –––– –– ––– 1,000 1,000
Appropriation and utilisation of
special reserve, net –––– –– (2,169) 2,16 9–––
Deemed disposal of non-controlling interests – (191) – – – – – – (191) 191 –
As at 31 December 2023 81,311 3,723,069 184,793 1,403 (2,024) 3,671 (2,169,992) 2,169 1,824,400 (73,936) 1,750,464
continued/...
APPENDIX I ACCOUNTANTS’ REPORT
– I-11 –


--- page 574 ---
For the five months ended 31 May 2023 (unaudited)
Attributable to owners of the parent
Share
capital
Capital and
other
reserve*
Share-
based
payment
reserve*
Statutory
surplus
reserve*
Fair value
reserve of
financial assets
at fair value
through other
comprehensive
income*
Exchange
fluctuation
reserve*
Accumulated
deficits*
Special
reserve* Total
Non-
controlling
interests Total equity
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Note 33 Note 35 Note 35 Note 35 Note 35
As at 1 January 2023 81,311 3,723,260 102,173 1,403 852 900 (1,638,351) – 2,271,548 (32,416) 2,239,132
Loss for the period –––– –– (247,137) – (247,137) (19,566) (266,703)
Other comprehensive income for the period:
Changes in fair value of equity investments at
fair value through other comprehensive
income, net of tax –––– (1,042) – – – (1,042) – (1,042)
Exchange differences related to
foreign operations –––– – 2 5 5 –– 2 5 5 1 3 5 3 9 0
Total comprehensive income for the period –––– (1,042) 255 (247,137) – (247,924) (19,431) (267,355)
Share-based payments (note 34) – – 18,575 – – – – – 18,575 548 19,123
Appropriation and utilisation of
special reserve, net –––– –– (904) 90 4–––
Deemed disposal of non-controlling interests – (191) – – – – – – (191) 191 –
As at 31 May 2023 (unaudited) 81,311 3,723,069 120,748 1,403 (190) 1,155 (1,886,392) 904 2,042,008 (51,108) 1,990,900
APPENDIX I ACCOUNTANTS’ REPORT
– I-12 –


--- page 575 ---
For the five months ended 31 May 2024
Attributable to owners of the parent
Share
capital
Capital and
other
reserve*
Share-
based
payment
reserve*
Statutory
surplus
reserve*
Fair value
reserve of
financial assets
at fair value
through other
comprehensive
income*
Exchange
fluctuation
reserve*
Accumulated
deficits*
Special
reserve* Total
Non-
controlling
interests Total equity
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Note 33 Note 35 Note 35 Note 35 Note 35
As at 1 January 2024 81,311 3,723,069 184,793 1,403 (2,024) 3,671 (2,169,992) 2,169 1,824,400 (73,936) 1,750,464
Loss for the period –––– –– (394,115) – (394,115) (15,316) (409,431)
Other comprehensive income for the period:
Changes in fair value of equity investments at
fair value through other comprehensive
income, net of tax –––– (1,254) – – – (1,254) – (1,254)
Exchange differences related to
foreign operations –––– – (3,954) – – (3,954) (622) (4,576)
Total comprehensive income for the period –––– (1,254) (3,954) (394,115) – (399,323) (15,938) (415,261)
Share-based payments (note 34) – – 116,268 – – – – – 116,268 1,216 117,484
Shareholders’ capital injection –––– –– ––– 8,500 8,500
Transfer of fair value reserve upon the disposal
of equity investments at fair value through
other comprehensive income –––– 1 1 4–( 1 1 4 ) ––––
Appropriation and utilisation of
special reserve, net –––– –– (1,123) 1,12 3–––
As at 31 May 2024 81,311 3,723,069 301,061 1,403 (3,164) (283) (2,565,344) 3,292 1,541,345 (80,158) 1,461,187
* These reserve accounts represent the total consolidated reserves of RMB501,028,000 and RMB2,190,237,000 and RMB1,743,089,000 and RMB1,960,697 ,000 and
RMB1,460,034,000 in the consolidated statements of financial position as at 31 December 2021, 2022 and 2023 and 31 May 2023 and 2024, respectively.
APPENDIX I ACCOUNTANTS’ REPORT
– I-13 –


--- page 576 ---
CONSOLIDATED STATEMENTS OF CASH FLOWS
Y ear ended 31 December
Five months ended
31 May
Notes 2021 2022 2023 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
CASH FLOWS FROM
OPERATING ACTIVITIES
Loss before tax (650,302) (545,473) (579,768) (269,254) (411,396)
Adjustments for:
Depreciation of property, plant
and equipment 6, 13 61,370 78,352 92,792 35,160 37,423
Depreciation of right-of-use assets 6, 14 18,577 20,138 18,151 8,155 7,718
Amortisation of other
intangible assets 6, 15 6,519 7,880 9,677 4,298 4,238
Share-based payment expenses 6, 34 31,326 27,094 87,066 19,123 117,484
Share of losses of:
A joint venture 5,750 18,75 0–––
Associates 2,466 2,695 3,855 2,680 5,721
Impairment losses on financial
assets and a financial guarantee
obligation, net 6 144,636 15,459 63,965 18,881 41,455
Impairment losses on
intangible assets 6, 15 2,446––––
Impairment losses on property,
plant and equipment 6, 13 10,41 8––––
Write-down of inventories to
net realisable value 6, 21 47,671 82,113 31,765 16,470 8,476
Finance costs 7 50,058 49,019 47,926 18,345 24,906
Interest income 5 (7,472) (18,021) (16,166) (6,673) (2,500)
Investment income from
structured deposits 5 – (920) (1,269) (495) –
Fair value (gains)/losses on
financial assets at fair value
through profit or loss 6 (436) (881) 3,120 18 2,171
Fair value loss on a derivative
financial instrument 6 607 19,68 1–––
Gain on deemed disposal of
equity of associates 5 (6,234) (3,594) – – –
Gains on disposal of associates 5 (6,937) – (2,010) – (950)
Government grants and subsidies
credited to the statement of
profit or loss (8,229) (11,790) (11,400) (3,849) (4,259)
Warranty provision 6 11,937 11,108 18,461 2,358 1,221
Losses on disposal of items of
property, plant and equipment 6 – 1,137 512 – 910
Loss on disposal of a derivative
financial instrument 6 – – 719 719 –
Loss/(gain) on a lease term
termination 6, 14 25 – (40) (40) –
Anti-dilution compensation to
investors 6 – 3,86 9–––
(285,804) (243,384) (232,644) (154,104) (167,382)
continued/...
APPENDIX I ACCOUNTANTS’ REPORT
– I-14 –


--- page 577 ---
Y ear ended 31 December
Five months ended
31 May
2021 2022 2023 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
(Increase)/decrease in inventories (109,563) (99,079) 5,297 (105,743) (104,964)
Increase in deferred income 24,904 10,771 10,600 3,575 342
(Increase)/decrease in restricted cash – (59,902) 59,156 7,293 718
Decrease/(increase) in trade and
bills receivables (476,725) (353,828) (527,533) (55,531) 17,845
Decrease/(increase) in
contract assets – – (31,380) (28,153) 13,998
Decrease/(increase) in prepayments,
other receivables and other assets 51,693 (2,782) (128,823) 80,625 74,235
Increase in other payables and
accruals 29,902 23,751 37,324 (33,487) 24,362
(Decrease)/increase in trade and
bills payables (15,495) 4,722 84,486 (142,928) (25,999)
Increase/(decrease) in
contract liabilities 5,611 (6,139) 7,491 (7,628) 21,437
Increase/(decrease) in provision 2,786 (8,482) (14,930) (2,813) (1,111)
Cash used in operations (772,691) (734,352) (730,956) (438,894) (146,519)
Interest received 7,472 15,935 14,955 6,275 2,500
Income tax paid (2,992) (9,644) (2,404) (1,524) (35)
Net cash flows from
operating activities (768,211) (728,061) (718,405) (434,143) (144,054)
continued/...
APPENDIX I ACCOUNTANTS’ REPORT
– I-15 –


--- page 578 ---
Y ear ended 31 December
Five months ended
31 May
Note 2021 2022 2023 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
CASH FLOWS FROM
INVESTING ACTIVITIES
Proceeds from disposal of items of
property, plant and equipment – 3,087 4,530 11 1,825
Purchases of items of property, plant
and equipment and leasehold land (154,765) (122,003) (142,120) (47,646) (23,703)
Purchase of other intangible assets (11,810) (4,497) (1,932) (191) (564)
Acquisition of a subsidiary 37 –––– (4,186)
Settlement of a derivative
financial instrument – – (38,142) – –
Maturity of financial assets at
fair value through profit or loss – 840,920 337,066 155,495 –
Investment in a joint venture – (24,500) – – –
Investments in associates (12,000) (26,200) (35,250) (10,050) (39,000)
Disposal of an associate 10,000 – 8,250 – –
Disposal of a financial assets at
fair value through other
comprehensive income –––– 6 8 6
Investments in financial assets at
fair value through profit or loss (6,000) (1,175,000) (41,000) – (10,000)
Investments in financial assets at
fair value through other
comprehensive income (10,890) (2,147) (27,895) (17,895) (360)
Disposal of time deposits – – 53,297 – –
Placement in time deposits – (50,000) – – –
Net cash flows from
investing activities (185,465) (560,340) 116,804 79,724 (75,302)
CASH FLOWS FROM
FINANCING ACTIVITIES
Acquisition of non-controlling
interests (8,713) ––––
Capital injection from
non-controlling shareholders 17,500 36,005 1,000 – 8,500
Capital injection from the
Company’s shareholders – 2,182,801 – – –
Anti-dilution compensation
payments to investors – (3,869) – – –
Lease payments (18,316) (21,801) (19,195) (9,797) (10,739)
New interest-bearing
bank and other borrowings 636,128 624,000 561,059 304,800 113,000
Repayment of interest-bearing
bank and other borrowings (236,667) (693,626) (265,383) (153,156) (103,233)
Payments on listing expenditures – – (2,318) – (43)
Deposit paid for supplier
chain financing – – (60,000) – –
Interest paid (21,578) (35,119) (33,751) (9,295) (13,008)
Net cash flows from
financing activities 368,354 2,088,391 181,412 132,552 (5,523)
continued/...
APPENDIX I ACCOUNTANTS’ REPORT
– I-16 –


--- page 579 ---
Y ear ended 31 December
Five months ended
31 May
Note 2021 2022 2023 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
NET (DECREASE)/INCREASE IN
CASH AND CASH
EQUIV ALENTS (585,322) 799,990 (420,189) (221,867) (224,879)
Cash and cash equivalents at
beginning of year/period 862,206 276,220 1,079,456 1,079,456 664,510
Effect of foreign exchange rate
changes, net (664) 3,246 5,243 980 (3,921)
Cash and cash equivalents at
end of year/period 276,220 1,079,456 664,510 858,569 435,710
ANALYSIS OF BALANCES OF
CASH AND CASH
EQUIV ALENTS
Cash and bank balances 25 276,220 1,191,444 665,256 963,662 435,738
Less: Time deposits 25 – 52,086 – 52,484 –
Restricted cash 25 – 59,902 746 52,609 28
Cash and cash equivalents as stated
in the statements of cash flows
and statements of financial
position 276,220 1,079,456 664,510 858,569 435,710
APPENDIX I ACCOUNTANTS’ REPORT
– I-17 –


--- page 580 ---
STATEMENTS OF FINANCIAL POSITION OF THE COMPANY
As at 31 December
As at
31 May
Notes 2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
NON-CURRENT ASSETS
Property, plant and equipment 13 1,179 5,221 9,100 8,127
Right-of-use assets 14 1,151 70,299 52,855 45,712
Other intangible assets 15 283 1,240 1,045 945
Equity investments designated at
fair value through other
comprehensive income 19 13,239 13,859 42,106 40,808
Financial assets at fair value
through profit or loss 24 6,436 6,521 24,079 22,116
Investments in subsidiaries 18 1,578,313 2,596,725 3,211,747 3,291,427
Investments in associates 17 40,158 63,321 91,232 104,817
Total non-current assets 1,640,759 2,757,186 3,432,164 3,513,952
CURRENT ASSETS
Trade and bills receivables 22 70,036 221,974 412,315 389,126
Prepayments, other receivables and
other assets 23 2,891 11,751 35,375 31,636
Due from subsidiaries 41 91,240 863,659 488,943 475,046
Financial assets at fair value
through profit or loss 24 – 280,689 – –
Cash and cash equivalents 25 31,145 67,464 27,060 10,702
Total current assets 195,312 1,445,537 963,693 906,510
CURRENT LIABILITIES
Trade and bills payables 26 17,442 138,865 311,465 297,947
Other payables and accruals 27 5,188 20,783 23,549 25,285
Due to subsidiaries 41 177 97,179 273,361 348,934
Lease liabilities 14 201 13,568 17,859 18,295
Derivative financial instrument 29 – 37,423 – –
Provision 32 11,760–––
Total current liabilities 34,768 307,818 626,234 690,461
NET CURRENT ASSETS 160,544 1,137,719 337,459 216,049
TOTAL ASSETS LESS
CURRENT LIABILITIES 1,801,303 3,894,905 3,769,623 3,730,001
NON-CURRENT LIABILITIES
Lease liabilities 14 994 58,925 41,067 31,589
Deferred income 31 – – 2,400 2,400
Provision 32 5,750–––
Derivative financial instrument 29 17,74 2–––
Total non-current liabilities 24,486 58,925 43,467 33,989
Net assets 1,776,817 3,835,980 3,726,156 3,696,012
EQUITY
Share capital 33 64,996 81,311 81,311 81,311
Reserves 35 1,711,821 3,754,669 3,644,845 3,614,701
Total equity 1,776,817 3,835,980 3,726,156 3,696,012
APPENDIX I ACCOUNTANTS’ REPORT
– I-18 –


--- page 581 ---
II NOTES TO THE HISTORICAL FINANCIAL INFORMATION
1. CORPORATE AND GROUP INFORMATION
Shanghai REFIRE Group Limited, formerly known as Hangzhou Refire Technology Co., Ltd. (the
“Company”), was incorporated as a limited liability company on 18 September 2015. The registered office of the
Company is located at Room 1004, 1/F, Unit 1, 1555 Jingyuan Road, Jiading District, Shanghai, the People’s
Republic of China (the “PRC”). On 11 September 2020, the Company was converted into a joint stock company with
limited liability.
The Company is an investment holding company. During the Relevant Periods, the Company and its
subsidiaries (collectively, the “Group”) were involved in the following principal activities:
 research and development, production and sale of hydrogen fuel cell systems, components and hydrogen
production systems and related components
 provision of hydrogen fuel cell engineering and technical services
As at the end of the Relevant Periods, the Company had direct and indirect interests in its subsidiaries, all of
which are private limited liability companies, the particulars of the major subsidiaries are set out below:
Name Notes
Place and date of
incorporation/
registration and
operations
Nominal value
of issued
ordinary/
registered share
capital
Percentage
of equity
attributable to
the Company
Principal activitiesDirect Indirect
(’000) % %
Shanghai REFIRE
Technology Co., Ltd.
ʮ
̡
(1), (3) PRC/Chinese
Mainland/
17 December 2014
RMB3,000,000 100 – Research and
development
(“R&D”)
manufacture and
sale of fuel cell
systems
Shanghai REFIRE Prismatic
Hydrogen Technology
Co., Ltd.
ҦϞ
ʮ̡
(4), (5) PRC/Chinese
Mainland/26 June
2023
RMB10,000 80 – Technology
development and
sale of
components
Beijing XCELL Technology
Co., Ltd.
ʮ
̡
(4), (5) PRC/Chinese
Mainland/
26 October 2016
RMB9,700 72.16 – Technology
development and
sale of new
energy technology
Changde REFIRE Surge
New Materials
Technology Co., Ltd.
Ҧ
ʮ̡
(4), (5) PRC/Chinese
Mainland/1 April
2023
RMB12,500 70 – Technology
development and
sale of
components
Shanghai PANDO Electric
Technology Co., Ltd.
ʮ
̡
(4), (5) PRC/Chinese
Mainland/
22 January 2018
RMB51,724 51 – R&D and sale of
fuel cell
components
PANDO (Zhejiang) Electric
Technology Co., Ltd.
ᇂਗ(एϪ)ࠢ
ʮ̡
(4), (5) PRC/Chinese
Mainland/
13 September 2021
RMB50,000 51 – Manufacture and
sale of fuel cell
parts
Jiangsu REFIRE Technology
Co., Ltd.
ʮ
̡
(1), (3) PRC/Chinese
Mainland/
23 November 2018
RMB350,000 – 100 Manufacture and
sale of fuel cell
systems
Xiangyang REFIRE
Technology Co., Ltd.
ʮ
̡
(4) PRC/Chinese
Mainland/
27 November 2020
RMB10,000 – 100 Technology
development and
sale of fuel cell
systems
continued/...
APPENDIX I ACCOUNTANTS’ REPORT
– I-19 –


--- page 582 ---
Name Notes
Place and date of
incorporation/
registration and
operations
Nominal value
of issued
ordinary/
registered share
capital
Percentage
of equity
attributable to
the Company
Principal activitiesDirect Indirect
(’000) % %
Tianjin Bohai REFIRE
Technology Co., Ltd.
ҦϞ
ʮ̡
(4) PRC/Chinese
Mainland/23 July
2021
RMB10,000 – 100 Technology
development and
sale of fuel cell
systems
Zhejiang REFIRE
Technology Co., Ltd.
ʮ
̡
(4) PRC/Chinese
Mainland/
2 September 2021
RMB30,000 – 100 Manufacture and
sale of fuel cell
systems
Guangdong REFIRE
Technology Co., Ltd.
ʮ
̡
(4) PRC/Chinese
Mainland/24 April
2018
RMB69,000 – 100 Manufacture and
sale of fuel cell
parts
Shaanxi Daqin REFIRE
Technology Co., Ltd.
ҦϞ
ʮ̡
(4) PRC/Chinese
Mainland/
27 December 2021
RMB100,000 – 100 Technology
development and
sale of fuel cell
systems
Zhengzhou REFIRE
Technology Co., Ltd.
ʮ
̡
(4) PRC/Chinese
Mainland/
24 December 2021
RMB10,000 – 100 Manufacture and
sale of fuel cell
systems
Shanghai Ruisu Technology
Co., Ltd.
ʮ̡
(4) PRC/Chinese
Mainland/12 July
2018
RMB100,000 – 100 Investment holding
Guangzhou Hydrogen
Technology Co., Ltd.
ʮ̡
(4), (5) PRC/Chinese
Mainland/17 July
2019
RMB10,000 – 60 Sale of fuel cell
system
Foshan Nanhai Cunqiu
Equity Investment Co.,
Ltd.
ᛆҳ
ʮ̡
(4), (6) PRC/Chinese
Mainland/16 March
2020
RMB1,260,000 – 100 Investment holding
Guangdong Discovery
Motors Co., Ltd.
ʮ̡
(4) PRC/Chinese
Mainland/
31 December 2018
RMB441,500 – 100 Sale of fuel cell
system
Unilia (Guangdong) Fuel
Cells Inc.
ཥϫ(؇)ࠢ
ʮ̡
(4), (5) PRC/Chinese
Mainland/27 August
2020
RMB14,178 – 80.9 R&D, manufacture
and sale of fuel
cell stacks
Unilia (Shanghai) Fuel Cells
Inc.
ࠢ
ʮ̡
(2), (3), (5) PRC/Chinese
Mainland/23 May
2017
RMB100,000 – 80.9 R&D, manufacture
and sale of fuel
cell stacks
Shanghai Unilia Hydrogen
Technology Ltd.
ʮ
̡
(4), (5) PRC/Chinese
Mainland/
23 December 2021
RMB10,000 – 80.9 Technology
development and
manufacture of
fuel cell stacks
and core
components
Shanghai Unilia
Technologies Inc.
ʮ̡
(4), (5) PRC/ Chinese
Mainland/
16 November 2018
RMB60,000 – 80.9 Investment holding
continued/...
APPENDIX I ACCOUNTANTS’ REPORT
– I-20 –


--- page 583 ---
Name Notes
Place and date of
incorporation/
registration and
operations
Nominal value
of issued
ordinary/
registered share
capital
Percentage
of equity
attributable to
the Company
Principal activitiesDirect Indirect
(’000) % %
Zhejiang Unilia Hydrogen
Technology Ltd.
ʮ
̡
(4), (5) PRC/Chinese
Mainland/
31 March 2022
RMB50,000 – 80.9 Technology
development and
manufacture of
bipolar plates, the
core components
of fuel cells
Foshan Diyi Element New
Energy Technology Co.,
Ltd.
Ҧ
ʮ̡
(4), (5) PRC/Chinese
Mainland/
5 December 2022
RMB120,000 45 10 Manufacture and
sale of fuel cell
systems
Unilia (Hong Kong) Fuel
Cells Ltd.
(4), (5) Hong Kong/
4 January 2019
RMB2,722 – 80.9 Investment holding
Unilia (Canada) Fuel Cell
Inc.
(4), (5) Canada/8 September
2017
CAD9,759.3 – 80.9 R&D of fuel cell
stack technology
REFIRE Europe GmbH (4) Germany/
23 June 2023
EUR25 100 – R&D and sales of
products and the
provision of
services in the
field of fuel cells
and hydrogen
technology in
Europe
Jia Hydrogen (Shanghai)
Industrial Co., Ltd.
ྗ૫(ɪऎ)ʮ̡
(4) PRC/Chinese
Mainland/
20 October 2017
RMB50,000 100 – Operating
hydrogenation
station
Jia Hydrogen One
(Shanghai) Energy
Technology Co., Ltd.
ྗ૫ɓ(ɪऎ)ҦϞ
ʮ̡
(4) PRC/Chinese
Mainland/
27 November 2017
RMB10,000 100 – Operating
hydrogenation
station
The English names of all group companies registered in the PRC represent the best efforts made by the
management of the Company to translate the Chinese names of these companies as they do not have official English
names.
Notes:
(1) The statutory financial statements for the years ended 31 December 2021 and 2022 prepared in accordance
with China Accounting Standards for Business Enterprises and regulations have been audited by Baker Tilly
China Certified Public Accountants (ה(౷ஷΥྫ)), which is a certified public
accounting firm registered in the PRC.
(2) The statutory financial statements for the year ended 31 December 2022 prepared in accordance with China
Accounting Standards for Business Enterprises have been audited by Baker Tilly China Certified Public
Accountants (ה(౷ஷΥྫ)), which is a certified public accounting firm registered in
the PRC.
(3) The statutory financial statements for the year ended 31 December 2023 prepared in accordance with China
Accounting Standards for Business Enterprises have been audited by Beijing Sino-West Global Accountants
(הwhich is a certified public accounting firm registered in the PRC.
(4) No audited financial statements have been prepared for these entities since their dates of incorporation.
(5) These companies are subsidiaries of non-wholly-owned subsidiaries of the Company and, accordingly, are
accounted for as subsidiaries by virtue of the Company having control over them.
(6) The Group legally transferred 48.97% equity interests in Foshan Nanhai Cunqiu Equity Investment Co., Ltd.
as collateral to trust financing companies on 15 March 2020. Under arrangements, the Group was obliged to
purchase the related equity interests at a fixed amount on a future date upon repayment of the borrowings from
the trust financing companies.
APPENDIX I ACCOUNTANTS’ REPORT
– I-21 –


--- page 584 ---
2.1 BASIS OF PREPARATION
The Historical Financial Information has been prepared in accordance with International Financial Reporting
Standards (“IFRSs”), which comprise all standards and interpretations approved by the International Accounting
Standards Board (the “IASB”). All IFRSs effective for the accounting period commencing from 1 January 2024,
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. They have been prepared under the historical cost
convention, except for a derivative financial instrument, structured deposits, private equity funds and equity
investments which have been measured at fair value.
Basis of consolidation
The consolidated financial statements include the financial statements of the Group for the Relevant Periods.
A subsidiary is an entity (including a structured entity), directly or indirectly, controlled by the Company. Control
is achieved when the Group is exposed, or has rights, to variable returns from its involvement with the investee and
has the ability to affect those returns through its power over the investee (i.e., existing rights that give the Group the
current ability to direct the relevant activities of the investee).
Generally, there is a presumption that a majority of voting rights results in control. When the Company has
less than a majority of the voting or similar rights of an investee, the Group considers all relevant facts and
circumstances in assessing whether it has power over an investee, including:
(a) the contractual arrangement with the other vote holders of the investee;
(b) rights arising from other contractual arrangements; and
(c) the Group’s voting rights and potential voting rights.
The financial statements of the subsidiaries are prepared for the same reporting period as the Company, using
consistent accounting policies. The results of subsidiaries are consolidated from the date on which the Group obtains
control, and continue to be consolidated until the date that such control ceases.
Profit or loss and each component of other comprehensive income are attributed to the owners of the parent
of the Group and to the non-controlling interests, even if this results in the non-controlling interests having a deficit
balance. All intra-group assets and liabilities, equity, income, expenses and cash flows relating to transactions
between members of the Group are eliminated in full on consolidation.
The Group reassesses whether or not it controls an investee if facts and circumstances indicate that there are
changes to one or more of the three elements of control described above. A change in the ownership interest of a
subsidiary, without a loss of control, is accounted for as an equity transaction.
If the Group loses control over a subsidiary, it derecognises the related assets (including goodwill), liabilities,
any non-controlling interest and the exchange fluctuation reserve, and recognises the fair value of any investment
retained and any resulting surplus or deficit in profit or loss. The Group’s share of components previously recognised
in other comprehensive income is reclassified to profit or loss or retained profits, as appropriate, on the same basis
as would be required if the Group had directly disposed of the related assets or liabilities.
2.2 ISSUED BUT NOT YET EFFECTIVE INTERNATIONAL FINANCIAL REPORTING STANDARDS
The Group has not applied the following new and revised IFRSs, that have been issued but are not yet effective,
in the Historical Financial Information. The Group intends to apply these new and revised IFRSs, if applicable, when
they become effective.
Amendments to IAS 21 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Lack of Exchangeability
1
Amendments to IFRS 9 and IFRS 7 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Amendments to the Classification and Measurement
of Financial Instrument 2
IFRS 18 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Presentation and Disclosure in Financial
Statements 3
IFRS 19 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Subsidiaries without Public Accountability:
Disclosures 3
Amendments to IFRS 10 and IAS 28 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Sale or Contribution of Assets between an Investor
and its Associate or Joint V enture 4
APPENDIX I ACCOUNTANTS’ REPORT
– I-22 –


--- page 585 ---
1 Effective for annual periods beginning on or after 1 January 2025
2 Effective for annual periods beginning on or after 1 January 2026
3 Effective for annual periods beginning on or after 1 January 2027
4 No mandatory effective date yet determined but available for adoption
The Group has already commenced an assessment of the impact of the new and revised IFRSs, which are
relevant to the Group’s operations. According to the preliminary assessment made by the directors, no significant
impact on the financial performance and financial position of the Group is expected when the new and revised IFRSs
become effective.
2.3 MATERIAL ACCOUNTING POLICIES
Investments in associates and a joint venture
An associate is an entity in which the Group has a long term interest of generally not less than 20% of the
equity voting rights and over which it has significant influence. Significant influence is the power to participate in
the financial and operating policy decisions of the investee, but is not control or joint control over those policies.
A joint venture is a type of joint arrangement whereby the parties that have joint control of the arrangement
have rights to the net assets of the joint ventures. Joint control is the contractually agreed sharing of control of an
arrangement, which exists only when decisions about the relevant activities require the unanimous consent of the
parties sharing control.
The Group’s investments in associates and a joint venture are stated in the consolidated statement of financial
position at the Group’s share of net assets under the equity method of accounting, less any impairment losses. The
Group’s share of the post-acquisition results and other comprehensive income of associates and a joint venture is
included in the consolidated statement of profit or loss and consolidated statement of other comprehensive income,
respectively. In addition, when there has been a change recognised directly in the equity of the associate or a joint
venture, the Group recognises its share of any changes, when applicable, in the consolidated statement of changes
in equity. Unrealised gains and losses resulting from transactions between the Group and its associates or a joint
venture are eliminated to the extent of the Group’s investments in the associates or a joint venture, except where
unrealised losses provide evidence of an impairment of the assets transferred. Goodwill arising from the acquisition
of associates or a joint venture is included as part of the Group’s investments in associates or a joint venture.
If an investment in an associate becomes an investment in joint ventures or vice versa, the retained interest
is not remeasured. Instead, the investment continues to be accounted for under the equity method. In all other cases,
upon loss of significant influence over the associate or joint control over the joint ventures, the Group measures and
recognises any retained investment at its fair value. Any difference between the carrying amount of the associate or
joint ventures upon loss of significant influence or joint control and the fair value of the retained investment and
proceeds from disposal is recognised in profit or loss.
Business combinations
Business combinations are accounted for using the acquisition method. The consideration transferred is
measured at the acquisition date fair value which is the sum of the acquisition date fair values of assets transferred
by the Group, liabilities assumed by the Group to the former owners of the acquiree and the equity interests issued
by the Group in exchange for control of the acquiree. For each business combination, the Group elects whether to
measure the non-controlling interests in the acquiree at fair value or at the proportionate share of the acquiree’s
identifiable net assets. All other components of non-controlling interests are measured at fair value. Acquisition-
related costs are expensed as incurred.
The Group determines that it has acquired a business when the acquired set of activities and assets includes
an input and a substantive process that together significantly contribute to the ability to create outputs.
When the Group acquires a business, it assesses the financial assets and liabilities assumed for appropriate
classification and designation in accordance with the contractual terms, economic circumstances and pertinent
conditions as at the acquisition date. This includes the separation of embedded derivatives in host contracts of the
acquiree.
If the business combination is achieved in stages, the previously held equity interest is remeasured at its
acquisition date fair value and any resulting gain or loss is recognised in profit or loss.
APPENDIX I ACCOUNTANTS’ REPORT
– I-23 –


--- page 586 ---
Fair value measurement
The Group measures its derivative financial instrument, structured deposits, equity investments and private
equity funds at fair value at the end of each reporting period. Fair value is the price that would be received to sell
an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.
The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability
takes place either in the principal market for the asset or liability, or in the absence of a principal market, in the most
advantageous market for the asset or liability. The principal or the most advantageous market must be accessible by
the Group. The fair value of an asset or a liability is measured using the assumptions that market participants would
use when pricing the asset or liability, assuming that market participants act in their economic best interest.
A fair value measurement of a non-financial asset takes into account a market participant’s ability to generate
economic benefits by using the asset in its highest and best use or by selling it to another market participant that
would use the asset in its highest and best use.
The Group uses valuation techniques that are appropriate in the circumstances and for which sufficient data
are available to measure fair value, maximising the use of relevant observable inputs and minimising the use of
unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in the financial statements are
categorised within the fair value hierarchy, described as follows, based on the lowest level input that is significant
to the fair value measurement as a whole:
Level 1 – based on quoted prices (unadjusted) in active markets for identical assets or liabilities
Level 2 – based on valuation techniques for which the lowest level input that is significant to the fair value
measurement is observable, either directly or indirectly
Level 3 – based on valuation techniques for which the lowest level input that is significant to the fair value
measurement is unobservable
For assets and liabilities that are recognised in the financial statements on a recurring basis, the Group
determines whether transfers have occurred between levels in the hierarchy by reassessing categorisation (based on
the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.
Impairment of non-financial assets
Where an indication of impairment exists, or when annual impairment testing for an asset is required (other
than inventories, contract assets, 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 the statement of profit or loss in the period in which it arises in those expense categories
consistent with the function of the impaired asset.
An assessment is made at the end of each reporting period as to whether there is an indication that previously
recognised impairment losses may no longer exist or may have decreased. If such an indication exists, the recoverable
amount is estimated. A previously recognised impairment loss of an asset other than goodwill is reversed only if there
has been a change in the estimates used to determine the recoverable amount of that asset, but not to an amount higher
than the carrying amount that would have been determined (net of any depreciation/amortisation) had no impairment
loss been recognised for the asset in prior years. A reversal of such an impairment loss is credited to the statement
of profit or loss in the period in which it arises unless the asset is carried at a revalued amount, in which case the
reversal of the impairment loss is accounted for in accordance with the relevant accounting policy for that revalued
asset.
APPENDIX I ACCOUNTANTS’ REPORT
– I-24 –


--- page 587 ---
Related parties
A party is considered to be related to the Group if:
(a) the party is a person or a close member of that person’s family and that person:
(i) has control or joint control over the Group;
(ii) has significant influence over the Group; or
(iii) is a member of the key management personnel of the Group or of a parent of the Group;
or
(b) the party is an entity where any of the following conditions applies:
(i) the entity and the Group are members of the same group;
(ii) one entity is an associate or joint venture of the other entity (or of a parent, subsidiary or fellow
subsidiary of the other entity);
(iii) the entity and the Group are joint ventures of the same third party;
(iv) one entity is a joint venture of a third entity and the other entity is an associate of the third entity;
(v) the entity is a post-employment benefit plan for the benefit of employees of either the Group or
an entity related to the Group; and the sponsoring employers of the post-employment benefit plan;
(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:
Buildings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183% to 5%
Leasehold improvements /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Over the shorter of the lease terms and 16%
Vehicles /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111819% to 25%
Machinery /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189% to 33%
Office equipment and electronic devices /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189% to 33%
APPENDIX I ACCOUNTANTS’ REPORT
– I-25 –


--- page 588 ---
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 the end of each of the reporting periods.
Software
Purchased software is stated at cost less any impairment losses and is amortised on the straight-line basis over
its estimated useful lives of 5 to 10 years, which is mainly determined by reference to the licensed period of the
purchased software.
Patents and licences
Purchased patents and licences are stated at cost less any impairment losses and are amortised on the
straight-line basis over their estimated useful life of 5 to 8 years, which is mainly determined by reference to the
period during which such assets are expected to bring economic benefits to the Group.
Research and development costs
All research costs are charged to the statement of profit or loss as incurred.
Leases
The Group assesses at contract inception whether a contract is, or contains, a lease. A contract is, or contains,
a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for
consideration.
Group as a lessee
The Group applies a single recognition and measurement approach for all leases, except for short-term leases
and leases of low-value assets. The Group recognises lease liabilities to make lease payments and right-of-use assets
representing the right to use the underlying assets.
(a) Right-of-use assets
Right-of-use assets are recognised at the commencement date of the lease (that is the date the underlying
asset is available for use). Right-of-use assets are measured at cost, less accumulated depreciation and any
impairment losses, and adjusted for any remeasurement of lease liabilities. The cost of right-of-use assets
includes the amount of lease liabilities recognised, initial direct costs incurred, and lease payments made at
or before the commencement date less any lease incentives received. Right-of-use assets are depreciated on a
straight-line basis over the shorter of the lease terms and the estimated useful lives of the assets as follows:
Leasehold land /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111850 years
Plant and properties /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181.5 to 8 years
If ownership of the leased asset transfers to the Group by the end of the lease term or the cost reflects
the exercise of a purchase option, depreciation is calculated using the estimated useful life of the asset.
APPENDIX I ACCOUNTANTS’ REPORT
– I-26 –


--- page 589 ---
(b) Lease liabilities
Lease liabilities are recognised at the commencement date of the lease at the present value of lease
payments to be made over the lease term. The lease payments include fixed payments (including in-substance
fixed payments) less any lease incentives receivable, variable lease payments that depend on an index or a rate,
and amounts expected to be paid under residual value guarantees. The lease payments also include the exercise
price of a purchase option reasonably certain to be exercised by the Group and payments of penalties for
termination of a lease, if the lease term reflects the Group exercising the option to terminate the lease. The
variable lease payments that do not depend on an index or a rate are recognised as an expense in the period
in which the event or condition that triggers the payment occurs.
In calculating the present value of lease payments, the Group uses its incremental borrowing rate at the
lease commencement date because the interest rate implicit in the lease is not readily determinable. After the
commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced
for the lease payments made. In addition, the carrying amount of lease liabilities is remeasured if there is a
modification, a change in the lease term, a change in lease payments (e.g., a change to future lease payments
resulting from a change in an index or rate) or a change in assessment of an option to purchase the underlying
asset.
(c) Short-term leases and leases of low-value assets
The Group applies the short-term lease recognition exemption to its short-term leases of machinery and
equipment (that is those leases that have a lease term of 12 months or less from the commencement date and
do not contain a purchase option). It also applies the recognition exemption for leases of low-value assets to
leases of office equipment that 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.
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.
APPENDIX I ACCOUNTANTS’ REPORT
– I-27 –


--- page 590 ---
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 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.
Financial assets designated at fair value through other comprehensive income (equity investments)
Upon initial recognition, the Group can elect to classify irrevocably its equity investments as equity
investments designated at fair value through other comprehensive income when they meet the definition of equity
under IAS 32 Financial Instruments: Presentation and are not held for trading. The classification is determined on
an instrument-by-instrument basis.
Gains and losses on these financial assets are never recycled to the statement of profit or loss. Dividends are
recognised as other income in the statement of profit or loss when the right of payment has been established, except
when the Group benefits from such proceeds as a recovery of part of the cost of the financial asset, in which case,
such gains are recorded in other comprehensive income. Equity investments designated at fair value through other
comprehensive income are not subject to impairment assessment.
Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss are carried in the statement of financial position at fair value
with net changes in fair value recognised in the statement of profit or loss.
This category includes equity investments which the Group had not irrevocably elected to classify at fair value
through other comprehensive income. Dividends on the equity investments are also recognised as other income in the
statement of profit or loss when the right of payment has been established.
A derivative embedded in a hybrid contract, with a financial liability or non-financial host, is separated from
the host and accounted for as a separate derivative if the economic characteristics and risks are not closely related
to the host; a separate instrument with the same terms as the embedded derivative would meet the definition of a
derivative; and the hybrid contract is not measured at fair value through profit or loss. Embedded derivatives are
measured at fair value with changes in fair value recognised in the statement of profit or loss. Reassessment only
occurs if there is either a change in the terms of the contract that significantly modifies the cash flows that would
otherwise be required or a reclassification of a financial asset out of the fair value through profit or loss category.
A derivative embedded within a hybrid contract containing a financial asset host is not accounted for
separately. The financial asset host together with the embedded derivative is required to be classified in its entirety
as a financial asset at fair value through profit or loss.
Derecognition of financial assets
A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets)
is primarily derecognised (i.e., removed from the Group’s consolidated statement of financial position) when:
 the rights to receive cash flows from the asset have expired; or
 the Group has transferred its rights to receive cash flows from the asset or has assumed an obligation
to pay the received cash flows in full without material delay to a third party under a “pass-through”
arrangement; and either (a) the Group has transferred substantially all the risks and rewards of the asset,
or (b) the Group has neither transferred nor retained substantially all the risks and rewards of the asset,
but has transferred control of the asset.
APPENDIX I ACCOUNTANTS’ REPORT
– I-28 –


--- page 591 ---
When the Group has transferred its rights to receive cash flows from an asset or has entered into a pass-through
arrangement, it evaluates if, and to what extent, it has retained the risk and rewards of ownership of the asset. When
it has neither transferred nor retained substantially all the risks and rewards of the asset nor transferred control of
the asset, the Group continues to recognise the transferred asset to the extent of the Group’s continuing involvement.
In that case, the Group also recognises an associated liability. The transferred asset and the associated liability are
measured on a basis that reflects the rights and obligations that the Group has retained.
Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower
of the original carrying amount of the asset and the maximum amount of consideration that the Group could be
required to repay.
Impairment of financial assets
The Group recognises an allowance for expected credit losses (“ECLs”) for all debt instruments not held at fair
value through profit or loss. ECLs are based on the difference between the contractual cash flows due in accordance
with the contract and all the cash flows that the Group expects to receive, discounted at an approximation of the
original effective interest rate. The expected cash flows will include cash flows from the sale of collateral held or
other credit enhancements that are integral to the contractual terms.
General approach
ECLs are recognised in two stages. For credit exposures for which there has not been a significant increase
in credit risk since initial recognition, ECLs are provided for credit losses that result from default events that are
possible within the next 12 months (a 12-month ECL). For those credit exposures for which there has been a
significant increase in credit risk since initial recognition, a loss allowance is required for credit losses expected over
the remaining life of the exposure, irrespective of the timing of the default (a lifetime ECL).
At the end of each of the reporting periods, 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 a financial asset in default when contractual payments are 360 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 and contract assets which apply the simplified approach as detailed below.
Stage 1 – Financial instruments for which credit risk has not increased significantly since initial 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 and contract assets that do not contain a significant financing component or when the
Group applies the practical expedient of not adjusting the effect of a significant financing component, the Group
applies the simplified approach in calculating ECLs. Under the simplified approach, the Group does not track changes
in credit risk, but instead recognises a loss allowance based on lifetime ECLs at 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.
For trade receivables and contract assets that contain a significant financing component and lease receivables,
the Group chooses as its accounting policy to adopt the simplified approach in calculating ECLs with policies as
described above.
APPENDIX I ACCOUNTANTS’ REPORT
– I-29 –


--- page 592 ---
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, or payables, as appropriate.
All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and
payables, net of directly attributable transaction costs.
The Group’s financial liabilities include trade payables, other payables and accruals, a derivative financial
instrument, lease liabilities and interest-bearing bank and other borrowings.
Subsequent measurement
The subsequent measurement of financial liabilities depends on their classification as follows:
Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial
liabilities designated upon initial recognition as at fair value through profit or loss.
Financial liabilities are classified as held for trading if they are incurred for the purpose of repurchasing in the
near term. This category also includes derivative financial instruments entered into by the Group that are not
designated as hedging instruments in hedge relationships as defined by IFRS 9. Separated embedded derivatives are
also classified as held for trading unless they are designated as effective hedging instruments. Gains or losses on
liabilities held for trading are recognised in the statement of profit or loss. The net fair value gain or loss recognised
in the statement of profit or loss does not include any interest charged on these financial liabilities.
Financial liabilities at amortised cost (trade and other payables, and borrowings)
After initial recognition, trade and other payables, and interest-bearing bank and other 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.
Financial guarantee contracts
Financial guarantee contracts issued by the Group are those contracts that require a payment to be made to
reimburse the holder for a loss it incurs because the specified debtor fails to make a payment when due in accordance
with the terms of a debt instrument. A financial guarantee contract is recognised initially as a liability at its fair value,
adjusted for transaction costs that are directly attributable to the issuance of the guarantee. Subsequent to initial
recognition, the Group measures the financial guarantee contracts at the higher of: (i) the ECL allowance determined
in accordance with the policy as set out in “Impairment of financial assets”; and (ii) the amount initially recognised
less, when appropriate, the cumulative amount of income recognised.
Derecognition of financial liabilities
A financial liability is derecognised when the obligation under the liability is discharged or cancelled, or
expires.
When an existing financial liability is replaced by another from the same lender on substantially different
terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as
a derecognition of the original liability and a recognition of a new liability, and the difference between the respective
carrying amounts is recognised in the statement of profit or loss.
APPENDIX I ACCOUNTANTS’ REPORT
– I-30 –


--- page 593 ---
Offsetting of financial instruments
Financial assets and financial liabilities are offset and the net amount is reported in the statement of 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.
Derivative financial instruments
Initial recognition and subsequent measurement
The derivative financial instrument is initially recognised at fair value on the date a derivative contract is
entered into and are subsequently remeasured at their fair value at the end of each reporting period. Change in fair
value of the derivative financial instrument is recognised in the statement of profit or loss.
Inventories
Inventories are stated at the lower of cost and net realisable value. Cost is determined on the weighted average
basis and, in the case of work in progress and finished goods, comprises direct materials, direct labour and an
appropriate proportion of overheads. Net realisable value is based on estimated selling prices less any estimated costs
to be incurred to completion and disposal.
Cash and cash equivalents
Cash and cash equivalents in the statement of financial position comprise cash on hand and at banks, and short-
term highly liquid deposits with a maturity of generally within three months that are readily convertible into known
amounts of cash, subject to an insignificant risk of changes in value and held for the purpose of meeting short-term
cash commitments.
For the purpose of the consolidated statement of cash flows, cash and cash equivalents comprise cash on hand
and at banks, and short-term deposits as defined above, less bank overdrafts which are repayable on demand and form
an integral part of the Group’s cash management.
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.
The Group provides for warranties in relation to the sale of hydrogen fuel cell systems, components and
hydrogen production systems for general repairs of defects occurring during the warranty period. Provisions for these
assurance-type warranties granted by the Group are initially recognised based on sales volume and past experience
of the level of repairs and returns, discounted to their present values as appropriate. The warranty-related cost is
revised annually.
Income tax
Income tax comprises current and deferred tax. Income tax relating to items recognised outside profit or loss
is recognised outside profit or loss, either in other comprehensive income or directly in equity.
Current tax assets and liabilities are measured at the amount expected to be recovered from or paid to the
taxation authorities, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of
the reporting period, taking into consideration interpretations and practices prevailing in the countries in which the
Group operates.
Deferred tax is provided, using the liability method, on all temporary differences at the end of the reporting
period between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.
APPENDIX I ACCOUNTANTS’ REPORT
– I-31 –


--- page 594 ---
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, associates and
a joint venture, 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, associates
and a joint venture, deferred tax assets are only recognised to the extent that it is probable that the
temporary differences will reverse in the foreseeable future and taxable profit will be available against
which the temporary differences can be utilised.
The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the
extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred
tax asset to be utilised. Unrecognised deferred tax assets are reassessed at the end of each reporting period and are
recognised to the extent that it has become probable that sufficient taxable profit will be available to allow all or part
of the deferred tax asset to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period when
the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively
enacted by the end of the reporting period.
Deferred tax assets and deferred tax liabilities are offset if and only if the Group has a legally enforceable right
to set off current tax assets and current tax liabilities and the deferred tax assets and deferred tax liabilities relate to
income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities which
intend either to settle current tax liabilities and assets on a net basis, or to realise the assets and settle the liabilities
simultaneously, in each future period in which significant amounts of deferred tax liabilities or assets are expected
to be settled or recovered.
Government grants
Government grants are recognised at their fair value where there is reasonable assurance that the grant will be
received and all attaching conditions will be complied with. When the grant relates to an expense item, it is
recognised as income on a systematic basis over the periods that the costs, for which it is intended to compensate,
are expensed.
Where the grant relates to an asset, the fair value is credited to a deferred income account and is released to
the statement of profit or loss over the expected useful life of the relevant asset by equal annual instalments or
deducted from the carrying amount of the asset and released to the statement of profit or loss by way of a reduced
depreciation charge.
Where the Group receives government loans granted with no interest for the industrial support, the initial
carrying amount of the government loans is determined using the effective interest rate method, as further explained
in the accounting policy for “Financial liabilities” above. The benefit of the government loans granted with no or at
a below-market rate of interest, which is the difference between the initial carrying value of the loans and the
proceeds received, is treated as a government grant and released to the statement of profit or loss over the expected
useful life of the relevant asset by equal annual instalments.
APPENDIX I ACCOUNTANTS’ REPORT
– I-32 –


--- page 595 ---
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 contract contains a financing component which provides the customer with a significant benefit of
financing the transfer of goods or services to the customer, 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 consideration in a contract includes a variable amount, the amount of consideration is estimated to
which the Group will be entitled in exchange for transferring the goods or services to the customer. The variable
consideration is estimated at contract inception and constrained until it is highly probable that a significant revenue
reversal in the amount of cumulative revenue recognised will not occur when the associated uncertainty with the
variable consideration is subsequently resolved.
(a) Sale of hydrogen fuel cell systems, components and hydrogen production systems
The Group manufactures and sells hydrogen fuel cell systems, components and hydrogen production
systems in the market. Revenue from sales of hydrogen fuel cell systems, components and hydrogen
production systems is recognised at the point in time when control of the products has transferred, being when
the products are delivered to the customer, and there is no unfulfilled obligation that could affect the
customer’s acceptance of the products. Delivery occurs when the products have been shipped to the specific
location, the risks of obsolescence and loss have been transferred to the customer, and either the customer has
accepted the products in accordance with the sales contract, the acceptance provisions have lapsed, or the
Group has objective evidence that all criteria for acceptance have been satisfied.
Certain sales contracts have back-to-back terms that the settlement of trade receivables from the
customer associated with the customer’s receipt of subsidies from the government, which give rise to variable
consideration.
(b) Provision of hydrogen fuel cell engineering and technical services and others
The Group recognises revenue from the hydrogen fuel cell engineering and technical services at a point
in time when the relevant services are rendered and acknowledged for receipt by the customers. Contract costs
include contract fulfilment costs. Costs incurred for provision of hydrogen fuel cell engineering and technical
services are recognised as contract fulfilment costs, which is recognised as the cost of sales when recognising
revenue. If the carrying amount of the contract costs is higher than the remaining consideration expected to
be obtained by rendering of the service net of the estimated cost to be incurred, the Group makes provision
for impairment on the excess portion and recognises it as asset impairment losses.
Revenue from provision of separate after-sales services is recognised over the scheduled period on a
straight-line basis because the customer simultaneously receives and consumes the benefits provided by the
Group.
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 assets
If the Group performs by transferring goods or services to a customer before being unconditionally entitled to
the consideration under the contract terms, a contract asset is recognised for the earned consideration that is
conditional. Contract assets are subject to impairment assessment, details of which are included in the accounting
policies for impairment of financial assets. They are reclassified to trade receivables when the right to the
consideration becomes unconditional.
APPENDIX I ACCOUNTANTS’ REPORT
– I-33 –


--- page 596 ---
Contract liabilities
A contract liability is recognised when a payment is received or a payment is due (whichever is earlier) from
a customer before the Group transfers the related goods or services. Contract liabilities are recognised as revenue
when the Group performs under the contract (i.e., transfers control of the related goods or services to the customer).
Share-based payments
Several employee incentive schemes and a Pre-IPO share option scheme are operated for the purpose of
providing incentives and rewards to eligible participants who contribute to the success of the Group’s operations.
Employees (including directors) of the Group receive remuneration in the form of share-based payments, whereby
employees render services in exchange for equity instruments (“equity-settled transactions”). The cost of
equity-settled transactions with employees is measured by reference to the fair value at the date at which they are
granted. The fair values for the employee incentive schemes are determined by a third party valuer based on
investors’ recent transaction price and independent valuation. The fair value for the Pre-IPO share option scheme is
determined by an external valuer using a binomial model. Further details of which are given in note 34 to the financial
statements.
The cost of equity-settled transactions is recognised in employee benefit expense, together with a
corresponding increase in equity, over the period in which the performance and/or service conditions are fulfilled.
The cumulative expense recognised for equity-settled transactions at the end of each reporting period until the vesting
date reflects the extent to which the vesting period has expired and the Group’s best estimate of the number of equity
instruments that will ultimately vest. The charge or credit to the statement of profit or loss for a period represents
the movement in the cumulative expense recognised as at the beginning and end of that period.
Service and non-market performance conditions are not taken into account when determining the grant date
fair value of awards, but the likelihood of the conditions being met is assessed as part of the Group’s best estimate
of the number of equity instruments that will ultimately vest. Market performance conditions are reflected within the
grant date fair value. Any other conditions attached to an award, but without an associated service requirement, are
considered to be non-vesting conditions. Non-vesting conditions are reflected in the fair value of an award and lead
to an immediate expensing of an award unless there are also service and/or performance conditions.
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. This includes any award where non-vesting
conditions within the control of either the Group or the employee are not met. However, if a new award is substituted
for the cancelled award, and is designated as a replacement award on the date that it is granted, the cancelled and
new awards are treated as if they were a modification of the original award, as described in the previous paragraph.
The dilutive effect of outstanding options is reflected as additional share dilution in the computation of
earnings per share.
Other employee benefits
Pension schemes
The Group operates a defined contribution Mandatory Provident Fund retirement benefit scheme (the “MPF
Scheme”) under the Mandatory Provident Fund Schemes Ordinance for certain of its employees. Contributions are
made based on a percentage of the employees’ basic salaries and are charged to the statement of profit or loss as they
become payable in accordance with the rules of the MPF Scheme. The assets of the MPF Scheme are held separately
from those of the Group in an independently administered fund. The Group’s employer contributions vest fully with
the employees when contributed into the MPF Scheme.
APPENDIX I ACCOUNTANTS’ REPORT
– I-34 –


--- page 597 ---
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. 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.
Termination benefits
Termination benefits are recognised at the earlier of when the Group can no longer withdraw the offer of those
benefits and when the Group recognises restructuring costs involving the payment of termination benefits.
Borrowing costs
Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, i.e.,
assets that necessarily take a substantial period of time to get ready for their intended use or sale, are capitalised as
part of the cost of those assets. The capitalisation of such borrowing costs ceases when the assets are substantially
ready for their intended use or sale. All other borrowing costs are expensed in the period in which they are incurred.
Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds.
Dividends
Final dividends are recognised as a liability when they are approved by the shareholders in a general meeting.
Foreign currencies
The Historical Financial Information is presented in RMB, which is the Company’s functional currency. Each
entity in the Group determines its own functional currency and items included in the financial statements of each
entity are measured using that functional currency. Foreign currency transactions recorded by the entities in the
Group are initially recorded using their respective functional currency rates prevailing at the dates of the transactions.
Monetary assets and liabilities denominated in foreign currencies are translated at the functional currency rates of
exchange ruling at the end of the reporting period. Differences arising on settlement or translation of monetary items
are recognised in the statement of profit or loss.
Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the
exchange rates at the dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency
are translated using the exchange rates at the date when the fair value was measured. The gain or loss arising on
translation of a non-monetary item measured at fair value is treated in line with the recognition of the gain or loss
on change in fair value of the item (i.e., translation difference on the item whose fair value gain or loss is recognised
in other comprehensive income or profit or loss is also recognised in other comprehensive income or profit or loss,
respectively).
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.
The functional currencies of certain overseas subsidiaries, a joint venture and associates are currencies other
than the RMB. As at the end of the reporting period, the assets and liabilities of these entities are translated into RMB
at the exchange rates prevailing at the end of the reporting period and their statements of profit or loss are translated
into RMB at the exchange rates that approximate to those prevailing at the dates of the transactions.
The resulting exchange differences are recognised in other comprehensive income and accumulated in the
exchange fluctuation reserve, except to the extent that the differences are attributable to non-controlling interests. On
disposal of a foreign operation, the cumulative amount in the reserve relating to that particular foreign operation is
recognised in the statement of profit or loss.
For the purpose of the consolidated statement of cash flows, the cash flows of overseas subsidiaries are
translated into RMB at the exchange rates ruling at the dates of the cash flows. Frequently recurring cash flows of
overseas subsidiaries which arise throughout the year are translated into RMB the weighted at average exchange rates
for the year.
APPENDIX I ACCOUNTANTS’ REPORT
– I-35 –


--- page 598 ---
3. MATERIAL ACCOUNTING JUDGEMENTS AND ESTIMATES
The preparation of the Group’s financial statements requires management to make judgements, estimates and
assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and their accompanying
disclosures, 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:
Measurement of variable consideration in sales contracts
Certain sales contracts have back-to-back terms that the settlement of trade receivables from certain customer
is associated with the customer’s receipt of subsidies from the government, which gives rise to variable consideration.
Based on the assessment of credit risk of the customer and collectability of government subsidies by the customer,
the Group considered it is highly probable that a significant revenue reversal in the amount of cumulative revenue
recognised will not occur for current sales contracts. However, this judgement may be reviewed and revised if the
industry market environment or conditions change in the future.
Identifying whether a significant financing component exists in sales contracts
According to the current market practice, as China’s hydrogen fuel cell vehicle industry is still in the early
stage of development and is highly affected by the government subsidy policies, therefore the Group’s customers, i.e.
hydrogen fuel cell commercial vehicle manufacturers, typically sell and charge prices to their customers after
deducting applicable subsidies at the time of sale before receiving government subsidies. The Group’s customers, i.e.
hydrogen fuel cell commercial vehicle manufacturers, can collect the relevant subsidies from the government, but this
usually takes a lengthy period of time, typically more than two years. Therefore, the Group granted similar credit
terms to major customers explicitly or implicitly to align with current market practice.
The management of the Group determined that such contracts currently do not contain a significant financing
component based on the industry market environment and conditions. However, this judgement may be reviewed and
revised if the industry market environment or conditions change in the future.
Estimation uncertainty
The key assumptions concerning the future and other key sources of estimation uncertainty at the end of the
reporting period, that have a significant risk of causing a material adjustment to the carrying amounts of assets and
liabilities within the next financial year, are described below.
Share-based payments
Several employee incentive schemes and a Pre-IPO share option scheme are operated for the purpose of
providing incentives to the Company’s directors and the Group’s employees. The grant date fair values of the shares
of the employee incentive schemes are determined based on investors’ recent capital injection price and independent
valuation. The fair value for the Pre-IPO share option scheme is determined by an external valuer using a binomial
model. 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. However, this estimate may be revised if the number of equity
instruments that will ultimately vest changes in the future. Further details are contained in note 34 to the Historical
Financial Information.
APPENDIX I ACCOUNTANTS’ REPORT
– I-36 –


--- page 599 ---
Provision for expected credit losses on trade receivables, commercial acceptance bills receivables and contract
assets, other receivables and a financial guarantee obligation
Provision for impairment of trade receivables is made based on an assessment of expected credit losses on
trade receivables. The assessment of expected credit losses requires management’s judgement and estimates. Trade
receivables relating to customers with known financial difficulties or significant doubt on collection are assessed
individually for impairment allowance. The remaining trading receivables are grouped based on aging of bills of
various customer segments with similar loss patterns and collectively assessed for impairment allowance.
Under the collective approach, the Group uses a provision matrix to calculate ECLs for trade receivables. The
provision rates are based on ageing analysis of customers that have similar loss patterns. The provision matrix is
initially based on the Group’s historical observed default rates. The Group will calibrate the matrix to adjust the
historical credit loss experience with forward-looking information. 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 22 to the Historical Financial Information.
Provision was mainly made for the Group’s financial guarantee obligation in respect of borrowings of the
Group’s joint venture, namely Guangdong Guohong Refire Energy Technology Co., Ltd. (“Guohong Refire”). The
amount represented management’s best estimate of loss that a default of the associated enterprise will cause to the
Group. The loss provision was measured as either 12-month expected credit losses or lifetime expected credit losses,
depending on whether there has been a significant increase in credit risk since initial recognition.
Estimation of provision for warranty claims
The warranty period is generally the shorter of 5 years and the period when the vehicle that carries the Group’s
product travels for 200,000 kilometres after the control of goods is transferred to the customers. Management
estimates the related provision for future warranty claims based on historical warranty claim information, as well as
recent trend that might suggest that past cost information may differ from future claims. The assumptions made in
respect of the Track Record Period are consistent with those in the prior years. Factors that could impact the estimated
claim information include the success of the Group’s productivity and quality initiatives, as well as parts and labour
costs.
Impairment of non-financial assets (other than goodwill)
The Group assesses whether there are any indicators of impairment for all non-financial assets (including the
right-of-use assets) at the end of each reporting period. These non-financial assets are tested for impairment when
there are indicators that the carrying amounts may not be recoverable. Impairment exists when the carrying value of
an asset or a cash-generating unit exceeds its recoverable amount, which is the higher of its fair value less costs of
disposal and its value in use. The calculation of the fair value less costs of disposal is based on available data from
binding sales transactions in an arm’s length transaction of similar assets or observable market prices less incremental
costs for disposing of the asset. When value-in-use calculations are undertaken, management must estimate the
expected future cash flows from the asset or cash-generating unit and choose a suitable discount rate in order to
calculate the present value of those cash flows.
Deferred tax assets
Deferred tax assets are recognised for unused tax losses to the extent that it is probable that taxable profit will
be available against which the losses can be utilised. Significant management judgement is required to determine the
amount of deferred tax assets that can be recognised, based upon the likely timing and level of future taxable profits
together with future tax planning strategies. The amounts of unrecognised tax losses at 31 December 2021, 2022 and
2023 and 31 May 2024 were RMB1,238,064,000, RMB1,814,906,000 and RMB2,429,235,000 and
RMB2,775,909,000, respectively. Further details are contained in note 20 to the Historical Financial Information.
APPENDIX I ACCOUNTANTS’ REPORT
– I-37 –


--- page 600 ---
4. OPERATING SEGMENT INFORMATION
Management has determined the operating segment based on the information reviewed by the Group’s chief
operating decision maker, who is responsible for allocating resources and assessing performance of the operating
segment. The chief operating decision maker has been identified as the executive directors of the Company.
Management monitors the results of the Group’s operating segment separately for the purpose of making
decisions about resource allocation and performance assessment, focuses on the operating results of the Group as a
whole as the Group’s resources are integrated and no discrete operating segment information is available.
Accordingly, no further information about the operating segment is presented.
Geographical information
Almost all the non-current assets of the Group are physically located in Chinese Mainland. The geographical
location of customers is based on the location at which the customers operate, and almost all of the revenue of the
Group was derived from operations in Chinese Mainland during the Relevant Periods.
Information about major customers
Information about external customers from which the revenue amounted to over 10% of the total revenue of
the Group for the years ended 31 December 2021, 2022 and 2023 and the five months ended 31 May 2023 and 2024
was as follows:
Y ear ended 31 December Five months ended 31 May
2021 2022 2023 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
Zhengzhou Yutong Group
Co., Ltd.
and its subsidiaries /H1118/H1118/H1118/H1118117,394 112,563 261,789 5,880 4,864
FAW Jiefang Automotive
Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111854,248 134,226 165,938 * *
Customer B /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118* 73,461 * 8,364 *
Customer Group C /H1118/H1118/H1118/H1118/H1118* 69,438 * * *
Customer Group D /H1118/H1118/H1118/H1118/H1118112,934 ****
Customer E /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111875,737 ****
* Less than 10% of the Group’s revenue
Seasonality of operations
The Group is a supplier of fuel cell system in fuel cell vehicle industry. Higher revenues and operating profits
are usually expected in the second half of the year, especially in the fourth quarter of the year. Higher sales during
the second half of the year are mainly attributed to the periodical issuance or updates of related government policies
in the hydrogen fuel cell industry and the kick-off of related government award projects, which generally occurs in
the second half of the year, as China’s hydrogen fuel cell vehicle industry is still in the early stage of development
and is highly affected by the government subsidy policies and customers will determine their purchase plan under
the updated government subsidy policies, resulting in the concentration of customers’ stocking demand in the second
half of the year.
5. REVENUE, OTHER INCOME AND GAINS
An analysis of revenue is as follows:
Y ear ended 31 December Five months ended 31 May
2021 2022 2023 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
Revenue from contracts
with customers /H1118/H1118/H1118/H1118/H1118/H1118524,109 604,648 895,278 88,068 12,521
APPENDIX I ACCOUNTANTS’ REPORT
– I-38 –


--- page 601 ---
Revenue from contracts with customers
(a) Disaggregated revenue information
Y ear ended 31 December Five months ended 31 May
2021 2022 2023 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
Types of goods or
services
Hydrogen fuel cell
systems /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118452,725 423,265 637,176 52,492 7,091
Components /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111861,017 150,297 220,082 32,700 1,897
Hydrogen production
systems and
related components /H1118/H1118/H1118 – – 7,681 – –
Fuel cell engineering and
technical services /H1118/H1118/H1118/H1118/H11187,251 26,473 23,444 – 966
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,116 4,613 6,895 2,876 2,567
Total revenue from
contracts with customers 524,109 604,648 895,278 88,068 12,521
Geographical markets
Since almost all of the revenue of the Group was derived from operations in Chinese Mainland during
the Relevant Periods, revenue from the overseas markets of the Group is assessed as not material.
Y ear ended 31 December Five months ended 31 May
2021 2022 2023 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
Timing of revenue
recognition
Goods or services
transferred at a point
in time /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118521,139 600,389 888,936 85,696 10,636
Services transferred
over time /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,970 4,259 6,342 2,372 1,885
Total revenue from
contracts with
customers /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118524,109 604,648 895,278 88,068 12,521
The following table shows the amounts of revenue recognised in the Relevant Periods 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 Five months ended 31 May
2021 2022 2023 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
Revenue recognised that was
included in contract liabilities
at the beginning of the
reporting period: /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,570 20,206 15,069 12,614 3,106
APPENDIX I ACCOUNTANTS’ REPORT
– I-39 –


--- page 602 ---
(b) Performance obligations
Information about the Group’s performance obligations is summarised below:
Sales of hydrogen fuel cell systems, components and hydrogen production systems
The performance obligation is satisfied upon acceptance and payment generally varies from 20 days to
36 months, except for Faw Jiefang Automotive Co., Ltd. (“FAW Jiefang”) that the payment is settled according
to back to back terms.
Provision of fuel cell engineering and technical services
The performance obligation is satisfied upon acknowledgement of receipt by the customers and payment
generally varies from 20 days to 150 days. Partial upfront payment is made in advance.
Others
Others mainly represent after-sales services. The performance obligation is satisfied over the scheduled
period on a straight-line basis and payment is periodical according to the service schedule.
As the original expected duration of the contracts from customers of the Group are within one year or
less, the Group applies the practical expedient of not disclosing the transaction price allocated to the remaining
performance obligation. The amounts of transaction prices allocated to the remaining performance obligations
which are expected to be recognised as revenue after one year are relate to after-sales services, of which the
performance obligations are to be satisfied within eight years. The amounts of transaction prices allocated to
the remaining performance obligations (unsatisfied or partially unsatisfied) as at 31 December 2021, 2022 and
2023 and 31 May 2024 are RMB5,023,000, RMB4,021,000, RMB13,841,000 and RMB12,466,000,
respectively.
An analysis of other income and gains is as follows:
Y ear ended 31 December Five months ended 31 May
2021 2022 2023 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
Other income
Government grants
and subsidies /H1118/H1118/H111832,178 34,286 39,446 7,866 14,494
Interest income /H1118/H1118/H1118/H11187,472 18,021 16,166 6,673 2,500
Investment income
from structured
deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118– 920 1,269 495 –
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,105 1,054 229 51 1,050
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111840,755 54,281 57,110 15,085 18,044
Gains
Gain on deemed
disposal of equity
of associates /H1118/H1118/H1118/H11186,234 3,59 4–––
Gain on disposal of
scrap materials /H1118/H1118 24 1,917 665 296 538
Gain on disposal of
associates /H1118/H1118/H1118/H1118/H1118/H11186,937 – 2,010 – 950
Gain on a lease term
termination /H1118/H1118/H1118/H1118/H1118– – 40 40 –
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111813,195 5,511 2,715 336 1,488
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111853,950 59,792 59,825 15,421 19,532
APPENDIX I ACCOUNTANTS’ REPORT
– I-40 –


--- page 603 ---
6. LOSS BEFORE TAX
The Group’s loss before tax is arrived at after charging/(crediting):
Y ear ended 31 December Five months ended 31 May
2021 2022 2023 2023 2024
Notes RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
Cost of goods sold* /H1118 361,332 436,029 598,727 56,892 5,007
Cost of hydrogen
fuel cell
engineering and
technical services
provided* /H1118/H1118/H1118/H1118/H1118/H1118 4,207 12,742 7,255 – 326
Depreciation of
property, plant and
equipment /H1118/H1118/H1118/H1118/H111813 61,370 78,352 92,792 35,160 37,423
Depreciation of
right-of-use assets /H1118 14 18,577 20,138 18,151 8,155 7,718
Amortisation of
other intangible
assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111815 6,519 7,880 9,677 4,298 4,238
Research and
development
costs* /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118110,009 80,846 104,418 34,446 12,322
Lease payments
not included in the
measurement
of lease liabilities /H1118 4,241 3,620 2,097 793 757
Employee benefit
expense (including
directors’ and
chief executive’s
remuneration
(note 8) ):
Wages and
salaries /H1118/H1118/H1118/H1118/H1118/H1118 211,151 232,321 250,554 89,948 71,817
Share-based
payment /H1118/H1118/H1118/H1118/H111834 31,326 27,094 87,066 19,123 117,484
Pension scheme
contributions
and social
welfare /H1118/H1118/H1118/H1118/H1118/H1118 50,082 59,267 65,093 24,449 21,384
Impairment losses on
property, plant and
equipment, net /H1118/H1118/H1118 10,418 ––––
Impairment losses on
other intangible
assets, net /H1118/H1118/H1118/H1118/H1118 2,446––––
Impairment losses on
financial assets
and a financial
guarantee
obligation, net /H1118/H1118/H1118 144,636 15,459 63,965 18,881 41,455
Write-down of
inventories to net
realisable value /H1118/H111821 47,671 82,113 31,765 16,470 8,476
APPENDIX I ACCOUNTANTS’ REPORT
– I-41 –


--- page 604 ---
Y ear ended 31 December Five months ended 31 May
2021 2022 2023 2023 2024
Notes RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
Loss/(gain) on a
lease term
termination /H1118/H1118/H1118/H1118/H1118 25 – (40) (40) –
Warranty provision /H1118 11,937 11,108 18,461 2,358 1,221
Losses on disposal
of items of
property, plant and
equipment /H1118/H1118/H1118/H1118/H1118 – 1,137 512 – 910
Loss on disposal of
a derivative
financial
instrument /H1118/H1118/H1118/H1118/H1118 – – 719 719 –
Anti-dilution
compensation to
investors /H1118/H1118/H1118/H1118/H1118/H1118 – 3,86 9–––
Gains on disposal of
associates /H1118/H1118/H1118/H1118/H11185 (6,937) – (2,010) – (950)
Fair value
(gains)/losses on
financial assets at
fair value through
profit or loss /H1118/H1118/H1118/H1118 (436) (881) 3,120 18 2,171
Fair value loss on a
derivative
financial
instrument /H1118/H1118/H1118/H1118/H1118 607 19,681 – – –
Listing expenses /H1118/H1118 – – 19,084 – 9,003
* The depreciation of property, plant and equipment, the depreciation of right-of-use assets and the
amortisation of other intangible assets related to manufacturing and research and development for the
Relevant Periods are included in “Depreciation of property, plant and equipment”, “Depreciation of
right-of-use assets” and “Amortisation of other intangible assets”, respectively. The labour costs related
to manufacturing and research and development for the Relevant Periods are included in “Employee
benefit expense”.
7. FINANCE COSTS
An analysis of finance costs is as follows:
Y ear ended 31 December Five months ended 31 May
2021 2022 2023 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
Interest on interest-bearing
bank and other
borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111845,280 44,862 43,373 16,841 23,740
Interest on lease liabilities /H1118 4,778 4,157 4,553 1,504 1,166
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111850,058 49,019 47,926 18,345 24,906
APPENDIX I ACCOUNTANTS’ REPORT
– I-42 –


--- page 605 ---
8. DIRECTORS’, CHIEF EXECUTIVE’S AND SUPERVISORS’ REMUNERATION
The remuneration of each director/supervisor of the Company paid/payable by the Group (including
emoluments for services as employees of the group entities prior to becoming the directors/supervisors of the
Company) for the Relevant Periods is set out as follows:
Y ear ended 31 December Five months ended 31 May
2021 2022 2023 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
Fees /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118360 360 361 150 150
Other emoluments:
Salaries, bonuses,
allowances and
benefits in kind /H1118/H1118/H1118/H11186,551 6,871 6,373 2,779 2,207
Performance related
bonuses* /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,112 2,610 1,090 455 528
Share-based payment
expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111815,120 15,995 43,069 13,692 41,583
Pension scheme
contributions /H1118/H1118/H1118/H1118/H1118/H1118962 1,205 1,126 472 413
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111824,745 26,681 51,658 17,398 44,731
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111825,105 27,041 52,019 17,548 44,881
* Certain executive directors of the Company are entitled to bonus payments which are determined by key
performance indicators.
During the Relevant Periods, certain directors were granted restricted shares and options, in respect of their
services to the Group, under the Share Incentive Schemes and the Pre-IPO share option scheme of the Company,
further details of which are set out in note 34 to the Historical Financial Information. The difference between the fair
value of the shares and options granted and the subscription price was recorded in the share-based payment reserve
within equity with the corresponding “share-based payment expenses” in profit or loss over the vesting period. The
amounts of the share-based payment expenses during the Relevant Periods are included in the above directors’ and
chief executive’s remuneration disclosures.
The remuneration of each director/supervisor of the Company paid/payable by the Group (including
emoluments for services as employees of the group entities prior to becoming the directors/supervisors of the
Company) for the Relevant Periods is set out as follows:
(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 Five months ended 31 May
2021 2022 2023 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
Ms. Qian, Meifen (i) /H1118/H1118/H1118/H1118120 120 120 50 50
Mr. Li, Wei (i) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118120 120 120 50 50
Mr. Xie, Penghong (i) /H1118/H1118/H1118 120 120 120 50 –
Mr. Chen, Fei (ii) /H1118/H1118/H1118/H1118/H1118/H1118––1– 5 0
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118360 360 361 150 150
i. On 8 September 2020, Ms. Qian, Meifen, Mr. Li, Wei and Mr. Xie, Penghong were appointed as
independent non-executive directors of the Company. Mr. Xie, Penghong resigned on 27 December
2023.
ii. On 27 December 2023, Mr. Chen, Fei was appointed as an independent non-executive director of the
Company.
There were no other emoluments payable to the independent non-executive directors during the Relevant
Periods.
APPENDIX I ACCOUNTANTS’ REPORT
– I-43 –


--- page 606 ---
(b) Executive directors, a non-executive director, the chief executive and supervisors
Salaries,
allowances and
benefits in kind
Performance
related bonuses
Share-based
payment
expense
Pension scheme
contributions
and social
welfare
Total
remuneration
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
2021
Executive directors:
Mr. Lin, Qi (i) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118841 139 404 121 1,505
Mr. Hu, Zhe (ii) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118759 226 3,296 121 4,402
Ms. Ma Audrey Jing Nan (iii) /H1118/H1118 859 236 1,129 – 2,224
Mr. Zhai, Shuang (ii) /H1118/H1118/H1118/H1118/H1118/H1118/H1118665 297 231 121 1,314
Mr. Zhao, Yong Sheng (iv) /H1118/H1118/H1118/H1118 530 183 452 121 1,286
Mr. Gong, Xiaohui (v) /H1118/H1118/H1118/H1118/H1118/H11181,058 253 2,258 121 3,690
Mr. Chen, Weishan (v) /H1118/H1118/H1118/H1118/H1118/H1118729 217 135 121 1,202
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,441 1,551 7,905 726 15,623
A non-executive director:
Mr. Liu, Hui You (vi) /H1118/H1118/H1118/H1118/H1118/H1118–––––
Supervisors:
Mr. Wu, Yang (vii) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––––
Mr. Zhou, Wei (viii) /H1118/H1118/H1118/H1118/H1118/H1118/H1118–––––
Mr. Ji, Yizhi (vii) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––––
Mr. Wang, Chuqi (viii) /H1118/H1118/H1118/H1118/H1118/H1118451 144 6,781 115 7,491
Mr. Sun, Bei (ix) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118659 417 434 121 1,631
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,110 561 7,215 236 9,122
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,551 2,112 15,120 962 24,745
Salaries,
allowances and
benefits in kind
Performance
related bonuses
Share-based
payment
expense
Pension scheme
contributions
and social
welfare
Total
remuneration
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
2022
Executive directors:
Mr. Lin, Qi (i) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118848 267 1,278 134 2,527
Mr. Hu, Zhe (ii) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118841 267 3,295 134 4,537
Ms. Ma Audrey Jing Nan (iii) /H1118/H1118 859 195 1,129 – 2,183
Mr. Zhai, Shuang (ii) /H1118/H1118/H1118/H1118/H1118/H1118/H1118704 241 231 134 1,310
Mr. Zhao, Yong Sheng (iv) /H1118/H1118/H1118/H1118 547 167 450 134 1,298
Mr. Gong, Xiaohui ( v) /H1118/H1118/H1118/H1118/H1118/H11181,038 324 2,257 202 3,821
Mr. Chen, Weishan ( v) /H1118/H1118/H1118/H1118/H1118/H1118729 234 139 202 1,304
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,566 1,695 8,779 940 16,980
A non-executive director:
Mr. Liu, Hui You (vi) /H1118/H1118/H1118/H1118/H1118/H1118–––––
Supervisors:
Mr. Wu, Yang (vii) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––––
Mr. Zhou, Wei (viii) /H1118/H1118/H1118/H1118/H1118/H1118/H1118–––––
Mr. Ji, Yizhi (vii) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––––
Mr. Wang, Chuqi (viii) /H1118/H1118/H1118/H1118/H1118/H1118492 198 6,781 132 7,603
Mr. Sun, Bei (ix) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118813 717 435 133 2,098
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,305 915 7,216 265 9,701
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,871 2,610 15,995 1,205 26,681
APPENDIX I ACCOUNTANTS’ REPORT
– I-44 –


--- page 607 ---
Salaries,
allowances and
benefits in kind
Performance
related bonuses
Share-based
payment
expense
Pension scheme
contributions
and social
welfare
Total
remuneration
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
2023
Executive directors:
Mr. Lin, Qi (i) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118874 100 27,996 143 29,113
Mr. Hu, Zhe (ii) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118902 100 3,295 143 4,440
Ms. Ma Audrey Jing Nan (iii) /H1118/H1118 861 100 1,129 114 2,204
Mr. Zhai, Shuang (ii) /H1118/H1118/H1118/H1118/H1118/H1118/H1118765 97 231 143 1,236
Mr. Zhao, Yong Sheng (iv) /H1118/H1118/H1118/H1118 636 91 451 143 1,321
Mr. Gong, Xiaohui (v) /H1118/H1118/H1118/H1118/H1118/H1118966 – 2,257 131 3,354
Mr. Chen, Weishan (v) /H1118/H1118/H1118/H1118/H1118/H1118142 – – 23 165
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,146 488 35,359 840 41,833
A non-executive director:
Mr. Liu, Hui You (vi) /H1118/H1118/H1118/H1118/H1118/H1118–––––
Supervisors:
Mr. Wu, Yang (vii) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––––
Mr. Zhou, Wei (viii) /H1118/H1118/H1118/H1118/H1118/H1118/H1118–––––
Mr. Ji, Yizhi (vii) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––––
Mr. Wang, Chuqi (viii) /H1118/H1118/H1118/H1118/H1118/H1118505 76 6,957 143 7,681
Mr. Sun, Bei (ix) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118722 526 753 143 2,144
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,227 602 7,710 286 9,825
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,373 1,090 43,069 1,126 51,658
Salaries,
allowances and
benefits in kind
Performance
related bonuses
Share-based
payment
expense
Pension scheme
contributions
and social
welfare
Total
remuneration
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
31 May 2023
(Unaudited)
Executive directors:
Mr. Lin, Qi (i) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118370 42 7,412 58 7,882
Mr. Hu, Zhe (ii) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118381 42 1,373 58 1,854
Ms. Ma Audrey Jing Nan (iii) /H1118/H1118 358 42 470 46 916
Mr. Zhai, Shuang (ii) /H1118/H1118/H1118/H1118/H1118/H1118/H1118334 41 96 58 529
Mr. Zhao, Yong Sheng (iv) /H1118/H1118/H1118/H1118 250 39 188 58 535
Mr. Gong, Xiaohui (v) /H1118/H1118/H1118/H1118/H1118/H1118435 – 940 58 1,433
Mr. Chen, Weishan (v) /H1118/H1118/H1118/H1118/H1118/H1118142 – – 20 162
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,270 206 10,479 356 13,311
A non-executive director:
Mr. Liu, Hui You (vi) /H1118/H1118/H1118/H1118/H1118/H1118–––––
Supervisors:
Mr. Wu, Yang (vii) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––––
Mr. Zhou, Wei (viii) /H1118/H1118/H1118/H1118/H1118/H1118/H1118–––––
Mr. Ji, Yizhi (vii) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––––
Mr. Wang, Chuqi (viii) /H1118/H1118/H1118/H1118/H1118/H1118208 32 2,899 58 3,197
Mr. Sun, Bei (ix) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118301 217 314 58 890
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118509 249 3,213 116 4,087
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,779 455 13,692 472 17,398
APPENDIX I ACCOUNTANTS’ REPORT
– I-45 –


--- page 608 ---
Salaries,
allowances and
benefits in kind
Performance
related bonuses
Share-based
payment
expense
Pension scheme
contributions
and social
welfare
Total
remuneration
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
31 May 2024
Executive directors:
Mr. Lin, Qi (i) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118358 87 17,483 61 17,989
Mr. Hu, Zhe (ii) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118369 90 11,460 61 11,980
Mrs. Ma Audrey Jing Nan (iii) /H1118 356 86 6,332 48 6,822
Mr. Zhai, Shuang (ii) /H1118/H1118/H1118/H1118/H1118/H1118305 74 2,185 60 2,624
Mr. Zhao, Yong Sheng (iv) /H1118/H1118/H1118 273 65 2,240 61 2,639
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,661 402 39,700 291 42,054
A non-executive director:
Mr. Liu, Hui You (vi) /H1118/H1118/H1118/H1118/H1118/H1118–––––
Supervisors:
Mr. Wu, Yang (vii) /H1118/H1118/H1118/H1118/H1118/H1118/H1118–––––
Mr. Zhou, Wei (viii) /H1118/H1118/H1118/H1118/H1118/H1118/H1118–––––
Mr. Ji, Yizhi (vii) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––––
Mr. Wang, Chuqi (viii) /H1118/H1118/H1118/H1118/H1118227 54 1,695 61 2,037
Mr. Sun, Bei (ix) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118319 72 188 61 640
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118546 126 1,883 122 2,677
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,207 528 41,583 413 44,731
i. On 8 September 2020, Mr. Lin, Qi was appointed as the chief executive officer and the chairman of the
board of directors of the Group.
ii. On 8 September 2020, Mr. Hu, Zhe and Mr. Zhai, Shuang were appointed as executive directors of the
Group.
iii. On 27 December 2023, Ms. Ma Audrey Jing Nan was appointed as an executive director of the Group.
iv. On 3 April 2023, Mr. Zhao, Yong Sheng was appointed as an executive director of the Group.
v. On 8 September 2020, Mr. Gong, Xiaohui and Mr. Chen, Weishan were appointed as executive directors
of the Group, Mr. Gong, Xiaohui resigned on 27 December 2023 and, Mr. Chen, Weishan resigned on
28 February 2023.
vi. On 27 December 2023, Mr. Liu, Hui You was appointed as a non-executive director of the Group.
vii. On 19 January 2023, Mr. Wu, Yang and Mr. Ji, Yizhi were appointed as supervisors of the Group.
viii. On 18 May 2022, Mr. Zhou, Wei and Mr. Wang, Chuqi were appointed as supervisors of the Group.
ix. On 8 September 2020, Mr. Sun, Bei was appointed as a supervisor of the Group.
There was no arrangement under which a director, the chief executive or a supervisor waived or agreed to
waive any remuneration during the Relevant Periods.
APPENDIX I ACCOUNTANTS’ REPORT
– I-46 –


--- page 609 ---
9. FIVE HIGHEST PAID EMPLOYEES
The five highest paid employees during the Relevant Periods included three directors and one supervisor at 31
December 2021, four directors and one supervisor at 31 December 2022, two directors and one supervisor at 31
December 2023, three directors and one supervisor at 31 May 2023, and three directors at 31 May 2024, details of
whose remuneration are set out in note 8 above. Details of the remuneration for the Relevant Periods of the remaining
highest paid employees who are neither a director nor supervisor of the Company are as follows:
As at 31 December As at 31 May
2021 2022 2023 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
Salaries, allowances and
benefits in kind /H1118/H1118/H1118/H1118/H1118/H11182,152 – 2,460 725 786
Performance related
bonuses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118120 – 600 42 191
Share-based payment
expense /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 6,280 428 7,484
Pension scheme
contributions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 286 58 121
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,273 – 9,626 1,253 8,582
The numbers of non-director and non-chief executive highest paid employees whose remuneration fell within
the following bands are as follows:
Number of employees
As at 31 December As at 31 May
2021 2022 2023 2023 2024
(Unaudited)
RMB1,000,000 to
RMB2,000,000 /H1118/H1118/H1118/H1118/H1118/H1118–––1–
RMB2,000,000 to
RMB3,000,000 /H1118/H1118/H1118/H1118/H1118/H11181–––1
RMB4,000,000 to
RMB5,000,000 /H1118/H1118/H1118/H1118/H1118/H1118––1––
More than RMB5,000,000 /H1118 ––1–1
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181–212
During the Relevant Periods, certain employees were granted restricted shares and options, in respect of their
services to the Group, under the Share Incentive Scheme and the Pre-IPO share option scheme of the Company,
further details of which are set out in note 34 to the Historical Financial Information. The difference between the fair
value of the shares and options granted and the subscription price was recorded in the share-based payment reserve
within equity with the corresponding “share-based payment expenses” in profit or loss over the vesting period. The
amounts of the share-based payment expenses during the Relevant Periods are included in the above directors’ and
chief executive’s remuneration disclosures.
APPENDIX I ACCOUNTANTS’ REPORT
– I-47 –


--- page 610 ---
10. INCOME TAX
The Group is subject to income tax on an entity basis on profits arising in or derived from the jurisdictions
in which members of the Group are domiciled and operate.
Chinese Mainland
The subsidiaries incorporated in Chinese Mainland are subject to tax at the statutory rate of 25% on the taxable
profits determined in accordance with the PRC Corporate Income Tax Law which became effective on 1 January
2008, except for these subject to tax preferential set out below:
Shanghai Refire Technology Co., Ltd., Shanghai Pando Electric Technology Co., Ltd. and Unilia (Shanghai)
Fuel Cells Inc. were granted with the qualification of High and New Technology Enterprises (“HNTE”). Accordingly,
the subsidiaries were entitled to a preferential corporate income tax rate of 15% during the Relevant Periods.
Certain subsidiaries of the Group have applied the Small-Scaled Minimal Profit Corporate Income Tax
Preferential Policy announced by the PRC’s State Administration of Taxation. Pursuant to the policy, during the
period from 1 January 2019 to 31 December 2021, the portion of annual taxable income amount of a Small-Scaled
Minimal Profit Corporate which does not exceed RMB1,000,000 shall be computed at a reduced rate of 25% as
taxable income amount, and shall be levied at a reduced tax rate of 20%; the portion of annual taxable income amount
which exceeds RMB1,000,000 but does not exceed RMB3,000,000 shall be computed at a reduced rate of 50% as
taxable income amount, and shall be levied at a reduced tax rate of 20%. Pursuant to the policy announced by the
PRC’s State Administration of Taxation, during the period from 1 January, 2022 to 31 December, 2024, the portion
of annual taxable income amount of a Small-Scaled Minimal Profit Corporate which exceeds RMB1,000,000 but does
not exceed RMB3,000,000 shall be computed at a reduced rate of 25% as taxable income amount, and shall be levied
at a reduced tax rate of 20%.
Hong Kong
The subsidiary incorporated in Hong Kong is subject to Hong Kong profits tax at the rate of 8.25% for taxable
income not exceeding HKD2,000,000, and 16.5% for taxable income exceeding HKD2,000,000 on any estimated
assessable profits arising in Hong Kong during the Relevant Periods. No provision for Hong Kong profits tax has
been made as the Group had no assessable profits derived from or earned in Hong Kong during the Relevant Periods.
Canada
The subsidiary incorporated in Canada is subject to Canada profits tax at the statutory rate of 15% on any
estimated assessable profits arising in Canada during the Relevant Periods. No provision for Canada profits tax has
been made as the Group had no assessable profits derived from or earned in Canada during the Relevant Periods.
Taxes on profits assessable elsewhere have been calculated at the rates of tax prevailing in the jurisdictions
in which the Group operates.
Y ear ended 31 December Five months ended 31 May
2021 2022 2023 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
Current income tax /H1118/H1118/H1118/H1118/H11189,428 1,953 13 27 83
Deferred tax credit
(note 20) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(5,438) (1,327) (2,250) (2,578) (2,048)
Total tax expense/(credit)
for the year/period /H1118/H1118/H1118/H11183,990 626 (2,237) (2,551) (1,965)
APPENDIX I ACCOUNTANTS’ REPORT
– I-48 –


--- page 611 ---
A reconciliation of the tax expense applicable to loss before tax at the statutory rates for the jurisdictions in
which the Company and the majority of its subsidiaries are domiciled to the tax expense at the effective tax rates,
and a reconciliation of the applicable rates (i.e., the statutory tax rates) to the effective tax rates, are as follows:
Y ear ended 31 December Five months ended 31 May
2021 2022 2023 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
Loss before tax /H1118/H1118/H1118/H1118/H1118/H1118/H1118(650,302) (545,473) (579,768) (269,254) (411,396)
Tax at the statutory tax
rate /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(162,576) (136,368) (144,942) (67,314) (102,849)
Effect of preferential tax
rates /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111852,167 32,939 24,957 18,683 24,630
Losses attributable to a
joint venture and
associates (a) /H1118/H1118/H1118/H1118/H1118/H1118/H11182,054 5,361 964 670 1,430
Expenses not deductible
for tax (b) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111811,241 11,227 21,921 6,398 24,241
Super deduction on
research and
development expenses
(c) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(29,791) (26,528) (25,256) (14,842) (13,600)
Deductible temporary
differences not
recognised /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111841,308 16,957 9,449 3,949 4,199
Tax losses not recognised /H1118 89,587 97,038 110,670 49,905 59,984
Tax expense/(credit) at the
Group’s effective tax
rate /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,990 626 (2,237) (2,551) (1,965)
(a) The losses attributable to a joint venture and associates comprise the tax effect of share of “Share of
losses of a joint venture” amounting to RMB5,750,000, RMB18,750,000, nil, nil and nil and “Share of
losses of associates” amounting to RMB2,466,000, RMB2,695,000, RMB3,855,000, RMB2,680,000,
and RMB5,721,000 for the years ended 31 December 2021, 2022 and 2023, and five months ended 31
May 2023 and 2024, respectively.
(b) Expenses not deductible for tax mainly include the tax effect of share-based payments, fair value losses
on a derivative financial instrument and non-deductible business entertainment expenses.
(c) Super deductible allowance was for qualified research and development costs. According to the relevant
laws and regulations promulgated by the State Taxation Administration of the PRC, enterprises engaging
in research and development activities are entitled to claim 175% of their research and development
costs so incurred as tax deductible expenses when determining their assessable profits for the year ended
31 December 2021 and the nine months ended 30 September 2022. According to the relevant laws and
regulations, the aforementioned deduction rate increased to 200% since 1 October 2022.
11. DIVIDENDS
No dividends have been paid or declared by the Company during the Relevant Periods.
APPENDIX I ACCOUNTANTS’ REPORT
– I-49 –


--- page 612 ---
12. LOSS PER SHARE ATTRIBUTABLE TO ORDINARY EQUITY HOLDERS OF THE PARENT
The calculation of the basic loss per share amounts is based on the loss for the year/period attributable to
ordinary equity holders of the parent, and the weighted average numbers of ordinary shares of 64,996,051,
75,169,925, 81,311,371, 81,311,371 and 81,311,371 during the Relevant Periods in issue, as adjusted to reflect the
rights issue during the Relevant Periods.
Y ear ended 31 December Five months ended 31 May
2021 2022 2023 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
Loss
Loss attributable to
ordinary equity holders
of the parent /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(572,802) (505,966) (529,472) (247,137) (394,115)
Shares
Weighted average number
(’000) of ordinary shares
in issue
during the year/period /H1118/H1118 64,996 75,170 81,311 81,311 81,311
Loss per share
Basic and diluted (RMB) /H1118 (8.81) (6.73) (6.51) (3.04) (4.85)
The Group had no potentially dilutive ordinary shares in issue during the Relevant Periods.
No adjustment has been made to the basic loss per share amount presented for five months ended 31 May 2024
in respect of a dilution as the impact of the option outstanding adopted in 2024 had an anti-dilutive effect on the basic
loss per share amount presented.
13. PROPERTY, PLANT AND EQUIPMENT
The Group
Buildings Machinery
Office
equipment
and
electronic
devices Vehicles
Leasehold
improvements
Construction
in progress Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
31 December 2021
At 1 January 2021:
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111847,554 159,281 17,059 2,114 125,845 44,752 396,605
Accumulated depreciation
and impairment /H1118/H1118/H1118/H1118/H1118(617) (28,124) (7,693) (1,039) (27,509) – (64,982)
Net carrying amount /H1118/H1118/H1118/H111846,937 131,157 9,366 1,075 98,336 44,752 331,623
At 1 January 2021, net of
accumulated depreciation
and impairment /H1118/H1118/H1118/H1118/H1118/H111846,937 131,157 9,366 1,075 98,336 44,752 331,623
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,402 95,978 3,587 737 22,394 33,581 162,679
Depreciation provided during
the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(2,030) (32,588) (3,418) (1,069) (22,265) – (61,370)
Exchange realignment /H1118/H1118/H1118/H1118 – (611) (2) – (417) – (1,030)
Transfers /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,175 39,697 1,720 81 13,113 (59,786) –
Impairment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (10,418) – – – – (10,418)
At 31 December 2021, net of
accumulated depreciation
and impairment /H1118/H1118/H1118/H1118/H1118/H111856,484 223,215 11,253 824 111,161 18,547 421,484
At 31 December 2021:
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111859,131 294,193 22,355 2,931 160,880 18,547 558,037
Accumulated depreciation
and impairment /H1118/H1118/H1118/H1118/H1118(2,647) (70,978) (11,102) (2,107) (49,719) – (136,553)
Net carrying amount /H1118/H1118/H1118/H111856,484 223,215 11,253 824 111,161 18,547 421,484
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 613 ---
Buildings Machinery
Office
equipment
and
electronic
devices Vehicles
Leasehold
improvements
Construction
in progress Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
31 December 2022
At 1 January 2022:
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111859,131 294,193 22,355 2,931 160,880 18,547 558,037
Accumulated depreciation
and impairment /H1118/H1118/H1118/H1118/H1118(2,647) (70,978) (11,102) (2,107) (49,719) – (136,553)
Net carrying amount /H1118/H1118/H1118/H111856,484 223,215 11,253 824 111,161 18,547 421,484
At 1 January 2022, net of
accumulated depreciation
and impairment 56,484 223,215 11,253 824 111,161 18,547 421,484
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118129 35,407 3,079 237 7,616 30,751 77,219
Disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(81) (3,577) (566) – – – (4,224)
Depreciation provided during
the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(2,481) (43,750) (4,640) (315) (27,166) – (78,352)
Exchange realignment /H1118/H1118/H1118/H1118 – 741 3 – 413 – 1,157
Transfers /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,330 25,879 57 – 5,523 (37,789) –
At 31 December 2022, net of
accumulated depreciation
and impairment /H1118/H1118/H1118/H1118/H1118/H111860,381 237,915 9,186 746 97,547 11,509 417,284
At 31 December 2022:
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111865,509 352,643 24,928 3,168 174,432 11,509 632,189
Accumulated depreciation
and impairment /H1118/H1118/H1118/H1118/H1118(5,128) (114,728) (15,742) (2,422) (76,885) – (214,905)
Net carrying amount /H1118/H1118/H1118/H111860,381 237,915 9,186 746 97,547 11,509 417,284
Buildings Machinery
Office
equipment
and
electronic
devices Vehicles
Leasehold
improvements
Construction
in progress Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
31 December 2023
At 1 January 2023:
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111865,509 352,643 24,928 3,168 174,432 11,509 632,189
Accumulated depreciation
and impairment /H1118/H1118/H1118/H1118/H1118(5,128) (114,728) (15,742) (2,422) (76,885) – (214,905)
Net carrying amount /H1118/H1118/H1118/H111860,381 237,915 9,186 746 97,547 11,509 417,284
At 1 January 2023, net of
accumulated depreciation
and impairment /H1118/H1118/H1118/H1118/H1118/H111860,381 237,915 9,186 746 97,547 11,509 417,284
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118264 49,849 3,083 1,757 4,450 72,232 131,635
Disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(258) (4,633) (108) (43) – – (5,042)
Depreciation provided during
the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(2,524) (52,702) (4,628) (575) (32,363) – (92,792)
Exchange realignment /H1118/H1118/H1118/H1118 – 1,160 22 13 521 – 1,716
Transfers /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,785 31,584 300 – 9,937 (45,606) –
At 31 December 2023, net of
accumulated depreciation
and impairment /H1118/H1118/H1118/H1118/H1118/H111861,648 263,173 7,855 1,898 80,092 38,135 452,801
At 31 December 2023:
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111869,300 430,603 28,225 4,895 189,340 38,135 760,498
Accumulated depreciation
and impairment /H1118/H1118/H1118/H1118/H1118(7,652) (167,430) (20,370) (2,997) (109,248) – (307,697)
Net carrying amount /H1118/H1118/H1118/H111861,648 263,173 7,855 1,898 80,092 38,135 452,801
APPENDIX I ACCOUNTANTS’ REPORT
– I-51 –


--- page 614 ---
Buildings Machinery
Office
equipment
and
electronic
devices Vehicles
Leasehold
improvements
Construction
in progress Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
31 May 2024
At 1 January 2024:
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111869,300 430,603 28,225 4,895 189,340 38,135 760,498
Accumulated depreciation and
impairment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(7,652) (167,430) (20,370) (2,997) (109,248) – (307,697)
Net carrying amount /H1118/H1118/H1118/H1118/H1118/H111861,648 263,173 7,855 1,898 80,092 38,135 452,801
At 1 January 2024 net of
accumulated depreciation and
impairment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111861,648 263,173 7,855 1,898 80,092 38,135 452,801
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 1,586 55 4 96 9,231 10,972
Acquisition of a subsidiary /H1118/H1118 – 7,833 – – – – 7,833
Disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (1,802) (260) – (673) – (2,735)
Depreciation provided during
the period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(1,095) (22,338) (1,597) (293) (12,100) – (37,423)
Exchange realignment /H1118/H1118/H1118/H1118– (571) (28) (6) (194) – (799)
Transfers /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 16,639 – – 1,757 (18,396) –
At 31 May 2024, net of
accumulated depreciation and
impairment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111860,553 264,520 6,025 1,603 68,978 28,970 430,649
At 31 May 2024:
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111869,300 461,237 27,992 4,893 190,326 28,970 782,718
Accumulated depreciation and
impairment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(8,747) (196,717) (21,967) (3,290) (121,348) – (352,069)
Net carrying amount /H1118/H1118/H1118/H1118/H111860,553 264,520 6,025 1,603 68,978 28,970 430,649
As at 31 December 2021, the carrying amount of certain machinery has been reduced to its recoverable amount
of nil through recognition of an impairment loss of RMB10,418,000 mainly due to the adjustment of the business of
hydrogen refueling stations.
As at 31 December 2021, 2022 and 2023 and 31 May 2024, the Group’s buildings, with aggregate carrying
amounts of approximately RMB56,484,000, RMB60,381,000, RMB61,648,000 and RMB60,553,000 respectively,
were pledged to secure interest-bearing bank and other borrowings granted to the Group (note 30).
As at 31 December 2023 and 31 May 2024, the Group’s certain machinery with aggregate carrying amounts
of approximately RMB138,522,000 and RMB129,988,000 was subject to the sale and leaseback business with
Taiping & Sinopec Financial Leasing Co., Ltd. (note 30).
APPENDIX I ACCOUNTANTS’ REPORT
– I-52 –


--- page 615 ---
The Company
Office equipment
and electronic
devices
Leasehold
improvements
Construction
in progress Total
RMB’000 RMB’000 RMB’000 RMB’000
31 December 2021
At 1 January 2021:
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 13,838 – 13,838
Accumulated depreciation /H1118/H1118/H1118/H1118/H1118/H1118– (10,630) – (10,630)
Net carrying amount /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 3,208 – 3,208
At 1 January 2021, net of
accumulated depreciation /H1118/H1118/H1118/H1118/H1118/H1118– 3,208 – 3,208
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118704 – 8 712
Depreciation provided during
the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(19) (2,722) – (2,741)
At 31 December 2021, net of
accumulated depreciation /H1118/H1118/H1118/H1118/H1118/H1118685 486 8 1,179
At 31 December 2021:
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118704 13,838 8 14,550
Accumulated depreciation /H1118/H1118/H1118/H1118/H1118/H1118(19) (13,352) – (13,371)
Net carrying amount /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118685 486 8 1,179
Office equipment
and electronic
devices
Leasehold
improvements
Construction
in progress Total
RMB’000 RMB’000 RMB’000 RMB’000
31 December 2022
At 1 January 2022:
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118704 13,838 8 14,550
Accumulated depreciation /H1118/H1118/H1118/H1118/H1118/H1118(19) (13,352) – (13,371)
Net carrying amount /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118685 486 8 1,179
At 1 January 2022, net of
accumulated depreciation /H1118/H1118/H1118/H1118/H1118/H1118685 486 8 1,179
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118884 3,505 624 5,013
Depreciation provided during the
year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(235) (736) – (971)
At 31 December 2022, net of
accumulated depreciation /H1118/H1118/H1118/H1118/H1118/H11181,334 3,255 632 5,221
At 31 December 2022:
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,588 17,342 632 19,562
Accumulated depreciation /H1118/H1118/H1118/H1118/H1118/H1118(254) (14,087) – (14,341)
Net carrying amount /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,334 3,255 632 5,221
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 616 ---
Office
equipment and
electronic
devices Vehicles
Leasehold
improvements
Construction
in progress Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
31 December 2023
At 1 January 2023:
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,588 – 17,342 632 19,562
Accumulated depreciation /H1118/H1118/H1118 (254) – (14,087) – (14,341)
Net carrying amount /H1118/H1118/H1118/H1118/H1118/H11181,334 – 3,255 632 5,221
At 1 January 2023, net of
accumulated depreciation /H1118/H1118/H11181,334 – 3,255 632 5,221
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,009 1,715 3,957 (632) 6,049
Depreciation provided during
the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(514) (252) (1,404) – (2,170)
At 31 December 2023, net of
accumulated depreciation /H1118/H1118/H11181,829 1,463 5,808 – 9,100
At 31 December 2023:
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,597 1,715 22,237 – 26,549
Accumulated depreciation /H1118/H1118/H1118 (768) (252) (16,429) – (17,449)
Net carrying amount /H1118/H1118/H1118/H1118/H1118/H11181,829 1,463 5,808 – 9,100
Office
equipment and
electronic
devices Vehicles
Leasehold
improvements
Construction in
progress Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
31 May 2024
At 1 January 2024:
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,597 1,715 22,237 – 26,549
Accumulated depreciation /H1118/H1118 (768) (252) (16,429) – (17,449)
Net carrying amount /H1118/H1118/H1118/H1118/H1118/H11181,829 1,463 5,808 – 9,100
At 1 January 2024, net of
accumulated depreciation /H1118/H1118/H11181,829 1,463 5,808 – 9,100
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 262 26 288
Depreciation provided during
the period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(271) (180) (810) – (1,261)
At 31 May 2024, net of
accumulated depreciation /H1118/H1118/H11181,558 1,283 5,260 26 8,127
At 31 May 2024:
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,597 1,715 22,499 26 26,837
Accumulated depreciation /H1118/H1118/H1118(1,039) (432) (17,239) – (18,710)
Net carrying amount /H1118/H1118/H1118/H1118/H1118/H11181,558 1,283 5,260 26 8,127
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 617 ---
14. LEASES
The Group as a lessee
The Group has lease contracts for various items of plant and properties used in its operations. Leases of plant
and properties generally have lease terms between 1.5 and 8 years. Other equipment generally has lease terms of 12
months or less or is individually of low value. Generally, the Group is restricted from assigning and subleasing the
leased assets outside the Group.
(a) Right-of-use assets
The carrying amounts of the Group’s right-of-use assets and the movements during the Relevant Periods are
as follows:
The Group
Leasehold land
Plant and
properties Total
RMB’000 RMB’000 RMB’000
As at 1 January 2021 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111822,589 99,645 122,234
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 1,585 1,585
Depreciation charge /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(465) (18,112) (18,577)
Decrease arising from lease term termination /H1118/H1118/H1118 – (552) (552)
As at 31 December 2021 and 1 January 2022 /H1118/H1118/H1118 22,124 82,566 104,690
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 3,318 3,318
Depreciation charge /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(465) (19,673) (20,138)
As at 31 December 2022 and 1 January 2023 /H1118/H1118/H1118 21,659 66,211 87,870
Depreciation charge /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(465) (17,686) (18,151)
Decrease arising from lease term termination /H1118/H1118/H1118 – (300) (300)
As at 31 December 2023 and 1 January 2024 /H1118/H1118/H1118 21,194 48,225 69,419
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/H111838,655 – 38,655
Depreciation charge /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(730) (6,988) (7,718)
As at 31 May 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111859,119 41,237 100,356
As at 31 December 2021, 2022 and 2023 and 31 May 2024, the Group’s leasehold land with aggregate carrying
amounts of approximately RMB22,124,000, RMB21,659,000 and RMB21,194,000 and RMB21,000,000,
respectively, was pledged to secure interest-bearing bank and other borrowings granted to the Group (note 30).
The Company
Plant and properties
RMB’000
As at 1 January 2021 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,377
Depreciation charge /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(226)
As at 31 December 2021 and 1 January 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,151
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111886,492
Depreciation charge /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(16,212)
Decrease arising from lease term termination /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(1,132)
As at 31 December 2022 and 1 January 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111870,299
Depreciation charge /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(17,444)
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/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111852,855
Depreciation charge /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(7,143)
As at 31 May 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/H111845,712
The Company leased the properties from its subsidiary pursuant to the agreement signed on 26 January 2022.
APPENDIX I ACCOUNTANTS’ REPORT
– I-55 –


--- page 618 ---
(b) Lease liabilities
The carrying amount of lease liabilities and the movements during the Relevant Periods are as follows:
The Group
As at 31 December As at 31 May
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Carrying amount at the beginning /H1118/H1118 103,192 90,712 76,386 61,404
New leases /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,585 3,318 – –
Accretion of interest recognised
during the year/period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,778 4,157 4,553 1,166
Decrease arising from lease term
termination /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(527) – (340) –
Payments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(18,316) (21,801) (19,195) (10,739)
Carrying amount at the end /H1118/H1118/H1118/H1118/H1118/H111890,712 76,386 61,404 51,831
Analysed into:
Current portion /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111815,418 15,523 18,921 19,738
Non-current portion /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111875,294 60,863 42,483 32,093
The Company
As at 31 December As at 31 May
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Carrying amount at the beginning /H1118/H1118 – 1,195 72,493 58,926
New leases /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,377 86,492 – –
Accretion of interest recognised
during the year/period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111860 3,429 3,854 1,364
Decrease arising from lease term
termination /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (1,179) – –
Payments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(242) (17,444) (17,421) (10,406)
Carrying amount at the end /H1118/H1118/H1118/H1118/H1118/H11181,195 72,493 58,926 49,884
Analysed into:
Current portion /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118201 13,568 17,859 18,295
Non-current portion /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118994 58,925 41,067 31,589
The maturity analysis of lease liabilities is disclosed in note 45.
APPENDIX I ACCOUNTANTS’ REPORT
– I-56 –


--- page 619 ---
(c) The amounts recognised in profit or loss in relation to leases are as follows:
The Group
Y ear ended 31 December Five months ended 31 May
2021 2022 2023 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
Interest on lease liabilities /H1118 4,778 4,157 4,553 1,504 1,166
Depreciation charge of
right-of-use assets /H1118/H1118/H1118/H111818,577 20,138 18,151 8,155 7,718
Expenses relating to short-
term leases /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,223 3,526 1,868 696 693
Expenses relating to leases
of low-value assets /H1118/H1118/H1118/H1118 18 94 229 97 64
Loss/(gain) on a lease term
termination /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111825 – (40) (40) –
Total amount recognised in
profit or loss /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111827,621 27,915 24,761 10,412 9,641
The Company
Y ear ended 31 December Five months ended 31 May
2021 2022 2023 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
Interest on lease liabilities /H1118 60 3,429 3,854 1,708 1,364
Depreciation charge of
right-of-use assets /H1118/H1118/H1118/H1118226 16,212 17,444 7,143 7,143
Expenses relating to short-
term leases /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118229 703 78 32 64
Gain on a lease term
termination /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (47) – – –
Total amount recognised in
profit or loss /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118515 20,297 21,376 8,883 8,571
15. OTHER INTANGIBLE ASSETS
The Group
Software
Patents and
licences
Construction in
progress Total
RMB’000 RMB’000 RMB’000 RMB’000
31 December 2021
Cost at 1 January 2021, net of
accumulated amortisation /H1118/H1118/H1118/H1118/H1118/H111814,608 8,433 7,698 30,739
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,415 – 5,395 11,810
Transfers /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,261 – (3,261) –
Amortisation provided during
the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(4,686) (1,833) – (6,519)
Impairment during the year /H1118/H1118/H1118/H1118/H1118/H1118– (2,446) – (2,446)
At 31 December 2021 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111819,598 4,154 9,832 33,584
APPENDIX I ACCOUNTANTS’ REPORT
– I-57 –


--- page 620 ---
Software
Patents and
licences
Construction in
progress Total
RMB’000 RMB’000 RMB’000 RMB’000
At 31 December 2021 and
at 1 January 2022:
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111829,889 11,000 9,832 50,721
Accumulated amortisation and
impairment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(10,291) (6,846) – (17,137)
Net carrying amount /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111819,598 4,154 9,832 33,584
31 December 2022
Cost at 1 January 2022, net of
accumulated amortisation and
impairment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111819,598 4,154 9,832 33,584
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,026 – 1,471 4,497
Transfers /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111810,825 – (10,825) –
Amortisation provided during
the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(6,414) (1,466) – (7,880)
At 31 December 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111827,035 2,688 478 30,201
At 31 December 2022 and at
1 January 2023:
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111843,740 11,000 478 55,218
Accumulated amortisation and
impairment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(16,705) (8,312) – (25,017)
Net carrying amount /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111827,035 2,688 478 30,201
31 December 2023
Cost at 1 January 2022, net of
accumulated amortisation /H1118/H1118/H1118/H1118/H1118/H111827,035 2,688 478 30,201
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,266 – 666 1,932
Transfers /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118973 – (973) –
Amortisation provided during the
year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(8,211) (1,466) – (9,677)
At 31 December 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111821,063 1,222 171 22,456
At 31 December 2023 and at 1
January 2024:
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111829,274 2,688 171 32,133
Accumulated amortisation and
impairment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(8,211) (1,466) – (9,677)
Net carrying amount /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111821,063 1,222 171 22,456
31 May 2024
Cost at 1 January 2023, net of
accumulated amortisation /H1118/H1118/H1118/H1118/H1118/H111821,063 1,222 171 22,456
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118136 – 428 564
Acquisition of a subsidiary /H1118/H1118/H1118/H1118/H1118/H1118– 4,666 – 4,666
Transfers /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118599 – (599) –
Amortisation provided during the
period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(3,391) (847) – (4,238)
At 31 May 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111818,407 5,041 – 23,448
APPENDIX I ACCOUNTANTS’ REPORT
– I-58 –


--- page 621 ---
As at 31 December 2021, the carrying amount of certain patent has been reduced to its recoverable amount of
nil through recognition of an impairment loss of RMB2,446,000 as a fuel cell battery case had ceased production
during 2021.
The Company
Patents and licences
RMB’000
31 December 2021
Cost at 1 January 2021, net of accumulated amortisation /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118288
Amortisation provided during the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(5)
At 31 December 2021 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118283
At 31 December 2021 and at 1 January 2022:
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118288
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(5)
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/H1118283
31 December 2022
Cost at 1 January 2022, net of accumulated amortisation /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118283
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,123
Amortisation provided during the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(166)
At 31 December 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,240
At 31 December 2022 and at 1 January 2023:
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,411
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(171)
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/H11181,240
31 December 2023
Cost at 1 January 2023, net of accumulated amortisation /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,240
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118101
Amortisation provided during the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(296)
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/H11181,045
At 31 December 2023 and at 1 January 2024:
Cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,512
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(467)
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/H11181,045
31 May 2024
Cost at 1 January 2024, net of accumulated amortisation /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,045
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111828
Amortisation provided during the period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(128)
At 31 May 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/H1118/H1118/H1118945
APPENDIX I ACCOUNTANTS’ REPORT
– I-59 –


--- page 622 ---
16. INVESTMENT IN A JOINT VENTURE
The Group and the Company
As at 31 December As at 31 May
2021 2022 2023 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
Share of net assets
Guohong Refire /H1118/H1118/H1118/H1118/H1118/H1118/H1118–––––
The Group’s and the Company’s outstanding balances with the joint venture are disclosed in note 41.
The joint venture of the Group is considered not individually material for the Relevant Periods and the
following table illustrates the financial information of the Group’s joint venture:
As at 31 December As at 31 May
2021 2022 2023 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
Share of the joint venture’s
loss for the year/period /H1118 (5,750) (18,750) – – –
Aggregate carrying amount
of the Group’s
investment in the joint
venture /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––––
17. INVESTMENTS IN ASSOCIATES
The Group
As at 31 December As at 31 May
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Share of net assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111851,590 78,689 99,522 131,051
The associates of the Group are considered not individually material for the Relevant Periods, and the
following table illustrates the aggregate financial information of the Group’s associates:
Y ear ended 31 December Five months ended 31 May
2021 2022 2023 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Unaudited)
Share of the associates’
losses for the
year/period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(2,466) (2,695) (3,855) (2,680) (5,721)
Share of the associates’
total comprehensive
income /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(2,466) (2,695) (3,855) (2,680) (5,721)
Aggregate carrying amount
of the Group’s
investments in the
associates /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111851,590 78,689 99,522 86,059 131,051
APPENDIX I ACCOUNTANTS’ REPORT
– I-60 –


--- page 623 ---
The Company
As at 31 December As at 31 May
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Share of net assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111840,158 63,321 91,232 104,817
The Group’s and the Company’s outstanding balances with the associates are disclosed in note 41.
18. INVESTMENTS IN SUBSIDIARIES
The Company
As at 31 December As at 31 May
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Investments, at cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,580,313 2,598,725 3,213,747 3,293,427
Impairment loss on investment in a
subsidiary /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(2,000) (2,000) (2,000) (2,000)
Investments in subsidiaries /H1118/H1118/H1118/H1118/H1118/H11181,578,313 2,596,725 3,211,747 3,291,427
Due to discontinuing of operation, the investment in the subsidiary, Beijing XCELL Technology Co., Ltd, was
fully impaired as at 31 December 2021. The directors assessed the other subsidiaries’ forecast and were of the opinion
that no impairment was needed for the investments in the other subsidiaries as at the end of each of the Relevant
Periods.
The Company’s outstanding balances with the subsidiaries are disclosed in note 41.
19. EQUITY INVESTMENTS DESIGNATED AT FAIR V ALUE THROUGH OTHER COMPREHENSIVE
INCOME
The Group
As at 31 December As at 31 May
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Unlisted equity investments /H1118/H1118/H1118/H1118/H1118/H111817,357 19,887 47,656 46,076
The Company
As at 31 December As at 31 May
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Unlisted equity investments /H1118/H1118/H1118/H1118/H1118/H111813,239 13,859 42,106 40,808
The above equity investments were irrevocably designated at fair value through other comprehensive income
as the Group considers these investments to be strategic in nature.
APPENDIX I ACCOUNTANTS’ REPORT
– I-61 –


--- page 624 ---
20. DEFERRED TAX
The Group
The movements in deferred tax assets and liabilities during the Relevant Periods are as follows:
Deferred tax assets
Impairment of
inventories Lease liabilities
Deferred
income
Losses
available for
offsetting
against future
taxable profits Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
At 1 January 2021 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,388 16,094 5,628 – 23,110
Deferred tax (charged)/credited
to profit or loss during the
year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(717) (1,874) 4,799 – 2,208
Gross deferred tax assets at
31 December 2021 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118671 14,220 10,427 – 25,318
Deferred tax credited/(charged) to
profit or loss during the year /H1118/H1118 958 (2,204) (541) – (1,787)
Gross deferred tax assets at
31 December 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,629 12,016 9,886 – 23,531
Deferred tax credited/(charged) to
profit or loss during the year /H1118/H1118 675 (2,654) (164) 609 (1,534)
Gross deferred tax assets at
31 December 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,304 9,362 9,722 609 21,997
Acquisition of a subsidiary /H1118/H1118/H1118/H1118 – – – 1,914 1,914
Deferred tax credited/(charged) to
profit or loss during the
period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118255 (1,349) 290 1,498 694
Gross deferred tax assets at
31 May 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,559 8,013 10,012 4,021 24,605
Deferred tax liabilities
Depreciation
allowance in
excess of related
depreciation
Right-of-use
assets
Fair value
adjustments
arising from
acquisition of
subsidiaries Total
RMB’000 RMB’000 RMB’000 RMB’000
At 1 January 2021 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,661 15,545 – 19,206
Deferred tax credited to profit or
loss during the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(685) (2,545) – (3,230)
Gross deferred tax liabilities at
31 December 2021 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,976 13,000 – 15,976
Deferred tax credited to profit or
loss during the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(616) (2,498) – (3,114)
Gross deferred tax liabilities at
31 December 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,360 10,502 – 12,862
Deferred tax credited to profit or
loss during the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(646) (3,138) – (3,784)
Gross deferred tax liabilities at
31 December 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,714 7,364 – 9,078
Acquisition of a subsidiary /H1118/H1118/H1118/H1118/H1118/H1118– – 1,914 1,914
Deferred tax credited to profit or
loss during the period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(127) (835) (392) (1,354)
Gross deferred tax liabilities at
31 May 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,587 6,529 1,522 9,638
APPENDIX I ACCOUNTANTS’ REPORT
– I-62 –


--- page 625 ---
For presentation purposes, certain deferred tax assets and liabilities have been offset in the statement of
financial position. The following is an analysis of the deferred tax balances of the Group for financial reporting
purposes:
As at 31 December As at 31 May
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Net deferred tax assets recognised in
the consolidated statement of
financial position /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189,342 10,669 12,919 14,967
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189,342 10,669 12,919 14,967
Deferred tax assets have not been recognised in respect of the following items:
As at 31 December As at 31 May
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Tax losses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,238,064 1,814,906 2,429,235 2,775,909
Deductible temporary differences /H1118/H1118 540,128 620,685 661,798 681,897
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,778,192 2,435,591 3,091,033 3,457,806
The Group has tax losses arising in Chinese Mainland of RMB1,238,064,000, RMB1,814,906,000 and
RMB2,429,235,000 and RMB2,775,909,000 as at 31 December 2021, 2022 and 2023 and 31 May 2024,
respectively, that will expire in one to ten years for offsetting against future taxable profits. Deferred tax assets
have not been recognised in respect of these losses as it is not considered probable that taxable profits will be
available against which the tax losses can be utilised.
The Company
The Company has tax losses arising in Chinese Mainland of RMB27,803,000, RMB116,216,000 and
RMB253,190,000 and RMB307,647,000 as at 31 December 2021, 2022 and 2023 and 31 May 2024,
respectively, that will expire in one to five years for offsetting against future taxable profits. Deferred tax
assets have not been recognised in respect of these losses are not considered probable that taxable profits will
be available against which the tax losses can be utilised.
21. INVENTORIES
As at 31 December As at 31 May
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Raw materials /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118175,630 212,380 175,710 218,847
Work in progress /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111812,267 4,639 12,993 24,744
Finished goods /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118145,716 185,357 166,784 195,192
333,613 402,376 355,487 438,783
Less: provision for impairment
losses on inventories /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(73,645) (125,442) (115,615) (102,419)
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118259,968 276,934 239,872 336,364
As at 31 December 2021, 2022 and 2023 and 31 May 2024, inventories were stated at the lower of cost
and net realisable value.
APPENDIX I ACCOUNTANTS’ REPORT
– I-63 –


--- page 626 ---
The movements in provision
Y ear ended 31 December
Five months
ended 31 May
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Carrying amount at the beginning /H1118/H1118 38,593 73,645 125,442 115,615
Impairment losses recognised
(note 6) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111847,671 82,113 31,765 8,476
Amounts written off /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(12,619) (30,316) (41,592) (21,672)
Carrying amount at the end /H1118/H1118/H1118/H1118/H1118/H111873,645 125,442 115,615 102,419
The Group has written off impairment losses amounting to RMB12,619,000, RMB30,316,000,
RMB41,592,000 and RMB21,672,000 during the years ended 31 December 2021, 2022 and 2023 and the five
months ended 31 May 2024, mainly due that certain hydrogen fuel cell systems with limited market presence
were scrapped or sold.
22. TRADE AND BILLS RECEIV ABLES AND CONTRACT ASSETS
The Group
As at 31 December As at 31 May
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Non-current:
Trade receivables (a) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118284,724 264,897 417,537 314,940
Contract assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 31,380 17,382
284,724 264,897 448,917 332,322
Less: Impairment losses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(15,039) (10,273) (14,199) (6,044)
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118269,685 254,624 434,718 326,278
Current:
Trade receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,270,484 1,590,683 1,974,948 2,018,777
Commercial acceptance bills /H1118/H1118/H1118/H1118/H11184,077 62,102 25,258 70,034
Bank acceptance notes /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187,323 2,611 30,083 26,788
1,281,884 1,655,396 2,030,289 2,115,599
Less: Impairment losses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(358,334) (389,867) (446,894) (496,968)
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118923,550 1,265,529 1,583,395 1,618,631
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,193,235 1,520,153 2,018,113 1,944,909
The Group’s trading terms with its customers are mainly on credit. Each customer has a maximum credit limit.
The Group seeks to maintain strict control over its outstanding receivables and has a credit control department to
minimise credit risk.
The Group does not hold any collateral or other credit enhancements over its trade receivable balances. Trade
receivables are non-interest-bearing.
(a) Non-current trade receivables represented receivables from customers who signed contracts with a
credit period of more than 1 year.
APPENDIX I ACCOUNTANTS’ REPORT
– I-64 –


--- page 627 ---
An aging analysis of the Group’s trade receivables, commercial acceptance bills and contract assets, based on
the past due information and net of loss allowance, as at the end of each of the Relevant Periods is as follows:
As at 31 December As at 31 May
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Current /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118650,086 893,979 1,137,834 684,272
Within 1 year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118239,938 316,959 519,188 751,905
1 to 2 years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118102,659 135,392 128,430 322,340
2 to 3 years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118190,345 19,952 72,735 23,516
3 to 4 years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,884 151,260 4,168 28,088
4 to 5 years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 125,675 108,000
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,185,912 1,517,542 1,988,030 1,918,121
The movements in the impairment losses on trade receivables, commercial acceptance bills and contract assets
are as follows:
Y ear ended 31 December
Five months
ended 31 May
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
At beginning of year/period /H1118/H1118/H1118/H1118/H1118/H1118237,857 373,373 400,140 461,093
Impairment losses recognised, net /H1118/H1118 135,516 26,767 60,953 41,919
At end of year/period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118373,373 400,140 461,093 503,012
The Group’s bills receivables aged within six months were not past due. Bank acceptance bills that are
measured at fair value through other comprehensive income are considered as having very low credit risk and the loss
allowance is assessed to be minimal.
The Group applies the simplified approach in calculating ECLs for trade receivables, commercial acceptance
bills and contract assets. Trade receivables, commercial acceptance bills and contract assets relating to customers not
sharing similar credit risk with others are assessed individually for impairment allowance, for instance, customers
with known financial difficulties or significant doubt on collection. The remaining trade receivables, commercial
acceptance bills and contract assets are grouped and collectively assessed for impairment allowance. Under the
collective approach, an impairment analysis is performed at each reporting date using a provision matrix to measure
expected credit losses. The provision rates are based on past due information for grouping of customers that have
similar loss patterns. The calculation reflects the probability-weighted outcome, the time value of money and
reasonable and supportable information that is available at the reporting date about past events, current conditions
and forecasts of future economic conditions. Generally, trade receivables are written off if past due for more than five
years and are not subject to enforcement activity. During 2021, the increase in impairment losses was mainly due to
certain customers encountering with financial difficulties where the trade receivables are assessed to be
uncollectable. During 2023 and five months ended 31 May 2024, the increase in impairment losses were mainly due
to the rise in the expected loss provision matrix along with the ageing migration.
APPENDIX I ACCOUNTANTS’ REPORT
– I-65 –


--- page 628 ---
Set out below is the information about the credit risk exposure on the Group’s trade receivables, commercial
acceptance bills and contract assets using a provision matrix:
Current
Within
1 year
1t o
2 years
2t o
3 years
3t o
4 years
4t o
5 years
Over
5 years Total
As at 31 December 2021
On a collective basis:
Expected credit loss rate /H1118/H1118/H1118/H1118/H11182.92% 9.66% 24.55% 40.57% 85.43% 100.00% 100.00% 16.12%
Gross carrying amount
(RMB’000) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118669,639 265,593 136,060 320,309 19,789 2,513 – 1,413,903
Expected credit losses
(RMB’000) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111819,553 25,655 33,401 129,964 16,905 2,513 – 227,991
On an individual basis:
Expected credit loss rate /H1118/H1118/H1118/H1118/H1118 100.00%
Gross carrying amount
(RMB’000) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118 145,382
Expected credit losses
(RMB’000) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118 145,382
Current
Within
1 year
1t o
2 years
2t o
3 years
3t o
4 years
4t o
5 years
Over
5 years Total
As at 31 December 2022
On a collective basis:
Expected credit loss rate /H1118/H1118/H1118/H1118/H11182.01% 6.95% 18.40% 41.82% 51.90% 100.00% 100.00% 14.30%
Gross carrying amount
(RMB’000) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118912,331 340,638 165,926 34,292 314,500 575 2,513 1,770,775
Expected credit losses
(RMB’000) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111818,352 23,679 30,534 14,340 163,240 575 2,513 253,233
On an individual basis:
Expected credit loss rate /H1118/H1118/H1118/H1118/H1118 100.00%
Gross carrying amount
(RMB’000) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118 146,907
Expected credit losses
(RMB’000) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118 146,907
Current
Within
1 year
1t o
2 years
2t o
3 years
3t o
4 years
4t o
5 years
Over
5 years Total
As at 31 December 2023
On collective basis:
Expected credit loss rate /H1118/H1118/H1118/H1118/H11182.06% 6.59% 13.56% 35.46% 56.99% 59.81% 100.00% 13.65%
Gross carrying amount
(RMB’000) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,161,778 555,826 148,573 112,699 9,690 312,700 950 2,302,216
Expected credit losses
(RMB’000) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111823,944 36,638 20,143 39,964 5,522 187,025 950 314,186
On individual basis:
Expected credit loss rate /H1118/H1118/H1118/H1118/H1118 100.00%
Gross carrying amount
(RMB’000) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118 146,907
Expected credit losses
(RMB’000) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118 146,907
APPENDIX I ACCOUNTANTS’ REPORT
– I-66 –


--- page 629 ---
Set out below is the information about the credit risk exposure on the Group’s trade receivables, commercial
acceptance bills and contract assets using a provision matrix:
Current
Within
1 year
1t o
2 years
2t o
3 years
3t o
4 years
4t o
5 years
Over
5 years Total
As at 31 May 2024
On collective basis:
Expected credit loss rate /H1118/H1118/H1118/H1118/H11181.64% 7.25% 14.50% 37.82% 55.53% 62.62% 100.00% 15.66%
Gross carrying amount
(RMB’000) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118695,675 810,685 376,986 37,817 63,160 288,953 950 2,274,226
Expected credit losses
(RMB’000) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111811,403 58,780 54,646 14,301 35,072 180,953 950 356,105
On individual basis:
Expected credit loss rate /H1118/H1118/H1118/H1118/H1118 100.00%
Gross carrying amount
(RMB’000) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118 146,907
Expected credit losses
(RMB’000) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118 146,907
The Company
As at 31 December As at 31 May
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Trade receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111867,205 229,658 442,784 451,346
Commercial acceptance bills
receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,701 376 28 –
Bank acceptance notes /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,443 1,475 – –
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111872,349 231,509 442,812 451,346
Less: Impairment losses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(2,313) (9,535) (30,497) (62,220)
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111870,036 221,974 412,315 389,126
An ageing analysis of the Company’s trade receivables and commercial acceptance bills, based on the past due
information and net of loss allowance, as at the end of each of the Relevant Periods is as follows:
As at 31 December As at 31 May
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Current /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111864,929 165,940 224,189 88,772
Within 1 year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118938 54,515 139,354 163,834
1 to 2 years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118726 44 48,772 106,425
2 to 3 years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 30,095
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111866,593 220,499 412,315 389,126
The movements in the loss allowance for impairment of trade receivables and commercial acceptance bills are
as follows:
Y ear ended 31 December
Five months
ended 31 May
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
At beginning of year/period /H1118/H1118/H1118/H1118/H1118/H1118939 2,313 9,535 30,497
Impairment losses recognised, net /H1118/H1118 1,374 7,222 20,962 31,723
At end of year/period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,313 9,535 30,497 62,220
APPENDIX I ACCOUNTANTS’ REPORT
– I-67 –


--- page 630 ---
Set out below is the information about the credit risk exposure on the Group’s trade receivables and
commercial acceptance bills receivables using a provision matrix:
Current Within 1 year 1 to 2 years 2 to 3 years Total
As at 31 December 2021
On a collective basis:
Expected credit loss rate /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182.90% 12.60% 24.55% – 3.36%
Gross carrying amount (RMB’000) /H1118/H1118 66,871 1,073 962 – 68,906
Expected credit losses (RMB’000) /H1118/H1118 1,942 135 236 – 2,313
As at 31 December 2022
On a collective basis:
Expected credit loss rate /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182.09% 9.89% 20.55% – 4.15%
Gross carrying amount (RMB’000) /H1118/H1118169,478 60,500 56 – 230,034
Expected credit losses (RMB’000) /H1118/H1118 3,538 5,985 12 – 9,535
As at 31 December 2023
On a collective basis:
Expected credit loss rate /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182.11% 8.90% 19.85% – 6.89%
Gross carrying amount (RMB’000) /H1118/H1118229,020 153,236 60,556 – 442,812
Expected credit losses (RMB’000) /H1118/H1118 4,831 13,643 12,023 – 30,497
As at 31 May 2024
On a collective basis:
Expected credit loss rate /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181.82% 8.92% 19.78% 37.82% 13.79%
Gross carrying amount (RMB’000) /H1118/H1118 90,418 179,873 132,659 48,396 451,346
Expected credit losses (RMB’000) /H1118/H1118 1,646 16,039 26,234 18,301 62,220
23. PREPAYMENTS, OTHER RECEIV ABLES AND OTHER ASSETS
The Group
As at 31 December As at 31 May
Note 2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Current:
Prepayment of government
subsidies /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(a) – – 113,100 –
Deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,725 9,722 88,657 93,343
Prepayments to suppliers /H1118/H1118/H1118/H1118 28,362 54,992 60,444 77,402
Other tax recoverable /H1118/H1118/H1118/H1118/H1118/H1118 26,498 17,139 17,812 31,581
Prepaid expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111839,803 21,942 16,346 15,538
Listing expenditures /H1118/H1118/H1118/H1118/H1118/H1118 – – 3,893 4,938
Due from related parties /H1118/H1118/H1118/H1118 522 500 642 –
Advances to employees /H1118/H1118/H1118/H1118 386 174 301 351
102,296 104,469 301,195 223,153
Impairment allowance /H1118/H1118/H1118/H1118/H1118 (1,502) (1,956) (4,927) (4,462)
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118100,794 102,513 296,268 218,691
Non-current:
Other tax recoverable /H1118/H1118/H1118/H1118/H1118/H1118 7,506 8,262 13,285 18,146
Prepayments for long-term
assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111812,037 54,910 54,607 31,951
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111819,543 63,172 67,892 50,097
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118120,337 165,685 364,160 268,788
(a) Entitled by the Group’s customers, i.e. hydrogen fuel cell commercial vehicle manufacturers, the Group
has applied for certain subsidies on the customers’ behalf with local government. As at 31 December
2023, the Group obtained approval from local government but only received a portion of the amounts
on the customers’ behalf. Considering the friendly cooperation relationship with these customers, the
Group paid the entire subsidies of RMB113,100,000 to its customers in December 2023, and the Group
received the remaining amount in February 2024.
An impairment analysis is performed at the end of each of the reporting periods. Impairment allowance
for deposits and amounts due from related parties was mainly due to the uncollectability of these receivables
as at 31 December 2021, 2022 and 2023 and 31 May 2024.
APPENDIX I ACCOUNTANTS’ REPORT
– I-68 –


--- page 631 ---
The Company
As at 31 December As at 31 May
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Current:
Prepayments to suppliers /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118836 4,954 13,511 7,633
Prepaid expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118609 1,670 1,932 421
Deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118168 1,218 10,953 10,811
Listing expenditures /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 3,893 4,938
Due from related parties /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 142 –
Advances to employees /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–6 33 4 1 0 0
Other tax recoverable /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,286 3,865 5,454 8,272
2,899 11,770 35,919 32,175
Impairment allowance /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(8) (19) (544) (539)
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,891 11,751 35,375 31,636
24. FINANCIAL ASSETS AT FAIR V ALUE THROUGH PROFIT OR LOSS
The Group
As at 31 December As at 31 May
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Current:
Structured deposits, at fair value (a) /H1118 – 335,797 – –
Non-current:
Private equity funds /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,436 6,521 44,401 52,230
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,436 342,318 44,401 52,230
The Company
As at 31 December As at 31 May
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Current:
Structured deposits, at fair value (a) /H1118 – 280,689 – –
Non-current:
Private equity funds /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,436 6,521 24,079 22,116
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,436 287,210 24,079 22,116
(a) The structured deposits were issued by banks in Chinese Mainland. They were mandatorily classified
as financial assets at fair value through profit or loss as their contractual cash flows are not solely
payments of principal and interest. The interest rates fluctuate within the range of 1.25% to 3.40%,
hooked onto the BFIX EURUSD exchange rate.
APPENDIX I ACCOUNTANTS’ REPORT
– I-69 –


--- page 632 ---
25. CASH AND CASH EQUIV ALENTS, TIME DEPOSITS AND RESTRICTED CASH
The Group
As at 31 December As at 31 May
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Cash and cash equivalents /H1118/H1118/H1118/H1118/H1118/H1118/H1118276,220 1,079,456 664,510 435,710
Time deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 52,086 – –
Restricted cash /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 59,902 746 28
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118276,220 1,191,444 665,256 435,738
As at 31 December 2022, time deposits amounting to RMB52,086,000 would mature in more than three months
when acquired by the Group and earn interest at the time deposit rates.
As at 31 December 2022 and 2023, restricted cash represented bank deposits amounting to RMB59,902,000
and RMB746,000, respectively, were pledged to banks as collateral for issuance of bank acceptance notes. As at 31
May 2024, restricted cash represented letter of guarantee amounting to RMB28,000.
As at 31 December As at 31 May
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Cash and cash equivalents
Denominated in RMB /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118266,342 1,057,651 634,632 403,886
Denominated in CAD /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188,552 18,173 16,522 14,201
Denominated in USD /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,313 3,632 11,656 –
Denominated in EUR /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 1,700 16,031
Denominated in HKD /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111813 – – 1,592
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118276,220 1,079,456 664,510 435,710
Time deposits and restricted cash
denominated in RMB /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 111,988 746 28
The Company
As at 31 December As at 31 May
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Cash and cash equivalents
Denominated in RMB /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111831,145 67,464 27,060 10,702
Cash at banks earns interest at floating rates based on daily bank deposit rates. The bank balances are deposited
with creditworthy banks with no recent history of default.
As at 31 December 2021, 2022 and 2023 and 31 May 2024, the Group and the Company have assessed the
credit risk of cash and cash equivalents, time deposits and restricted cash to be minimal as they were placed in
reputable financial institutions.
APPENDIX I ACCOUNTANTS’ REPORT
– I-70 –


--- page 633 ---
26. TRADE AND BILLS PAYABLES
An ageing analysis of the trade and bills payables as at the end of the reporting period, based on the invoice
date, is as follows:
The Group
As at 31 December As at 31 May
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Within 1 year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118386,201 390,707 447,319 445,871
1 to 2 years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111858,024 69,947 113,317 75,577
2 to 3 years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111881,813 16,653 25,801 27,766
Over 3 years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111835,495 88,948 64,304 76,799
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118561,533 566,255 650,741 626,013
The trade payables are non-interest-bearing and are normally settled within 30 to 180 days upon receipt of the
V AT invoice. Certain suppliers made part of the final payment within 24 months.
In 2023, the Group entered into supplier finance arrangements with Xi’an Jingchan Commercial Factoring Co.,
Ltd. (“Xi’an Jingchan”) and Cloudchain Group Co., Ltd. (“Cloudchain”), together as the “factoring companies”.
Pursuant to the agreements, Xi’an Jingchan provided a total credit limit up to RMB200 million for factoring the
accounts receivable of the Group’s suppliers. To secure the Group’s payment obligations, the Group provided a
deposit of RMB60 million to Xi’an Jingchan. Cloudchain provided a total credit limit up to RMB10,000,000 from
Bank of Communications Co., Ltd. for factoring the accounts receivable of the Group’s suppliers with deposits
request.
Under these supplier finance arrangements, the Group’s suppliers can elect to have their undue accounts
receivables from the Group factored by the factoring companies. Upon the Group’s approval, the suppliers will sign
an accounts receivables transfer agreements with the factoring companies, whereby their corresponding accounts
receivables transfer from the Group to the factoring companies. The factoring companies will pay the suppliers
directly for the factored receivables. The Group will subsequently make payments to the factoring companies to settle
the factored accounts receivables.
From the perspective of the Group, the supplier finance arrangements effect a non-cash movement of the
reclassification from payables to suppliers to payables to the factoring companies. As at 31 May 2024, Xi’an Jingchan
and Cloudchain had paid factoring financing funds amounting to RMB47,260,000 and RMB26,358,000, respectively.
The Company
As at 31 December As at 31 May
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Within 1 year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111817,442 138,865 248,465 201,856
1 to 2 years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 63,000 96,091
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111817,442 138,865 311,465 297,947
APPENDIX I ACCOUNTANTS’ REPORT
– I-71 –


--- page 634 ---
27. OTHER PAYABLES AND ACCRUALS
The Group
As at 31 December As at 31 May
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Payroll and welfare payable /H1118/H1118/H1118 49,027 68,448 40,295 21,817
Other tax payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111826,110 29,858 27,839 5,380
Government grants /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,910 2,910 26,360 64,272
Collection on behalf of others /H1118 (a) – – 28,628 56,056
Listing expenditures payable /H1118/H1118 – – 11,624 15,634
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118618 1,200 6,569 11,558
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111878,665 102,416 141,315 174,717
(a) Entitled by the Group’s customers, i.e. hydrogen fuel cell commercial vehicle manufacturers, the Group
has applied for certain subsidies on the customers’ behalf with local government. As at 31 December
2023, the Group obtained approval from local government but only received a portion of the amounts
on the customers’ behalf, accumulated to RMB28,028,000 and RMB56,056,000 as at 31 December 2023
and 31 May 2024, respectively. The Group has paid the subsidies to its customers in June 2024
subsequently.
The Company
As at 31 December As at 31 May
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Payroll and welfare payable /H1118/H1118/H1118/H1118/H1118/H11184,590 17,939 10,000 8,014
Other tax payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118287 2,729 982 784
Listing expenditures payable /H1118/H1118/H1118/H1118/H1118/H1118– – 11,624 15,634
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118311 115 943 853
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,188 20,783 23,549 25,285
Other payables are non-interest-bearing, unsecured and repayable on demand.
28. CONTRACT LIABILITIES
The Group
As at 31 December As at 31 May
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Non-current:
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,023 4,021 13,841 12,466
Current:
Hydrogen fuel cell systems /H1118/H1118/H1118/H1118/H1118/H11183,828 1,940 7,707 12,562
Components /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118333 399 1,762 1,061
Hydrogen fuel cell engineering and
technical services /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111813,324 5,463 263 10,713
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,721 7,267 3,008 11,216
20,206 15,069 12,740 35,552
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111825,229 19,090 26,581 48,018
Contract liabilities represented advances received to deliver products and services.
APPENDIX I ACCOUNTANTS’ REPORT
– I-72 –


--- page 635 ---
29. DERIV ATIVE FINANCIAL INSTRUMENTS
The Group and the Company
The Group has an agreement with the obligation to buy back the shares of the joint venture as follows:
As at 31 December As at 31 May
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Non-current
Put option on interests in a joint
venture
held by a third party /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111817,742 – – –
Current
Put option on interests in a joint
venture
held by a third party /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 37,423 – –
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111817,742 37,423 – –
In December 2018, the Company entered into an agreement with Yunfu Rongda Asset Management Co.,
Ltd. (“Yunfu Rongda”), Guangdong Guohong Refire Energy Technology Co., Ltd. (“Guohong Refire”) and a
third party namely Sino-Synergy Hydrogen Energy Technology (Jiaxing) Co., Ltd. (“Sino-Synergy”). Pursuant
to the agreement, Yunfu Rongda had the right to withdraw its investment in Guohong Refire of approximately
RMB77,840,000 with a post-tax return rate at 1.5% per annum on or after 30 June 2020 and the Company and
Sino-Synergy are required to agree on such capital withdrawal in proportion to the shareholdings of 49% and
51%, respectively. According to the agreement, Yunfu Rongda can choose to withdraw its investment through
capital reduction or share transfer. If Yunfu Rongda chooses capital reduction, Guohong Refire shall return
Yunfu Rongda’s investment fund at the amount of RMB77,840,000, and the Company and Sino-Synergy shall
assume a joint and several liability guarantee. If Yunfu Rongda chooses to transfer shares to exit from the
investment, the Company and Sino-Synergy shall jointly undertake the transferred shares and Guohong Refire
should provide a joint-liability guarantee. On 8 January 2019, the Company, Yunfu Rongda, Sino-Synergy and
Guohong Refire signed a supplementary agreement, pursuant to which Yunfu Rongda could exercise its right
of capital withdrawal on or after 30 June 2023. Accordingly, the Group recognised fair value changes of
RMB607,000 and RMB19,681,000 for the derivative financial instrument and the value of the put option that
Yunfu Rongda held amounting to RMB17,742,000 and RMB37,423,000, respectively, as at 31 December 2021,
and 2022, which were measured using the option model based on the expected cash flows determined under
the contract terms and market discount rate. In April 2023, Yunfu Rongda chose to withdraw its investment,
Sino-Synergy and the Company agreed to acquire from Yunfu Rongda the registered capital of Guohong Refire
of RMB39,699,000 and RMB38,142,000, respectively, at respective considerations of RMB39,699,000 and
RMB38,142,000.
APPENDIX I ACCOUNTANTS’ REPORT
– I-73 –


--- page 636 ---
30. INTEREST-BEARING BANK AND OTHER BORROWINGS
The Group
2021
Effective interest
rate (%) Maturity RMB’000
Current
Bank loans – unsecured /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183.8-4.8 2022 452,434
Current portion of long-term bank loans –
unsecured /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184.5 2022 13,379
Current portion of long-term other borrowings –
secured /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184.5-5.8 2022 188,504
Subtotal – current /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118654,317
Non-current
Bank loans – unsecured /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184.5 2024 20,000
Other borrowings – secured /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184.65-4.75 2024-2025 383,736
Subtotal – non-current /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118403,736
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,058,053
2022
Effective interest
rate (%) Maturity RMB’000
Current
Bank loans – unsecured /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183.5-4.35 2023 180,150
Current portion of long-term bank loans –
unsecured /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183.65-4.6 2023 73,800
Current portion of long-term bank loans –
secured /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185 2023 15,129
Subtotal – current /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118269,079
Non-current
Bank loans – unsecured /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183.85-4.85 2024-2025 258,066
Bank loans – secured /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184.35-4.5 2025-2029 77,500
Other borrowings – secured /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184.3-4.65 2024-2025 393,525
Subtotal – non-current /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118729,091
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/H1118998,170
APPENDIX I ACCOUNTANTS’ REPORT
– I-74 –


--- page 637 ---
2023
Effective interest
rate (%) Maturity RMB’000
Current
Bank loans – unsecured /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183.1-3.45 2024 36,840
Current portion of long-term bank loans –
unsecured /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182.9-4.55 2024 192,032
Current portion of long-term bank loans –
secured /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184.35 2024 20,095
Current portion of long-term other borrowings –
sale leaseback – secured /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184 2024 41,476
Current portion of long-term other borrowings –
secured /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184.2 2024 180,000
Subtotal – current /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118470,443
Non-current
Bank loans – unsecured /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182.9-4.55 2025-2026 469,900
Bank loans – secured /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184.5 2025-2029 57,500
Other borrowings – sale leaseback – secured /H1118/H1118/H1118 4 2026 82,840
Other borrowings – secured /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184.2 2025 222,785
Subtotal – non-current /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118833,025
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,303,468
The Group
31 May 2024
Effective interest
rate (%) Maturity RMB’000
Current
Bank loans – unsecured /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183-4.15 2024-2025 138,756
Current portion of long-term bank loans –
unsecured /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182.7-4.2 2024-2025 215,540
Current portion of long-term bank loans –
secured /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184.25 2024-2025 20,818
Current portion of long-term other borrowings –
sale leaseback – secured /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184 2024-2025 42,397
Current portion of long-term other borrowings –
secured /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184-4.2 2024-2025 393,533
Subtotal – current /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118811,044
Non-current
Bank loans -unsecured /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182.7-4.2 2025-2027 384,000
Bank loans –secured /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184.3 2025-2029 57,500
Other borrowings – sale leaseback – secured /H1118/H1118/H1118 4 2025-2026 71,423
Subtotal – non-current /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118512,923
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,323,967
APPENDIX I ACCOUNTANTS’ REPORT
– I-75 –


--- page 638 ---
As at 31 December As at 31 May
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Analysed into: /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Bank loans repayable: /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Within one year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118465,813 269,079 248,967 375,114
In the second year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111813,333 130,266 321,400 403,700
In the third to fifth years,
inclusive /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,667 195,300 203,500 35,300
Beyond five years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 10,000 2,500 2,500
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118485,813 604,645 776,367 816,614
Other borrowings repayable: /H1118/H1118/H1118/H1118/H1118
Within one year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118188,504 – 221,476 435,930
In the second year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 180,000 264,205 41,420
In the third to fifth years,
inclusive /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118383,736 213,525 41,420 30,003
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118572,240 393,525 527,101 507,353
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,058,053 998,170 1,303,468 1,323,967
As at 31 December 2021, 2022 and 2023 and 31 May 2024, the Group’s right-of-use assets with aggregate
carrying amounts of approximately RMB22,124,000, RMB21,659,000, RMB21,194,000 and RMB21,000,000 and
property, plant and equipment with aggregate carrying amounts of approximately RMB56,484,000, RMB60,381,000,
RMB61,648,000 and RMB60,553,000, respectively, were pledged to secure interest-bearing bank and other
borrowings granted to the Group (notes 13 and 14).
As at 31 December 2021, 2022 and 2023 and 31 May 2024, the Group pledged the equity interests in a
subsidiary as collateral to trust financing companies, as disclosed in note 1.
As at 31 December 2023 and 31 May 2024, the Group’s certain machinery with aggregate carrying amounts
of approximately RMB138,522,000 and RMB129,988,000 was subject to sale and leaseback business with Taiping
& Sinopec Financial Leasing Co., Ltd (note 13).
31. DEFERRED INCOME
The Group
As at 31 December As at 31 May
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Non-current:
Government grants
Asset-related grants (a) /H1118/H1118/H1118/H1118/H1118/H1118/H111856,122 58,247 54,084 50,198
Reimbursement of future
expenses (b) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,915 1,800 4,200 4,200
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111858,037 60,047 58,284 54,398
Current:
Government grants
Reimbursement of future
expenses (b) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,029 – 963 932
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111861,066 60,047 59,247 55,330
APPENDIX I ACCOUNTANTS’ REPORT
– I-76 –


--- page 639 ---
The Company
As at 31 December As at 31 May
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Non-current:
Reimbursement of future
expenses (b) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 2,400 2,400
(a) Asset-related grants
The asset-related grants were the subsidies received from the government in relation to the Group’s property,
plant and equipment.
(b) Reimbursement of future expenses
Government grants as reimbursement of future expenses were subsidies received in relation to the Group’s
future research and development activities.
32. PROVISION
The Group
As at 31 December As at 31 May
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Non-current
Product warranties (a) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111818,544 19,913 21,219 21,307
Excess deficit (b) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,750 – – –
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111824,294 19,913 21,219 21,307
Current
Product warranties (a) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111817,596 18,855 21,080 21,102
Financial guarantee obligation (c) /H1118/H1118/H1118 11,760 – – –
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111829,356 18,855 21,080 21,102
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111853,650 38,768 42,299 42,409
The Company
As at 31 December As at 31 May
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Non-current:
Excess deficit (b) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,750 – – –
Current:
Financial guarantee obligation (c) /H1118/H1118/H1118 11,760 – – –
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111817,510 – – –
APPENDIX I ACCOUNTANTS’ REPORT
– I-77 –


--- page 640 ---
(a) Product warranties
Provision was made for estimated warranty claims in respect of products sold which were still under warranty
at the end of each of the Relevant Periods. These claims are normally expected to be settled according to the terms
of sales contract.
(b) Excess deficit
The Company and the other shareholders shall subscribe shares of RMB89,090,000 and RMB170,570,000 as
capital contributions in a joint venture, Guohong Refire, pursuant to the articles of association of Guohong Refire,
and the Company has subscribed shares of RMB4,900,000 and RMB29,400,000 as at 31 December 2021 and
31 December 2022, respectively. As at 31 December 2021, the Group’s investment in Guohong Refire amounted to
zero due to accumulated losses incurred by Guohong Refire, and due to the legal obligation as stipulated in the
articles of association of Guohong Refire that shareholders shall bear limited losses by subscription of shares as
capital contribution, so the residual liabilities of Guohong Refire to be borne by the Group to the limit of the
remaining unsubscribed capital contribution were recorded as provision for excess deficit accordingly. As at
31 December 2021, the share of loss from Guohong Refire was recognised as a provision for excess deficit,
amounting to RMB5,750,000. The Group made a capital injection of RMB24,500,000 into Guohong Refire in
December 2022. As Guohong Refire has been gradually ceasing major operations since 2020, the maximum exposure
in relation to the excess deficit for 2021 was RMB5,750,000, which could be covered by the capital contribution by
the Company. As at 31 December 2022, all of liabilities of Guohong Refire could covered by its realizable assets,
except for the liability to the Group and its obligation to buy back shares from Yunfu Rongda as disclosed in note
29.
(c) Financial guarantee obligation
On 15 September 2017, Guohong Refire (a joint venture of the Company) signed an agreement (the “Main
Contract”) with its subsidiary, Yunfu Hongsu Hydrogen Dynamic Power Technology Co., Ltd. (“Yunfu Hongsu”) and
a third party, namely Yunfu Yunneng, pursuant to which Yunfu Hongsu obtained a borrowing of RMB250,000,000
from Yunfu Yunneng with a fixed interest rate of 6.8% per annum and a term of maturity of three years (the “Main
Contract”) to support the development of Yunfu Hongsu. On the same day, the Company and Sino-Synergy signed
a guarantee contract with Yunfu Yunneng, pursuant to which the Company and Sino-Synergy provided a guarantee
according to the shareholding ratio for all debts arising from the obligation of the Main Contract until 18 September
2020. Pursuant to the resolution of the general meeting of shareholders of Yunfu Yunneng on 4 February 2021, Yunfu
Yunneng agreed to extend the maturity date of the remaining borrowing balance of RMB50,000,000 to 31 December
2022 and the Group’s guarantee was extended as well. Accordingly, for the year ended 31 December 2021, the Group
recognised a financial guarantee obligation allowance of RMB11,760,000 for the gross amount of the financial
guarantee obligation of RMB24,500,000, which was measured against lifetime expected credit losses for the year
ended 31 December 2021. The provision reflected the directors’ best estimate of the most likely outcome. As
Guohong Refire did not have enough surplus cash in 2022 when a debt became due, the Group and Sino-Synergy
made capital injections in the proportion of the shareholding of 49% and 51%, respectively, into Guohong Refire in
December 2022. Accordingly, the Group made a capital injection of RMB24,500,000. As such, Guohong Refire
repaid RMB50,000,000 to Yunfu Yunneng in December 2022.
33. SHARE CAPITAL
The Group and the Company
Shares
As at 31 December As at 31 May
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Issued and fully paid:
Share capital /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111864,996 81,311 81,311 81,311
APPENDIX I ACCOUNTANTS’ REPORT
– I-78 –


--- page 641 ---
Pursuant to the shareholders’ resolution dated 8 September 2020, shareholders of the Company agreed to
convert the Company into a joint stock company with limited liability with registered capital of RMB56,063,300
(56,063,300 shares with a nominal value of RMB1.00 each). Upon completion of the registration with the Shanghai
Municipal Administration for Market Regulation on 11 September 2020, the Company was renamed as Shanghai
REFIRE Group Limited.
Pursuant to the shareholders’ resolution dated 22 September 2020, shareholders of the Company agreed to
increase the registered capital from RMB56,063,300 to RMB64,996,051 (64,996,051 shares with a nominal value of
RMB1.00 each).
Pursuant to the shareholders’ resolution dated 25 January 2022, shareholders of the Company agreed to
increase the registered capital from RMB64,996,051 to RMB81,311,371 (81,311,371 shares with a nominal value of
RMB1.00 each).
A summary of movements in the Company’s share capital is as follows:
Y ear ended 31 December
Five months
ended 31 May
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
At 1 January /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111864,996 64,996 81,311 81,311
Shareholders’ capital injection /H1118/H1118/H1118/H1118 – 16,315 – –
At 31 December /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111864,996 81,311 81,311 81,311
34. SHARE-BASED PAYMENTS
Expenses arising from equity-settled share-based payment transactions were as follows:
Y ear ended 31 December Five months ended 31 May
2021 2022 2023 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Share Incentive
Schemes (a) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111831,326 27,094 87,066 19,123 51,558
Pre-IPO Share Option
Scheme (b) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––– 65,926
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111831,326 27,094 87,066 19,123 117,484
Share-based payment expenses relating to employees recognised for the Relevant Periods are as follows:
Y ear ended 31 December Five months ended 31 May
2021 2022 2023 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Administrative expenses /H1118/H1118 22,025 21,667 61,483 11,865 79,931
Research and development
expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187,687 3,394 20,085 6,215 27,723
Selling expenses /H1118/H1118/H1118/H1118/H1118/H1118/H11181,557 1,976 3,565 603 8,658
Cost of sales /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111857 57 1,933 440 1,172
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111831,326 27,094 87,066 19,123 117,484
APPENDIX I ACCOUNTANTS’ REPORT
– I-79 –


--- page 642 ---
(a) Share Incentive Schemes
To provide incentives and rewards to eligible participants who contribute to the Group’s operation, the actual
controller of the Company, Mr. Lin Qi, designed and established several employee shareholding platforms for the
Company to operate a series of employee incentive schemes (the “Share Incentive Schemes”). Eligible participants
of the Schemes, including members of senior management, mid-level managers and other employees of the Group,
were determined by the actual controller and approved by the Company through board resolutions. The actual
controller of the Company acted as the general partner of these platforms, and had the right to determine the eligible
participants, vesting criteria, and was obliged to repurchase the shares of the resigned eligible participants at
subscription prices and then reallocate these shares to other eligible participants.
On 17 March 2017, 30 May 2019, 24 December 2020, 27 April 2023 and 21 January 2024, 1,200,000 shares,
1,673,797 shares, 296,000 shares, 1,087,285 shares and 1,035,206 shares of the Company were granted to eligible
participants through the employee shareholding platforms of the Schemes at subscription prices of RMB1.00 per
share, RMB9.13 per share, RMB2.65 per share, RMB33.64 per share and RMB33.64 per share, respectively. The
grant date fair values of the shares of the Share Incentive Schemes were RMB16.67 per share, RMB41.06 per share,
RMB80.27 per share, RMB133.55 per share, which were determined based on investors’ recent capital injection
price, and RMB140.36 per share, which was determined based on independent valuation, respectively. The difference
between the fair value of the shares granted and the subscription price was recorded in the share-based payment
reserve within equity with the corresponding “share-based payment expenses” in profit or loss.
The shares held by the employee shareholding platforms of the Share Incentive Schemes will be vested at the
date of successful listing of the shares of the Company. Therefore service conditions are included in assumptions
about the number of equity instruments that are expected to vest. The vesting period will be reviewed and determined
by management and the related expense is recognised over the vesting period, which is from the date of grant to the
expected listing date.
Movements in the number of equity interests shares granted and the respective weighted average grant date fair
value were as follows:
Y ear ended
31 December 2021
Y ear ended
31 December 2022
Y ear ended
31 December 2023
Five months ended
31 May 2023
(unaudited)
Five months ended
31 May 2024
Weighted
average
grant
date fair
value
Number
of shares
Weighted
average
grant
date fair
value
Number
of shares
Weighted
average
grant
date fair
value
Number
of shares
Weighted
average
grant
date fair
value
Number
of shares
Weighted
average
grant
date fair
value
Number
of shares
RMB RMB RMB RMB RMB
per share per share per share per share per share
At the beginning of
the year/period /H1118/H111839.38 4,852,697 39.38 4,848,078 39.35 4,769,195 39.35 4,769,195 56.96 5,824,553
Granted during the
year/period /H1118/H1118/H1118/H1118–––– 133.55 1,087,285 133.55 1,087,285 140.36 1,035,206
Forfeited during the
year/period /H1118/H1118/H1118/H111841.06 (4,619) 41.06 (78,883) 34.03 (31,928) 41.06 (12,059) 129.76 (841,331)
At the end of the
year/period /H1118/H1118/H1118/H111839.38 4,848,078 39.35 4,769,195 56.96 5,824,552 56.91 5,844,421 61.07 6,018,428
(b) Pre-IPO Share Option Scheme
The Group adopted the Pre-IPO Share Option Scheme, the purpose of which is to recognise employees’
contribution to the Group. As at 21 January, 2024, the Group grant options under the Pre-IPO Share Option Scheme
to 154 grantees, including directors, senior management of the Company and other employees of the Group, to
subscribe 5,267,800 shares. The Pre-IPO Share Option Scheme is valid and effective for 6 years from the grant date.
The exercise price of all the granted options is RMB33.64 per ordinary share. 50% and 50% of the shares
subject to the options shall vest at the last trading day of H share within 12 months and the last trading day of H share
within 24 months of the vesting commencement date upon the fulfilment of the targets, being the revenue increasing
by 20% in 2023 and 2024, respectively. The vesting commencement date shall be the later of 12 months after the grant
and the listing date of the public offering, The options may not be exercised until they vest.
There are no cash settlement alternatives. The Group does not have a past practice of cash settlement for these
share options. The Group accounts for the Pre-IPO Share Option Scheme as an equity-settled plan.
Share options do not confer rights on the holders to dividends or to vote at shareholders’ meetings.
APPENDIX I ACCOUNTANTS’ REPORT
– I-80 –


--- page 643 ---
The following share options were outstanding under the Pre-IPO Share Option Scheme during the year/period:
From 1 January 2024 to 31 May 2024
Weighted average
exercise price
Number of share
options
RMB
per share
At the beginning of the period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118––
Granted /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111833.64 5,267,800
Forfeited /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111833.64 (364,050)
At the end of the period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111833.64 4,903,750
The fair value of the share options granted on 21 January 2024 was RMB531,152,000 (RMB107.80 each), of
which the Group recognised a share option expense of RMB65,926,000 during the period from 1 January 2024 to 31
May 2024 based on the Group’s best estimate of the number of equity instruments that will ultimately vest.
The fair value of share options granted was estimated as at the date of grant, using a binomial model, taking
into account the terms and conditions upon which the options were granted. The following table lists the inputs to
the model used:
Period ended
31 May 2024
Dividend yield (%) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11180.00
Expected volatility (%) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111842.63-50.87
Risk-free interest rate (%) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182.08-2.28
Expected life of options (year) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182-3
Weighted average share price (RMB per share) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118140.36
The expected life of the options is based on the historical data over the past three years and is not necessarily
indicative of the exercise patterns that may occur. The expected volatility reflects the assumption that the historical
volatility is indicative of future trends, which may also not necessarily be the actual outcome. No other feature of
the options granted was incorporated into the measurement of fair value.
35. 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 of the Historical Financial Information.
(i) Share premium and other reserve
The share premium and other reserve of the Group mainly represents the premium in issuing shares and the
premium in acquisition of non-controlling interest.
(ii) Statutory surplus reserve
In accordance with the PRC Company Law, certain subsidiaries of the Group which are domestic enterprises
are required to allocate 10% of their profit after tax, as determined in accordance with the relevant PRC accounting
standards, to their respective statutory surplus reserves until the reserves reach 50% of their respective registered
capital. Subject to certain restrictions set out in the PRC Company Law, part of the statutory surplus reserve may be
converted to share capital, provided that the remaining balance after the capitalisation is not less than 25% of the
registered capital.
(iii) Exchange fluctuation reserve
The exchange fluctuation reserve represents exchange differences arising from the translation of the financial
statements of foreign operations whose functional currencies are different from the Group’s presentation currency.
(iv) Share-based payment reserve
The share-based payment reserve represents the equity-settled share awards as set out in note 34 to the
Historical Financial Information.
(v) Special reserve
According to relevant PRC regulations, transfer of production and maintenance funds at fixed rates based on
relevant bases to a specific reserve account is required. The production and maintenance funds could be utilised when
expenses or capital expenditures on production maintenance and safety measures are incurred. The amount of
production and maintenance funds utilised would be transferred from the specific reserve account to retained
earnings.
APPENDIX I ACCOUNTANTS’ REPORT
– I-81 –


--- page 644 ---
The Company
Capital and
other reserves
Share-based
payment
reserve
Fair value
reserve of
financial assets
at fair value
through other
comprehensive
income
Retained
profits/
(accumulated
losses) Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
As at 31 December 2020 and
1 January 2021 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,583,391 48,505 (236) 111,680 1,743,340
Loss for the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – (63,230) (63,230)
Other comprehensive income for
the year:
Changes in equity investments
designated at fair value through
other comprehensive income, net of
tax /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 385 – 385
Total comprehensive income for
the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 385 (63,230) (62,845)
Share-based payments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 31,326 – – 31,326
As at 31 December 2021 and
1 January 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,583,391 79,831 149 48,450 1,711,821
Loss for the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – (151,352) (151,352)
Other comprehensive income for
the year:
Changes in equity investments
designated at fair value through
other comprehensive income,
net of tax /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 620 – 620
Total comprehensive income for
the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 620 (151,352) (150,732)
Share-based payments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 27,094 – – 27,094
Shareholders’ capital injection /H1118/H1118/H1118/H1118/H1118/H11182,166,486 – – – 2,166,486
As at 31 December 2022 and 1 January
2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,749,877 106,925 769 (102,902) 3,754,669
Loss for the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – (194,492) (194,492)
Other comprehensive income for the
year: /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– ––– –
Changes in fair value of equity
investments at fair value through
other comprehensive income,
net of tax /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – (2,398) – (2,398)
Total comprehensive income for the year – – (2,398) (194,492) (196,890)
Share-based payments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 87,066 – – 87,066
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/H1118/H11183,749,877 193,991 (1,629) (297,394) 3,644,845
Loss for the period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – (145,969) (145,969)
Other comprehensive income for the
period:
Changes in fair value of equity
investments at fair value through
other comprehensive income,
net of tax /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – (1,659) – (1,659)
Total comprehensive income for the
period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – (1,659) (145,969) (147,628)
Share-based payments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 117,484 – – 117,484
As at 31 May 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,749,877 311,475 (3,288) (443,363) 3,614,701
APPENDIX I ACCOUNTANTS’ REPORT
– I-82 –


--- page 645 ---
36. PARTLY-OWNED SUBSIDIARIES WITH MATERIAL NON-CONTROLLING INTERESTS
As at 31 December 2021
Percentage of
equity interest held
by non-controlling
interests
Loss for the year
allocated to
non-controlling
interests
Accumulated
balances of
non-controlling
interests
% RMB’000 RMB’000
Unilia (Shanghai) Fuel Cells Inc.
(“Shanghai Unilia”)* /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111819.10 (70,435) (52,568)
As at 31 December 2022
Percentage of
equity interest held
by non-controlling
interests
Loss for the year
allocated to
non-controlling
interests
Accumulated
balances of
non-controlling
interests
% RMB’000 RMB’000
Shanghai Unilia /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111819.10 (26,077) (78,440)
Foshan Diyi Element New Energy Technology
Co., Ltd. (“Foshan Diyi”) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111845 – 36,000
As at 31 December 2023
Percentage of
equity interest held
by non-controlling
interests
Loss for the year
allocated to
non-controlling
interests
Accumulated
balances of
non-controlling
interests
% RMB’000 RMB’000
Shanghai Unilia /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111819.10 (26,107) (99,488)
Foshan Diyi /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111845 (3,461) 32,540
As at 31 May 2024
Percentage of
equity interest held
by non-controlling
interests
Loss for the period
allocated to
non-controlling
interests
Accumulated
balances of
non-controlling
interests
% RMB’000 RMB’000
Shanghai Unilia /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111819.10 (10,619) (109,783)
Foshan Diyi /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111845 (1,062) 31,260
* On 27 December 2021, the Group acquired an additional 29.8778% equity interest in Shanghai Unilia.
APPENDIX I ACCOUNTANTS’ REPORT
– I-83 –


--- page 646 ---
The following tables illustrate the summarised financial information of the above subsidiary. The amounts
disclosed are before any inter-company eliminations:
Shanghai Unilia Foshan Diyi
31 December
2021
31 December
2022
31 December
2023
31 May
2024
31 December
2022
31 December
2023
31 May
2024
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Revenue /H1118/H1118/H1118/H1118/H1118/H1118/H1118261,725 208,798 289,646 8,55 7–––
Total cost and
expenses /H1118/H1118/H1118/H1118/H1118(405,528) (345,325) (426,330) (64,154) (1) (7,691) 2,359
Income tax
expense /H1118/H1118/H1118/H1118/H1118/H1118–––––––
Total
comprehensive
income /H1118/H1118/H1118/H1118/H1118/H1118(143,803) (136,527) (136,684) (55,597) (1) (7,691) 2,359
Current assets /H1118/H1118/H1118/H1118106,491 160,189 250,621 185,114 36,001 74,838 69,456
Non-current assets /H1118 77,349 101,748 113,631 113,283 – 480 435
Current liabilities /H1118(352,136) (565,688) (778,202) (754,401) – (3,008) (424)
Non-current
liabilities /H1118/H1118/H1118/H1118/H1118(6,930) (6,930) (6,930) (18,778) – – –
(175,226) (310,681) (420,880) (474,782) 36,001 72,310 69,467
Net cash flows
(used in)/from
operating
activities /H1118/H1118/H1118/H1118/H1118(160,009) 34,652 (374,219) 65,108 1 (6,028) (5,172)
Net cash flows
used in investing
activities /H1118/H1118/H1118/H1118/H1118(3,386) (27,156) (45,711) (13,006) – (231) –
Net cash flows
from/(used in)
financing
activities /H1118/H1118/H1118/H1118/H1118166,247 (4,555) 426,571 (53,862) 36,000 44,000 –
Net increase in
cash and cash
equivalents /H1118/H1118/H1118/H11182,852 2,941 6,641 (1,760) 36,001 37,741 (5,172)
37. BUSINESS COMBINATION
On 31 January 2024, the Group acquired 70% equity interest in Jiaqing (Shanghai) Industrial Co., Ltd., an
unlisted company, from two independent third parties. Jiaqing (Shanghai) Industrial Co., Ltd. is engaged in operating
hydrogenation station. The acquisition was made as part of the Group’s strategy to expand business in operating
hydrogenation station. The purchase consideration for the acquisition was in the form of cash, with RMB6,300,000
paid at 31 January 2024.
APPENDIX I ACCOUNTANTS’ REPORT
– I-84 –


--- page 647 ---
The fair values of the identifiable assets and liabilities of Jiaqing (Shanghai) Industrial Co., Ltd. as at the date
of acquisition were as follows:
Notes
Fair value recognised
on acquisition
RMB’000
Property, plant and equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111813 7,833
Other intangible assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111815 4,666
Cash and bank balances /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,114
Trade receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118558
Inventories /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184
Prepayments and other receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111810
Trade payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(1,271)
Accruals and other payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(4,914)
Total identifiable net assets at fair value /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189,000
Fair value of investments in the associate held before business
combinations /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,700
Satisfied by cash /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,300
The fair values of the trade receivables and other receivables as at the date of acquisition amounted to
RMB558,000 and RMB10,000, respectively. The gross contractual amounts of trade receivables and other receivables
were RMB560,000 and RMB10,000.
An analysis of the cash flows in respect of the acquisition of a subsidiary is as follows:
RMB’000
Cash consideration /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(6,300)
Cash and bank balances acquired /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,114
Net outflow of cash and cash equivalents included in cash flows from
investing activities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(4,186)
Since the acquisition, Jiaqing (Shanghai) Industrial Co., Ltd. contributed RMB2,000 to the Group’s revenue
and RMB1,905,000 to the consolidated losses for the five months ended 31 May 2024.
Had the combination taken place at the beginning of the period, the revenue of the Group and the losses of
the Group for the five months ended 31 May 2024 would have been RMB12,530,000 and RMB410,043,000,
respectively.
APPENDIX I ACCOUNTANTS’ REPORT
– I-85 –


--- page 648 ---
38. NOTES TO THE CONSOLIDATED STATEMENT OF CASH FLOWS
(a) Major non-cash transactions
During the years ended 31 December 2021, 2022 and 2023 and the five months ended 31 May 2024, the Group
had non-cash additions to right-of-use assets and lease liabilities of RMB1,585,000, RMB3,318,000, nil and nil,
respectively, in respect of lease arrangements for plant and equipment.
(b) Changes in liabilities arising from financing activities
Interest-bearing
bank and other
borrowings Lease liabilities Total
RMB’000 RMB’000 RMB’000
At 1 January 2021 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118634,889 103,192 738,081
Changes from financing cash flows /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118377,884 (18,316) 359,568
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– 1,585 1,585
Interest expense /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111845,280 4,778 50,058
Lease term termination /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (527) (527)
At 31 December 2021 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,058,053 90,712 1,148,765
Changes from financing cash flows /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(104,745) (21,801) (126,546)
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– 3,318 3,318
Interest expense /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111844,862 4,157 49,019
At 31 December 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118998,170 76,386 1,074,556
Changes from financing cash flows /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118261,925 (19,195) 242,730
Gain arising from a lease term termination /H1118/H1118/H1118/H1118 – (340) (340)
Interest expense /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111843,373 4,553 47,926
At 31 December 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,303,468 61,404 1,364,872
Changes from financing cash flows /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(3,241) (10,739) (13,980)
Interest expense /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111823,740 1,166 24,906
At 31 May 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,323,967 51,831 1,375,798
(c) Total cash outflow for leases
The total cash outflow for leases included in the statements of cash flows is as follows:
Y ear ended 31 December Five months ended 31 May
2021 2022 2023 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Within operating activities /H1118 4,241 3,620 2,097 793 757
Within financing activities /H1118 18,316 21,801 19,195 9,797 10,739
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111822,557 25,421 21,292 10,590 11,496
39. CONTINGENT LIABILITIES
Pursuant to the supplemental arrangement signed with a major customer, FAW Jiefang, who is also one of the
Group’s shareholders in December 2023, the Group has offered a guarantee that this customer will receive subsidies
related to the hydrogen fuel cell vehicle with the Group’s products embedded in from the government amounting to
RMB206,360,000 before 31 December 2025. Pursuant to the supplemental arrangement signed with FAW Jiefang in
February 2024, the Group has offered a guarantee that this customer will receive subsidies related to the hydrogen
fuel cell vehicle with the Group’s products embedded in from the government amounting to RMB180,880,000 before
31 December 2024. According to the subsidies policy, such subsidies can be applied and received once the criteria
are fulfilled. The management of the Group considers that it is highly probable for the customer to collect such
subsidies. In addition, for the amount for which the criteria have been fulfilled, the application process has already
been taken with the government, and for the remaining amount, management considered it would be highly probable
for the customer to fulfill the criteria in forthcoming periods. Accordingly, the guarantee provision was assessed to
be minimal as at 31 December 2023 and May 2024.
APPENDIX I ACCOUNTANTS’ REPORT
– I-86 –


--- page 649 ---
40. COMMITMENTS
The Group had the following capital commitments at the end of the reporting period:
As at 31 December As at 31 May
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Contracted, but not provided for:
Properties, plant and equipment /H1118/H1118 35,391 63,429 51,827 37,763
In addition, the Group had the following commitments provided to a joint venture, associates and other
unlisted investments:
As at 31 December As at 31 May
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Contracted, but not provided for:
Capital injection obligation /H1118/H1118/H1118/H1118103,190 80,744 99,052 97,884
41. RELATED PARTY TRANSACTIONS
(a) Transactions with related parties:
In addition to the transactions disclosed in note 14 to the Historical Financial Information, the Group had the
following material transactions with related parties during the Relevant Periods:
The Group
The Group had the following transactions with related parties during the Relevant Periods:
Y ear ended 31 December Five months ended 31 May
2021 2022 2023 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Associates:
Sales of goods or services
Aerospace Hydrogen Energy
(Shanghai) Technology Co.,
Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 15,330 24,482 – –
Shanghai Taihydrochen Energy
Technology Co., Ltd. /H1118/H1118/H1118/H1118/H1118– – 1,567 – –
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 15,330 26,049 – –
Provide rental service
Jiaqing (Shanghai) Industrial
Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118187 162 190 162 –
Shanghai Pegasus Hydrogen
Technology
Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118850 706 12 12 –
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,037 868 202 174 –
Purchase of goods or services
Jiaqing (Shanghai) Industrial
Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187,164 5,698 9,031 – –
Plastic Cloud Technology
(Shenzhen) Co., Ltd. /H1118/H1118/H1118/H1118/H111812,219 5,358 5,263 3,753 141
Shanghai Taihydrochen Energy
Technology Co., Ltd. /H1118/H1118/H1118/H1118/H1118– – 852 852 –
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111819,383 11,056 15,146 4,605 141
APPENDIX I ACCOUNTANTS’ REPORT
– I-87 –


--- page 650 ---
Y ear ended 31 December Five months ended 31 May
2021 2022 2023 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Purchase of property, plant and
equipment
Plastic Cloud Technology
(Shenzhen)
Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 3,86 0–––
Disposal of property, plant and
equipment
Shanghai Pegasus Hydrogen
Technology
Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 1 0 9 3 7––
A joint venture:
Purchase of goods or services
Guohong REFIRE Technology
Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,575 280 10,615 593 –
Entity controlled by an entity with
significant influence over the
Group:
Interest expense
Sinopec Finance Co., Ltd. /H1118/H1118/H11188,197 3,54 9–––
Dongli Machinery Engineering
Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182––––
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188,199 3,54 9–––
Repayment of borrowings and
interest
Sinopec Finance Co., Ltd. /H1118/H1118/H111828,233 123,76 0–––
Dongli Machinery Engineering
Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,220––––
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111829,453 123,76 0–––
Key management personnel:
Repayment of borrowings and
interest
Ma Dongsheng /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,106––––
Lin Qi /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183 8 9––––
Zhai Shuang /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 1 2 3–––
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,495 12 3–––
Advances of borrowings and
interest
Ma Audrey Jing Nan /H1118/H1118/H1118/H1118/H1118/H1118–– 1 4 2––
Interest expense
Ma Dongsheng /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185––––
Lin Qi /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181––––
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186––––
These transactions were carried out in accordance with the terms and conditions mutually agreed by the parties
involved.
APPENDIX I ACCOUNTANTS’ REPORT
– I-88 –


--- page 651 ---
(b) Outstanding balances with related parties:
The Group
Y ear ended 31 December
Five months
ended 31 May
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Associates:
Trade related:
Trade receivables:
Non-current
Aerospace Hydrogen Energy
(Shanghai) Technology Co., Ltd. /H1118 – 3,502 – –
Less: Impairment allowance /H1118/H1118/H1118/H1118/H1118/H1118/H1118– (1,471) – –
– 2,031 – –
Current
Guangdong Hanhe Automobile Co.,
Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,325 1,325 1,325 1,325
Jiaqing (Shanghai) Industrial Co.,
Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118415 597 804 –
Aerospace Hydrogen Energy
(Shanghai) Technology Co., Ltd. /H1118 – 19,909 50,426 49,404
Shanghai Pegasus Hydrogen
Technology Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118724 735 1,800 1,736
Shanghai Taihydrochen Energy
Technology Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 1,609 1,141
2,464 22,566 55,964 53,606
Less: Impairment allowance /H1118/H1118/H1118/H1118/H1118/H1118/H1118(504) (6,869) (4,971) (5,206)
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,960 15,697 50,993 48,400
Prepayments, other receivables and other
assets
Jiaqing (Shanghai) Industrial Co.,
Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118500 500 500 –
Plastic Cloud Technology (Shenzhen)
Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111822 22 – –
Less: Impairment allowance /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(25) (50) (50) –
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118497 472 450 –
Trade payables
Jiaqing (Shanghai) Industrial Co.,
Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,102 – 79 –
Shanghai Pegasus Hydrogen
Technology Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,870 1,870 100 100
Plastic Cloud Technology (Shenzhen)
Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,851 7,137 1,421 754
Aerospace Hydrogen Energy
(Shanghai) Technology Co., Ltd. /H1118/H1118/H1118 – 2,404 1,429 –
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188,823 11,411 3,029 854
Other payables and accruals
Aerospace Hydrogen Energy
(Shanghai) Technology Co., Ltd. /H1118/H1118/H1118 4 3–––
Contract liabilities
Aerospace Hydrogen Energy
(Shanghai) Technology Co., Ltd. /H1118/H1118/H1118 5 6 4–––
APPENDIX I ACCOUNTANTS’ REPORT
– I-89 –


--- page 652 ---
Y ear ended 31 December
Five months
ended 31 May
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
A joint venture:
Trade related:
Trade receivables:
Current
Guohong REFIRE Technology Co.,
Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111885,832 20,696 – –
Less: Impairment allowance /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(21,693) (4,253) – –
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111864,139 16,443 – –
Trade payables
Guohong REFIRE Technology Co.,
Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111860,943 191 755 –
Entity controlled by an entity with
significant influence over the Group:
Non-trade related:
Current portion of long-term borrowings
Sinopec Finance Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111840,211–––
Long-term borrowings
Sinopec Finance Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111880,00 0–––
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118120,211 – – –
Key management personnel:
Non-trade related:
Prepayments, other receivables and other
assets
Zhai Shuang /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181 2 3–––
Ma Audrey Jing Nan /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 142 –
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118123 – 142 –
Trade receivables due from a joint venture and associates are repayable on credit terms similar to those offered
to the major customers of the Group.
Trade payables due to a joint venture and associates are repayable within 90 days, which represents credit
terms similar to those offered by the joint venture and associates to their major customers.
As at 31 December 2021, 2022 and 2023 and 31 May 2024, except for the long-term borrowings from the entity
controlled by an entity with significant influence over the Group that bore interest at a rate of 5.80% per annum, all
the remaining balances due to related parties were non-interest-bearing, unsecured and repayable on demand.
As at 31 December 2021, 2022 and 2023 and 31 May 2024, all the remaining balances due from related parties
were non-interest-bearing, unsecured and payable on demand.
APPENDIX I ACCOUNTANTS’ REPORT
– I-90 –


--- page 653 ---
The Company
Y ear ended 31 December
Five months
ended 31 May
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Associates:
Trade related:
Trade receivables
Jiaqing (Shanghai) Industrial
Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 159 366 –
Trade payable
Plastic Cloud Technology
(Shenzhen) Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118– – 638 –
Key management personnel:
Prepayments, other receivables
and other assets
Zhai Shuang /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181 2 3–––
Ma Audrey Jing Nan /H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 142 –
123 – 142 –
Subsidiaries:
Trade related:
Trade receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,059 17,026 40,322 49,221
Less: Impairment allowance /H1118/H1118/H1118 – (2,939) (851) (807)
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,059 14,087 39,471 48,414
Due from subsidiaries /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111894,000 882,118 499,173 485,279
Less: Impairment allowance /H1118/H1118/H1118 (2,760) (18,459) (10,230) (10,233)
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111891,240 863,659 488,943 475,046
Trade payable /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111812,488 126,855 284,501 286,283
Due to subsidiaries /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118177 97,179 273,361 348,934
As at 31 December 2021, 2022 and 2023 and 31 May 2024, all the remaining balances due to related parties
were non-interest-bearing, unsecured and repayable on demand.
As at 31 December 2021, 2022 and 2023 and 31 May 2024, all the remaining balances due from related parties
were non-interest-bearing, unsecured and payable on demand.
APPENDIX I ACCOUNTANTS’ REPORT
– I-91 –


--- page 654 ---
(c) Compensation of key management personnel of the Group
Y ear ended 31 December Five months ended 31 May
2021 2022 2023 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(unaudited)
Fees /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118360 360 361 150 150
Salaries, bonuses,
allowances and benefits
in kind /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,551 6,871 6,373 2,779 2,207
Performance related
bonuses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,112 2,610 1,090 455 528
Share-based payments /H1118/H1118/H111815,120 15,995 43,069 13,692 41,583
Pension scheme
contributions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118962 1,205 1,126 472 413
Total compensation paid to
key management
personnel /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111825,105 27,041 52,019 17,548 44,881
Further details of directors’, the chief executive’s and supervisors’ emoluments are included in note 8 to
Historical Financial Information.
(d) Other transactions with related parties
The Group provided a joint-liability guarantee for Guohong Refire as disclosed in note 29.
42. FINANCIAL INSTRUMENTS BY CATEGORY
The carrying amounts of each of the categories of financial instruments as at the end of each of the Relevant
Periods are as follows:
The Group
As at 31 December 2021
Financial assets
Financial assets
at fair value
through profit
or loss
Financial assets at
fair value through other
comprehensive income
Financial assets
at amortised
cost Total
Equity
investments
Debt
investments
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Equity investments designated
at fair value through other
comprehensive income /H1118/H1118/H1118/H1118 – 17,357 – – 17,357
Financial assets at fair value
through profit or loss /H1118/H1118/H1118/H1118/H11186,436 – – – 6,436
Trade and bills receivables /H1118/H1118 – – 7,323 1,185,912 1,193,235
Financial assets included in
prepayments, other
receivables and other
assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 6,131 6,131
Cash and cash equivalents /H1118/H1118/H1118 – – – 276,220 276,220
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,436 17,357 7,323 1,468,263 1,499,379
APPENDIX I ACCOUNTANTS’ REPORT
– I-92 –


--- page 655 ---
Financial liabilities
Financial liabilities
at fair value
through profit
or loss
Financial liabilities
at amortised cost 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– 90,712 90,712
Trade and bills payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 561,533 561,533
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– 3,528 3,528
Interest-bearing bank and other borrowings /H1118/H1118/H1118/H1118 – 1,058,053 1,058,053
Derivative financial instrument /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111817,742 – 17,742
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/H111817,742 1,713,826 1,731,568
As at 31 December 2022
Financial assets
Financial assets
at fair value
through profit
or loss
Financial assets at
fair value through other
comprehensive income
Financial assets
at amortised
cost Total
Equity
investments
Debt
investments
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Equity investments designated
at fair value through other
comprehensive income /H1118/H1118/H1118/H1118 – 19,887 – – 19,887
Financial assets at fair value
through profit or loss /H1118/H1118/H1118/H1118/H1118342,318 – – – 342,318
Trade and bills receivables /H1118/H1118/H1118 – – 2,611 1,517,542 1,520,153
Financial assets included in
prepayments, other
receivables and other
assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 8,440 8,440
Time deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 52,086 52,086
Restricted cash /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 59,902 59,902
Cash and cash equivalents /H1118/H1118/H1118 – – – 1,079,456 1,079,456
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118342,318 19,887 2,611 2,717,426 3,082,242
Financial liabilities
Financial liabilities
at fair value
through profit
or loss
Financial liabilities
at amortised cost 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– 76,386 76,386
Trade and bills payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 566,255 566,255
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– 4,110 4,110
Interest-bearing bank and other borrowings /H1118/H1118/H1118/H1118 – 998,170 998,170
Derivative financial instrument /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111837,423 – 37,423
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111837,423 1,644,921 1,682,344
APPENDIX I ACCOUNTANTS’ REPORT
– I-93 –


--- page 656 ---
As at 31 December 2023
Financial assets
Financial assets
at fair value
through profit
or loss
Financial assets at
fair value through other
comprehensive income
Financial assets
at amortised
cost Total
Equity
investments
Debt
investments
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Equity investments designated
at fair value through other
comprehensive income /H1118/H1118/H1118/H1118 – 47,656 – – 47,656
Financial assets at fair value
through profit or loss /H1118/H1118/H1118/H111844,401 – – – 44,401
Trade and bills receivables /H1118/H1118/H1118 – – 30,083 1,957,245 1,987,328
Financial assets included in
prepayments, other
receivables and other
assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 197,773 197,773
Restricted cash /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 746 746
Cash and cash equivalents /H1118/H1118/H1118 – – – 664,510 664,510
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111844,401 47,656 30,083 2,820,274 2,942,414
Financial liabilities
Financial liabilities at
amortised cost Total
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/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111861,404 61,404
Trade and bills payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118650,741 650,741
Financial liabilities included in other payables and accruals /H1118/H1118 73,181 73,181
Interest-bearing bank and other borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,303,468 1,303,468
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,088,794 2,088,794
As at 31 May 2024
Financial assets
Financial assets
at fair value
through profit
or loss
Financial assets at
fair value through other
comprehensive income
Financial assets
at amortised
cost Total
Equity
investments
Debt
investments
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Equity investments designated
at fair value through other
comprehensive income /H1118/H1118/H1118/H1118 – 46,076 – – 46,076
Financial assets at fair value
through profit or loss /H1118/H1118/H1118/H1118/H111852,230 – – – 52,230
Trade and bills receivables /H1118/H1118/H1118 – – 26,788 1,901,055 1,927,843
Financial assets included in
prepayments, other
receivables and other assets /H1118 – – – 89,232 89,232
Restricted cash /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 28 28
Cash and cash equivalents /H1118/H1118/H1118 – – – 435,710 435,710
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111852,230 46,076 26,788 2,426,025 2,551,119
APPENDIX I ACCOUNTANTS’ REPORT
– I-94 –


--- page 657 ---
Financial liabilities
Financial liabilities at
amortised cost Total
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/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111851,831 51,831
Trade and bills payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118626,013 626,013
Financial liabilities included in other payables and accruals /H1118/H1118 147,520 147,520
Interest-bearing bank and other borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,323,967 1,323,967
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,149,331 2,149,331
The Company
As at 31 December 2021
Financial assets
Financial assets
at fair value through other
comprehensive income
Financial assets
at amortised cost Total
Equity
investments
Debt
investments
RMB’000 RMB’000 RMB’000 RMB’000
Equity investments designated at fair
value through other
comprehensive income /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111813,239 – – 13,239
Trade and bills receivables /H1118/H1118/H1118/H1118/H1118/H1118– 3,443 66,593 70,036
Financial assets included in
prepayments, other receivables
and other assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 160 160
Due from subsidiaries /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 91,240 91,240
Cash and cash equivalents /H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 31,145 31,145
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111813,239 3,443 189,138 205,820
Financial liabilities
Financial assets at
fair value through
profit or loss
Financial liabilities
at amortised cost 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– 1,195 1,195
Trade and bills payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 17,442 17,442
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/H1118–3 1 13 1 1
Due to subsidiaries /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 177 177
Derivative financial instrument /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111817,742 – 17,742
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/H111817,742 19,125 36,867
APPENDIX I ACCOUNTANTS’ REPORT
– I-95 –


--- page 658 ---
As at 31 December 2022
Financial assets
Financial assets
at fair value
through profit
or loss
Financial assets
at fair value through other
comprehensive income
Financial assets
at amortised
cost Total
Equity
investments
Debt
investments
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Equity investments
designated at fair value
through other
comprehensive income /H1118/H1118 – 13,859 – – 13,859
Trade and bills
receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 1,475 220,499 221,974
Financial assets included
in prepayments, other
receivables and other
assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 1,262 1,262
Financial assets at fair
value through profit or
loss /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118287,21 0––– 287,210
Due from subsidiaries /H1118/H1118/H1118 – – – 863,659 863,659
Cash and cash equivalents /H1118 – – – 67,464 67,464
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118287,210 13,859 1,475 1,152,884 1,455,428
Financial liabilities
Financial assets at
fair value through
profit or loss
Financial liabilities
at amortised cost 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– 72,493 72,493
Trade and bills payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 138,865 138,865
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/H1118–1 1 51 1 5
Due to subsidiaries /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 97,179 97,179
Derivative financial instrument /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111837,423 – 37,423
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111837,423 308,652 346,075
As at 31 December 2023
Financial assets
Financial assets
at fair value
through profit
or loss
Financial assets
at fair value through other
comprehensive income
Financial assets
at amortised
cost Total
Equity
investments
Debt
investments
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Equity investments
designated at fair value
through other
comprehensive income /H1118/H1118 – 42,106 – – 42,106
Trade and bills
receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 412,315 412,315
Financial assets included
in prepayments, other
receivables and other
assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 11,129 11,129
Financial assets at fair
value through profit or
loss /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111824,07 9––– 24,079
Due from subsidiaries /H1118/H1118/H1118 – – – 488,943 488,943
Cash and cash equivalents /H1118 – – – 27,060 27,060
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111824,079 42,106 – 939,447 1,005,632
APPENDIX I ACCOUNTANTS’ REPORT
– I-96 –


--- page 659 ---
Financial liabilities
Financial liabilities at
amortised cost Total
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/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111858,926 58,926
Trade and bills payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118311,465 311,465
Financial liabilities included in other payables and accruals /H1118/H1118 12,567 12,567
Due to subsidiaries /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118273,361 273,361
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118656,319 656,319
As at 31 May 2024
Financial assets
Financial assets
at fair value
through profit
or loss
Financial assets
at fair value through other
comprehensive income
Financial assets
at amortised
cost Total
Equity
investments
Debt
investments
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Equity investments
designated at fair value
through other
comprehensive income /H1118/H1118 – 40,808 – – 40,808
Trade and bills
receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 389,126 389,126
Financial assets included
in prepayments, other
receivables and other
assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 10,911 10,911
Financial assets at fair
value through profit or
loss /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111822,116––– 22,116
Due from subsidiaries /H1118/H1118/H1118 – – – 475,046 475,046
Cash and cash equivalents /H1118 – – – 10,702 10,702
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111822,116 40,808 – 885,785 948,709
Financial liabilities
Financial liabilities at
amortised cost Total
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/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111849,884 49,884
Trade and bills payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118297,947 297,947
Financial liabilities included in other payables and accruals /H1118/H1118 16,487 16,487
Due to subsidiaries /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118348,934 348,934
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118713,252 713,252
APPENDIX I ACCOUNTANTS’ REPORT
– I-97 –


--- page 660 ---
43. TRANSFERS OF FINANCIAL ASSETS
Transferred financial assets that are derecognised in their entirety
During the Relevant Periods, certain subsidiaries of the Group, endorsed certain bills receivable accepted by
banks (the “Derecognised Bills”) to certain of their suppliers in order to settle the trade payables due to such suppliers
with carrying amounts in aggregate of nil, RMB24,810,892, nil and RMB24,943,286 as at 31 December 2021, 2022
and 2023 and 31 May 2024, respectively. The Derecognised Bills had a maturity of 1 to 12 months at the end of each
reporting period. In accordance with the Law of Negotiable Instruments, the holders of the Derecognised Bills may
exercise the right of recourse against any, several or all of the persons, including the Group, liable for the
Derecognised Bills regardless of the order of precedence (the “Continuing Involvement”). In the opinion of the
management, the Group has transferred substantially all the risks and rewards relating to the Derecognised Bills.
Accordingly, it has derecognised the full carrying amounts of the Derecognised Bills and the associated trade
payables. The maximum exposure to loss from the Group’s Continuing Involvement in the Derecognised Bills and
the undiscounted cash flows to repurchase these Derecognised Bills is equal to their carrying amounts. In the opinion
of management, the fair values of the Group’s Continuing Involvement in the Derecognised Bills are not significant.
44. FAIR V ALUE AND FAIR V ALUE HIERARCHY OF FINANCIAL INSTRUMENTS
Management has assessed that the fair values of cash and cash equivalents, restricted cash, time deposits, trade
and bills receivables, financial assets included in prepayments, other receivables and other assets, trade and bills
payables, financial liabilities included in other payables and accruals, lease liabilities and short-term interest-bearing
bank and other borrowings approximate to their carrying amounts largely due to the short term maturities of these
instruments. The non-current portion of interest-bearing bank and other borrowings approximate to their carrying
amounts mainly due to the floating interest rate.
The Group’s finance department headed by the finance manager is responsible for determining the policies and
procedures for the fair value measurement of financial instruments. The finance manager reports directly to the chief
financial officer. At each reporting date, the finance department analyses the movements in the values of financial
instruments and determines the major inputs applied in the valuation. The valuation is reviewed and approved by the
chief financial officer. The valuation process and results are discussed with the audit committee of the board (the
“Audit Committee”) twice a year for interim and annual financial reporting.
The fair values of the financial assets and liabilities are included at the amount at which the instrument could
be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. The following
methods and assumptions were used to estimate the fair values:
The Group invests in financial assets at fair value through profit or loss, which represent structured deposits
issued by banks in Chinese Mainland. The Group has estimated the fair value of these structured deposits based on
the net value announced by the bank at the end of each of the Relevant Periods.
The fair values of unlisted equity investments designated at fair value through other comprehensive income
and unlisted investments measured at fair value through profit or loss have been estimated using a market-based
valuation technique based on assumptions that are not supported by observable market prices or rates. The valuation
requires the directors to determine comparable public companies (peers) based on industry, size, leverage and
strategy, and to calculate an appropriate price multiple, such as price to book (“P/B”) multiple and price to sales
(“P/S”) multiple for each comparable company identified. The multiple is calculated by dividing the enterprise value
of the comparable company by an earnings measure. The trading multiple is then discounted for considerations such
as illiquidity and size differences between the comparable companies based on company-specific facts and
circumstances. The discounted multiple is applied to the corresponding earnings measure of the unlisted equity
investments to measure the fair value. The directors believe that the estimated fair values resulting from the valuation
technique, which are recorded in the consolidated statement of financial position, and the related changes in fair
values, which are recorded in other comprehensive income, are reasonable, and that they were the most appropriate
values at the end of the reporting period.
The Group has bank acceptance notes issued by banks in Chinese Mainland measured at fair value through
other comprehensive income. The Group has estimated the fair value of these bank acceptance notes by using a
discounted cash flow valuation model based on the market interest rates of instruments with similar terms and risks.
The Group enters into a derivative financial instrument, which represents an obligation to buy back the share
of a joint venture, the derivative financial instrument is measured under an option model. The valuation method is
based on expected net cash outflows.
For the fair value of the unlisted equity investments designated at fair value through other comprehensive
income, management has estimated the potential effect of using reasonably possible alternatives as inputs to the
valuation model.
APPENDIX I ACCOUNTANTS’ REPORT
– I-98 –


--- page 661 ---
Below is a summary of significant unobservable inputs to the valuation of financial instruments together with
a quantitative sensitivity analysis as at 31 December 2021, 2022 and 2023 and 31 May 2024:
Valuation technique
Significant
unobservable input Range
Sensitivity of fair value
to the input
Financial assets
Equity investments
designated at fair
value through other
comprehensive
income
Unlisted equity
investments
Market approach Discounts for lack
of marketability
(“DLOM”)
31 December 2021:
16% to 30%
1% increase or
decrease in
multiple would
result in increase
or decrease in
fair value by
RMB174,000.
31 December 2022:
16% to 30%
1% increase or
decrease in
multiple would
result in increase
or decrease in
fair value by
RMB199,000.
31 December 2023:
16% to 30%
1% increase or
decrease in
multiple would
result in increase
or decrease in
fair value by
RMB675,000.
31 May 2024:
16% to 30%
1% increase or
decrease in
multiple would
result in increase
or decrease in
fair value by
RMB461,000.
Financial assets at fair
value through profit
or loss
Private equity funds Market approach Discounts for lack
of marketability
(“DLOM”)
31 December 2021:
16% to 30%
1% increase or
decrease in
multiple would
result in increase
or decrease in
fair value by
RMB64,000.
31 December 2022:
16% to 30%
1% increase or
decrease in
multiple would
result in increase
or decrease in
fair value by
RMB65,000.
31 December 2023:
16% to 30%
1% increase or
decrease in
multiple would
result in increase
or decrease in
fair value by
RMB45,000.
APPENDIX I ACCOUNTANTS’ REPORT
– I-99 –


--- page 662 ---
Valuation technique
Significant
unobservable input Range
Sensitivity of fair value
to the input
31 May 2024:
16% to 30%
1% increase or
decrease in
multiple would
result in increase
or decrease in
fair value by
RMB52,000.
Financial liabilities:
Derivative financial instrument:
The Group used the option model based on expected cash flows to measure the exercise price of
derivative financial instrument of the obligation to buy back the shares of a joint venture. As at 31 December
2021, the range of expected cash flows of Guohong Refire was assessed to be from nil to RMB76,933,000. If
cash flows of Guohong Refire had increased/decreased by 1%, the fair value of the derivative financial
instrument would have increased/decreased by RMB377,000. As Guohong Refire has been gradually ceasing
its operations, the expected cash flows was assessed to be nil as at 31 December 2022.
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 2021
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 other comprehensive
income /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 7,323 17,357 24,680
Financial assets at fair value
through profit or loss /H1118/H1118/H1118/H1118/H1118/H1118– – 6,436 6,436
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 7,323 23,793 31,116
APPENDIX I ACCOUNTANTS’ REPORT
– I-100 –


--- page 663 ---
As at 31 December 2022
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 other comprehensive
income /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 2,611 19,887 22,498
Financial assets at fair value
through profit or loss /H1118/H1118/H1118/H1118/H1118/H1118– 335,797 6,521 342,318
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 338,408 26,408 364,816
As at 31 December 2023
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 other comprehensive
income /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 30,083 47,656 77,739
Financial assets at fair value
through profit or loss /H1118/H1118/H1118/H1118/H1118/H1118– – 44,401 44,401
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 30,083 92,057 122,140
As at 31 May 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
Financial assets at fair value
through other comprehensive
income /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 26,788 46,076 72,864
Financial assets at fair value
through profit or loss /H1118/H1118/H1118/H1118/H1118/H1118– – 52,230 52,230
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 26,788 98,306 125,094
APPENDIX I ACCOUNTANTS’ REPORT
– I-101 –


--- page 664 ---
Liabilities measured at fair value:
As at 31 December 2021
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
Derivative financial instrument /H1118/H1118 – – 17,742 17,742
As at 31 December 2022
Fair value measurement using
Quoted prices in
active markets
Significant
observable inputs
Significant
unobservable
Level 1 Level 2 Level 3 Total
RMB’000 RMB’000 RMB’000 RMB’000
Derivative financial instrument /H1118/H1118/H1118/H1118 – – 37,423 37,423
During the Relevant Periods, there were no transfers of fair value measurements between Level 1 and Level
2 and no transfers into or out of Level 3 for both financial assets and financial liabilities.
45. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
The Group’s principal financial instruments, other than a derivative, comprise bank loans, other interest-
bearing borrowings, and cash and short term deposits. The main purpose of these financial instruments is to raise
finance for the Group’s operations. The Group has various other financial assets and liabilities such as trade and bills
receivables and trade and bills payables, which arise directly from its operations.
The main risks arising from the Group’s financial instruments are interest rate risk, foreign currency risk,
credit risk and liquidity risk. The board of directors reviews and agrees policies for managing each of these risks and
they are summarised below.
Interest rate risk
The Group’s exposure to the risk of changes in market interest rates relates primarily to the Group’s long term
debt obligations with a floating interest rate. The Group’s policy is to manage its interest cost using a mix of fixed
and variable rate debts.
If the interest rate of bank and other borrowings had increased/decreased by 50 basis points and all other
variables were held constant, the loss before tax of the Group, through the impact on floating rate borrowings, would
have increased/decreased by approximately RMB1,079,000, RMB1,806,000 and RMB3,067,000 and RMB1,573,000
for the years ended 31 December 2021, 2022 and 2023 and the five months ended 31 May 2024, respectively.
Foreign currency risk
The Group has transactional currency exposures. Such exposures arise from sales or purchases by operating
units in currencies other than the units’ functional currencies. As the Group’s major businesses are in Chinese
Mainland, the majority of the transactions are conducted in RMB. Most of the Group’s assets and liabilities are
denominated in RMB. The Group was not exposed to material foreign currency risk during the Relevant Periods.
APPENDIX I ACCOUNTANTS’ REPORT
– I-102 –


--- page 665 ---
Credit risk
The Group trades only with recognised and creditworthy third parties. It is the Group’s policy that all
customers who wish to trade on credit terms are subject to credit verification procedures. In addition, receivable
balances are monitored on an ongoing basis. For transactions that are not denominated in the functional currency of
the relevant operating unit, the Group does not offer credit terms without specific verification procedures.
As at the end of each of the Relevant Periods, the Group had certain concentrations of credit risk as 33.97%,
41.58%, 42.20% and 26.03% of the Group’s trade receivables were due from the Group’s five largest customers,
respectively.
Maximum exposure and year-end staging
The tables below show the credit quality and the maximum exposure to credit risk based on the Group’s credit
policy, which is mainly based on past due information unless other information is available without undue cost or
effort, and year-end staging classification.
The amounts presented are gross carrying amounts for financial assets. The loss provision for a financial
guarantee obligation was measured as lifetime expected credit loss as disclosed in note 32.
As at 31 December 2021
12-month ECLs Lifetime ECLs
Stage 1 Stage 2 Stage 3
Simplified
approach Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Trade and bills receivables* /H1118/H1118 – – – 1,559,285 1,559,285
Financial assets included in
prepayments, other
receivables and other assets
– Normal** /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,433 – – – 6,433
– Doubtful** /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 1,200 – 1,200
Cash and cash equivalents /H1118/H1118/H1118
– Not yet past due /H1118/H1118/H1118/H1118/H1118/H1118/H1118276,220 – – – 276,220
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118282,653 – 1,200 1,559,285 1,843,138
As at 31 December 2022
12-month ECLs Lifetime ECLs
Stage 1 Stage 2 Stage 3
Simplified
approach Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Trade and bills receivables* /H1118/H1118 – – – 1,917,682 1,917,682
Financial assets included in
prepayments, other
receivables and other assets
– Normal** /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111810,077 – – – 10,077
– Doubtful** /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 319 – 319
Time deposits
– Not yet past due /H1118/H1118/H1118/H1118/H1118/H1118/H111852,086 – – – 52,086
Restricted cash
– Not yet past due /H1118/H1118/H1118/H1118/H1118/H1118/H111859,902 – – – 59,902
Cash and cash equivalents
– Not yet past due /H1118/H1118/H1118/H1118/H1118/H1118/H11181,079,456 – – – 1,079,456
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,201,521 – 319 1,917,682 3,119,522
APPENDIX I ACCOUNTANTS’ REPORT
– I-103 –


--- page 666 ---
As at 31 December 2023
12-month ECLs Lifetime ECLs
Stage 1 Stage 2 Stage 3
Simplified
approach Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Trade and bills receivables* /H1118/H1118 – – – 2,447,826 2,447,826
Financial assets included in
prepayments, other
receivables and other assets
– Normal** /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118199,369 – – – 199,369
– Doubtful** /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 3,331 – 3,331
Restricted cash
– Not yet past due /H1118/H1118/H1118/H1118/H1118/H1118/H11187 4 6––– 7 4 6
Cash and cash equivalents
– Not yet past due /H1118/H1118/H1118/H1118/H1118/H1118/H1118664,510 – – – 664,510
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118864,625 – 3,331 2,447,826 3,315,782
As at 31 May 2024
12-month ECLs Lifetime ECLs
Stage 1 Stage 2 Stage 3
Simplified
approach Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Trade and bills receivables* /H1118/H1118 – – – 2,430,539 2,430,539
Financial assets included in
prepayments, other
receivables and other assets
– Normal** /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111890,828 – – – 90,828
– Doubtful** /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 2,866 – 2,866
Restricted cash
– Not yet past due /H1118/H1118/H1118/H1118/H1118/H11182 8––– 2 8
Cash and cash equivalents /H1118/H1118/H1118
– Not yet past due /H1118/H1118/H1118/H1118/H1118/H1118435,710 – – – 435,710
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118526,566 – 2,866 2,430,539 2,959,971
* For trade and bills receivables to which the Group applies the simplified approach for impairment,
information based on the provision matrix is disclosed in note 22.
** The credit quality of the financial assets included in prepayments, other receivables and other assets is
considered to be “normal” when they are not past due and there is no information indicating that the
financial assets had a significant increase in credit risk since initial recognition. Otherwise, the credit
quality of the financial assets is considered to be “doubtful”.
APPENDIX I ACCOUNTANTS’ REPORT
– I-104 –


--- page 667 ---
Liquidity risk
The Group monitors and maintains a level of cash and cash equivalents deemed adequate by the management
of the Group to finance the operations and mitigate the effects of fluctuations of cash flows.
The Group’s objective is to maintain a balance between continuity of funding and flexibility through the use
of interest-bearing bank and other borrowings and lease liabilities.
The maturity profile of the Group’s financial liabilities as at the end of the reporting period, based on the
contractual undiscounted payments, is as follows:
Less than
1 year
Between
1 and 2 years
Between
2 and 3 years
Between
3 and 5 years Over 5 years Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
31 December 2021
Interest-bearing bank
and other
borrowings /H1118/H1118/H1118/H1118/H1118/H1118693,965 24,226 166,796 230,482 – 1,115,469
Lease liabilities /H1118/H1118/H1118/H111821,910 19,657 35,846 44,921 – 122,334
Trade and bills
payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118561,533 –––– 561,533
Financial liabilities
included in other
payables /H1118/H1118/H1118/H1118/H1118/H1118/H11183,528–––– 3,528
Derivative financial
instrument /H1118/H1118/H1118/H1118/H1118/H1118– 17,742 – – – 17,742
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,280,936 61,625 202,642 275,403 – 1,820,606
Less than
1 year
Between
1 and 2 years
Between
2 and 3 years
Between
3 and 5 years Over 5 years Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
31 December 2022
Interest-bearing bank
and other
borrowings /H1118/H1118/H1118/H1118/H1118/H1118300,388 334,540 399,892 28,182 10,684 1,073,686
Lease liabilities /H1118/H1118/H1118/H111819,657 35,846 21,850 23,071 – 100,424
Trade and bills
payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118566,255 –––– 566,255
Financial liabilities
included in other
payables /H1118/H1118/H1118/H1118/H1118/H1118/H11184 , 1 1 0–––– 4 , 1 1 0
Derivative financial
instrument /H1118/H1118/H1118/H1118/H1118/H111837,423 –––– 37,423
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118927,833 370,386 421,742 51,253 10,684 1,781,898
APPENDIX I ACCOUNTANTS’ REPORT
– I-105 –


--- page 668 ---
Less than
1 year
Between
1 and 2 years
Between
2 and 3 years
Between
3 and 5 years Over 5 years Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
31 December 2023
Interest-bearing bank
and other
borrowings /H1118/H1118/H1118/H1118/H1118/H1118512,617 605,918 232,595 19,258 2,555 1,372,943
Lease liabilities /H1118/H1118/H1118/H111821,867 21,683 23,238 – – 66,788
Trade and bills
payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118650,741 –––– 650,741
Financial liabilities
included in other
payables /H1118/H1118/H1118/H1118/H1118/H1118/H111873,181 –––– 73,181
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,258,406 627,601 255,833 19,258 2,555 2,163,653
On demand or
less than
1 year
Between
1 and 2 years
Between
2 and 3 years
Between
3 and 5 years Over 5 years Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
As at 31 May 2024
Interest-bearing bank
and other
borrowings /H1118/H1118/H1118/H1118/H1118/H1118852,350 458,012 50,080 18,327 2,509 1,381,278
Lease liabilities /H1118/H1118/H1118/H111821,867 22,534 11,649 – – 56,050
Trade and bills
payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118626,013 –––– 626,013
Financial liabilities
included in other
payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118147,520 –––– 147,520
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,647,750 480,546 61,729 18,327 2,509 2,210,861
Capital management
The primary objectives of the Group’s capital management are to safeguard the Group’s ability to continue as
a going concern and to maintain healthy capital ratios in order to support its business and maximise shareholders’
value.
The Group manages its capital structure and makes adjustments to it in light of changes in economic
conditions. To maintain or adjust the capital structure, the Group may return capital to shareholders or issue new
shares.
APPENDIX I ACCOUNTANTS’ REPORT
– I-106 –


--- page 669 ---
The Group monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt. The
Group includes, within net debt, interest-bearing bank and other borrowings, trade and bills payables, a derivative
financial instrument, other payables and accruals and lease liabilities, less cash and cash equivalents. Capital includes
equity attributable to the owners of the parent. The gearing ratios as at the end of the Relevant Periods were as
follows:
As at 31 December As at 31 May
2021 2022 2023 2024
RMB’000 RMB’000 RMB’000 RMB’000
Trade and bills payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118561,533 566,255 650,741 626,013
Other payables and accruals /H1118/H1118/H1118/H1118/H1118/H111878,665 102,416 141,315 174,717
Derivative financial instrument /H1118/H1118/H1118/H111817,742 37,423 – –
Interest-bearing bank and other
borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,058,053 998,170 1,303,468 1,323,967
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111890,712 76,386 61,404 51,831
Less: Cash and cash equivalents /H1118/H1118/H1118(276,220) (1,079,456) (664,510) (435,710)
Net debt /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,530,485 701,194 1,492,418 1,740,818
Equity attributable to owners of the
parent /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118566,024 2,271,548 1,824,400 1,541,345
Capital and net debt /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,096,509 2,972,742 3,316,818 3,282,163
Gearing ratio /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111873% 24% 45% 53%
46. EVENTS AFTER THE RELEV ANT PERIODS
There were no other significant events that required additional disclosure or adjustments occurred after the end
of the Relevant Periods.
47. SUBSEQUENT FINANCIAL STATEMENTS
No audited financial statements have been prepared by the Company, the Group or any of the companies now
comprising the Group in respect of any period subsequent to 31 May 2024.
APPENDIX I ACCOUNTANTS’ REPORT
– I-107 –


--- page 670 ---
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 purposes only. The
unaudited pro forma financial information should be read in conjunction with “Financial
Information” and the Accountants’ Report set out in Appendix I to this prospectus.
A. UNAUDITED PRO FORMA ADJUSTED CONSOLIDATED NET TANGIBLE
ASSETS
The following unaudited pro forma adjusted consolidated net tangible assets attributable
to the owners of the Company has been prepared in accordance with Rule 4.29 of the Rules
Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited and with
reference to Accounting Guideline 7 Preparation of Pro Forma Financial Information for
inclusion in Investment Circulars issued by the Hong Kong Institute of Certified Public
Accountants to illustrate the effect of the Global Offering on our consolidated net tangible
assets attributable to owners of the Company as at 31 May 2024 as if the Global Offering had
taken place on 31 May 2024.
The unaudited pro forma statement of adjusted consolidated net tangible assets
attributable to owners of the Company has been prepared for illustrative purposes only and
because of its hypothetical nature, it may not give a true picture of the financial position of the
Group as at 31 May 2024 or any future dates following the Global Offering.
Consolidated net
tangible assets
attributable to
owners of the
Company as at
May 31, 2024
Estimated net
proceeds from
the Global
Offering
Unaudited
pro forma
adjusted
consolidated
net tangible
assets
Unaudited pro forma
adjusted net tangible assets
attributable to owners of
the Company per Share
RMB’000 RMB’000 RMB’000 RMB HK$
(Note 1) (Note 2) (Note 3) (Note 4)
Based on an Offer Price
Of HK$145.00 per Share /H1118/H1118/H11181,517,897 600,634 2,118,531 24.59 26.62
Based on an Offer Price
Of HK$155.00 per Share /H1118/H1118/H11181,517,897 643,219 2,161,116 25.09 27.16
Based on an Offer Price
Of HK$165.00 per Share /H1118/H1118/H11181,517,897 685,805 2,203,702 25.58 27.69
Notes:
(1) The consolidated net tangible assets attributable to owners of the Company as at 31 May 2024 is extracted from
the Accountants’ Report, which is based on the audited consolidated total equity of the Company as at 31 May
2024 of approximately RMB1,461.19 million. The amount of audited consolidated net tangible assets
attributable to the owners of the Company as at 31 May 2024 exclude other intangible assets of RMB23.45
million and non-controlling interests of RMB(80.16) million.
APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION
– II-1 –


--- page 671 ---
(2) The estimated net proceeds from the Global Offering are based on the Offer Price of HK$145.00 per Share or
HK$155.00 per Share or HK$165.00 per Share, after deduction of the underwriting fees and other related
expenses payable by the Company (excluding the listing expense that have been charged to profit or loss during
the Track Record Period) and does not take into account of any Shares which may be issued upon the exercise
of the Over-allotment Option. The estimated net proceeds from the Global Offering are converted from Hong
Kong dollars into Renminbi at an exchange rate of HK$1.0 to RMB0.92371.
(3) The unaudited pro forma adjusted consolidated net tangible assets per Share is calculated based on total
86,139,291 Shares in issue after the completion of the Global Offering, representing the aggregate of the H
Shares to be converted from Domestic Shares, the Domestic Shares in issue, and the 4,827,920 H Shares to
be issued pursuant to the Global Offering.
(4) For the purpose of this unaudited pro forma statement of adjusted consolidated net tangible assets, the balances
stated in Renminbi are converted into Hong Kong dollars at an exchange rate of HK$1 to RMB0.92371. No
representation is made that the Hong Kong dollar amounts have been, could have been or may be converted
to Renminbi, or vice versa, at that rate or any other rates or at all.
(5) No adjustment has been made to reflect any trading result or other transactions of the Group entered into
subsequent to 31 May 2024.
APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION
– II-2 –


--- page 672 ---
INDEPENDENT REPORTING ACCOUNTANTS’ ASSURANCE REPORT ON THE
COMPILATION OF PRO FORMA FINANCIAL INFORMATION
⭰㰟㛪姯⸒Ṳ⋀㈧
榀㸖毩歁㵳勘䙮怺 979噆
⤑⏋✱ᷧ⺎27㧺
Tel 曢婘: +852 2846 9888
Fax ₚ䜆: +852 2868 4432
ey.com
Ernst & Young
27/F, One Taikoo Place
979 King’s Road
Quarry Bay, Hon
g Kong
To the Directors of Shanghai REFIRE Group Limited
We have completed our assurance engagement to report on the compilation of pro forma
financial information of Shanghai REFIRE Group Limited (the “Company”) and its
subsidiaries (hereinafter collectively referred to as the “Group”) by the directors of the
Company (the “Directors”) for illustrative purposes only. The pro forma financial information
consists of the pro forma consolidated net tangible assets as at 31 May 2024, and related notes
as set out on pages II-1 and II-2 of the prospectus dated 28 November 2024 issued by the
Company (the “Pro Forma Financial Information”). The applicable criteria on the basis of
which the Directors have compiled the Pro Forma Financial Information are described in
Appendix II to the Prospectus.
The Pro Forma Financial Information has been compiled by the Directors to illustrate the
impact of the global offering of shares of the Company on the Group’s financial position as at
31 May 2024 as if the transaction had taken place at 31 May 2024. As part of this process,
information about the Group’s financial position, has been extracted by the Directors from the
Group’s financial statements for the period ended 31 May 2024, on which an accountants’
report has been published.
Directors’ responsibility for the Pro Forma Financial Information
The Directors are responsible for compiling the Pro Forma Financial Information in
accordance with paragraph 4.29 of the Rules Governing the Listing of Securities on The Stock
Exchange of Hong Kong Limited (the “Listing Rules”) and with reference to Accounting
Guideline (“AG”) 7 Preparation of Pro Forma Financial Information for Inclusion in
Investment Circulars issued by the Hong Kong Institute of Certified Public Accountants (the
“HKICPA”).
Our independence and quality control
We have complied with the independence and other ethical requirements of the Code of
Ethics for Professional Accountants issued by the HKICPA, which is founded on fundamental
principles of integrity, objectivity, professional competence and due care, confidentiality and
professional behavior.
APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION
– II-3 –


--- page 673 ---
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 Pro Forma Financial Information and to report our opinion to you. We do
not accept any responsibility for any reports previously given by us on any financial
information used in the compilation of the Pro Forma Financial Information beyond that owed
to those to whom those reports were addressed by us at the dates of their issue.
We conducted our engagement in accordance with Hong Kong Standard on Assurance
Engagements 3420 Assurance Engagements to Report on the Compilation of Pro Forma
Financial Information Included in a Prospectus issued by the HKICPA. This standard requires
that the reporting accountants plan and perform procedures to obtain reasonable assurance
about whether the Directors have compiled the Pro Forma Financial Information in accordance
with paragraph 4.29 of the Listing Rules and with reference to AG 7 issued by the HKICPA.
For purposes of this engagement, we are not responsible for updating or reissuing any
reports or opinions on any historical financial information used in compiling the Pro Forma
Financial Information, nor have we, in the course of this engagement, performed an audit or
review of the financial information used in compiling the Pro Forma Financial Information.
The purpose of the Pro Forma Financial Information included in the Prospectus is solely
to illustrate the impact of the global offering of shares of the Company on unadjusted financial
information of the Group as if the transaction had been undertaken at an earlier date selected
for purposes of the illustration. Accordingly, we do not provide any assurance that the actual
outcome of the transaction would have been as presented.
A reasonable assurance engagement to report on whether the Pro Forma Financial
Information has been properly compiled on the basis of the applicable criteria involves
performing procedures to assess whether the applicable criteria used by the Directors in the
compilation of the Pro Forma Financial Information provide a reasonable basis for presenting
the significant effects directly attributable to the transaction, and to obtain sufficient
appropriate evidence about whether:
 the related pro forma adjustments give appropriate effect to those criteria; and
 the Pro Forma Financial Information reflects the proper application of those
adjustments to the unadjusted financial information.
APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION
– II-4 –


--- page 674 ---
The procedures selected depend on the reporting accountants’ judgment, having regard to
the reporting accountants’ understanding of the nature of the Group, the transaction in respect
of which the Pro Forma Financial Information has been compiled, and other relevant
engagement circumstances.
The engagement also involves evaluating the overall presentation of the Pro Forma
Financial Information.
We believe that the evidence we have obtained is sufficient and appropriate to provide a
basis for our opinion.
Opinion
In our opinion:
(a) the Pro Forma Financial Information has been properly compiled on the basis stated;
(b) such basis is consistent with the accounting policies of the Group; and
(c) the adjustments are appropriate for the purpose of the Pro Forma Financial
Information as disclosed pursuant to paragraph 4.29(1) of the Listing Rules.
Yours faithfully,
Ernst & Y oung
Certified Public Accountants
Hong Kong
28 November 2024
APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION
– II-5 –


--- page 675 ---
TAXATION OF SECURITY HOLDERS
The taxation of income and capital gains of holders of H Shares is subject to the laws and
practices of the PRC and of jurisdictions in which holders of H Shares are residents or
otherwise subject to tax. The following summary of certain relevant taxation provisions is
based on current effective laws and practices, and no predictions are made about changes or
adjustments to relevant laws or policies, and no comments or suggestions will be made
accordingly. The discussion has no intention to cover all possible tax consequences resulting
from the investment in H Shares, nor does it take the specific circumstances of any particular
investor into account. Accordingly, you should consult your own tax advisor regarding the tax
consequences of an investment in H Shares. The discussion is based upon laws and relevant
interpretations in effect as of the date of this prospectus, which is subject to change or
adjustment and may have retrospective effect. No issues on PRC or Hong Kong taxation other
than income tax, capital appreciation and profit tax, appreciation tax, stamp duty and estate
duty were referred in the discussion. Prospective investors are urged to consult their financial
advisers regarding the PRC, Hong Kong and other tax consequences of owning and disposing
of H Share.
TAXATION IN THE PRC
Taxation on Dividends
Individual Investor
Pursuant to the Individual Income Tax Law of the PRC (੻೼
‘) (the “IIT Law”), which was latest amended on August 31, 2018 and its implementation
rules, for individual income including interest, dividend and bonus, individual income tax with
applicable proportional tax rate of 20% shall be paid. 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 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 and its implementation rules, a uniform enterprise
income tax rate of 25% is imposed on all resident enterprises in China, including foreign-
invested enterprises; a non-resident enterprise is generally subject to enterprise income tax at
a rate of 10% on PRC-sourced income (including dividends received from a PRC resident
enterprise that issues shares in Hong Kong), if it does not have an establishment or premise in
the PRC or has an establishment or premise in the PRC but its PRC-sourced income has no real
APPENDIX III TAXATION AND FOREIGN EXCHANGE
– III-1 –


--- page 676 ---
connection with such establishment or premise. The aforesaid income tax payable for
non-resident enterprises is deducted at source, where the payer of the income is required to
withhold the income tax from the amount to be paid to the non-resident enterprise when such
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 (͏ΆุΣྤ̮H੻೼Ϟᗫ
‘), which was issued by the SAT on November 6, 2008, further clarifies that a
PRC-resident enterprise must withhold enterprise income tax at a rate of 10% on the dividends
distributed to overseas non-resident enterprise shareholders of H Shares in 2008 and any
subsequent year. 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՟੻Bҭᔧ‘), which was
issued by the SAT on July 24, 2009, further provides that any PRC-resident enterprise whose
shares are listed on overseas stock exchanges must withhold and remit enterprise income tax
at a rate of 10% on dividends distributed to overseas non-resident enterprise shareholders of
H Shares in 2008 and any subsequent year. Such tax rates may be further modified pursuant
to the tax treaty or agreement that China has entered into with a relevant country or area, where
applicable.
Pursuant to the Arrangement between the Mainland 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 (֛
ࣣwhich came in to effect on 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 the main purposes for the arrangement or transactions which will bring any direct or
indirect benefits under this Arrangement, after taking into account all relevant facts and
conditions, are reasonably deemed to be obtaining such benefits, except when the grant of such
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
statutory requirements of PRC tax law documents, such as the Notice of the SAT on the Issues
Concerning the Enforcement of the Dividend Clauses of Tax Treaties (ੂ
‘).
APPENDIX III TAXATION AND FOREIGN EXCHANGE
– III-2 –


--- page 677 ---
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 treaties 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 IIT Law and its implementation rules, 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 on Continuing to Temporarily Exempt Individual Income Tax on
Income from the Transfer of Shares by Individuals (ٰ
‘) issued by the MOF and the SAT in March 1998,
from January 1, 1997, income of individuals from transfer of the shares of listed enterprises
shall continue to be exempted from individual income tax. On December 31, 2009, the MOF,
the SAT and CSRC jointly issued the Circular on Issues on Levying Individual Income Tax
over the Income Received by Individuals from the Transfer of Restricted Shares of Listed
Company (‘), this
circular provides that any individual’s 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 on Levying Individual Income Tax over the
Income Received by Individuals from the Transfer of Restricted Shares of Listed Company
(‘) jointly issued
by the abovementioned three departments on November 10, 2010).
As of the Latest Practicable Date, no aforesaid provisions had expressly provided that
whether individual income tax shall be levied from non-PRC resident individuals on the
transfer of shares in PRC resident enterprises listed on overseas stock exchanges. To the
knowledge of the Company, in practice, the PRC tax authorities have not levied income tax
from non-PRC resident individuals on gains from the transfer of PRC resident enterprises listed
on overseas stock exchange. However, there is no assurance that the PRC tax authorities will
not change these practices which could result in levying income tax on non-PRC resident
individuals on gains from the sale of H shares.
APPENDIX III TAXATION AND FOREIGN EXCHANGE
– III-3 –


--- page 678 ---
Enterprise Investors
In accordance with the EIT Law and its implementation rules, a non-resident enterprise
is generally subject to enterprise income tax 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 is deducted at source, where the
payer of the income is required to withhold the income tax from the amount to be paid to the
non-resident enterprise when such payment is made or due. Such tax may be reduced or
exempted pursuant to relevant tax treaties or agreements on avoidance of double taxation.
Stamp Duty
Pursuant to the Stamp Duty Law of the PRC (‘) issued by
the Standing Committee of the National People’s Congress (ึ)o n
June 10, 2021 and implemented on July 1, 2022, the PRC stamp duty applies to entities and
individuals that conclude taxable documents and conduct securities transactions within the
PRC and the entities and individuals that conclude taxable documents outside the PRC which
are used within the PRC. Therefore, the requirements of the stamp duty imposed on the transfer
of shares of PRC listed companies does not apply to the acquisition and disposal of H shares
outside the PRC by non-PRC investors.
Estate Duty
The PRC currently does not impose any estate duty.
HONG KONG TAXATION
Taxation on Dividends
No tax is payable by any person or corporation under the laws of Hong Kong in respect
of dividends paid by our Company.
Profits Tax
Hong Kong profits tax will not be payable by any Shareholders (other than Shareholders
carrying on a trade, profession or business in Hong Kong and holding the Shares for trading
purposes) on any capital gains made on the sale or other disposal of the Shares. Shareholders
should take advice from their own professional advisers as to their particular tax position.
APPENDIX III TAXATION AND FOREIGN EXCHANGE
– III-4 –


--- page 679 ---
Stamp Duty
Hong Kong stamp duty will be charged on the sale and purchase of shares at the current
rate of 0.2% of the consideration for, or (if greater) the value of, the shares being sold or
purchased, in total, whether or not the sale or purchase is on or off the Hong Kong Stock
Exchange. The Shareholder selling the shares and the purchaser will each be liable for one-half
of the amount of Hong Kong stamp duty payable upon such transfer. In addition, a fixed duty
of HK$5 is currently payable on any instrument of transfer of shares.
Estate Duty
The Revenue (Abolition of Estate Duty) Ordinance 2005 came into effect on February 11,
2006 in Hong Kong, pursuant to which no Hong Kong estate duty is payable and no estate duty
clearance papers are needed for an application of a grant of representation in respect of holders
of H shares whose deaths occur on or after February 11, 2006.
Major Taxes on the Company in the PRC
EIT
According to the EIT Law, which was promulgated on March 16, 2007 and amended from
time to time, together with its implementation rules, enterprises are classified into resident
enterprises and non-resident enterprises. Enterprises, which are incorporated in the PRC or
incorporated pursuant to the foreign laws with their “de facto management bodies” located in
the PRC, are deemed as “resident enterprise” and subject to an enterprise income tax rate of
25% on their global income. Non-resident enterprises are subject to (i) an enterprise income tax
rate of 25% on their income generated by their establishments or places of business in the PRC
and their income derived outside the PRC which are effectively connected with their
establishments or places of business in the PRC; and (ii) an enterprise income tax rate of 10%
on their income derived from the PRC but not connected with their establishments or places
of business located in the PRC. Non-resident enterprises without establishment or place of
business in the PRC are subject to an enterprise income tax of 10% on their income derived
from the PRC.
V alue-Added Tax
According to the Interim Regulations on Value-Added Tax of the PRC ( ʕശɛ͏΍ձ
೼ᅲБૢԷ‘), which was promulgated on December 13, 1993 and latest amended on
November 19, 2017, together with its implementation rules, entities and individuals engaged
in selling goods or labor services of processing, repair or maintenance, selling services,
intangible assets or immovables within the PRC or importing goods to the PRC are subject to
the payment of value-added tax. Pursuant to the Notice of the Ministry of Finance of the PRC
and State Taxation Administration of the PRC on Adjusting Value-Added Tax Rates (݁
‘) effective on May 1, 2018, a taxpayer who is
previously subject to 17% on value-added tax-taxable sales activities shall have the applicable
APPENDIX III TAXATION AND FOREIGN EXCHANGE
– III-5 –


--- page 680 ---
tax rate adjusted to 16%. According to the Announcement on Relevant Policies for Deepening
Value-Added Tax Reform (ʮѓ‘), which came into effect
on April 1, 2019, for value-added tax-taxable sales or imported goods of a value-added tax
general taxpayer where the value-added tax rate of 16% and 10% applies currently, it shall be
adjusted to 13% and 9% respectively.
TAXATION OF OUR COMPANY IN HONG KONG
Profits Tax
Our subsidiaries incorporated in Hong Kong, are subject to Hong Kong profits tax rate of
8.25% on assessable profits up to HK$2,000,000 and 16.5% on any part of assessable profits
over HK$2,000,000 during the Track Record Period.
PRC LA WS AND REGULATIONS RELATING TO FOREIGN EXCHANGE
According to the PRC Foreign Currency Administration Rules ( ʕശɛ͏΍ձ਷̮ි၍
ଣૢԷ‘) promulgated on January 29, 1996 and amended from time to time, the RMB is
generally freely convertible for current account items, including the distribution of dividends,
trade and service related foreign exchange transactions, but not for capital account items, such
as direct investment, loan, repatriation of investment and investment in securities outside the
PRC, unless the prior approval of the SAFE or its designated banks is obtained.
According to the SAFE Notice on Reforming and Regulating Policies on the Control over
Foreign Exchange Settlement of Capital Accounts (ձ஝ᇍ༟͉ධ
‘) promulgated on June 9, 2016, the settlement of foreign exchange
receipts under the capital account (including but not limited to the repatriation of capital raised
from overseas listing) may convert from foreign currency into RMB on self-discretionary
basis. The ratio of the discretionary exchange rate of foreign exchange receipts under domestic
capital account is tentatively set at 100%. The SAFE may adjust the above ratio in due course
according to the balance of payment status.
According to the SAFE Circular on Further Promoting Cross-border Trade and
Investment Facilitation (‘)
which was promulgated on October 23, 2019, which amended by the SAFE Circular on Further
Promoting and reforming Cross-border Trade and Investment Facilitation (̮ි၍ଣ҅
‘) promulgated on December 4, 2023,
foreign-invested enterprises engaged in non-investment business are permitted to settle foreign
exchange capital in RMB and make domestic equity investments with such RMB funds
according to law on the condition that the current Special Administrative Measures for Access
of Foreign Investment (Negative List) are not violated and the relevant domestic investment
projects are genuine and in compliance with laws.
APPENDIX III TAXATION AND FOREIGN EXCHANGE
– III-6 –


--- page 681 ---
On December 26, 2014, the SAFE issued the Notice of the State Administration of
Foreign Exchange on Issues Concerning the Foreign Exchange Administration of Overseas
Listing (‘). Pursuant to the notice,
a domestic company shall, within 15 business days of the date of the end of its overseas listing
issuance, register the overseas listing with the Administration of Foreign Exchange at the place
of its establishment; the proceeds from an overseas listing of a domestic company may be
remitted to the domestic account or deposited in an overseas account, but the use of the
proceeds shall be consistent with the content of the prospectus and other disclosure documents.
A domestic company (except for bank financial institutions) shall present its certificate of
overseas listing to open a “special account for overseas listing of domestic company” at a local
bank for its initial public offering (or follow-on offering) and repurchase business to handle the
exchange, remittance, and transfer of funds for the business concerned.
APPENDIX III TAXATION AND FOREIGN EXCHANGE
– III-7 –


--- page 682 ---
This Appendix contains a summary of laws and regulations on companies and securities
in the PRC. The principal objective of this summary is to provide potential investors with an
overview of the principal laws and regulations applicable to us. This summary is with no
intention to include all the information which may be important to the potential investors. For
discussion of laws and regulations specifically governing the business of the Company, see
“Regulatory Overview”.
PRC LEGAL SYSTEM
The PRC legal system is based on the Constitution of the PRC (‘)
(the “ Constitution ”) and is made up of written laws, administrative regulations, local
regulations, separate regulations, autonomous regulations, rules and regulations of
departments, rules and regulations of local governments, international treaties of which the
PRC government is a signatory, and other regulatory documents. Court verdicts do not
constitute binding precedents. However, they may be used as judicial reference and guidance.
According to the Constitution and the Legislation Law of the PRC (2023 revision) ( ʕ
جج2023͍)‘) (the “ Legislation Law ”), the NPC and the Standing
Committee of the NPC are empowered to exercise the legislative power of the State in
accordance with the Constitution. The NPC has the power to formulate and amend basic laws
governing civil and criminal matters, state organs and other matters. The Standing Committee
of the NPC is empowered to formulate and amend laws other than those required to be enacted
by the NPC and to supplement and amend any parts of laws enacted by the NPC during the
adjournment of the NPC, provided that such supplements and amendments are not in conflict
with the basic principles of such laws.
The State Council is the highest organ of the PRC administration and has the power to
formulate administrative regulations based on the Constitution and laws.
The people’s congresses of provinces, autonomous regions and municipalities and their
respective standing committees may formulate local regulations based on the specific
circumstances and actual requirements of their own respective administrative areas, provided
that such local regulations do not contravene any provision of the Constitution, laws or
administrative regulations.
The ministries and commission of the State Council, PBOC, the State Audit
Administration, organs endowed with administrative functions directly under the State Council
and the organizations prescribed by laws may, in accordance with the laws as well as the
administrative regulations, decisions and orders of the State Council and within the limits of
their power, formulate rules.
APPENDIX IV SUMMARY OF PRINCIPAL LEGAL AND
REGULATORY PROVISIONS
–I V - 1–


--- page 683 ---
The people’s congresses of cities divided into districts and their respective standing
committees may formulate local regulations in terms of urban and rural development and
management, ecological civilization development, grassroots governance, and historical and
cultural protection based on the specific circumstances and actual requirements of such cities,
which will become enforceable after being reported to and approved by the standing
committees of the people’s congresses of the relevant provinces or autonomous regions but
such local regulations shall conform with the Constitution, laws, administrative regulations,
and the relevant local regulations of the relevant provinces or autonomous regions. 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
nationality (nationalities) in the areas concerned.
The people’s governments of the provinces, autonomous regions, and municipalities
directly under the central government and the cities divided into districts or autonomous
prefectures may enact rules, in accordance with laws, administrative regulations and the local
regulations of their respective provinces, autonomous regions or municipalities.
The Constitution has supreme legal authority, and no laws, administrative regulations,
local regulations, autonomous regulations or separate regulations 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 local regulations is greater than that of the rules of the
local governments at or below the corresponding level. The authority of the rules enacted by
the people’s governments of the provinces or autonomous regions is greater than that of the
rules enacted by the people’s governments of the city divided into districts or autonomous
prefecture within the administrative areas of the provinces and the autonomous regions.
The NPC has the power to alter or annul any inappropriate laws enacted by its Standing
Committee, and to annul any autonomous regulations or separate regulations which have been
approved by its Standing Committee but which contravene the Constitution or the Legislation
Law. The Standing Committee of the NPC has the power to annul any administrative
regulations that contravene the Constitution and laws, to annul any local regulations that
contravene the Constitution, laws or administrative regulations, and to annul any autonomous
regulations or local 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 or
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 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.
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According to the Constitution and the Legislation Law, the power to interpret laws is
vested in the Standing Committee of the NPC. According to the Decision of the Standing
Committee of the NPC Regarding the Strengthening of Interpretation of Laws ( Ό਷ɛ͏˾
Ӕᙄ‘) passed on June 10, 1981, the Supreme
People’s Court of the PRC (the “ Supreme People’s Court ”) has the power to give general
interpretation on questions involving the specific application of laws and decrees in court
trials. The State Council and its ministries and commissions are also vested with the power to
give interpretation of the administrative regulations and department rules which they have
promulgated. At the regional level, the power to give interpretations of the local laws and
regulations as well as administrative rules is vested in the regional legislative and
administrative organs which promulgate such laws, regulations and rules.
PRC JUDICIAL SYSTEM
Under the Constitution and the PRC Law on the Organization of the People’s Courts
(2018 revision) (ج2018ࠈࡌ)‘), the PRC judicial system
is made up of the Supreme People’s Court, the local people’s courts and special people’s courts.
The local people’s courts are comprised of the primary people’s courts, the intermediate
people’s courts and the higher people’s courts. The higher level people’s courts supervise the
primary and intermediate people’s courts. The people’s procuratorates also have the right to
exercise legal supervision over the civil proceedings of people’s courts of the same level and
lower levels. The Supreme People’s Court is the highest judicial body in the PRC. It supervises
the judicial administration of the people’s courts at all levels.
The PRC Civil Procedure Law (‘) (the “ Civil Procedure
Law”) was adopted in 1991 and amended in 2007, 2012, 2017, 2021 and 2023, and will have
its latest version come into effect on January 1, 2024. The Civil Procedure Law sets forth the
criteria for instituting a civil action, the jurisdiction of the people’s courts, the procedures to
be followed for conducting a civil action and the procedures for enforcement of a civil
judgment or order. All parties to a civil action conducted within the PRC must comply with the
Civil Procedure Law. Generally, a civil case is initially heard by a local court of the
municipality or province in which the defendant resides. The parties to a contract may, by
express agreement, select a judicial court where civil actions may be brought, provided that the
judicial court is either the plaintiff’s or the defendant’s domicile, the place of execution or
implementation of the contract or the place of the object of the action, provided that the
provisions of this law regarding the level of jurisdiction and exclusive jurisdiction shall not be
violated.
A foreign national or enterprise generally has the same litigation rights and obligations as
a citizen or legal person of the PRC. If a foreign country’s judicial system limits the litigation
rights of PRC citizens and enterprises, the PRC courts may apply the same limitations to the
citizens and enterprises of that foreign country within the PRC.
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If any party to a civil action refuses to comply with a judgment or ruling made by a
people’s court or an award made by an arbitration panel in the PRC, the other party may apply
to the people’s court for the enforcement of the same. There are time limits of two years
imposed on the right to apply for such enforcement. If a person fails to satisfy a judgment made
by the court within the stipulated time, the court will, upon application by either party, enforce
the judgment in accordance with the law.
A party seeking to enforce a judgment or ruling of a people’s court against a party who
is not personally or whose property is not within the PRC may apply to a foreign court with
jurisdiction over the case for recognition and enforcement of the judgment or ruling. A foreign
judgment or ruling may also be recognized and enforced by the people’s court according to
PRC enforcement procedures if the PRC has entered into or acceded to an international treaty
with the relevant foreign country, which provides for such recognition and enforcement, or if
the judgment or ruling satisfies the court’s examination according to the principle of
reciprocity. However, if the people’s court finds that the recognition or enforcement of such
judgment or ruling will result in a violation of the basic legal principles of the PRC, its
sovereignty or security or against social and public interest, or if other circumstances specified
in Article 300 of the Civil Procedure Law occur, the people’s court shall, upon examination,
not to recognize or enforce such judgment or ruling.
THE PRC COMPANY LA W, OVERSEAS LISTING TRIAL MEASURES AND PRC
GUIDELINES ON AOA
A joint stock limited company which was incorporated in the PRC and seeking a listing
on the Hong Kong Stock Exchange is mainly subject to the following laws and regulations in
the PRC:
 The PRC Company Law which was promulgated by the Standing Committee of the
NPC on December 29, 1993, came into effect on July 1, 1994, revised on December
25, 1999, August 28, 2004, October 27, 2005, December 28, 2013, October 26, 2018
and December 29, 2023, respectively and the latest revision of which was
implemented on July 1, 2024;
 The Overseas Listing Trial Measures and its five guidelines which were promulgated
by the CSRC on February 17, 2023 and came into effect on March 31, 2023,
applicable to the overseas offering and listing of joint stock limited companies; and
 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, according to which the domestic
companies that directly offer and list securities on overseas markets, shall formulate
their articles of association making reference to the Guidelines for the Articles of
Association of Listed Companies (ˏ‘) (the “ PRC Guidelines
on AoA ”) promulgated by the CSRC on January 5, 2022 and latest amended on
December 15, 2023.
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Set out below is a summary of the major provisions of the PRC Company Law, Overseas
Listing Trial Measures and the PRC Guidelines on AoA.
General
A joint stock limited company refers to an enterprise legal person incorporated under the
PRC Company Law with its registered capital divided into shares of equal par value. The
liability of its shareholders is limited to the amount of shares held by them and the company
is liable to its creditors for an amount equal to the total value of its assets.
A joint stock limited company shall conduct its business in accordance with laws and
administrative regulations. It may invest in other limited liability companies and joint stock
limited companies and its liabilities with respect to such invested companies are limited to the
amount invested. Unless otherwise provided by law, the joint stock limited company may not
be a contributor that undertakes joint and several liabilities for the debts of the invested
companies.
Incorporation
A joint stock limited company may be incorporated by promotion or public subscription.
A joint stock limited company may be incorporated by a minimum of one but not more
than 200 promoters, and at least half of the promoters must have residence within the PRC. The
registered capital of a joint stock limited company shall be the total number of issued shares
registered with the company’s registration authority.
The promoters shall, before the incorporation of the company, pay the full amount of the
shares for which they have subscribed. If a promoter fails to pay for the shares he has
subscribed for, or if the actual value of the non-monetary property used as a capital
contribution is significantly less than the amount of the shares subscribed for, the other
promoters are jointly and severally liable to the extent of the shortfall in the capital
contribution.
Where the shares issued remain undersubscribed by the time of incorporation of the
company, or where the promoter fails to convene an inauguration meeting within 30 days of
the subscription monies for the shares issued being fully paid up, the subscribers may demand
that the promoters refund the subscription monies so paid together with the interest at bank
rates of a deposit for the same period. After the promoters and subscribers have paid the share
capital or delivered the non-monetary capital contribution, their share capital shall not be
withdrawn except in the case where the shares are not fully subscribed as scheduled, or where
the promoters fail to convene an inauguration meeting as scheduled, or where the inauguration
meeting resolves not to establish the company.
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The board of directors shall authorize its representatives to apply to the registrar of
companies for registration of the establishment of the company within thirty days after the
conclusion of the inauguration meeting.
The promoters must convene an inaugural meeting within 30 days after the issued shares
have been fully paid up and must give notice to all subscribers or make an announcement of
the date of the inaugural meeting 15 days before the meeting. The inaugural meeting may be
convened only with the presence of promoters or subscribers representing at least half of the
shares in the company. At the inaugural meeting, matters including the adoption of articles of
association and the election of members of the board of directors and members of the board of
supervisors of the company will be dealt with. All resolutions of the meeting require the
approval of subscribers with more than half of the voting rights present at the meeting.
Share Capital
The promoters of a company can make capital contributions in cash or in kind, which can
be valued in currency and transferable according to law such as intellectual property rights or
land use rights equity interests, creditor’s rights and other non-monetary assets which can be
appraised with monetary value and transferred lawfully; provided, however, that such assets
are not prohibited from being contributed as capital as stipulated by laws and administrative
regulations.
The issuance of shares shall be conducted in a fair and equitable manner. Each share of
the same class shall carry equal rights. Shares issued at the same time and within the same class
must be issued on the same conditions and at the same price. The same price per share shall
be paid by any share subscriber.
Under the Overseas Listing Trial Measures, if a domestic enterprise issues shares
overseas, it may raise funds and make dividend distributions in foreign currency or RMB.
Subject to specific circumstances, the Overseas Listing Trial Measures requires that, among
other things, (i) initial public offerings or listings on overseas markets of domestic companies
shall be filed with the CSRC within three working days after the relevant application is
submitted overseas, (ii) subsequent securities offerings of an issuer on the same overseas
market where it has previously offered and listed securities shall be filed with the CSRC within
three working days after the offering is completed, and (iii) subsequent securities offerings or
listings of an issuer on other overseas markets other than where it has offered and listed
securities shall be filed with the CSRC within three working days after the relevant application
is submitted overseas.
The share offering price may be equal to or greater than nominal value but shall not be
less than nominal value.
The transfer of shares by shareholders should be conducted via the legally established
stock exchange or in accordance with other methods as stipulated by the State Council.
Transfer of registered shares by a shareholder must be made by means of an endorsement or
by other means stipulated by laws or administrative regulations.
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Shares issued by a company prior to the public offer of its shares shall not be transferred
within one year from the date of listing of the shares of the company on a stock exchange.
Directors, supervisors and senior management of a company shall not transfer over 25% of the
shares held by each of them in the company each year during their term of office and shall not
transfer any share of the company held by each of them within one year after the listing date.
There is no restriction under the PRC Company Law as to the percentage of shareholding a
single shareholder may hold in a company.
Transfers of shares may not be entered in the register of shareholders within 20 days
before the date of a shareholders’ meeting or within five days before the record date set for the
purpose of distribution of dividends.
Registered Shares
Under the PRC Company Law, the shareholders may make capital contributions in cash,
or alternatively may make capital contributions with such valuated non-monetary property as
physical items, intellectual property rights, land-use rights, equity interests, creditor’s rights
and other non-monetary assets which can be appraised with monetary value and transferred
lawfully.
Under the PRC Company Law, when the company issues shares in registered form, it shall
maintain a register of shareholders, stating the following matters:
 the name and domicile of each shareholder;
 the number of shares held by each shareholder;
 the serial numbers of shares held by each shareholder; and
 the date on which each shareholder acquired the shares.
Increase of Share Capital
According to the PRC Company Law, when the joint stock limited company issues new
shares, resolutions shall be passed by a shareholders’ general meeting, approving the class and
number of the new shares, the issue price of the new shares, the commencement and end of the
new share issuance and the class and amount of new shares to be issued to existing
shareholders. When the company launches a public issuance of new shares with the approval
of the securities regulatory authorities of the State Council, it shall publish a document and
financial and accounting reports, and prepare the share subscription form. After the new share
issuance has been paid up, the change shall be registered with the company registration
authorities and an announcement shall be made.
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Reduction of Share Capital
A company may reduce its registered capital in accordance with the following procedures
prescribed by the PRC Company Law:
 it shall prepare a balance sheet and a property list;
 the reduction of registered capital shall be approved by a shareholders’ general
meeting;
 it shall inform its creditors of the reduction in capital within 10 days and publish an
announcement of the reduction in the newspaper within 30 days after the resolution
approving the reduction has been passed;
 creditors may within 30 days after receiving the notice, or within 45 days of the
public announcement if no notice has been received, require the company to pay its
debts or provide guarantees covering the debts; and
 it shall apply to the relevant administration of registration for the registration of the
reduction in registered capital.
Repurchase of Shares
According to the PRC Company Law, a joint stock limited company may not purchase its
shares other than for one of the following purposes: (i) to reduce its registered capital; (ii) to
merge with another company that holds its shares; (iii) to grant its shares for carrying out an
employee stock ownership plan or equity incentive plan; (iv) to purchase its shares from
shareholders who are against the resolution regarding the merger or division with other
companies at a shareholders’ general meeting; (v) use of shares for conversion of convertible
corporate bonds issued by a listed company; and (vi) the share buyback is necessary for a listed
company to maintain its company value and protect its shareholders’ interest.
The purchase of shares on the grounds set out in (i) and (ii) above shall require approval
by way of a resolution passed by the shareholders’ general meeting. For a company’s share
buyback under any of the circumstances stipulated in (iii), (v) or (vi) above, a resolution of the
company’s board of directors shall be made by a two-third majority of directors attending the
meeting according to the provisions of the company’s articles of association or as authorized
by the shareholders’ meeting.
Following the purchase of shares in accordance with (i), such shares shall be canceled
within 10 days from the date of purchase. The shares shall be assigned or deregistered within
six months if the share buyback is made under the circumstances stipulated in either (ii) or (iv).
The shares held in total by a company after a share buyback under any of the circumstances
stipulated in (iii), (v) or (vi) shall not exceed 10% of the company’s total issued shares and
shall be assigned or deregistered within three years.
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Listed companies making a share buyback shall perform their obligation of information
disclosure according to the provisions of the Securities Law. If the share buyback is made
under any of the circumstances stipulated in (iii), (v) or (vi) hereof, centralized trading shall
be adopted publicly.
Transfer of Shares
Shares held by shareholders may be transferred in accordance with the relevant laws and
regulations. Pursuant to the PRC Company Law, transfer of shares by shareholders shall be
carried out at a legally established securities exchange or in other ways stipulated by the State
Council. No modifications of registration in the share register caused by transfer of registered
shares shall be carried out within twenty days prior to the convening of shareholder’s general
meeting or five days prior to the base date for determination of dividend distributions.
However, where there are separate provisions by law on alternation of registration in the share
register of listed companies, those provisions shall prevail.
Shareholders
Under the PRC Company Law and the PRC Guidelines on AoA, the rights of holders of
ordinary shares of a joint stock limited company include:
 to receive dividends and other distributions in respect of the number of shares held;
 to attend or appoint a proxy to attend shareholders’ general meetings and exercise
voting rights in respect of the number of shares held;
 to supervise, make recommendations or inquire about the company’s operations;
 to transfer, donate or pledge their shares in accordance with applicable laws,
regulations and the company’s articles of association;
 to inspect the articles of association, share register, counterfoil of company
debentures, minutes of shareholders’ general meetings, board resolutions,
resolutions of the supervisory board and financial and accounting reports;
 to participate in distribution of residual properties of the company in proportion to
their shareholdings upon the termination or liquidation of the company;
 to request the company to acquire the shares of any shareholder who dissent on a
resolution regarding a merger or division at the shareholders’ meeting; and
 other rights granted by laws, administrative regulations, other regulatory documents
and the company’s articles of association.
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The obligations of a shareholder include the obligation to abide by the Company’s articles
of association, to pay the subscription moneys in respect of the shares subscribed for and in
accordance with the form of making capital contributions, to be liable for the company’s debts
and liabilities to the extent of the amount of subscription monies agreed to be paid in respect
of the shares taken up by them, to not abuse shareholders’ rights to harm the interests of the
company or other shareholders of the company, to not abuse the company’s independent status
and limited liability as a legal person to harm the interests of the company’s creditors, and any
other shareholder obligation specified in the articles of association.
Shareholders’ General Meetings
The shareholders’ general meeting is the organ of authority of the company, which
exercises its powers in accordance with the PRC Company Law.
Under the PRC Company Law, the shareholders’ general meeting exercises the following
principal powers:
 to elect or remove the directors and supervisors (other than the representative of the
employees of the company) and to decide on matters relating to the remuneration of
directors and supervisors;
 to examine and approve reports of the board of directors;
 to examine and approve reports of the board of supervisors;
 to examine and approve the company’s proposals for profit distribution plans and
loss recovery plans;
 to decide on any increase or reduction of the company’s registered capital;
 to decide on the issue of bonds by the company;
 to decide on issues such as merger, division, dissolution and liquidation of the
company and other matters;
 to amend the company’s articles of association; and
 other powers as provided for in the articles of association.
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--- page 692 ---
Shareholders’ annual general meetings are required to be held once every year. Under the
PRC Company Law, an extraordinary shareholders’ general meeting is required to be held
within two months after the occurrence of any of the following:
 the number of directors is less than the number stipulated by the law or less than two
thirds of the number specified in the articles of association;
 the aggregate losses of the company which are not recovered reach one-third of the
company’s total paid-in share capital;
 when shareholders alone or in aggregate holding 10% or more of the company’s
shares request the convening of an extraordinary general meeting;
 whenever the board of directors deems necessary;
 when the board of supervisors so requests; or
 other circumstances as provided for in the articles of associations.
Under the PRC Company Law, shareholders’ general meetings shall be convened by the
board of directors, and presided over by the chairman of the board of directors. In the event
that the chairman is incapable of performing or does not perform his duties, the meeting shall
be presided over by the vice chairman. In the event that the vice chairman is incapable of
performing or not performing his duties, a director nominated by more than half of directors
shall preside over the meeting.
Where the board of directors is incapable of performing or not performing its duties of
convening the shareholders’ general meeting, the board of supervisors shall convene and
preside over such meeting in a timely manner. In case the board of supervisors fails to convene
and preside over such meeting, shareholders alone or in aggregate holding more than 10% of
the company’s shares for 90 days consecutively may unilaterally convene and preside over such
meeting.
Under the PRC Company Law, notice of shareholders’ general meeting shall state the
time, venue and matters to be considered at the meeting and shall be given to all shareholders
20 days before the meeting. Notice of extraordinary shareholder’s general meetings shall be
given to all shareholders 15 days prior to the meeting.
Under the PRC Company Law, shareholders present at shareholders’ general meeting
have one vote for each share they hold, save that shares held by the company are not entitled
to any voting rights.
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Pursuant to the provisions of the articles of association or a resolution of the
shareholders’ general meeting, the accumulative voting system may be adopted for the election
of directors and supervisors at the shareholders’ general meeting. Under the accumulative
voting system, each share shall be entitled to vote equivalent to the number of directors or
supervisors to be elected at the shareholders’ general meeting and shareholders may
consolidate their voting rights when casting a vote.
Pursuant to the PRC Company Law and the PRC Guidelines on AoA, resolutions of the
shareholders’ general meeting shall be adopted by more than half of the voting rights held by
the shareholders present at the meeting. However, resolutions of the shareholders’ general
meeting regarding the following matters shall be adopted by more than two-thirds of the voting
rights held by the shareholders present at the meeting: (i) amendments to the articles of
association; (ii) the increase or decrease of registered capital; (iii) the merger, division,
dissolution, liquidation or change in the form of the company; and (vi) any other matters
specified by laws, administrative regulations or the Articles of Association and other matters
considered by the shareholders’ general meeting, by way of an ordinary resolution, to be of a
nature which may have a material impact on the company and should be adopted by a special
resolution.
Under the PRC Company Law, meeting minutes shall be prepared in respect of decisions
on matters discussed at the shareholders’ general meeting. The chairman of the meeting and
directors attending the meeting shall sign to endorse such minutes. The minutes shall be kept
together with the shareholders’ attendance register and the proxy forms.
Board
Under the PRC Company Law, a joint stock limited company shall have a board of
directors, which shall consist of more than 3 members. Members of the board of directors may
include representatives of the employees of the company, who shall be democratically elected
by the company’s staff at the staff representative assembly, general staff meeting or otherwise.
The term of a director shall be stipulated in the articles of association, but no term of office
shall last for more than three years. Directors may serve consecutive terms if re-elected. A
director shall continue to perform his duties in accordance with the laws, administrative
regulations and articles of association until a duly re-elected director takes office, if re-election
is not conducted in a timely manner upon the expiry of his term of office, or if the resignation
of directors results in the number of directors being less than the quorum.
APPENDIX IV SUMMARY OF PRINCIPAL LEGAL AND
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Under the PRC Company Law, the board of directors mainly exercises the following
powers:
 to convene the shareholders’ general meetings and report on its work to the
shareholders’ general meetings;
 to implement the resolutions passed in shareholders’ general meetings;
 to decide on the company’s business plans and investment proposals;
 to formulate the company’s proposed annual financial budget and final accounts;
 to formulate the company’s profit distribution proposals and loss recovery proposal;
 to formulate proposals for the increase or reduction of the company’s registered
capital and the issuance of corporate bonds;
 to prepare plans for the merger, division, dissolution and change in the form of the
company;
 to formulate the company’s basic management system;
 to appoint or dismiss the company’s managers and decide on his/her remuneration
and, based on the manager’s recommendation, to appoint or dismiss any deputy
manager and financial officer of the company and to decide on their remunerations;
 to formulate the company’s basic management system; and
 to exercise any other power under the articles of association.
Board Meetings
Under the PRC Company Law, meetings of the board of directors of a joint stock limited
company shall be convened at least twice a year. Notice of meeting shall be given to all
directors and supervisors 10 days before the meeting. Interim board meetings may be proposed
to be convened by shareholders representing more than 10% of voting rights, more than
one-third of the directors or the board of supervisors. The chairman shall convene and preside
over such meeting within 10 days after receiving such proposal. Meetings of the board of
directors shall be held only if half or more of the directors are present. Resolutions of the board
of directors shall be passed by more than half of all directors. Each director shall have one vote
for resolutions to be approved by the board of directors. Directors shall attend board meetings
in person. If a director is unable to attend a board meeting, he may appoint another director by
a written power of attorney specifying the scope of the authorization to attend the meeting on
his behalf.
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--- page 695 ---
If a resolution of the board of directors violates the laws, administrative regulations or the
articles of association, and as a result of which the company sustains serious losses, the
directors participating in the resolution are liable to compensate the company. However, if it
can be proved that a director expressly objected to the resolution when the resolution was voted
on, and that such objection was recorded in the minutes of the meeting, such director may be
released from that liability.
Chairman of the Board
Under the PRC Company Law, the board of directors shall appoint a chairman and may
appoint a vice chairman. The chairman and the vice chairman are elected with approval of more
than half of all the directors. The chairman shall convene and preside over board meetings and
examine the implementation of board resolutions. The vice chairman shall assist the work of
the chairman. In the event that the chairman is incapable of performing or not performing his
duties, the duties shall be performed by the vice chairman. In the event that the vice chairman
is incapable of performing or not performing his duties, a director nominated by more than half
of the directors shall perform his duties.
Qualification of Directors
The PRC Company Law provides that the following persons may not serve as a director:
 a person who is unable or has limited ability to undertake any civil liabilities;
 a person who has been convicted of an offense of bribery, corruption, embezzlement
or misappropriation of property, or the destruction of socialist market economy
order; or who has been deprived of his political rights due to his crimes, in each case
where less than five years have elapsed since the date of completion of the sentence
or where less than two years have lapsed from the date of the completion of the
probationary period if having been given probation;
 a person who has been a former director, factory manager or manager of a company
or an enterprise that has entered into insolvent liquidation and who was personally
liable for the insolvency of such company or enterprise, where less than three years
have elapsed since the date of the completion of the bankruptcy and liquidation of
the company or enterprise;
 a person who has been a legal representative of a company or an enterprise that has
had its business license revoked due to violations of the law and has been ordered
to close down by law and the person was personally responsible, where less than
three years have elapsed since the date of such revocation; or
 a person who has been classified by a people’s court as a dishonest judgment debtor
as a result of failing to settle a large amount of overdue debts.
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Board of Supervisors
The directors and senior management may not act concurrently as supervisors.
The board of supervisors shall appoint a chairman and may appoint a vice chairman. The
chairman and the vice chairman of the board of supervisors are elected with approval of more
than half of all the supervisors. The chairman of the board of supervisors shall convene and
preside over the meetings of the board of supervisors. In the event that the chairman of the
board of supervisors is incapable of performing or not performing his duties, the vice chairman
of the board of supervisors shall convene and preside over the meetings of the board of
supervisors. In the event that the vice chairman of the board of supervisors is incapable of
performing or not performing his duties, a supervisor nominated by more than half of the
supervisors shall convene and preside over the meetings of the board of supervisors.
Each term of office of a supervisor is three years and he or she may serve consecutive
terms if re-elected. A supervisor shall continue to perform his duties in accordance with the
laws, administrative regulations and articles of association until a duly re-elected supervisor
takes office, if re-election is not conducted in a timely manner upon the expiry of his term of
office, or if the resignation of supervisors results in the number of supervisors being less than
the quorum.
The board of supervisors of a company shall hold at least two meetings each year.
The board of supervisors exercises the following powers:
 to review the company’s financial position;
 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 the resolutions of
shareholders’ meeting;
 when the acts of directors and senior management are harmful to the company’s
interests, to require correction of those acts;
 to propose the convening of extraordinary shareholders’ general meetings and to
convene and preside over shareholders’ general meetings when the board of
directors fails to perform the duty of convening and presiding over shareholders’
general meeting under this law;
 to initiate proposals for resolutions to shareholders’ general meeting;
 to initiate proceedings against directors and senior management;
APPENDIX IV SUMMARY OF PRINCIPAL LEGAL AND
REGULATORY PROVISIONS
– IV-15 –


--- page 697 ---
 other powers specified in the articles of association; and
 Supervisors may attend board meetings and make enquiries or proposals in respect
of board resolutions. The board of supervisors may initiate investigations into any
irregularities identified in the operation of the company and, where necessary, may
engage an accounting firm to assist their work at the company’s expense.
Manager and Senior Management
Under the PRC Company Law, a company shall have a manager who shall be appointed
or removed by the board of directors. The manager shall report to the board of directors and
may exercise powers authorized by the Board.
The manager shall comply with other provisions of the articles of association concerning
his/her powers. The manager shall attend board meetings.
Duties of Directors, Supervisors and Senior Management
Directors, supervisors and senior management of the company are required under the PRC
Company Law to comply with the relevant laws, regulations and the articles of association, and
have fiduciary and diligent duties to the company. Directors, supervisors and senior
management are prohibited from abusing their powers to accept bribes or other unlawful
income and from misappropriating of the company’s properties. Directors and senior
management are prohibited from:
 misappropriation of the company’s capital;
 depositing the company’s capital into accounts under his own name or the name of
other individuals;
 using their position to accept bribe or other illegal income;
 accept for their own benefit commissions from a third party for transactions
conducted with the company;
 unauthorized divulgence of confidential business information of the company; or
 other acts in violation of their duty of loyalty to the company.
Under the PRC Company Law, a joint stock limited company may, in accordance with the
provisions of its articles of association, establish an audit committee under the board of
directors comprising directors to exercise the powers and functions of the supervisory board,
in place of a supervisory board or supervisors. Otherwise, a joint stock limited company shall
have a supervisory board composed of not less than three members. The supervisory board
APPENDIX IV SUMMARY OF PRINCIPAL LEGAL AND
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--- page 698 ---
shall consist of representatives of the shareholders and an appropriate proportion of
representatives of the company’s staff, among which the proportion of representatives of the
company’s staff shall not be less than one-third, and the actual proportion shall be determined
in the articles of association. Representatives of the company’s staff at the supervisory board
shall be democratically elected by the company’s staff at the staff representative assembly,
general staff meeting or other manners of democratic election.
Each term of office of a supervisor is three years and he/she may serve consecutive terms
if re-elected. A supervisor shall continue to perform his/her duties as a supervisor in accordance
with the laws, administrative regulations and the articles of association until a duly re-elected
supervisor takes office, if re-election is not conducted in a timely manner upon the expiry of
his/her term of office or if the resignation of supervisor results in the number of supervisors
being less than the quorum.
Finance and Accounting
Under the PRC Company Law, a company shall establish financial and accounting
systems according to laws, administrative regulations and the regulations of the financial
department of the State Council and shall at the end of each financial year prepare a financial
and accounting report which shall be audited by an accounting firm as required by law. The
company’s financial and accounting report shall be prepared in accordance with provisions of
the laws, administrative regulations and the regulations of the financial department of the State
Council.
Pursuant to the PRC Company Law, the company shall deliver its financial and
accounting reports to all shareholders within the time limit stipulated in the articles of
association and make its financial and accounting reports available at the company for
inspection by the shareholders at least 20 days before the convening of an annual general
meeting of shareholders. It must also publish its financial and accounting reports.
When distributing each year’s after-tax profits, it shall set aside 10% of its after-tax
profits into a statutory common reserve fund (except where the fund has reached 50% of its
registered capital).
If its statutory common reserve fund is not sufficient to make up losses of the previous
year, profits of the current year shall be applied to make up losses before allocation is made
to the statutory common reserve fund pursuant to the above provisions.
After allocation of the statutory common reserve fund from after-tax profits, it may, upon
a resolution passed at the shareholders’ general meeting, allocate discretionary common
reserve fund from after-tax profits.
APPENDIX IV SUMMARY OF PRINCIPAL LEGAL AND
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--- page 699 ---
The remaining after-tax profits after making up losses and allocation of common reserve
fund shall be distributed in proportion to the number of shares held by the shareholders, unless
otherwise stipulated in the articles of association.
Shares held by the Company shall not be entitled to any distribution of profit.
The premium received through issuance of shares at prices above par value, proceeds
from the issuance of no-par shares not included in the registered capital and other incomes
required by the financial department of the State Council to be allocated to the capital reserve
fund shall be allocated to the company’s capital reserve fund.
When a company’s common reserve fund is used to make up for its losses, it should first
be used as a discretionary capital reserve fund and a statutory capital reserve fund; if it is still
unable to make up for the losses, it may be used as a capital reserve in accordance with the
regulations. Upon the conversion of statutory common reserve fund into capital, the balance of
the statutory common reserve fund shall not be less than 25% of the registered capital of the
company before such conversion.
The Company shall have no other accounting books except the statutory accounting
books. Its assets shall not be deposited in any accounts opened in the name of any individual.
Appointment and Retirement of Accounting Firms
Pursuant to the PRC Company Law, the appointment or dismissal of accounting firms
responsible for the auditing of the company shall be determined by shareholders’ general
meeting or board of directors in accordance with provisions of articles of association. The
accounting firm should be allowed to make representations when the shareholders’ general
meeting or board of directors conducts a vote on the dismissal of the accounting firm. The
company should provide true and complete accounting evidences, books, financial and
accounting reports and other accounting data to the accounting firm it employs without any
refusal, withholding and misrepresentation.
Distribution of Profits
According to the PRC Company Law, a company shall not distribute profits before losses
are covered and the statutory common reserve is drawn.
Amendments to Articles of Association
Any amendments to the company’s articles of association must be made in accordance
with the procedures set out in the company’s articles of association. In relation to matters
involving the company’s registration, its registration with the authority must also be changed.
APPENDIX IV SUMMARY OF PRINCIPAL LEGAL AND
REGULATORY PROVISIONS
– IV-18 –


--- page 700 ---
Dissolution and Liquidation
According to the PRC Company Law, a company shall be dissolved by reason of the
following: (i) the term of its operations set down in the articles of association has expired or
other events of dissolution specified in the articles of association have occurred; (ii) the
shareholders’ general meeting have resolved to dissolve the company; (iii) the company is
dissolved by reason of merger or division; (iv) the business license is revoked; the company
is ordered to close down or be dissolved; or (v) the company is dissolved by the people’s court
in response to the request of shareholders holding shares that represent more than 10% of the
voting rights of all its shareholders, on the grounds that the company suffers significant
hardship in its operation and management that cannot be resolved through other means, and the
ongoing existence of the company would bring significant losses for shareholders. In the event
that a company is dissolved on the aforesaid reasons, the company shall make public the
reasons for dissolution through the National Enterprise Credit Information Publicity System
within ten days.
In the event of scenarios (i) and (ii) set out in the preceding paragraph and has not yet
distributed its property to its shareholders, the company may carry on its existence by
amending its articles of association or by resolution of the shareholders’ meeting. The
amendment to the articles of association or the resolution of the shareholders’ meeting in
accordance with the provisions described above shall require the approval of more than
two-thirds of voting rights of shareholders attending a shareholders’ meeting.
Where the company is dissolved in the circumstances described in subparagraphs (i), (ii),
(iv), or (v) above, a liquidation group shall be established and the liquidation process shall
commence within 15 days after the occurrence of an event of dissolution.
The members of the company’s liquidation group shall be composed of its directors or the
personnel appointed by the shareholders’ general meeting. If a liquidation group is not
established within the stipulated period, creditors may apply to the people’s court and request
the court to appoint relevant personnel to form the liquidation group. The people’s court should
accept such application and form a liquidation group to conduct liquidation in a timely manner.
The liquidation group shall exercise the following powers during the liquidation period:
 to handle the company’s assets and to prepare a balance sheet and an inventory of
the assets;
 to notify creditors through notice or public announcement;
 to deal with the company’s outstanding businesses related to liquidation;
 to pay any tax overdue as well as tax amounts arising from the process of
liquidation;
APPENDIX IV SUMMARY OF PRINCIPAL LEGAL AND
REGULATORY PROVISIONS
– IV-19 –


--- page 701 ---
 to claim credits and pay off debts;
 to handle the company’s remaining assets after its debts have been paid off; and
 to represent the company in civil lawsuits.
The liquidation group shall notify the company’s creditors within 10 days after its
establishment and issue public notices in newspapers within 60 days. A creditor shall lodge his
claim with the liquidation group within 30 days after receiving notification, or within 45 days
of the public notice if he did not receive any notification. A creditor shall state all matters
relevant to his creditor rights in making his claim and furnish evidence. The liquidation group
shall register such creditor rights. The liquidation group shall not make any debt settlement to
creditors during the period of claim.
Upon liquidation of properties and the preparation of the balance sheet and inventory of
assets, the liquidation group shall draw up a liquidation plan to be submitted to the
shareholders’ general meeting or people’s court for confirmation.
The company’s remaining assets after payment of liquidation expenses, wages, social
insurance expenses and statutory compensation, outstanding taxes and debts shall be
distributed to shareholders according to their shareholding proportion. It shall continue to exist
during the liquidation period, although it can only engage in any operating activities that are
related to the liquidation. The company’s properties shall not be distributed to the shareholders
before repayments are made in accordance to the foregoing provisions.
Upon liquidation of the company’s properties and the preparation of the balance sheet and
inventory of assets, if the liquidation group becomes aware that the company does not have
sufficient assets to meet its liabilities, it must apply to the people’s court for a declaration for
bankruptcy.
Following such declaration, the liquidation group shall hand over all matters relating to
the liquidation to the people’s court.
Upon completion of the liquidation, the liquidation group shall submit a liquidation report
to the shareholders’ general meeting or the people’s court for verification. Thereafter, the report
shall be submitted to the registration authority of the company in order to cancel the company’s
registration, and a public notice of its termination shall be issued. Members of the liquidation
group are required to discharge their duties honestly and in compliance with the relevant laws.
Members of the liquidation group shall be prohibited from abusing their powers to accept
bribes or other unlawful income and from misappropriating the company’s properties.
A member of the liquidation group is liable to indemnify the company and its creditors
in respect of any loss arising from his intentional or gross negligence.
APPENDIX IV SUMMARY OF PRINCIPAL LEGAL AND
REGULATORY PROVISIONS
– IV-20 –


--- page 702 ---
Overseas Listing
Subject to specific circumstances, the Overseas Listing Trial Measures and its guidelines
require that, among other things, (i) initial public offerings or listings on overseas markets of
domestic companies shall be filed with the CSRC within three working days after the relevant
application is submitted overseas, (ii) subsequent securities offerings of an issuer on the same
overseas market where it has previously offered and listed securities shall be filed with the
CSRC within three working days after the offering is completed, (iii) subsequent securities
offerings or listings of an issuer on other overseas markets other than where it has offered and
listed securities shall be filed with the CSRC within three working days after the relevant
application is submitted overseas; and (iv) if the overseas offering or listing has not been
completed within one year upon the completion of the filing with CSRC, the filing documents
shall be updated if such overseas offering or listing is going to further proceed.
Loss of Share Certificates
If a registered share certificate is lost, stolen or destroyed, the relevant shareholder may
apply, in accordance with the relevant provisions set out in the Civil Procedure Law, to a
people’s court to declare such certificate invalid. After the people’s court declares the
invalidity of such certificate, the shareholder may apply to the company for a replacement
share certificate.
Termination of Listing
The PRC Securities Law (2019 revision) (‘(2019ࠈࡌ))
“(PRC Securities Law ”) stipulates that the trading of shares of a company of a stock exchange
may be terminated if so decided by the stock exchange. Where the stock exchange decides on
delisting of securities, it shall promptly announce and file records with the securities regulatory
authority of the State Council.
The Overseas Listing Trial Measures requires that, upon the occurrence of voluntary or
mandatory delisting after an issuer has offered and listed securities on an overseas market, the
issuer shall submit a report to CSRC within three working days after the occurrence and public
announcement of such event.
Merger and Demerger
Companies may merge through merger by absorption or through the establishment of a
newly merged entity. If it merges by absorption, the company which is absorbed shall be
dissolved. If it merges by forming a new corporation, both companies will be dissolved.
APPENDIX IV SUMMARY OF PRINCIPAL LEGAL AND
REGULATORY PROVISIONS
– IV-21 –


--- page 703 ---
SECURITIES LA W AND REGULATIONS
CSRC, a ministerial-level public institution directly under the State Council, performs a
unified regulatory function, according to the relevant laws and regulations, and with the
authority by the State Council, over the securities and futures market of China, maintains an
orderly securities and futures market order, and ensure a legal operation of the capital market.
The PRC Securities Law took effect on July 1, 1999 and was revised on August 28, 2004,
October 27, 2005, June 29, 2013, August 31, 2014 and December 28, 2019, respectively. This
is the first national securities law in the PRC, which is divided into 14 chapters and 226 articles
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. The PRC Securities Law comprehensively
regulates activities in the PRC securities market. Article 224 of the PRC Securities Law
provides that domestic enterprises shall comply with the relevant provisions of the State
Council to list its shares outside the PRC. Currently, the issue and trading of foreign issued
shares (including H shares) are mainly governed by the rules and regulations promulgated by
the State Council and the CSRC.
ARBITRATION AND ENFORCEMENT OF ARBITRAL A W ARDS
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.
A claimant may elect for arbitration to be carried out at either the China International
Economic and Trade Arbitration Commission (ึ)( “CIETAC”) in
accordance with its rules or the Hong Kong International Arbitration center (“ HKIAC ”) in
accordance with its Securities Arbitration Rules (the “ Securities Arbitration Rules ”). Once a
claimant refers a dispute or claim to arbitration, the other party shall submit to the arbitral body
elected by the claimant. If the claimant elects for arbitration to be carried out at the HKIAC,
any party to the dispute or claim may apply for a hearing to take place in Shenzhen in
accordance with the Securities Arbitration Rules. In accordance with the Arbitration
Regulations of CIETAC (‘) which was latest
amended on September 2, 2023 and implemented on January 1, 2024, CIETAC shall deal with
economic and trading disputes over contractual or non-contractual transactions, based on an
agreement of the parties, including disputes involving Hong Kong based on the agreement of
the parties.
APPENDIX IV SUMMARY OF PRINCIPAL LEGAL AND
REGULATORY PROVISIONS
– IV-22 –


--- page 704 ---
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, shall 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 York Convention provides that all arbitral
awards made in a state which is a party to the New York Convention shall be recognized and
enforced by all other parties to the New York 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 York 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 Arrangement on Mutual Enforcement of Arbitral Awards between Mainland China and
Hong Kong (τર‘), which became
effective on February 1, 2000. In accordance with this arrangement, and its supplemental
arrangements, upon satisfying certain requirements, 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.
Judicial judgment and its enforcement
According to the Arrangement on Mutual Recognition and Enforcement of Judgments in
Civil and Commercial Matters by the Courts of the Mainland China and of the Hong Kong
Special Administrative Region Pursuant to Agreed Jurisdiction by Parties Concerned ( ௰৷
΁кӔ
τર‘) (the “Arrangement”) promulgated by the Supreme People’s Court on July 3, 2008
and implemented on August 1, 2008, in the case of final judgment, defined with payment
amount and enforcement power, made between the court of China and the court of the Hong
Kong Special Administrative Region in a civil and commercial case with written jurisdiction
APPENDIX IV SUMMARY OF PRINCIPAL LEGAL AND
REGULATORY PROVISIONS
– IV-23 –


--- page 705 ---
agreement, any party concerned may apply to the People’s Court of China or the court of the
Hong Kong Special Administrative Region for recognition and enforcement based on this
arrangement. “Written jurisdiction agreement” refers to a written agreement defining the
exclusive jurisdiction of either the People’s Court of China or the court of the Hong Kong
Special Administrative Region in order to resolve dispute with particular legal relation
occurred or likely to occur by the party concerned. Therefore, the party concerned may apply
to the Court of China or the court of the Hong Kong Special Administrative Region to
recognize and enforce the final judgment made in China or Hong Kong that meet certain
conditions of the aforementioned regulations.
On January 18, 2019, a further arrangement was reached between Hong Kong Special
Administrative Region and the Supreme People’s Court, Arrangements for Reciprocal
Recognition and Enforcement of Judgments in Civil and Commercial Cases between Courts of
the Mainland and Hong Kong Special Administrative Region (ج
τર‘), which will become effective and replace the
Arrangement on January 29, 2024, privileged that “Written Agreement on Jurisdiction” reached
under the Arrangement before January 29, 2024 will still apply. This new arrangement further
stipulates the scope and content of judgments applicable to the reciprocal recognition and
enforcement and corresponding procedures and methods for applying, the circumstances
concerning review, non-recognition and enforcement upon the jurisdiction of the court of first
instance and the means of remedy. Non-monetary judgments and judgments on some
intellectual property cases are included in the reciprocal recognition and enforcement of in
accordance with this new arrangement.
Shareholding and Transfer of Shares
Under PRC law, our Domestic Shares, which are denominated and subscribed for in
Renminbi, may only be subscribed for and traded by the government or government authorized
departments, PRC legal persons, natural persons, qualified foreign institutional investors, or
eligible foreign strategic investors. Overseas listed shares, which are denominated in Renminbi
and subscribed for in a foreign currency other than Renminbi, may only be subscribed for, and
traded by investors from Hong Kong, Macau or Taiwan or any country and territory outside the
PRC, or qualified domestic institutional investors. However, qualified institutional investors
and individual investors may trade Southbound Hong Kong trading Link and Northbound
Shanghai trading Link (or the Northbound Shenzhen trading Link) shares via participating in
Shanghai-Hong Kong Stock Connect and Shenzhen-Hong Kong Stock Connect.
When the application for “full circulation” has been approved by the CSRC, the domestic
unlisted shares of the H share listed company might be listed and circulated on the Hong Kong
Stock Exchange.
APPENDIX IV SUMMARY OF PRINCIPAL LEGAL AND
REGULATORY PROVISIONS
– IV-24 –


--- page 706 ---
Under the PRC Company Law, a promoter of a joint stock limited company is not allowed
to transfer the shares it holds for a period of one year after the date of establishment of the
company. Shares issued prior to the public offering cannot be transferred within one year from
the listing date of the shares on a stock exchange. Shares transferred each year by the directors,
supervisors and senior management of a joint stock limited company during their respective
term of office shall not exceed 25% of the total shares they held in the company, and the shares
they held in the company cannot neither be transferred within one year from the listing date
of the shares nor within half a year after such person has left office. The articles of association
may set other restrictive requirements on the transfer of the company’s shares held by its
directors, supervisors and senior management.
Derivative Action by Minority Shareholders
The PRC Company Law provides shareholders of a joint stock limited company with the
right so that in the event where the directors and senior management violate their obligations
and cause damages to a company, the shareholders individually or jointly holding more than
1% of the shares in the company for more than 180 consecutive days may request in writing
the supervisory board to initiate proceedings in the people’s court. In the event that the
supervisory board violates their obligations and cause damages to company, the above said
shareholders may send written request to the board of directors to initiate proceedings in the
people’s court. Upon receipt of aforesaid written request from the shareholders, if the
supervisory board or the board of directors refuses to initiate such proceedings, or has not
initiated proceedings within 30 days from the date of receipt of the request, or if under urgent
situations, failure of initiating immediate proceeding may cause irremediable damages to the
company, the above said shareholders shall, for the benefit of the company’s interests, have the
right to initiate proceedings directly to the people’s court in their own name.
Dividends
The Company has the power in certain circumstances to withhold, and pay to the relevant
tax authorities, any tax payable under PRC laws on any dividends or other distributions payable
to a shareholder. Under PRC laws, the relevant limitation period is three years. The company
must not exercise its powers to forfeit any unclaimed dividend in respect of shares until after
the expiry of such limitation of actions.
APPENDIX IV SUMMARY OF PRINCIPAL LEGAL AND
REGULATORY PROVISIONS
– IV-25 –


--- page 707 ---
This appendix summarizes the principal provisions of the Company’s Articles of
Association approved on October 8, 2024, which shall take effect on the date of the H-Shares
being listed on the Stock Exchange. As the primary purpose of this appendix is to provide
potential investors with an overview of the Company’s Articles of Association, it does not
necessarily contain all of the information that is important to potential investors.
1 SHARES AND REGISTERED CAPITAL
Shares of the Company adopt the form of share certificates.
The issue of the shares of the Company shall be based on the principle of fairness and
impartiality, and shall rank pari passu in all respects with the shares of the same class. Shares
of the same class issued at the same time shall be issued under the same condition and at the
same price; the same price shall be paid for each of the shares subscribed for by any entity or
individual.
The Company shall have ordinary shares at all times. The Company may issue other
classes of shares if necessary, upon approval by the examining and approving departments.
After completing the filing procedures with the securities regulatory authorities of the
State Council and the consent of The Stock Exchange of Hong Kong Limited (the “SEHK”),
the Company may issue shares to qualified domestic investors and overseas investors. Upon the
approval of the plan for issuing H-shares and unlisted shares by the securities regulatory
authority of the State Council, the Board of Directors of the Company (the “Board”) may
arrange for the implementation of such plan by means of separate issues. The Company’s plan
for separate issues of H-shares and domestic unlisted shares in accordance with the preceding
paragraph may be implemented separately within 15 months from the date of filing with the
securities regulatory authority of the State Council. If the Company issues H-shares and
unlisted shares separately within the total amount of shares specified in the issue plan, such
shares shall be fully issued for at their respective prices; if the shares cannot be fully issued
for once due to special circumstances, the shares may, subject to the approval of the securities
regulatory authority of the State Council, be issued in several stages.
2 INCREASE AND DECREASE OF CAPITAL AND REPURCHASE OF SHARES
In accordance with the laws and regulations, the Company may, based on its operating
and development needs and the resolution of the general meeting, increase its capital by the
following methods:
(I) by public offering of shares;
(II) by non-public offering of shares;
(III) by placing or allotting new shares to existing shareholders;
APPENDIX V SUMMARY OF ARTICLES OF ASSOCIATION
–V - 1–


--- page 708 ---
(IV) by capitalizing its capital reserve;
(V) by any other methods which is permitted by the laws and administrative regulations.
The Company’s increase in capital by issuing new shares shall be handled in accordance
with the procedures provided for in the relevant laws, administrative regulations and Hong
Kong Listing Rules after having been approved in accordance with the Articles of Association.
The Company may reduce its registered capital. The Company shall reduce its registered
capital in accordance with the PRC Company Law, Hong Kong Listing Rules and other relevant
provisions and the procedures stipulated in the Articles of Association. In case of decrease of
registered capital of the Company, a balance sheet and assets list shall be formulated. The
Company shall notify its creditors within 10 days from the date of passing of the resolution for
the decrease of registered capital and shall publish a notice in a newspaper or National
Enterprise Credit Information Publicity System within 30 days thereof. The creditors shall,
within 30 days since the date of receiving the notice or within 45 days since the date of the first
public announcement for those who have not received a written notice, be entitled to require
the Company to pay off its debts in full or to provide a corresponding guarantee for repayment.
Under the following circumstances, the Company may repurchase its shares in accordance
with the provisions of the relevant laws, administrative regulations, departmental rules, Hong
Kong Listing Rules and Articles of Association:
(I) to reduce the registered capital of the Company;
(II) to merge with other companies that hold the shares of the Company;
(III) to use the shares for Employee Stock Ownership Plan or as equity incentive;
(IV) the shareholders disagreeing with the merger or separation resolution made by the
general meeting ask the Company to acquire their shares;
(V) to use the shares in the conversion of the convertible corporate bonds issued by the
Company;
(VI) to safeguard the company value and the shareholders’ rights as deems necessary;
(VII) any other circumstances required by the laws, administrative regulations,
departmental rules, regulation rules of the place where the Company’s shares are
listed, etc..
Except for the above situations, the Company shall not engage in the activity of
transaction related to its shares.
APPENDIX V SUMMARY OF ARTICLES OF ASSOCIATION
–V - 2–


--- page 709 ---
The Company may proceed to repurchase its shares in one of the following manners:
(I) by issuing repurchase offer to all the shareholders based on the same proportion;
(II) through public trading on stock exchange;
(III) through agreement outside the stock exchange;
(IV) other methods permitted by the law, administrative statutes and regulatory
authorities.
The repurchase of shares of the Company through agreement outside the stock exchange
shall be approved in advance by the general meeting in accordance with the provisions of the
Articles of Association. With prior approval by shareholders at general meeting obtained in the
same manner, the Company may rescind or amend contracts concluded in the manner set forth
above or waive any of its rights under such contracts. The contract to repurchase shares
referred to above includes but not limited to such agreement for the commitment to fulfill the
obligations of share repurchase and acquisition of the rights to repurchase shares. The
Company shall not assign a contract for the repurchase of its own shares or any of its rights
thereunder. Where the Company has the right to purchase redeemable share, the purchase price
shall be limited to a maximum price if the purchases are not made through the market or by
tender; if purchases are by tender, tenders shall be made available to all shareholders on the
same terms.
3 SHARE TRANSFER
Unless otherwise specified in the laws, administrative regulations and by the securities
regulatory authorities in the place where the shares of the Company, the paid up shares of the
Company can be freely transferred in accordance with the laws and are not subject to any lien.
The shares of the Company may be donated, inherited and pledged in accordance with the
relevant laws, administrative regulations and the Articles of Association. The transfer of shares
shall be registered with the local stock registration institution entrusted by the Company.
4 FINANCIAL ASSISTANCE FOR THE PURCHASE OF COMPANY SHARES
As stipulated by Article 33 of the Articles of Association, the Company or its subsidiaries
(including affiliates of the Company) shall not at any time by way of gift, advance, guarantee,
compensation or loans to provide any financial assistance to purchasers or potential purchasers
of the Company’s shares in any way. The aforesaid purchasers include persons directly or
indirectly undertaking obligations because of the purchase of the Company’s shares. The
Company or its subsidiaries (including affiliates of the Company) shall not at any time or in
any form provide any financial assistance to the aforesaid obligors for the purpose of reducing
or discharging their obligations.
APPENDIX V SUMMARY OF ARTICLES OF ASSOCIATION
–V - 3–


--- page 710 ---
The acts listed below are not prohibited by Article 33 of the Articles of Association as
forementioned, subject to any prohibitions by the relevant laws, administrative regulations,
departmental rules and normative documents:
(I) the provision of financial assistance by the Company in good faith for the benefit of
the Company and the main purpose of the financial assistance is not to purchase
shares in the Company, or the financial assistance is an incidental part of a master
plan of the Company;
(II) the lawful distribution of the Company’s assets as dividends;
(III) the distribution of dividends in the form of shares;
(IV) a decrease of registered capital, a repurchase of shares, capital restructuring, etc. in
accordance with the Articles of Association;
(V) the provision of loans by the Company within its scope of business and in the
ordinary course of its business (provided that the net assets of the Company are not
thereby reduced or that, to the extent that the assets are thereby reduced, the
financial assistance was paid out of the Company’s distributable profits);
(VI) contributions made by the Company to the ESOP (provided that the net assets of the
Company are not thereby reduced or that, to the extent that the assets are thereby
reduced, the financial assistance was paid out of the Company’s distributable
profits).
5 SHARE CERTIFICATES AND REGISTER OF SHAREHOLDERS
The share certificates of the Company shall be in registered form. The share certificates
of the Company shall contain the particulars as required by the PRC Company Law, and any
other items as required by any stock exchange on which the shares of the Company are listed.
The Company shall keep a register of members containing the following particulars or
register shareholders pursuant to the provisions of the laws, administrative regulations,
departmental rules and the Hong Kong Listing Rules:
(I) the name (title), address (domicile) of each shareholder;
(II) the class and number of shares held by each shareholder;
(III) the serial numbers of the shares held by each shareholder if the share issued in
written paper; and
(IV) the date on which each shareholder was registered as a shareholder.
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--- page 711 ---
The register of shareholders shall be sufficient evidence of the shareholders’ shareholding
in Company, unless there is evidence to the contrary.
Transfer of shares shall be recorded in the register of members. The Company may, in
accordance with the understanding and agreement reached between the securities regulatory
agency under the State Council and the overseas securities regulatory agency, keep the register
of shareholders of overseas listed foreign shares outside China and appoint overseas agencies
to maintain such register. The original register of shareholders of overseas listed foreign shares
issued in Hong Kong shall be maintained at Hong Kong and must be accessible to shareholders.
Copies of the register of shareholders for overseas listed foreign shares shall be kept at
the Company’s legal address. Appointed overseas agencies shall from time to time maintain the
consistency of the original register of shareholders for overseas listed foreign shares and the
copies thereof. In case of any inconsistency between the original and copies of the register of
shareholders of overseas listed foreign shares, the original shall prevail.
6 SHAREHOLDERS
The shareholders of the Company are those who lawfully hold the shares of the Company
and have their names registered in the register of shareholders. The shareholders shall enjoy
the rights and assume the obligations according to the class and amount of the shares they hold;
the shareholders holding the same class of shares shall enjoy the same rights and assume the
same obligations.
Shareholders of ordinary shares of the Company shall enjoy the following rights:
(I) to receive dividend and other forms of distribution of interest in proportion to their
respective shareholdings;
(II) to legally request, convene, preside over, attend or dispatch shareholder’s agent to
attend the general meeting and exercise the corresponding speaking and voting
rights;
(III) to supervise the business operations of the Company and to make suggestions or
inquiries;
(IV) to transfer, bestow or pledge the shares they hold according to the laws,
administrative regulations and the Articles of Association;
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--- page 712 ---
(V) to access relevant information according to the provisions of the Articles of
Association, including:
i. the right to review and duplicate the Articles of Association of the Company
and the articles of association of wholly-owned subsidiaries of the Company
upon payment of a fee covering the cost;
ii. the rights to inspect and obtain photocopies of the following information upon
payment of a fee covering the cost:
(1) all parts of the register of members (the list of all shareholders at the close
of share registration on the record date of the Company’s latest periodic
report);
(2) personal particulars of the directors, supervisors, CEO and other senior
management personnel of the Company, including:
(a) current and previous names and aliases;
(b) main address (domicile);
(c) nationality;
(d) full-time and all other part-time jobs and titles;
(e) identity documents and numbers.
(3) status of the share capital of the Company;
(4) reports showing the aggregate par value, number of shares, and maximum
and minimum prices paid in respect of each class of shares repurchased
by the Company since the last fiscal year, as well as all the expenses paid
by the Company therefore;
(5) meeting minutes of general meetings, board meeting and supervisor’s
meeting (only available for shareholders’ inspection) and copies of the
Company’s resolutions of general meetings, Board meetings and meeting
of Board of Supervisors;
(6) the latest audited financial statements and accounting reports of the
Board, auditors and Board of Supervisors;
(7) copies of the annual return for the latest period that has been filed with
China’s Administration for Market Regulation or other authorities;
(8) special resolutions of the Company;
(9) Accounting book and accounting certificate of the Company and its
wholly-owned subsidiaries.
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--- page 713 ---
iii. bond record of the Company.
A shareholder requesting for inspection of information or access to aforesaid
materials shall provide the Company with written documents evidencing the class
and number of shares of the Company that such shareholder holds. The Company
shall provide such information and materials as requested by the shareholder after
confirming the identity of the shareholder; provided that the Company has
reasonable grounds to believe that a shareholder’s review of accounting books and
accounting vouchers was under an improper purpose and may harm the company’s
legitimate interests, the company could refuse to do so but shall reply to the
shareholder in writing and explain the reasons within 15 days from the date of the
shareholder’s written request;
(VI) to participate in the distribution of remaining assets of the Company in proportion
to the number of shares held in the event of the termination or liquidation of the
Company;
(VII) to request the Company to buy back his/her shares if a shareholder opposes the
merger or division of the Company at the general meeting;
(VIII) for shareholders individually or jointly holding more than 1% of the outstanding and
voting shares of the Company, to raise temporary proposal and submit it to the
convener in writing 10 days before the general meeting is held;
(IX) other rights conferred by the laws, administrative regulations, departmental rules,
regulation rules of the place where the Company’s shares are listed and the Articles
of Association.
The shareholders are entitled to request the court to invalidate the resolution of the
general meeting and board meeting which violates the laws and administrative regulations.
The shareholders are entitled to request the court to cancel the relevant resolution within
60 days after the resolution is adopted if the convening procedure and voting methods of the
general meeting or board meeting violates the laws, administrative regulations or the Articles
of Association, or the resolution content breaches the Articles of Association; provided,
however, that the request shall not be adopted when the convening procedures or voting
methods of the general meeting or board meeting are only slightly flawed.
Any director and senior management personnel who causes losses to the Company for
violation of the requirements of the laws, administrative regulations or the Articles of
Association during the performance of his/her duties, shall be liable to the Company. The
shareholders who hold more than 1%, individually or jointly, of the Company’s outstanding and
voting shares for more than 180 days continuously, have the right to request the Board of
Supervisors to bring a suit to the people’s court; if the Board of Supervisors causes losses to
the Company for violation of the requirements of the laws, administrative regulations or the
Articles of Association during the performance of its duties, the aforesaid shareholders can
request the Board in written form to file a suit in the people’s court.
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--- page 714 ---
Upon receipt of the written request by the shareholders as stipulated in the preceding
paragraph, in case the Board of Supervisors and/or the Board refuses to file a litigation or fails
to file a litigation within 30 days from receipt of such request, or under urgent circumstances
that failure in filing a litigation immediately, the Company will suffer from irreparable
damages, the aforesaid shareholders shall have the right to file a litigation with a people’s court
directly in their own name for protection of the Company’s interests.
In the event that any person infringes the legal interests of the Company causing losses
to the Company, the shareholders specified in the last two paragraph may file a litigation with
a people’s court in accordance with the provisions of the preceding two paragraphs.
In the event of directors, supervisors and manager in wholly-owned subsidiaries violating
the laws, administrative regulations or the provisions under regulated Articles of Association
resulting damage to the shareholders’ interest, the shareholders may also file a litigation with
a people’s court by itself or through the request for the Board or the board of supervisors in
relevant wholly-owned subsidiaries.
Shareholders of ordinary shares of the Company shall assume the following obligations:
(I) to abide by the laws, administrative regulations, departmental rules, regulatory rules
of the place where the Company’s shares are listed and the Articles of Association;
(II) to pay subscription moneys for the shares subscribed in accordance with the agreed
manner of payment;
(III) not to withdraw from the Company except for the circumstances set out in the
relevant laws, regulations and the Articles of Association;
(IV) not to abuse shareholder’s rights to damage the interests of the Company or other
shareholders; not to abuse the independent legal person status of the Company and
the limited liability of shareholders to damage the interests of the creditors of the
Company;
If any shareholder of the Company abuses the shareholder’s rights and causes loss
to the Company or other shareholders, he/she shall be liable for the compensation;
If any shareholder of the Company abuses the independent legal person status of the
Company and the limited liability of shareholders to evade debts and severely
damage the interests of the creditors of the Company, he/she shall bear joint liability
for the debts of the Company;
(V) to assume other obligations required by the laws, administrative regulations,
regulation rules of the place where the Company’s shares are listed and the Articles
of Association.
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--- page 715 ---
Shareholders shall not be liable for making any additional contribution to the share capital
other than according to the terms agreed by the subscriber of the shares at the time of
subscription.
7 GENERAL PROVISIONS OF GENERAL MEETINGS
The General Meeting of Shareholders acts as the organ of authority of the Company
which, according to the laws, exercises the following authorities:
(I) to elect and replace directors and supervisors who are not staff representatives, and
to decide on matters relating to their remuneration;
(II) to review and approve the reports of the Board;
(III) to review and approve the reports of the Board of Supervisors;
(IV) to review and approve the annual financial budget plans and accounting plans of the
Company;
(V) to review and approve the profit distribution plan and loss recovery plan of the
Company;
(VI) to make resolutions on the increase or reduction of the Company’s registered capital;
(VII) to make resolutions on the issuance of shares of any series, stock warrant, corporate
bonds or other securities plans thereof;
(VIII) to make resolutions on matters such as the merger, division, dissolution, liquidation
or change in the organizational form of the Company;
(IX) to amend the Articles of Association;
(X) to make resolutions on the appointment or dismissal or non-renewal of engagement
of accounting firms by the Company;
(XI) to examine and approve the external guarantees of the Company that require the
approval by the general meetings;
(XII) to consider the Company’s purchase or disposal of major assets and external
guarantees within one year of an aggregate value exceeding 30% of the latest
audited total assets of the Company;
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--- page 716 ---
(XIII) to examine material transactions and connected transaction which should be
submitted to the general meeting for examination in accordance with the relevant
laws, administrative regulations, regulatory rules of the place where the Company’s
shares are listed and the Articles of Association;
(XIV) to review and approve stock incentive plan;
(XV) to consider proposals raised by shareholder(s), individually or collectively
representing over 1% of the Company’s outstanding and voting shares;
(XVI) to review and approve the change use of raised fund;
(XVII) to consider other matters that should be decided by the general meeting according
to the laws, administrative regulations, departmental rules, Hong Kong Listing
Rules or the Articles of Association;
(XVIII) to consider other matters required by administrative authorities of the place where
the Company’s shares.
Under the condition of not breaching any laws and regulations and mandatory provisions
of the laws and regulations of the listing place, the general meeting may authorize or entrust
the Board to handle the matters as authorized or entrusted.
The general meetings shall be divided into the annual general meetings and the
extraordinary general meetings. The general meeting shall be convened by the Board. The
annual general meeting shall be convened once a year, and shall be held within six months after
the prior accounting year ends.
The Company shall convene an extraordinary general meeting within two months under
any of the following circumstances:
(I) when the number of directors is less than the number specified in the PRC Company
Law or two-thirds of the number required by the Articles of Association;
(II) when the uncovered loss of the Company reaches one-third of the total paid-in share
capital of the Company;
(III) at the request of shareholders who individually or collectively hold more than 10%
of the Company’s issued voting shares;
(IV) when the Board considers it necessary;
(V) when the Board of Supervisors proposes such a meeting be held;
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--- page 717 ---
(VI) any other circumstances required by the laws, administrative regulations,
departmental rules, regulation rules of the place where the Company’s shares are
listed and the Articles of Association.
The number of shares held under the item (III) above shall be calculated from the date of
such shareholder’s written request.
8 CONVENING OF THE GENERAL MEETING
The general meeting shall be convened by the Board, the chairman of which shall also act
as the chairman of the meeting; when the Chairman of the Board is unable or fails to perform
his duties, a director of the Company jointly recommended by more than half of the Board shall
convene the meeting on his/her behalf and act as the chairman of the meeting.
If the Board is unable to perform or does not perform the duty of convening a general
meeting, the Board of Supervisors of the Company shall convene and preside over the meeting;
if the Board of Supervisors does not convene and preside over the meeting, shareholders who
individually or collectively hold more than ten percent of the outstanding and voting shares of
the Company for more than ninety consecutive days may convene and preside over the meeting
themselves.
9 PROPOSALS AND NOTICES OF THE GENERAL MEETING
Where the Company convenes a general meeting, the Board, Board of Supervisors, and
shareholder(s) individually or jointly holding more than 1% outstanding and voting shares of
the Company may make proposals to the Company.
The shareholders individually or jointly holding more than 1% of the outstanding and
voting shares of the Company may raise temporary proposal and submit it to the convener in
writing 10 days before the general meeting is held. The convener shall, within 2 days after the
receipt of the proposal, issue a supplementary notice to inform the general meeting of the
contents of the temporary proposal.
In order to hold a general meeting, notices in writing shall be given 21 days prior to the
date of the meeting in case of an annual general meeting and 15 days prior to the date of the
meeting in case of an extraordinary general meeting.
10 VOTING AND RESOLUTIONS OF THE GENERAL MEETING
The resolutions of a general meeting are classified into ordinary resolutions and special
resolutions.
APPENDIX V SUMMARY OF ARTICLES OF ASSOCIATION
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--- page 718 ---
Ordinary resolutions of the general meeting shall be passed by more than half of the
voting rights held by the shareholders (including proxies) present at the meeting.
Special resolutions of the general meeting shall be passed by more than two-thirds of the
voting rights held by the shareholders (including proxies) present at the meeting.
The following matters shall be resolved by way of ordinary resolution of the general
meeting:
(I) work reports of the Board and the Board of Supervisors;
(II) profit distribution proposals and proposals for making up losses formulated by the
Board;
(III) appointment, dismissal and remuneration of the members of the Board and the Board
of Supervisors (expect for the employees representative Supervisor) and the method
of payment of the remuneration;
(IV) annual report of the Company;
(V) other matters required by the laws, administrative regulations, regulation rules of the
place where the Company’s shares are listed or the Articles of Association to be
passed by special resolutions.
The following matters shall be resolved by way of special resolution of the general
meeting:
(I) increase or reduction of the Company’s registered capital, issuance of any class of
shares, options and other similar types of securities;
(II) issuance of corporate bonds;
(III) division, merger, dissolution and liquidation or change of organizational form of the
Company;
(IV) amendment to the Articles of Association;
(V) purchase and disposal of material assets by the Company within one year, or a
guarantee amount exceeding 30% of the audited total assets in the most recent
period of the Company;
(VI) Equity Incentive Plan;
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--- page 719 ---
(VII) other matters required by the laws, administrative regulations, regulation rules of the
place where the Company’s shares are listed or the Articles of Association, and
matters which, according to an ordinary resolution of the general meeting, may have
a significant impact on the Company and shall be adopted by way of a special
resolution.
Shareholders (including proxies) shall exercise their voting rights by the number of
voting shares they represent at the general meeting, and each share shall have one vote, unless
individual shareholders are required by the Hong Kong Listing Rules to waive their voting
rights on individual matters. Shareholders (including proxies) who have two or more votes are
not required to vote for or against all voting rights. The Company shares held by the Company
have no voting right, and those shares are not included in the total number of voting shares
present at the general meeting and shall not be deposited in CCASS. Any shareholder who is
required under the Hong Kong Listing Rules to waive his/her voting rights on a resolution or
is restricted from voting only for or against a resolution shall not be counted as a vote made
by that shareholder or his/her representative in contravention of such requirement or
restriction.
11 DIRECTORS
Directors are elected by the general meeting with a term of office of three years. Upon
expiration of the term, the directors may be re-elected and serve consecutive terms.
The director shall comply with the laws, administrative regulations, the regulatory rules
of the place where the Company’s shares are listed or the Articles of Association, and shall
have the following duties of fidelity to the Company:
(I) shall not abuse their duties and rights to receive bribes or other illegal income and
shall not misappropriate the property of the Company;
(II) shall not misappropriate the Company funds;
(III) shall not deposit Company funds in a bank account opened in his/her name or in the
name of others;
(IV) shall not use of Company funds to make loans to others or provide guarantee for
others without the consent of the general meeting of shareholders or the board of
directors and in violation of the provisions of the Articles of Association of the
Company;
(V) shall not enter into contracts or transactions with the Company in violation of the
provisions of the Articles of Association or without the consent of the general
meeting of shareholders;
APPENDIX V SUMMARY OF ARTICLES OF ASSOCIATION
– V-13 –


--- page 720 ---
(VI) shall not abuse his/her duties and powers to seize commercial opportunities of the
Company for himself/herself or others or engage in similar business of the same
kind with that of the Company for himself/herself or for others without the consent
of the general meeting of shareholders;
(VII) shall not accept commissions from transactions with the Company for his or her own
benefit;
(VIII) shall not disclose the secrets of the Company arbitrarily;
(IX) shall not use his affiliation to harm the interests of the Company;
(X) other duties of fidelity stipulated by laws, administrative regulations, departmental
rules and regulations, regulatory rules of the place where the Company’s shares are
listed or the Articles of Association.
Any income derived by a director in violation of the provisions of this Article shall belong
to the Company; if it causes losses to the Company, he/she shall be liable for compensation.
If a director fails to attend the board meeting in person (a director who participates in a
board meeting or vote by means of communication is considered to be present in person) or
entrust any other director to attend the meeting on his/her behalf for two consecutive times, it
shall be deemed that he/she cannot perform his/her duties, and the Board shall recommend the
general meeting to remove such director.
A director may resign before the end of his tenure. The director shall submit a written
resignation report to the board of director.
12 INDEPENDENT NON-EXECUTIVE DIRECTORS
The Company has independent directors (equivalent to independent non-executive
directors under the Hong Kong Listing Rules) and the issues including conditions of
appointment, nomination and election procedures, tenure of office, resignation and powers of
the independent directors are implemented in accordance with the relevant provisions of the
laws, administrative regulations, departmental rules and regulation rules of the place where the
shares of the Company are listed.
Independent directors shall faithfully perform their duties and safeguard the interests of
the Company, with particular attention to ensuring that the legitimate rights and interests of
public shareholders are not jeopardized, so as to ensure that the interests of all shareholders are
adequately represented. The functions and powers of the independent non-executive directors
and the related matters shall be subject to the relevant provisions of the laws, administrative
regulations, departmental rules and the regulation rules of the place where the Company’s
shares are listed.
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--- page 721 ---
13 THE BOARD
The Board is composed of 9 directors, including one chairman. At all times, the Board
should have at more than one-third independent directors, and the total number of independent
directors should not be less than three, at least one of whom should have appropriate
professional qualifications in line with regulatory requirements, or appropriate accounting or
related financial management expertise compliance with the regulation rules of the place where
the Company’s shares are listed.
The Board shall exercise the following powers:
(I) to convene a shareholders’ general meeting and report to the meeting on the work
of the Board;
(II) to implement the resolutions of the general meeting;
(III) to decide on the business plan and investment scheme of the Company;
(IV) to formulate the annual financial budgetary plans and final accounting plans of the
Company;
(V) to formulate the profit distribution plan and loss recovery plan of the Company;
(VI) to formulate plans of increasing or decreasing the Company’s registered capital,
issuing corporate bonds or other securities and going public;
(VII) to formulate plans for substantial acquisition, repurchase of shares, or merger,
division, dissolution and change of corporate form of the Company;
(VIII) to examine and approve the guarantees of the Company that require the approval by
the general meetings;
(IX) to examine and approve the transactions under Article 128 of the Articles of
Association;
(X) to examine and approve the matters required to be passed by the Board as stipulated
in the Management Measures on Connected Transactions;
(XI) to determine the setup of the Company’s internal management structure;
(XII) to appoint or dismiss the CEO of the Company; to appoint or dismiss senior
management personnel such as financial officer according to the nomination of the
CEO, and to decide on matters of remuneration, rewards and punishments;
(XIII) to formulate the basic management system of the Company;
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--- page 722 ---
(XIV) to formulate the proposals for any amendment to the Articles of Association;
(XV) to request the general meeting to engage or replace the accounting firm that provides
audit for the Company;
(XVI) to debrief the work report of the CEO of the Company and check the works of the
CEO;
(XVII) to manage the information disclosure of the Company;
(XVIII) any other functions and powers granted by the laws, administrative regulations,
departmental rules, regulation rules of the place where the Company’s shares are
listed or the Articles of Association.
For matters resolved by the Board in the preceding paragraph, except for items (VI),
(VII), (VIII) and (XIV) which must be approved by a vote of at least two-thirds of the directors,
the remaining items may be approved by a vote of more than half of the directors.
For the disposal of fixed assets by the Board, in the event that the aggregate amount of
the expected value of the proposed disposal of fixed assets and the value of the disposed fixed
assets during the four months prior to this proposed disposal exceeds 33% of the value of fixed
assets shown in the latest balance sheet as considered at the general meeting, the Board shall
not dispose or agree to dispose of such fixed asset without obtaining approval at the general
meeting.
The chairman of the Board shall exercise the following powers:
(I) to preside over general meetings and convening and presiding over Board meetings;
(II) to procure and examining the implementation of resolutions of the Board;
(III) to sign share certificates, corporate bonds and other securities issued by the
Company;
(IV) to sign important documents of the Board;
(V) to exercise the special disposal power on the Company affairs in line with the
interests of the Company in accordance with the provisions of the laws and
regulations in case of an emergency of force majeure such as a major natural
disaster, and reporting to the Board or the general meeting of the Company
afterwards; and
(VI) to exercise other powers as set forth by the Board or in the laws, administrative
regulations and regulatory rules of the place where the Company’s shares are listed.
APPENDIX V SUMMARY OF ARTICLES OF ASSOCIATION
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--- page 723 ---
Board meetings are composed of regular meetings and extraordinary meetings. The Board
shall hold at least four meetings each year, approximately once a quarter, which shall be
convened by the Chairman and notified to all the directors and supervisors 14 days prior to the
meeting in writing. Regular Board meetings do not include obtaining Board approval by
circulating written resolutions. Written notice shall be given to all directors and supervisors
five days prior to the convening of an extraordinary Board meeting. In case of emergency and
it is necessary to convene an extraordinary Board meeting as soon as possible, the convening
of the meeting shall not be subject to the time limit as set out above.
A Board meeting shall not be held unless more than half of the directors are present. A
resolution made by the Board must be approved by more than half of all the directors. Each
director shall have one vote for the resolutions of the Board. When the Board considers the
external guarantee provided by the Company, consent by more than two-thirds of directors is
required.
The directors shall attend the Board meeting in person. If a director is unable to attend
the meeting for some reason, he/she may entrust another director in writing to attend the
meeting on his/her behalf. The power of attorney shall specify the name, matters entrusted to,
scope of authorization and term of validity of the proxy, and shall be signed or sealed by the
principal. The director who attend the meeting on behalf of another director shall exercise the
rights of the directors within the scope of authorization. If a director fails to attend a Board
meeting or to appoint a proxy, he/she shall be deemed to have waived his/her right to vote at
that meeting.
The Articles of Association do not contain any special provision in respect of the manner
in which borrowing powers may be exercised by the Directors, except (i) required the provision
regarding the power of the Board to formulate proposal for our Company to issue bonds; (ii)
required the provision stating the issuance of bonds to be approved by the Shareholders of the
Company at a general meeting by way of a special resolution; and (iii) required the provision
regarding prohibition of loans to Directors, senior officers and supervisors with certain
exceptions in favor of our Company.
14 SPECIAL COMMITTEES OF THE BOARD
The Board of the Company sets up special committees, such as the Audit Committee, the
Nomination Committee, the Remuneration and Appraisal Committee, and the Strategy
Committee. The special committees shall be accountable to the Board and shall perform their
duties in accordance with the Articles of Association and the authorization of the Board. Their
proposals shall be submitted to the Board for deliberation and decision.
APPENDIX V SUMMARY OF ARTICLES OF ASSOCIATION
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--- page 724 ---
15 CEO AND OTHER SENIOR OFFICERS
The Company has one CEO, one president and several senior officers. The CEO shall be
appointed or dismissed by the Board. Other senior officers shall be appointed by CEO and
dismissed by the Board.
The CEO of the Company shall be liable to the Board and exercise the following powers:
(I) to manage the production and operation management of the Company, organizing
execution of the Board’s resolutions, and reporting the relevant work to the Board;
(II) to organize the implementation of the annual business plan and investment scheme
of the Company;
(III) to prepare proposal for the internal management organization setting scheme of the
Company;
(IV) to prepare proposal for the basic management system of the Company;
(V) to develop the specific rules of the Company;
(VI) to propose the appointment or termination of CFO, board secretary or other senior
officer of the Company to the Board;
(VII) to decide to appoint or remove the officers other than those subject to the decision
of the Board;
(VIII) to deal with transactions that are not stipulated in the Articles of Association and
whose approving standards need to be deliberated by the general meeting or the
Board; and
(IX) other powers granted by the Articles of Association or the Board.
The CEO may attend the Board meetings. The CEO who is not a director has no right to
vote at the Board meetings.
16 BOARD OF SUPERVISORS
The Company shall have a Board of Supervisors, which shall consist of five supervisors,
including one chairman. The appointment or dismissal of the chairman of the Board of
Supervisors shall be determined by more than half of the members of the Board of Supervisors.
The chairman of the Board of Supervisors shall convene and preside over the meeting of the
Board of Supervisors. When the chairman of the Board of Supervisors is unable or fails to
perform his or her duty, a supervisor jointly recommended by more than half of the supervisors
shall convene and preside over the meeting of the Board of Supervisors.
APPENDIX V SUMMARY OF ARTICLES OF ASSOCIATION
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--- page 725 ---
The directors, CEO and other senior officers of the Company shall not serve concurrently
as supervisors.
Meetings of the Board of Supervisors are composed of regular meetings and extraordinary
meetings. The Board of Supervisors shall hold at least one regular meeting every six months
and at least two meetings every year. The chairman of the Board of Supervisors shall be
responsible for convening meetings of the Board of Supervisors. The supervisors may propose
to convene an extraordinary meeting of the Board of Supervisors.
The Board of Supervisors shall be accountable to the general meeting and exercise the
following powers:
(I) to examine the Company’s financial affairs;
(II) to supervise the acts of the directors and senior officers, and proposing dismissal of
directors and senior officers who violate the laws, administrative regulations, the
Articles of Association, or resolutions of general meetings;
(III) when the actions of any directors or senior officers are found to damage the interests
of the Company, to urge them to make correction;
(IV) to propose the convening of extraordinary general meetings and, in case the Board
does not perform the obligations to convene and preside over the general meetings
in accordance with PRC Company Law and the Articles of Association, convening
and presiding over the general meetings;
(V) to submit proposals to the general meetings;
(VI) to liaise with directors, prosecute or file a lawsuit against directors and senior
officers on behalf of the Company;
(VII) to conduct investigation if there is any unusual circumstances in the Company’s
operations; and if necessary, engaging an accounting firm, law firm, or other
professional institutions to assist in their work with expenses to be borne by the
Company;
(VIII) to verify financial information such as financial reports, business reports, profit
distribution plans, etc. that the Board intends to submit to the general meeting and,
if in doubt, appointing a registered accountant or practicing auditor in the name of
the Company to assist in reviewing such information;
(IX) to propose a temporary Board meeting;
(X) to request the director and officers to submit report on performing duties; and
(XI) to exercise other powers prescribed in the Articles of Association of the Company.
APPENDIX V SUMMARY OF ARTICLES OF ASSOCIATION
– V-19 –


--- page 726 ---
17 QUALIFICATIONS AND DUTIES OF THE DIRECTORS, SUPERVISORS AND
SENIOR OFFICERS OF THE COMPANY
None of the following persons may serve as a director, supervisor, CEO or other senior
officer of the Company:
(I) persons without capacity or with limited capacity for civil acts;
(II) persons who were sentenced for crimes of corruption, bribery, encroachment or
embezzlement of property or disruption of the social and economic order, or persons
who were deprived of their political rights for committing a crime, where five years
have not lapsed following the serving of the sentence or two years from the date of
expiration of the probation period if a suspended sentence is pronounced;
(III) persons who acted as directors, or factory managers or managers of companies or
enterprises which were bankrupt or liquidated and who should bear personal liability
for the bankruptcy or liquidation of such companies or enterprises, where three years
have not lapsed following the date of completion of such bankruptcy or liquidation;
(IV) the legal representatives of companies or enterprises that had their business licenses
revoked or business ordered shut-down as a result of violating the law, and where
such representatives bear personal liability therefore and three years have not lapsed
following the date of revocation of such business licenses or business shut-down;
(V) persons with relatively heavy individual debts that have not been settled upon
maturity and listed as a dishonest debtor by the People’s Court;
(VI) persons against whom a case has been established for investigation by the judicial
authorities as a result of suspected violation of the criminal law, and such case has
not been closed;
(VII) persons who may not act as leaders of enterprises by virtue of the laws and
administrative regulations;
(VIII) non-natural persons;
(IX) persons ruled by a relevant organization in charge to have violated securities-related
regulations, where such violation involved fraudulent or dishonest acts and five
years have not lapsed following the date of the ruling; and
(X) circumstances specified in the laws, administrative regulations, the listing rules of
the place where the Company’s shares are listed, and the relevant laws and
regulations of the place where the Company’s shares are listed.
APPENDIX V SUMMARY OF ARTICLES OF ASSOCIATION
– V-20 –


--- page 727 ---
Any election, designation or appointment of directors, supervisors, CEO or other senior
officers in violation of this provision shall be invalid. The Company shall dismiss the director,
supervisor, CEO or other senior officers if they are involved in the said circumstances during
their respective term of office.
The validity of an act of a director, CEO or other senior officer of the Company on behalf
of the Company towards a bona fide third party shall not be affected by any irregularity in his
current position, election or qualifications.
The fiduciary duty imposing on the director shall be also applicable to the supervisors,
CEO and other senior management personnel. In addition to obligations imposed by the laws,
administrative regulations or listing rules of the place where the Company’s shares are listed,
the Company’s directors, supervisors, CEO and other senior officers shall owe the following
obligations to each shareholder in the exercise of the functions and powers granted to them by
the Company:
(I) not to cause the Company to act beyond the scope of business as stipulated in its
business license;
(II) to act in good faith in the best interests of the Company;
(III) not to deprive the property of the Company in any form, including (but not limited
to) any opportunity favorable to the Company; and
(IV) not to deprive the individual rights and interests of the shareholders, including (but
not limited to) any distribution rights and voting rights, but excluding any plan of
reorganization of the Company submitted to the general meeting for approval in
accordance with the Articles of Association.
The Company’s directors, supervisors, CEO and other senior officers shall, in the exercise
of their duties, abide by the principles of honesty and creditability and shall not place
themselves in a position where there is a possible conflict between their personal interests and
their duties. This principle shall include (but not limited to) the fulfillment of the following
obligations:
(I) to act in good faith in the best interests of the Company;
(II) to exercise powers within the scope of their functions and powers and not to act
beyond such powers;
(III) to personally exercise the discretion vested in him/her, not to allow himself/herself
to be manipulated by another person and, not to delegate the exercise of his/her
discretion to another party unless permitted by the laws and administrative
regulations or with the consent of the general meeting that has been informed;
(IV) to treat shareholders of the same class equally and to be impartial to shareholders of
different classes;
APPENDIX V SUMMARY OF ARTICLES OF ASSOCIATION
– V-21 –


--- page 728 ---
(V) not to conclude a contract or enter into a transaction or arrangement with the
Company except as otherwise provided in the Articles of Association or with the
consent of the general meeting that has been informed;
(VI) not to use Company property for his/her own benefit in any way without the consent
of the general meeting that has been informed;
(VII) not to use his/her functions and powers as a means for accepting bribes or other
forms of illegal income, and not to illegally appropriate Company assets in any way,
including (but not limited to) any opportunities that are favorable to the Company;
(VIII) not to accept commissions in connection with Company transactions without the
consent of the general meeting that has been informed;
(IX) to abide by the Articles of Association, perform his/her duties faithfully, protect the
interests of the Company and not to seek personal gain with his/her position,
functions and powers in the Company;
(X) not to compete with the Company in any way without the consent of the general
meeting that has been informed;
(XI) not to embezzle the Company’s funds or lend the Company’s funds to others, not to
deposit the Company’s assets in accounts opened in his own or in another’s name,
and unless otherwise specified by the laws, regulations and the Articles of
Association, not to use the Company’s assets as security for the debts of the
Company’s shareholders or other persons; and
(XII) not to disclose confidential information relating to the Company that was acquired
by him/her during his/her office without the consent of the general meeting that has
been informed, and not to use such information except in the interests of the
Company; however, such information may be disclosed to the court or other
government authorities if:
1. required by law;
2. required for the public interest; or
3. required for the interest of such director, supervisor or other senior officer of
the Company.
APPENDIX V SUMMARY OF ARTICLES OF ASSOCIATION
– V-22 –


--- page 729 ---
The obligation of honesty and credibility of the Company’s directors, supervisors, CEO
and other senior officers does not necessarily cease with the termination of their office. Their
confidentiality obligation in relation to the Company’s trade secrets shall continue after the
termination of their office. The term for which other obligations shall continue shall be decided
upon in accordance with the principle of fairness, depending on the time lapse between the
termination and the occurrence of the matter as well as the circumstances and conditions under
which the relationship with the Company is terminated.
If a director, supervisor, CEO or other senior officer of the Company has directly or
indirectly been vested a material interest in a contract, transaction or arrangement concluded
or planned by the Company (except for his/her employment contract with the Company),
he/she shall disclose the nature and extent of his/her interest to the Board at the earliest
opportunity, whether or not the matter is normally subject to the approval of the Board.
Except as approved by the Stock Exchange, the director shall not vote on any contract or
arrangement or any other proposed resolution of the Board in which he/she has a material
interest through himself/herself or any of his/her associates (as defined in the Listing Rules);
nor shall he/she be counted when determining whether a quorum is present at the meeting,
unless otherwise stipulated by the laws, administrative regulations, normative documents, and
securities regulatory authority at the place where the Company’s shares are listed.
Unless the interested director, supervisor, CEO or other senior officer of the Company has
disclosed such interest to the Board as required under the preceding paragraphs of this Article
and the matter has been approved by the Board at a meeting in which he/she was not counted
in the quorum and had refrained from voting, the Company shall have the right to void the
contract, transaction or arrangement, except where the other party is a bona fide party acting
without knowledge of the breach of obligation by the director, supervisor, CEO or other senior
officer concerned.
A director, supervisor, CEO and other senior officer of the Company shall be deemed to
have an interest in any contract, transaction or arrangement in which a connected person of that
director, supervisor, CEO and senior officer has an interest.
18 FINANCIAL AND ACCOUNTING SYSTEMS AND DISTRIBUTION OF PROFITS
The Company shall formulate its own financial and accounting systems in accordance
with the laws, administrative regulations and rules of the relevant authorities of the state. If the
securities regulatory authorities at the place where the Company’s shares are listed stipulate
otherwise, the relevant provisions shall prevail.
The company shall file, disclose and/or submit annual reports, interim reports,
preliminary results announcements and other documents to shareholders in accordance with the
laws and regulations of the place of listing, the listing rules and other regulatory documents of
the stock exchange where the company’s shares are listed.
APPENDIX V SUMMARY OF ARTICLES OF ASSOCIATION
– V-23 –


--- page 730 ---
The reserve fund of the Company shall be used to cover the Company’s losses, expand
its production and operation or to increase its registered capital. The Company shall first use
discretionary reserve fund and statutory reserve fund to cover the loss of the Compnay, and the
capital reserve fund could be used when the loss still couldn’t be covered. The capital reserve
fund consists of the following:
(I) the premium from the issuance of shares in excess of their face value; and
(II) other income to be included in the capital reserve fund as stipulated by the
competent financial department of the State Council.
When the statutory reserve fund is converted into registered capital, the remaining
statutory reserve fund shall be no less than 25% of the registered capital of the Company before
the capital increase.
19 EMPLOYMENT OF ACCOUNTING FIRMS
The Company shall employ an independent accounting firm that complies with relevant
state regulations to perform audit of the annual financial reports and other financial reports of
the Company.
Employing an accounting firm for the Company shall be decided by the general meeting.
The term of office of an accounting firm employed by the Company shall be from the end of
the current annual general meeting of the Company until the end of the next annual general
meeting.
An accounting firm employed by the Company shall have the following rights:
(I) the right of access at all times to the account books, records or vouchers of the
Company and the right to require the directors, CEO and other senior officers of the
Company to provide relevant information and explanations;
(II) the right to require the Company to take all reasonable measures to obtain from its
subsidiaries the information and explanations necessary for the accounting firm to
perform its duties; and
(III) the right to attend general meetings and to receive a notice or other information
concerning any meeting which any shareholder has a right to receive, and to make
speech at any general meeting on any matter which relates to it as the accounting
firm of the Company.
If the position of accounting firm becomes vacant, the Board may temporarily appoint an
accounting firm to fill such vacancy and decide on its expense before a general meeting is held,
provided that such appointment shall be terminated until the next annual meeting except a
confirmation, reappointment and re-election is resolved. However, if there are other accounting
firms holding the position as an accounting firm of the Company while such vacancy still
exists, such accounting firms may continue to act.
APPENDIX V SUMMARY OF ARTICLES OF ASSOCIATION
– V-24 –


--- page 731 ---
20 NOTICE AND ANNOUNCEMENT
The Company’s notices (including but not limited to the notice of the general meetings,
the Board meetings and the meetings of the Board of Supervisors and corporate
communications as define in Hong Kong Listing Rules) may be given or provided in the
following means:
(I) by personal delivery;
(II) by fax;
(III) by post;
(IV) by email;
(V) by announcement;
(VI) by publication in newspaper or other designated media;
(VII) by publishing them on the website of the Company and the website designated by
the stock exchange on which the Company’s shares are listed in accordance with the
laws, administrative regulations, departmental rules, normative documents, and the
Articles of Association; and
(VIII) by other means acceptable to the securities regulatory authorities at the place where
the Company’s shares are listed or stipulated in the Articles of Association.
Giving notices to shareholders with the registered address outside Hong Kong is not
prohibited in the Articles of Association.
If a notice of the Company is sent by way of announcement, once public announcement
is made, it is deemed that all relevant personnel have received the notice. If the securities
regulatory authorities at the place where the Company’s shares are listed stipulate otherwise,
the relevant provisions shall prevail.
Notwithstanding any requirement of the Articles of Association with regard to the
provision or notice form of any document, notice or other corporate communications, the
Company may choose to adopt the form of notice as stipulated under item 7 of paragraph 1 of
this article in substitution for the sending of written materials to the shareholders by way of
personal delivery or by way of prepaid post, provided that relevant regulations of securities
regulatory authority at the place where the Company’s shares are listed have been complied
with.
APPENDIX V SUMMARY OF ARTICLES OF ASSOCIATION
– V-25 –


--- page 732 ---
The Company issues announcements and information disclosure to shareholders through
the laws, administrative regulations or information disclosure newspapers and websites
designated by the relevant domestic regulatory authorities. If an announcement is to be made
to shareholders under the Articles of Association, such announcement shall also be published
in designated newspapers, websites and/or the website of the Company in accordance with the
method provided for in the Hong Kong Listing Rules. All notices or other documents required
to be lodged with the Stock Exchange under Chapter 13 of the Hong Kong Listing Rules shall
be in English or accompanied by a signed and certified English translation.
21 MERGER, DIVISION, CAPITAL INCREASE AND REDUCTION, DISSOLUTION
AND LIQUIDATION
Merger of the Company may take two forms: merger by absorption and merger by new
establishment.
In the case of a merger, parties to the merger shall execute a merger agreement, and shall
prepare the balance sheets and a schedule of assets. The Company shall notify its creditors
within a period of 10 days since the date on which the resolution to proceed with the merger
is passed, and publish announcements on the merger in newspaper within 30 days. The
creditors shall, within 30 days since the date of receiving a written notice or within 45 days
since the date of the first public announcement for those who have not received a written
notice, be entitled to require the Company to pay off its debts in full or to provide a
corresponding guarantee.
In case of decrease of registered capital of the Company, a balance sheet and assets list
shall be formulated. The Company shall notify its creditors within 10 days from the date of
passing of the resolution for the decrease of registered capital and shall publish a notice in a
newspaper or National Enterprise Credit Information Publicity System within 30 days thereof.
The creditors shall, within 30 days since the date of receiving the notice or within 45 days since
the date of the first public announcement for those who have not received a written notice, be
entitled to require the Company to pay off its debts in full or to provide a corresponding
guarantee.
Where the merger or division of the Company results in a change in its registered
particulars, such change shall be registered with the company registry according to law. Where
the Company is dissolved, it shall cancel its registration according to law. Where a new
company is established, its establishment shall be registered according to law.
The Company shall be dissolved if:
(I) business term specified in the Articles of Association expires or other dissolution
reasons as stipulated in the Articles of Association arise;
(II) the general meeting resolves to dissolve the Company;
(III) dissolution is required due to merger or division of the Company;
APPENDIX V SUMMARY OF ARTICLES OF ASSOCIATION
– V-26 –


--- page 733 ---
(IV) the Company is declared bankrupt according to law because it is unable to pay its
debts as they fall due;
(V) the Company is revoked of business license, ordered to close or canceled according
to law; or
(VI) there is severe difficulty in the operation and management of the Company, and the
continued existence of the Company will have material prejudice to the interests of
the shareholders and there is no other way to resolve, shareholders who hold an
aggregate of over 10% of the whole outstanding and voting rights can make a
petition to the People’s Court to dissolve the Company.
The Company shall announce the occurrence of any of the paragraph foresaid within 10
days through National Enterprise Credit Information Publicity System.
The liquidation committee shall exercise the following functions and powers during
liquidation:
(I) to thoroughly examine the assets of the Company and preparing a balance sheet and
a schedule of assets respectively;
(II) to notify the creditors by a notice or public announcement;
(III) to handle the outstanding business of the Company in connection with liquidation;
(IV) to repay all outstanding tax payment and the tax payment which arise in the course
of the liquidation process;
(V) to clear up claims and debts;
(VI) to distribute the remaining assets after full payment of the Company’s debts; and
(VII) to participate in civil litigation on behalf of the Company.
The liquidation committee shall notify its creditors within a period of 10 days since the
date it is established, and publish relevant announcements on in newspaper or National
Enterprise Credit Information Publicity System at least three times within 60 days. Creditors
shall, within 30 days since the date of receiving the notice, or for creditors who do not receive
the notice, within 45 days since the date of the public announcement, report their creditors’
rights to the liquidation committee.
After the liquidation committee has thoroughly examined the Company’s assets and
prepared a balance sheet and schedule of assets, it shall formulate a liquidation plan and submit
such plan to the general meeting or the people’s court for confirmation.
The remaining property of the Company after paying the liquidation expenses, wages
owed to employees of the Company, labor insurance fees and statutory compensation,
outstanding taxes and debts of the Company shall be distributed by the class of shares held by
shareholders and in proportion to the number of shares held by shareholders.
APPENDIX V SUMMARY OF ARTICLES OF ASSOCIATION
– V-27 –


--- page 734 ---
During the liquidation period, the Company still exists but shall not carry out any
business activities not related to liquidation. The property of the Company shall not be
distributed to the shareholders until all liabilities have been paid off in accordance with the
preceding paragraph.
Following the completion of liquidation, the liquidation committee shall formulate a
liquidation report, a revenue and expenditure statement and financial account books in respect
of the liquidation period and, after verification thereof by an accountant registered in the PRC,
submit the same to the general meeting or the relevant competent authorities for confirmation.
Within 30 days from the date of confirmation of the above-mentioned documents by the
general meeting or the relevant competent authorities, the liquidation committee shall deliver
the same to the company registry, apply for cancelation of the Company’s registration and
publicly announce the Company’s termination.
22 AMENDMENT TO THE ARTICLES OF ASSOCIATION
The Company shall amend the Articles of Association under any of the following
circumstances:
(I) after the PRC Company Law, relevant laws and administrative regulations, or the
Hong Kong Listing Rules are amended, the provisions of the Articles of Association
are in conflict with the provisions of the amended laws or regulations;
(II) there has been a change to the Company, resulting in inconsistency with the contents
in the Articles of Association; and
(III) the general meeting decides to amend the Articles of Association.
Where any amendment to the Articles of Association, as approved by way of a resolution
at the general meeting, is subject to the approval of the relevant administrative authority, it
shall be submitted to the relevant administrative authorities for approval; where the Company’s
registered items are involved, change registration shall be made according to law.
APPENDIX V SUMMARY OF ARTICLES OF ASSOCIATION
– V-28 –


--- page 735 ---
FURTHER INFORMATION ABOUT OUR COMPANY
1. Incorporation of our Company
Our Company was established as a limited liability company in the PRC on September 18,
2015 and was converted into a joint stock company with limited liability on September 11,
2020 under the laws of the PRC. As of the Latest Practicable Date, the registered share capital
of our Company was RMB81,311,371 divided into 81,311,371 Shares with a nominal value of
RMB1.00 each.
Our Company has established a place of business in Hong Kong at 19/F, Golden Centre,
188 Des V oeux Road Central, Hong Kong and has registered as a non-Hong Kong company in
Hong Kong under Part 16 of the Companies Ordinance on February 6, 2024. Mr. POON Ping
Yeung (౮), the joint company secretary of our Company, has been appointed as our
authorized representative for the acceptance of service of process in Hong Kong whose
correspondence address is the same as our place of business in Hong Kong.
2. Changes in Share Capital of our Company
On September 18, 2015, our Company was established as a limited liability company with
a registered capital of RMB25,000,000.
On December 16, 2022, the registered capital of our Company increased from
RMB77,711,371 to RMB81,311,371.
For further details, see “History, Development and Corporate Structure” in this
prospectus. Save as disclosed above, there has been no alteration in our share capital within
two years immediately preceding the date of this prospectus.
3. Changes in the Share Capital of our Subsidiaries
Details of our major subsidiaries are set out in note 1 to the Accountants’ Report. The
following sets out changes in the share capital of our subsidiaries within the two years
immediately preceding the date of this prospectus:
REFIRE Technology
On December 1, 2022, the registered capital of REFIRE Technology increased from
RMB1,500,000,000 to RMB2,500,000,000 with the additional capital subscribed by our
Company.
On January 8, 2024, the registered capital of REFIRE Technology increased from
RMB2,500,000,000 to RMB3,000,000,000 with the additional capital subscribed by our
Company.
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-1 –


--- page 736 ---
Jiangsu REFIRE Technology Co., Ltd. (ʮ̡)
On November 30, 2022, the registered capital of Jiangsu REFIRE Technology Co.,
Ltd. increased from RMB200,000,000 to RMB350,000,000 with the additional capital
subscribed by REFIRE Technology.
Zhejiang Unilia Hydrogen Technology Ltd. (
ʮ̡)
On October 31, 2023, the registered capital of Zhejiang Unilia Hydrogen
Technology Ltd. increased from RMB10,000,000 to RMB40,000,000 with the additional
capital subscribed by Unilia (Guangdong) Fuel Cells Inc. (ཥϫ(؇)ʮ̡),
a subsidiary of our Company.
On July 17, 2024, the registered capital of Zhejiang Unilia Hydrogen Technology
Ltd. increased from RMB40,000,000 to RMB50,000,000 with the additional capital
subscribed by Unilia (Guangdong) Fuel Cells Inc. (ཥϫ(؇)ʮ̡), a
subsidiary of our Company.
Shanghai REFIRE Prismatic Hydrogen Technology Co., Ltd. (
Ҧ
ʮ̡)
On June 26, 2023, Shanghai REFIRE Prismatic Hydrogen Technology Co., Ltd. was
established in the PRC as a limited liability company with a registered capital of
RMB10,000,000.
Changde REFIRE Surge New Materials Technology Co., Ltd. (
߅ࣘ
ʮ̡)
On April 1, 2023, Changde REFIRE Surge New Materials Technology Co., Ltd. was
established in the PRC as a limited liability company with a registered capital of
RMB10,000,000.
On August 13, 2024, the registered capital of Changde REFIRE Surge New
Materials Technology Co., Ltd. increased from RMB10,000,000 to RMB12,500,000 with
the additional capital subscribed by Shanghai Taiqingchen Energy Technology Co., Ltd.
(ʮ̡). Save for the minority equity stake in Shanghai
Taiqingchen Energy Technology Co., Ltd. held by our Group, Shanghai Taiqingchen
Energy Technology Co., Ltd. is an Independent Third Party.
REFIRE New Energy Development (Shanghai) Co., Ltd. (
࢝(ɪऎ)ʮ
̡)
On November 20, 2023, the registered capital of REFIRE New Energy Development
(Shanghai) Co., Ltd. increased from RMB10,000,000 to RMB35,000,000 with the
additional capital subscribed by our Company.
Beijing XCELL Technology Co., Ltd. (
ʮ̡)
On February 28, 2023, the registered capital of Beijing XCELL Technology Co.,
Ltd. decreased from RMB10,000,000 to RMB9,700,000.
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-2 –


--- page 737 ---
Foshan Diyi Element New Energy Technology Co., Ltd. (ࠢ
ʮ̡)
On December 5, 2022, Foshan Diyi Element New Energy Technology Co., Ltd. was
established in the PRC as a limited liability company with a registered capital of
RMB120,000,000.
REFIRE XPanse (Beijing) Ltd. (
ʮ̡)
On November 17, 2023, REFIRE XPanse (Beijing) Ltd. was established in the PRC
as a limited liability company with a registered capital of RMB70,000,000.
On April 28, 2024, the registered capital of REFIRE XPanse (Beijing) Ltd. increased
from RMB70,000,000 to RMB75,000,000 with the additional capital subscribed by our
Company.
Yunnan REFIRE Technology Co., Ltd. (
ʮ̡)
On December 15, 2022, Yunnan REFIRE Technology Co., Ltd. was established in
the PRC as a limited liability company with a registered capital of RMB10,000,000.
Wuan REFIRE Technology Co., Ltd. (ʮ̡)
On December 19, 2022, Wuan REFIRE Technology Co., Ltd. was established in the
PRC as a limited liability company with a registered capital of RMB10,000,000.
Ningxia Saishang REFIRE Technology Co., Ltd. (ʮ̡)
On June 2, 2023, Ningxia Saishang REFIRE Technology Co., Ltd. was established
in the PRC as a limited liability company with a registered capital of RMB10,000,000.
Jiangsu Peijun REFIRE Technology Co., Ltd. (ʮ̡)
On October 30, 2023, Jiangsu Peijun REFIRE Technology Co., Ltd. was established
in the PRC as a limited liability company with a registered capital of RMB10,000,000.
Zhengzhou REFIRE Hydrogen Technology Co., Ltd. (ʮ̡)
On July 28, 2023, Zhengzhou REFIRE Hydrogen Technology Co., Ltd. was
established in the PRC as a limited liability company with a registered capital of
RMB10,000,000.
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-3 –


--- page 738 ---
Unilia (Jiangsu) Fuel Cells Ltd. (ʮ̡)
On March 22, 2023, Unilia (Jiangsu) Fuel Cells Ltd. was established in the PRC as
a limited liability company with a registered capital of RMB10,000,000.
REFIRE Europe GmbH
On June 23, 2023, REFIRE Europe GmbH was established in Germany as a limited
liability company ( GmbH) with a registered share capital of EUR25,000.
Shanghai Wellness Haven Technology Co., Ltd. (ʮ̡)
On December 20, 2023, Shanghai Wellness Haven Technology Co., Ltd. was
established in the PRC as a limited liability company with a registered capital of
RMB10,000,000.
REFIRE PTE. LTD.
On January 11, 2024, REFIRE PTE. LTD. was established in Singapore as a private
company limited by shares with an issued share capital of 490,000 Singapore dollars.
Shaanxi Daqin REFIRE Technology Co., Ltd. (
ʮ̡)
On January 23, 2024, the registered capital of Shaanxi Daqin REFIRE Technology
Co., Ltd. increased from RMB10,000,000 to RMB100,000,000 with the additional capital
subscribed by REFIRE Technology.
Shanghai PANDO Electric Technology Co., Ltd. (
ʮ̡)
On August 1, 2024, the registered capital of Shanghai PANDO Electric Technology
Co., Ltd. increased from RMB50,000,000 to RMB51,724,138 with the additional capital
subscribed by Shaanxi Yingfeng Shicheng Green Energy Industry Investment Fund
Partnership (Limited Partnership) (ΥྫΆุ(ࠢ
Υྫ)). Save for the minority equity stake in Shaanxi Yingfeng Shicheng Green Energy
Industry Investment Fund Partnership (Limited Partnership) held by our Group, Shaanxi
Yingfeng Shicheng Green Energy Industry Investment Fund Partnership (Limited
Partnership) is an Independent Third Party.
Hubei Lvye Hydrogen Energy Technology Co., Ltd. (
ʮ̡)
On July 31, 2024, Hubei Lvye Hydrogen Energy Technology Co., Ltd. was
established in the PRC as a limited liability company with a registered capital of
RMB20,000,000.
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-4 –


--- page 739 ---
Ningxia REFIRE Hydrogen Technology Co., Ltd. (ʮ̡)
On September 30, 2024, Ningxia REFIRE Hydrogen Technology Co., Ltd. was
established in the PRC as a limited liability company with a registered capital of
RMB10,000,000.
Cangzhou REFIRE Technology Co., Ltd. (
ʮ̡)
On October 10, 2024, Cangzhou REFIRE Technology Co., Ltd. was established in
the PRC as a limited liability company with a registered capital of RMB20,000,000.
Save as disclosed above, there has been no alteration in the share capital of our
subsidiaries within two years immediately preceding the date of this prospectus.
4. Resolutions of the Shareholders
Pursuant to a general meeting of our Company held on January 21, 2024, the following
resolutions, among others, were passed by our Shareholders:
(a) the issue by our Company of H Shares of a nominal value of RMB1.00 each and that
such H Shares be listed on the Hong Kong Stock Exchange;
(b) that the number of H Shares to be issued shall not be more than 10% of the total
issued share capital of our Company as enlarged by the Global Offering (without
taking into account the H Shares which may be allotted and issued pursuant to the
exercise of the Over-allotment Option), and the grant to the underwriters (or their
representatives) of the Over-allotment Option of not more than 15% of the number
of H Shares issued pursuant to the Global Offering;
(c) subject to the completion of the Global Offering, the adoption of the Articles of
Association which shall become effective on the Listing Date, and the authorization
to the Board to amend the Articles of Association in accordance with the
requirements of the relevant laws and regulations and the Listing Rules; and
(d) authorization of our Board to handle relevant matters relating to, among other
things, the issue and listing of the H Shares.
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-5 –


--- page 740 ---
FURTHER INFORMATION ABOUT THE BUSINESS OF OUR COMPANY
1. Summary of Material Contracts
We have entered into the following contracts (not being contracts entered into in the
ordinary course of business) within the two years immediately preceding the date of this
prospectus that are or may be material:
(a) the cornerstone investment agreement dated November 26, 2024 entered into among
our Company, Jiujiang Economic Development Zone Dingchuang Equity Investment
Center (Limited Partnership) (ᛆҳ༟ʕː(Υྫ)) and China
International Capital Corporation Hong Kong Securities Limited in the aggregate
amount of RMB300 million (exclusive of brokerage, the SFC transaction levy, the
AFRC transaction levy and the Stock Exchange trading fee), details of which are set
out in the section headed “Cornerstone Placing” in this prospectus; and
(b) the Hong Kong Underwriting Agreement.
2. Intellectual Property Rights
Trademarks
As of the Latest Practicable Date, we have registered the following trademarks
which we consider to be material to our business:
No. Owner
Registration
no.
Place of
registration Trademark Class Validity period
1. Our Company 306401475 Hong Kong 7, 9, 12, 37,
42
November 16, 2023 –
November 15, 2033
2. Our Company 306401448 Hong Kong 7, 9, 12, 37,
42
November 16, 2023 –
November 15, 2033
3. Our Company 61981783 PRC
 12 July 14, 2023 –
July 13, 2033
4. Our Company 61667541 PRC
 9 August 21, 2023 –
August 20, 2033
5. Our Company 61690648 PRC
 7 October 28, 2022 –
October 27, 2032
6. Our Company 61677854 PRC
 42 September 7, 2022 –
September 6, 2032
7. Our Company 61685804 PRC
 12 July 7, 2022 –
July 6, 2032
8. Our Company 61673926 PRC
 9 July 7, 2022 –
July 6, 2032
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-6 –


--- page 741 ---
No. Owner
Registration
no.
Place of
registration Trademark Class Validity period
9. Our Company 61689878 PRC
 7 July 7, 2022 –
July 6, 2032
10. Our Company 57936758 PRC
 40 January 28, 2022 –
January 27, 2032
11. Our Company 57949214 PRC
 38 January 28, 2022 –
January 27, 2032
12. Our Company 57941296 PRC
 37 January 28, 2022 –
January 27, 2032
13. Our Company 57929736 PRC
 25 May 7, 2022 –
May 6, 2032
14. Our Company 57929759 PRC
 12 January 28, 2022 –
January 27, 2032
15. Our Company 57946548 PRC
 9 February 7, 2022 –
February 6, 2032
16. Our Company 57923827 PRC
 7 January 28, 2022 –
January 27, 2032
17. Our Company 57939117 PRC
 6 January 28, 2022 –
January 27, 2032
18. Our Company 57946353 PRC
 4 January 28, 2022 –
January 27, 2032
19. Our Company 6494906 Japan
 7, 9, 12 January 5, 2022 –
January 4, 2032
20. Our Company 018332479 European
Union
7, 9, 12 March 9, 2021 –
November 5, 2030
21. Our Company 6451673 Japan
 7, 9, 12, 42 October 5, 2021 –
October 4, 2031
22. Our Company 018332475 European
Union
7, 9, 12, 42 March 10, 2021 –
November 5, 2030
23. Our Company 50124156 PRC
 40 June 7, 2021 –
June 6, 2031
24. Our Company 50142698 PRC
 38 August 28, 2021 –
August 27, 2031
25. Our Company 50122653 PRC
 9 April 7, 2022 –
April 6, 2032
26. Our Company 50140619 PRC
 7 January 14, 2023 –
January 13, 2033
27. Our Company 50152867 PRC
 6 September 14, 2021 –
September 13, 2031
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-7 –


--- page 742 ---
No. Owner
Registration
no.
Place of
registration Trademark Class Validity period
28. Our Company 50139843 PRC
 4 July 21, 2021 –
July 20, 2031
29. Our Company 48995660 PRC
 12 October 21, 2021 –
October 20, 2031
30. Our Company 48976267 PRC
 7 July 14, 2021 –
July 13, 2031
31. Our Company 61689039 PRC
 42 May 7, 2024 –
May 6, 2034
32. Shanghai PANDO
Electric Technology Co.,
Ltd. (Ҧ
ʮ̡)
33508658 PRC
 9 May 14, 2019 –
May 13, 2029
33. Shanghai PANDO
Electric Technology Co.,
Ltd. (Ҧ
ʮ̡)
33493412 PRC
 7 May 14, 2019 –
May 13, 2029
34. Shanghai Unilia 7058829 United States
 42 May 23, 2023 –
May 22, 2033
35. Shanghai Unilia 7034333 United States
 9 April 25, 2023 –
April 24, 2033
36. Shanghai Unilia 7034332 United States
 7 April 25, 2023 –
April 24, 2033
37. Shanghai Unilia 018609710 European
Union
7, 9, 42 March 16, 2022 –
November 26, 2031
38. Shanghai Unilia 54116923 PRC
 42 June 14, 2023 –
June 13, 2033
39. Shanghai Unilia 6300595 United States
 9 March 23, 2021 –
March 22, 2031
40. Shanghai Unilia 6300597 United States
 7 March 23, 2021 –
March 22, 2031
41. Shanghai Unilia TMA1162233 Canada
 7, 9, 42 January 25, 2023 –
January 25, 2033
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-8 –


--- page 743 ---
No. Owner
Registration
no.
Place of
registration Trademark Class Validity period
42. Shanghai Unilia 6419362 Japan
 7, 9, 42 July 21, 2021 –
July 20, 2031
43. Shanghai Unilia 018270950 European
Union
7, 9, 42 October 23, 2020 –
July 9, 2030
44. Shanghai Unilia 47083883 PRC
 42 May 7, 2021 –
May 6, 2031
45. Shanghai Unilia 47077681 PRC
 9 May 21, 2021 –
May 20, 2031
46. Shanghai Unilia 47094852 PRC
 7 October 14, 2021 –
October 13, 2031
47. Shanghai Unilia 47095576 PRC
 42 August 21, 2021 –
August 20, 2031
48. Shanghai Unilia 47080724 PRC
 9 March 14, 2021 –
March 13, 2031
49. Shanghai Unilia 47093700 PRC
 7 March 7, 2021 –
March 6, 2031
50. Shanghai Unilia 47087654 PRC
 42 May 7, 2021 –
May 6, 2031
51. Shanghai Unilia 47109414 PRC
 9 March 7, 2021 –
March 6, 2031
52. Shanghai Unilia 47093717 PRC
 7 February 28, 2021 –
February 27, 2031
53. Shanghai Unilia 66660289 PRC
 9 April 14, 2024 –
April 13, 2034
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-9 –


--- page 744 ---
Patents
As of the Latest Practicable Date, we have registered the following patents which we
consider to be material to our business:
No. Owner Type Patent Patent no.
Application
date
Place of
application
1. REFIRE
Technology
Invention Fuel cell system and its
low-temperature purging
method (ཥϫӻ୕ʿ
ج)
2020100479238 January 16,
2020
PRC
2. REFIRE
Technology
Invention Component concentration
estimation device, anode
component estimation
method and fuel cell
system (ༀ
ج
ཥϫӻ୕)
2020114591661 December 11,
2020
PRC
3. REFIRE
Technology
Invention Closed loop control
method, system, medium
and electronic equipment
of drainage valves ( ર˥უ
eӻ୕eʧ
ሯʿཥɿண௪)
20211116 32787 September 30,
2021
PRC
4. REFIRE
Technology
Invention A low-temperature self-
initiation method for fuel
cell system (ཥϫ
ج)
20211119 30502 October 13,
2021
PRC
5. REFIRE
Technology
Invention Fuel cell control system
and its control method
(ཥϫછՓӻ୕ʿՉછ
ج)
2022102096164 March 4, 2022 PRC
6. REFIRE
Technology
Invention A fast cold start system
and method for fuel cells
(Ҟ஺и઼
ج)
2022102342648 March 10, 2022 PRC
7. REFIRE
Technology
Invention Intelligent allocation
system and method for
fuel cell coolant
(૰౽ঐሜৣ
ج)
202310472690X April 27, 2023 PRC
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-10 –


--- page 745 ---
No. Owner Type Patent Patent no.
Application
date
Place of
application
8. REFIRE
Technology
Invention Heat dissipation control
method, device, electronic
equipment and fuel cell
for high-power fuel cell
stack ( ɽ̌ଟཥ਼౳ᆠછ
eༀໄeཥɿண௪
ཥϫ)
2023104244767 April 20, 2023 PRC
9. REFIRE
Technology
Invention Method, device, medium
and vehicle for controlling
the inlet water temperature
of high-power fuel cells
(ܓ
eༀໄeʧሯձ
ԓሿ)
202310525006X May 11, 2023 PRC
10. Shanghai
Unilia
Invention A leakage detection
method for stack
membrane electrodes
(ဍᏨ಻
ج)
2020114139388 December 4,
2020
PRC
11. Shanghai
Unilia
Invention A CCM membrane
electrode assembly process
and assembly equipment
(ɓ၇CCMᇫཥ฽ༀৣʈᖵ
ʿༀৣண௪)
2023106301942 May 31, 2023 PRC
12. Shanghai
Unilia
Invention A fuel cell alloy catalyst
and its preparation method
and application (ࣘ
ළʷኒʿՉႡ௪
ձᏐ͜)
2023105199222 May 10, 2023 PRC
13. REFIRE
Technology
Invention Fuel cell system thermal
management control
device and system (ཥ
ϫӻ୕ᆠ၍ଣછՓༀໄʿ
ӻ୕)
2017106288092 July 28, 2017 PRC
14. REFIRE
Technology
Invention Hydrogen sprays control
method and its device,
equipment, system and
storage medium ( ૫ᄝછՓ
ʿՉༀໄeண௪eӻ
୕ձπᎷʧሯ)
2018114738461 December 4,
2018
PRC
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-11 –


--- page 746 ---
No. Owner Type Patent Patent no.
Application
date
Place of
application
15. REFIRE
Technology
Invention Method for calculating
concentration of exhaust
hydrogen of fuel cell
automobile, exhaust
control system, use
method of exhaust control
system and storage
medium (ཥϫӛԓ҈
eર
ंછՓӻ୕ʿՉԴ͜˙
eπᎷʧሯ)
2019110299671 October 25,
2019
PRC
16. REFIRE
Technology
Invention Water knockout drum
(ʱ˥ኜ)
2019113335434 December 23,
2019
PRC
17. REFIRE
Technology
Invention Air compressor intake
flow sectional correction
method, system, medium
and device (ݴ
eӻ୕e
ʧሯʿༀໄ)
2021103350558 March 29, 2021 PRC
18. REFIRE
Technology
Invention Humidifier leak diagnosis
method and fuel cell
system (ဍൢᓙ˙
ཥϫӻ୕)
2021106197297 June 3, 2021 PRC
19. REFIRE
Technology
Invention Construction method of
hydrogen concentration
calculation model,
detection device and fuel
cell system (ၑ
eᏨ಻ༀ
ཥϫӻ୕)
2021110037873 August 30, 2021 PRC
20. REFIRE
Technology
Invention Fuel cell thermal
management system (ࣘ
ཥϫᆠ၍ଣӻ୕)
2021113010853 November 4,
2021
PRC
21. REFIRE
Technology
Invention Fuel cell water
management system and
control method thereof
(ཥϫ˥၍ଣӻ୕
ج)
2021116295332 December 28,
2021
PRC
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-12 –


--- page 747 ---
No. Owner Type Patent Patent no.
Application
date
Place of
application
22. REFIRE
Technology
and Jiangsu
REFIRE
Technology
Co., Ltd.
(෧ঐ
ࠢ
ʮ̡)
Invention Method for calculating
humidity of inlet of
galvanic pile ( ɓ၇ཥ਼ɝ
ج)
2023101212711 February 16,
2023
PRC
23. REFIRE
Technology
and Jiangsu
REFIRE
Technology
Co., Ltd.
(෧ঐ
ࠢ
ʮ̡)
Invention Anode loop hydrogen
concentration measuring
method and system
(ج
ʿӻ୕)
2023100426018 January 28,
2023
PRC
24. REFIRE
Technology
and Jiangsu
REFIRE
Technology
Co., Ltd.
(෧ঐ
ࠢ
ʮ̡)
Invention Humidity estimation
method, humidity
estimation device,
humidity estimation
medium, humidity
estimation equipment and
fuel cell (П
eༀໄeʧሯeண
ཥϫ)
2023100655144 February 6,
2023
PRC
25. REFIRE
Technology
Invention Method and system for
managing energy of fuel
cell automobile (ࣘ
ج
ʿӻ୕)
2023104014479 April 15, 2023 PRC
26. REFIRE
Technology
Invention Control method and
device for fuel cell system
(ج
ၾༀໄ)
2023105310535 May 12, 2023 PRC
27. REFIRE
Technology
Invention Global optimization
algorithm for fuel cell and
power cell degradation
(ཥϫձਗɢཥϫΕʷ
ج)
2023110793668 August 25, 2023 PRC
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-13 –


--- page 748 ---
No. Owner Type Patent Patent no.
Application
date
Place of
application
28. REFIRE
Technology
Invention Optimal fuel cell system
performance control
method and system ( ɓ၇
ঐછ
ʿӻ୕)
2023106313691 May 31, 2023 PRC
29. REFIRE
Technology
Invention Method and system for
energy management of
multi-energy-source fuel
cell system ( ɓ၇εঐඎ๕
ཥϫӻ୕ঐඎ၍ଣ
ձӻ୕)
2023109443964 July 31, 2023 PRC
30. REFIRE
Technology
Invention Method for identifying
reversible attenuation of
fuel cell (ཥϫ̙
ج)
2023107424827 June 21, 2023 PRC
31. REFIRE
Technology
Invention High-power fuel cell
temperature control
method and device and
vehicle (ཥϫ๝
eༀໄձԓሿ)
2023105310624 May 12, 2023 PRC
32. REFIRE
Technology
Invention Cathode purging time
determination method and
device, electronic
equipment and fuel
cell (˙
eༀໄeཥɿண௪ʿዷ
ཥϫ)
2023113688057 October 23,
2023
PRC
33. REFIRE
Technology
Invention Method and device for
determining performance
parameters of diaphragm
of humidifier and
electronic equipment ( ᄣ᐀
˙
eༀໄʿཥɿண௪)
2023113688095 October 23,
2023
PRC
34. REFIRE
Technology
Invention Control method, system
and device for flow of
cooling liquid of electric
pile (ඎ
eӻ୕ʿༀໄ)
2023105837401 May 23, 2023 PRC
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-14 –


--- page 749 ---
No. Owner Type Patent Patent no.
Application
date
Place of
application
35. REFIRE
Technology
Invention Method and system for
controlling water
temperature of fuel cell
in-stack based
on temperature change
rate (ዷ
ج
ʿӻ୕)
202310517776X May 10, 2023 PRC
36. REFIRE
Technology
Invention High-power fuel cell
phase-change heat
dissipation system,
method, vehicle and
storage medium ( ɽ̌ଟዷ
ᜊ౳ᆠӻ୕e˙
eԓሿձπᎷʧሯ)
202310531047X May 12, 2023 PRC
37. REFIRE
Technology
Invention Power distribution method,
device, equipment and
medium based on internal
resistance of power battery
(̌ଟ
eༀໄeண௪ձ
ʧሯ)
202310807646X July 4, 2023 PRC
38. REFIRE
Technology
Invention Multi-mode thermal
management control
system and control method
for fuel cell (ٙ
εᅼόᆠ၍ଣછՓӻ୕ʿ
ج)
2023105181801 May 10, 2023 PRC
39. REFIRE
Technology
Invention Method, device, apparatus
and medium for regulating
fuel cell charging system
(ཥϫ̂ཥӻ୕ሜື˙
eༀໄeண௪ձʧሯ)
2023110458814 August 18, 2023 PRC
40. REFIRE
Technology
Invention Anode circulation amount
control method and
device, electronic
equipment and fuel cell
(eༀ
ཥϫ)
2023113709886 October 23,
2023
PRC
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-15 –


--- page 750 ---
No. Owner Type Patent Patent no.
Application
date
Place of
application
41. REFIRE
Technology
Invention Protection method and
system for fuel cell stack
and membrane electrode
temperature measuring and
calculating method ( ɓ၇
ᚐ˙
಻
ج)
2023113521716 October 19,
2023
PRC
42. Shanghai
Unilia
Invention Diagnosis method for
cathode-anode reversal of
membrane electrode in
electric pile ( ཥ਼ʕᇫཥ
ج)
2020115654418 December 25,
2020
PRC
43. Zhejiang
Unilia
Hydrogen
Technology
Ltd. ( एϪᗲ
Ҧ
ʮ̡)
and
Shanghai
Unilia
Invention Fuel cell stack capable of
removing gas impurities
and method for removing
gas impurities ( ɓ၇ঐ̘
ཥ਼ʿ
ج)
2023105161189 May 9, 2023 PRC
44. Shanghai
Unilia
Invention Cathode interface plate
assembly with anode
bypass and fuel cell stack
including the same ( ੭ජ
ଡ଼΁
ཥ਼)
2023108788587 July 18, 2023 PRC
45. Shanghai
Unilia
Invention Method and system for
testing cross pressure
cycle life of fuel cell stack
(ཥϫ਼ʹɸᏀɢ
ʿӻ୕)
2023108297903 July 7, 2023 PRC
46. REFIRE
Technology
Invention A hydrogen circulation
pump testing system for
fuel cell engines and its
testing method (ࣘ
ݿ
ج)
2021114603409 December 2,
2021
PRC
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-16 –


--- page 751 ---
No. Owner Type Patent Patent no.
Application
date
Place of
application
47. REFIRE
Technology
Invention Antifreeze fuel cell cold
start system, fuel cell
system and ice melting
method (ཥϫ
ཥϫӻ
ج)
202111611614X December 27,
2021
PRC
48. REFIRE
Technology
Invention A gas-water separator for
fuel cells (ཥϫ͜
ं˥ʱᕎኜ)
2022111411628 September 20,
2022
PRC
49. REFIRE
Technology
Invention A fuel cell system ( ɓ၇ዷ
ཥϫӻ୕)
2024102353800 March 1, 2024 PRC
Software copyrights
As of the Latest Practicable Date, we have registered the following software
copyrights which we consider to be material to our business:
No. Copyright owner Copyright Registration no. Registration date
1. REFIRE
Technology
Refire fuel cell humidifier test bench
lower computer software V1.0 (෧ዷ
ཥϫᄣ᐀ኜ಻༊̨ɨЗዚழ΁V1.0)
2020SR1604451 November 18,
2020
2. REFIRE
Technology
Refire FCU controller EOL offline
testing software V1.0 (෧FCUછՓኜ
EOLɨᇞ಻༊ழ΁V1.0)
2021SR1085171 July 22, 2021
3. REFIRE
Technology
Refire access to ETAS tool software
v1.0 based on Python (׵Python
ஞਪETASʈՈழ΁V1.0)
2021SR1143018 August 3, 2021
4. REFIRE
Technology
Refire ejector calculation software V1.0
(ၑழ΁V1.0)
2022SR0078520 January 12, 2022
5. REFIRE
Technology
Refire CVM2.1 software for fuel cell
voltage inspection controller V1.0 (ࠠ
ཥϫཥᏀԚᏨછՓኜCVM2.1 ழ
΁V1.0)
2023SR0318459 March 13, 2023
6. Shanghai Unilia Unilia leakage positioning system for
membrane electrodes and bipolar plates
in a single battery stack V1.0 ( ᗲඎཥ
Зӻ୕
V1.0)
2020SR1866568 December 21,
2020
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-17 –


--- page 752 ---
No. Copyright owner Copyright Registration no. Registration date
7. Shanghai Unilia Unilia fuel mixing ratio control system
for electric reactor V1.0 (ࣘ
૿ΥৣˢછՓӻ୕V1.0)
2020SR1866569 December 21,
2020
8. Shanghai Unilia Unilia dry/wet mode switching system
for fuel cell stack operation V1.0 ( ᗲඎ
ཥ਼༶Б৻᐀ᅼόʲ౬ӻ୕V1.0)
2020SR1866612 December 21,
2020
9. Shanghai Unilia Unilia water/heat balance management
system for electric reactor V1.0 ( ᗲඎ
ཥ਼˥ᆠ̻ፅ၍ଣӻ୕V1.0)
2020SR1866613 December 21,
2020
10. Shanghai Unilia Shanghai Unilia electric stack test data
analysis software V1.9.3
(ழ΁V1.9.3)
2022SR0223465 February 14,
2022
Domain Names
As of the Latest Practicable Date, we have registered the following domain names
which we consider to be material to our business:
No. Owner Domain name Registration date
1. REFIRE Technology refire.com February 3, 1999
2. Shanghai Unilia unilia.com March 4, 2019
Save as disclosed above, as of the Latest Practicable Date, there was no other trade
or service mark, patent, intellectual or industrial property right which was material in
relation to our business.
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-18 –


--- page 753 ---
FURTHER INFORMATION ABOUT OUR DIRECTORS, SUPERVISORS AND
SUBSTANTIAL SHAREHOLDERS
1. Disclosure of Interests
Save as disclosed below, immediately following completion of the Global Offering
(without taking into account the H Shares which may be allotted and issued pursuant to the
exercise of the Over-allotment Option and the Domestic Shares which may be issued pursuant
to the exercise of the options granted under the Pre-IPO Share Option Scheme), so far as our
Directors are aware, none of our Directors, Supervisors and chief executive has any interest or
short positions in our Shares, underlying Shares or debentures of our Company or any
associated corporations (within the meaning of Part XV of the SFO) which will have to be
notified to our Company and the Hong Kong Stock Exchange pursuant to Divisions 7 and 8 of
Part XV of the SFO (including interests and short positions which they are taken or deemed to
have under such provisions of the SFO), or which will be required, pursuant to section 352 of
the SFO, to be entered in the register referred to therein, or which will be required to be
notified to our Company and the Hong Kong Stock Exchange pursuant to the Model Code for
Securities Transactions by Directors of Listed Issuers contained in the Listing Rules.
Name Position
Capacity/
nature of interest
Number of
Shares held
Approximate
percentage of
shareholding
in the
relevant
proportion of
Shares (1)
Approximate
percentage of
shareholding
in the total
issued share
capital of our
Company (1)
(%) (%)
Mr. Lin (2) /H1118/H1118/H1118/H1118Chairperson of our
Board, executive
Director and chief
executive officer
Beneficial owner;
Interest in
controlled
corporations
18,852,700
Domestic Shares
41.45 21.89
Dr. HU Zhe
(ࡪߡ3) /H1118/H1118/H1118/H1118
Executive Director,
chief operating
officer and
president
Beneficial owner 750,000
Domestic Shares
1.65 0.87
Ms. MA Audrey
Jing Nan
(৵౺฻)
(4) /H1118/H1118
Executive Director
and vice president
Beneficial owner 1,967,500
Domestic Shares
4.33 2.28
Dr. ZHAI
Shuang
(ၱᕐ)
(5) /H1118/H1118/H1118/H1118
Executive Director
and deputy
executive director
of the R&D
center
Beneficial owner 150,000
Domestic Shares
0.33 0.17
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-19 –


--- page 754 ---
Name Position
Capacity/
nature of interest
Number of
Shares held
Approximate
percentage of
shareholding
in the
relevant
proportion of
Shares (1)
Approximate
percentage of
shareholding
in the total
issued share
capital of our
Company (1)
(%) (%)
Mr. ZHAO
Yongsheng
(͛)
(6) /H1118/H1118
Executive Director
and director of
the supply chain
center
Beneficial owner 150,000
Domestic Shares
0.33 0.17
Notes:
(1) The calculation is based on the total number of 45,482,153 Domestic Shares in issue and 40,657,138 H
Shares (assuming the Over-allotment Option is not exercised and the options granted under the Pre-IPO
Share Option Scheme are not exercised) in issue upon Listing.
(2) The 12,834,272 Domestic Shares Mr. Lin beneficially holds include 1,000,000 Domestic Shares, which
is the maximum number of Domestic Shares which Mr. Lin is entitled to receive pursuant to the exercise
of options granted to him under the Pre-IPO Share Option Scheme, subject to the terms and conditions
of these options. Mr. Lin is the executive partner of Shanghai Weilan, Shanghai Weiqing and Shanghai
Weijing and is responsible for their respective management. As such, under the SFO, Mr. Lin is deemed
to be interested in the 6,018,428 Domestic Shares held by Shanghai Weilan, Shanghai Weiqing and
Shanghai Weijing.
(3) These Shares represent the maximum number of Domestic Shares which Dr. HU Zhe (ࡪߡis entitled
to receive pursuant to the exercise of options granted to him under the Pre-IPO Share Option Scheme,
subject to the terms and conditions of these options.
(4) The 1,967,500 Domestic Shares Ms. MA Audrey Jing Nan ( ৵౺฻) beneficially holds include 200,000
Domestic Shares, which is the maximum number of Domestic Shares which Ms. MA Audrey Jing Nan
is entitled to receive pursuant to the exercise of options granted to her under the Pre-IPO Share Option
Scheme, subject to the terms and conditions of these options.
(5) These Shares represent the maximum number of Domestic Shares which Dr. ZHAI Shuang ( ၱᕐ)i s
entitled to receive pursuant to the exercise of options granted to him under the Pre-IPO Share Option
Scheme, subject to the terms and conditions of these options.
(6) These Shares represent the maximum number of Domestic Shares which Mr. ZHAO Yongsheng (آ
͛) is entitled to receive pursuant to the exercise of options granted to him under the Pre-IPO Share
Option Scheme, subject to the terms and conditions of these options.
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-20 –


--- page 755 ---
2. Substantial Shareholders
For the information on the persons who will, immediately following the completion of the
Global Offering, have interests or short positions in our Shares or underlying Shares which
would be required to be disclosed to our Company and the Hong Kong Stock Exchange under
the provisions of Divisions 2 and 3 of Part XV of the SFO, see “Substantial Shareholders” in
this prospectus.
Save as set out below, our Directors are not aware of any other person (other than our
Directors, Supervisors or chief executive) who will, immediately following 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
member of our Group other than our Company:
Our subsidiary
Total
registered capital
Person with 10%
or more interest
Approximate
percentage
of the interest
in the subsidiary
(RMB) (%)
Beijing XCELL
Technology Co., Ltd.
(ҦϞ
ʮ̡) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
9,700,000 Beijing General
Dynamics Technology
Development Center
(General Partnership)
(Ҧ೯
ʕː(౷ஷΥྫ))
27.84
Shanghai PANDO
Electric Technology
Co., Ltd. ( ɪऎᇂਗ
ʮ̡) /H1118/H1118
51,724,138 Shanghai Zhengtai
Hydrogen Energy
Development Co., Ltd.
(࢝
ʮ̡)
24.17
Shanghai PANDO
Electric Technology
Co., Ltd. ( ɪऎᇂਗ
ʮ̡) /H1118/H1118
51,724,138 Shanghai Bojing
Hydrogen Business
Consulting Services
Partnership (Limited
Partnership) ( ɪऎЬԯ
ਕΥྫ
Άุ(Υྫ))
16.20
Shanghai PANDO
Electric Technology
Co., Ltd. ( ɪऎᇂਗ
ʮ̡) /H1118/H1118
51,724,138 Shanghai Taiqingchen
Energy Technology
Co., Ltd. ( ɪऎइ૫ો
ʮ̡)
11.83
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-21 –


--- page 756 ---
Our subsidiary
Total
registered capital
Person with 10%
or more interest
Approximate
percentage
of the interest
in the subsidiary
(RMB) (%)
Foshan Diyi Element
New Energy
Technology
Co., Ltd. (ɓ
ࠢ
ʮ̡) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
120,000,000 FAW Jiefang Automotive
Co., Ltd. (ӛ
ʮ̡)
45.00
Foshan Diyi Element
New Energy
Technology Co., Ltd.
(ɓʩ९อঐ๕
ʮ̡) /H1118/H1118/H1118/H1118/H1118
120,000,000 Shanghai Ruisu
Technology Co., Ltd.
(ʮ
̡)
10.00
Changde REFIRE
Surge New Materials
Technology Co., Ltd.
(ࣘ
ʮ̡) /H1118/H1118/H1118/H1118/H1118
12,500,000 Hunan Yongyou
Technology Co., Ltd.
(ʮ
̡)
24.00
Changde REFIRE
Surge New Materials
Technology Co., Ltd.
(ࣘ
ʮ̡) /H1118/H1118/H1118/H1118/H1118
12,500,000 Shanghai Taiqingchen
Energy Technology
Co., Ltd. ( ɪऎइ૫ો
ʮ̡)
20.00
Shanghai REFIRE
Prismatic Hydrogen
Technology Co., Ltd.
(߅
ʮ̡)/H1118/H1118/H1118/H1118/H1118/H1118/H1118
10,000,000 Shanghai All Hydrogen
Times Business
Management
Consulting Partnership
(Limited Partnership)
(˾ਠਕ၍
ଣፔ༔ΥྫΆุ(ࠢ
Υྫ))
10.00
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-22 –


--- page 757 ---
Our subsidiary
Total
registered capital
Person with 10%
or more interest
Approximate
percentage
of the interest
in the subsidiary
(RMB) (%)
Shanghai REFIRE
Prismatic Hydrogen
Technology Co., Ltd.
(߅
ʮ̡)/H1118/H1118/H1118/H1118/H1118/H1118/H1118
10,000,000 Shenzhen Biqu
Technology Co., Ltd.
(ࠢ
ʮ̡)
10.00
Guangzhou Qingchi
Technology Co., Ltd.
(ʮ
̡) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
10,000,000 Xiongchuan Hydrogen
Energy Technology
(Guangzhou) Co., Ltd.
(Ҧ(ᄿψ)Ϟ
ப΂ʮ̡)
40.00
Foshan Nanhai Cunqiu
Equity Investment
Co., Ltd. (ی
ᛆҳ༟Ϟ
ʮ̡) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
1,260,000,000 Guangdong Nanhai
Industry Group Co.,
Ltd. (ऎପุණ
ʮ̡)
48.97
Unilia (Guangdong)
Fuel Cells Inc. ( ᗲඎ
ཥϫ(؇)ࠢ
ʮ̡) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
14,178,150 Shanghai Wutang
Technology Partnership
(Limited Partnership)
(ҦΥྫΆ
ุ(Υྫ))
13.71
Shanghai Wutang
Technology
Partnership (Limited
Partnership) (ࢻ
ҦΥྫΆุ(ࠢ
Υྫ)) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
1,944,400 Michael Patrick Sexsmith 48.22 (as a limited
partner)
Hubei Lvye Hydrogen
Energy Technology
Co., Ltd. ( ಳ̏ၠз
ʮ̡) /H1118/H1118
20,000,000 Hubei Lvye Industrial
Investment Group Co.,
Ltd. ( ಳ̏ၠзପุҳ
ʮ̡)
30.00
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-23 –


--- page 758 ---
3. Service Contracts
Each of our Directors and Supervisors has entered into a service contract with our
Company. The principal particulars of these service contracts comprise (a) a term of office
commencing on the date of the approval at the relevant Company’s general meeting and ending
on the expiration of the term of office of the prevailing session of the Board (with respect to
Directors) or a term of office commencing on the date of the approval at the Company’s general
meeting or the date of the employees’ representative assembly (as the case may be) and ending
on the expiration of the term of office of the prevailing session of the Supervisory Committee
(with respect to Supervisors); and (b) termination provisions in accordance with their
respective terms. Our Directors may be re-appointed subject to Shareholders’ approval.
Save as disclosed above, none of our Directors and Supervisors has or is proposed to have
entered into any service contract with any member of our Group (excluding contracts expiring
or determinable by any member of our Group within one year without payment of
compensation other than statutory compensation).
4. Remuneration of Directors and Supervisors
Save as disclosed in the section headed “Directors, Supervisors and Senior Management”
in this prospectus and note 8 to the Accountants’ Report, for the three financial years ended
December 31, 2021, 2022 and 2023 and the five months ended May 31, 2024, none of our
Directors or Supervisors received other remunerations of benefits in kind from us.
5. Employee Incentive Schemes
Our Company adopted and approved the Employee Incentive Schemes on March 27,
2017, May 15, 2019, December 24, 2020, June 23, 2022 and January 21, 2024, respectively.
The Employee Incentive Schemes are not subject to the provisions of Chapter 17 of the Listing
Rules as they do not involve the grant of Shares or the grant of options by our Company to
subscribe for Shares after the Listing. Given the underlying Shares under the Employee
Incentive Schemes had already been issued, there will not be any dilution effect to the issued
Shares upon the vesting of the awards under the Employee Incentive Schemes. No further
awards will be granted after the Listing.
As of the Latest Practicable Date, our Company established seven ESOP Platforms,
namely Shanghai Weilan, Shanghai Weiqing, Shanghai Weijing, Shanghai Weijun, Shanghai
Yuanyiqing, Shanghai Weiyi and Canada ESOP Platform, which, in aggregate, held 6,018,428
Domestic Shares. For further details of the ESOP Platforms, see “History, Development and
Corporate Structure — Employee Incentive Platforms” in this prospectus.
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-24 –


--- page 759 ---
The following is a summary of the principal terms of the Employee Incentive Schemes (as
amend from time to time).
(a) Objective
The purpose of the Employee Incentive Schemes is to incentivize our employees and
external consultant who have made contribution to our Group’s development.
(b) Eligibility
Participants of the Employee Incentive Schemes include our senior management
members, middle management members and other individuals who have significant
contribution to the development of our Company (the “ Participants ”). The Employee
Incentive Schemes further provide that the Participants:
 shall possess full capacity for civil conducts;
 shall not have any criminal record;
 shall not have been publicly condemned or declared as an inappropriate participant
by any stock exchange, the CSRC or any administrative authority under the CSRC
in the past three years;
 shall not have been imposed administrative penalties or market bans (݄)
by the CSRC and any administrative authority under the CSRC as a result of
material violations of laws and regulations in the past three years;
 shall not have been the legal representative of a company or enterprise whose
business license had been revoked or which had been ordered to close as a result of
violation of laws (except where three years had passed since the date of liquidation
of such company or enterprise);
 shall not have been a director, factory director or manager of a company or
enterprise which had been bankrupt or liquidated (except where three years had
passed since the date of bankruptcy or liquidation of such company or enterprise);
 shall not have a significant amount of personal debts due but not repaid;
 shall not have violated the Articles of Association or their employment contracts;
 shall not have severely violated the rules and regulations of our Company.
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-25 –


--- page 760 ---
(c) Grant of Awards
The executive partner of Shanghai Weilan, Shanghai Weiqing, Shanghai Weijing,
Shanghai Weijun, Shanghai Yuanyiqing and Shanghai Weiyi is Mr. Lin. The general partner of
Canada ESOP Platform is 1415085 B.C. Ltd., which has delegated all of its powers and duties
as a general partner of Canada ESOP Platform to Mr. Lin pursuant to a management agreement
dated January 9, 2024, and Mr. Lin is responsible for the management of Canada ESOP
Platform. Therefore, in effect, all management powers of the ESOP Platforms reside with Mr.
Lin.
The selected Participants will be granted awards in the form of economic interest in the
ESOP Platforms conditional upon certain conditions as specified in each award agreement and
upon fulfilment of such conditions, such selected Participants will become a limited partner of
the relevant ESOP Platform. Upon becoming the limited partner of the ESOP Platforms, the
selected Participants indirectly receive economic interest in the corresponding number of
underlying Shares held by the ESOP Platforms. All selected Participants irrevocably authorize
the general partner of the relevant ESOP Platform to handle all affairs of the relevant ESOP
Platform and act as the concerted party to the general partner of the relevant ESOP Platform.
(d) Administration
Our executive Directors or our Board (as the case may be) shall be responsible for:
 formulation, modifications and specific implementation of the Employee Incentive
Schemes;
 interpretation and supervision of the Employee Incentive Schemes;
 where applicable, formulation and implementation of specific incentive schemes for
foreign employees and relevant rules for overseas employee shareholding platforms
(if any); and
 any other matters relating to the supervision and implementation of the Employee
Incentive Schemes, or authorized under the Employee Incentive Schemes, the
Articles of Association and relevant legal documents or by a general meeting of our
Company.
(e) Lock-up Period and Restrictions on Disposals
The interest held by the Participants in the relevant ESOP Platform shall be subject to a
lock-up period which shall be 12 months from the Listing (in the case of the partnership
interest whose underlying Shares are H Shares) or 36 months from the date of our Company’s
listing in the PRC (in the case of the partnership interest whose underlying Shares are not H
Shares).
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-26 –


--- page 761 ---
Upon listing of our Company, prior to the expiry of the applicable lock-up period, the
Participants may not transfer, pledge, gift or otherwise encumber or entrust to another person
their interest in the limited partnership without the consent of the executive partner of the
relevant ESOP Platform.
Upon listing of our Company and the expiry of the applicable lock-up period, (i) subject
to any applicable rules and regulations, the Participants make an application to the executive
partner of the relevant ESOP Platform in connection with the disposal of their interest in the
limited partnership; and (ii) other than the aforementioned circumstance, the Participants may
not transfer, pledge, gift or otherwise encumber or entrust to another person their interest in the
limited partnership without the consent of the executive partner of the relevant ESOP Platform.
6. Pre-IPO Share Option Scheme
The Pre-IPO Share Option Scheme was adopted and approved on January 21, 2024. The
purpose of the Pre-IPO Share Option Scheme is to, among others, further improve the
long-term incentive mechanism of our Company, attract and retain outstanding talents and
enhance the enthusiasm of our employees. All Shares to be issued under the Pre-IPO Share
Option Scheme are Domestic Shares. The Pre-IPO Share Option Scheme is not subject to the
provisions of Chapter 17 of the Listing Rules as it does not involve the grant of options by our
Company to subscribe for Shares after the Listing.
The following is a summary of the principal terms of the Pre-IPO Share Option Scheme.
(a) Duration
The term of the Pre-IPO Share Option Scheme commences on the date on which the
options under the Pre-IPO Share Option Scheme are first granted and ends on the date on which
all options granted under the Pre-IPO Share Option Scheme are exercised or canceled, and in
any event, will not exceed six years.
(b) Administration
Our Board is responsible for the implementation and management of the Pre-IPO Share
Option Scheme.
(c) Eligibility
The eligible participants of the Pre-IPO Share Option Scheme (“ Eligible Participants ”)
include our Group’s directors, senior management members, core technical personnel and
important technical personnel, as well as other employees that our Company thinks fit,
excluding independent non-executive Directors and Supervisors.
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-27 –


--- page 762 ---
(d) Grant of Options
Before granting any option under the Pre-IPO Share Option Scheme, our Board shall
evaluate whether conditions for the grant of options have been satisfied by the relevant Eligible
Participant, the relevant Eligible Participant shall enter into a share option grant agreement
with our Company, which sets out the respective rights and obligations of the relevant Eligible
Participant and our Company. No consideration is payable upon the grant of options under the
Pre-IPO Share Option Scheme.
(e) Maximum Number of Shares Underlying Options
The maximum aggregate number of underlying Shares which may be issued upon exercise
of all options granted under the Pre-IPO Share Option Scheme shall not exceed 5,267,800
Domestic Shares.
(f) Exercise Price
The exercise price in respect of each option granted shall be RMB33.64.
(g) Exercise of Options
The options under the Pre-IPO Share Option Scheme shall not be exercised before the
expiry of 12 months commencing on the date on which the options are granted or the Listing
Date (whichever is later) (the “ Waiting Period ”). Subject to the satisfaction of the relevant
conditions in respect of the exercise of options, the Eligible Participants may exercise their
options in two tranches:
Exercise period
Maximum
portion of
options which
may be
exercised
The first exercise
period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Commencing on the first trading day of H
Shares upon the expiry of the Waiting
Period and ending on the last trading
day within 12 months from the expiry
of the Waiting Period
50%
The second exercise
period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Commencing on the first trading day of H
Shares upon the expiry of 12 months
from the expiry of the Waiting Period
and ending on the last trading day
within 24 months from the expiry of the
Waiting Period
50%
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-28 –


--- page 763 ---
Where options which may be exercised are not exercised within the relevant exercise
period, such options shall be cancelled. Where any relevant condition in respect of the exercise
of options is not satisfied for the relevant exercise period, the portion of options which may be
exercised during the corresponding exercise period shall be cancelled.
(h) Adjustment
If our Company conducts capitalization of capital reserve, bonus shares issue, share
subdivision, share split, rights issue or share reduction, the number and price of the options
shall be adjusted in accordance with the Pre-IPO Share Option Scheme.
(i) Lock-up Period and Restrictions on Disposals
The Domestic Shares issued to the Eligible Participants pursuant to the exercise of the
options are subject to a lock-up period of one year from the date on which the options are
exercised, following which the Eligible Participants may dispose of such Domestic Shares in
accordance with applicable laws and regulations of the place(s) where our Company’s
securities are listed and the stock exchange(s) where our Company’s securities are listed.
(j) Non-transferability of Options
All options are non-transferable and shall not be used as a form of guarantee or as a
repayment of debt.
(k) Change in Control
Despite a change in control, amalgamation or separation of our Company, there shall not
be any amendments to the Pre-IPO Share Option Scheme.
(l) Amendments to the Pre-IPO Share Option Scheme
Any amendment to the Pre-IPO Share Option Scheme shall be approved by a general
meeting of our Company.
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-29 –


--- page 764 ---
(m) Outstanding Options
As of the Latest Practicable Date, outstanding options to subscribe for an aggregate of
4,828,750 Domestic Shares have been granted to a total of 128 Eligible Participants.
The table below sets out the details of options granted to the Directors, senior
management members of our Company and a grantee who is not a connected person of our
Company and has been granted options to subscribe for 150,000 Shares under the Pre-IPO
Share Option Scheme, which are outstanding as of the Latest Practicable Date.
Name Address
Positions held
within our Group
Number of
Domestic
Shares under
outstanding
options
granted (1)
Approximate
percentage of
equity interest
in our Company
underlying the
outstanding
options upon
completion of
the Global
Offering (2)
Directors
Mr. Lin /H1118/H1118/H1118/H1118/H1118/H1118Room 601, No. 188,
Lane 99, Wanding Road,
Minhang District,
Shanghai, PRC
Chairperson of our
Board, executive
Director and chief
executive officer
1,000,000 1.16%
Dr. HU Zhe
(ࡪߡ)H1118/H1118/H1118/H1118/H1118
Room 702, No. 2,
Lane 388, Moyu Road,
Anting Town, Jiading
District, Shanghai, PRC
Executive Director,
chief operating officer
and president
750,000 0.87%
Ms. MA Audrey
Jing Nan
(৵౺฻) /H1118/H1118/H1118/H1118
Room 202, No. 22,
Lane 18, Shenzheng Road,
Minhang District,
Shanghai, PRC
Executive Director and
vice president
200,000 0.23%
Dr. ZHAI
Shuang
(ၱᕐ) /H1118/H1118/H1118/H1118/H1118
Room 605, No. 24,
Lane 12, Minzhi Road,
Yangpu District, Shanghai,
PRC
Executive Director and
deputy executive
director of the
R&D center
150,000 0.17%
Mr. ZHAO
Yongsheng
(͛) /H1118/H1118/H1118/H1118
Room 301, No. 111,
Lane 2078, Anzhi Road,
Jiading District, Shanghai,
PRC
Executive Director and
director of the supply
chain center
150,000 0.17%
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-30 –


--- page 765 ---
Name Address
Positions held
within our Group
Number of
Domestic
Shares under
outstanding
options
granted (1)
Approximate
percentage of
equity interest
in our Company
underlying the
outstanding
options upon
completion of
the Global
Offering (2)
Senior management members of our Company (other than Directors)
Mr. ZHENG
Zhong
(ࠠ)H1118/H1118/H1118/H1118/H1118
No. 97, Lane 651,
Donghuan Road, Jiading
District, Shanghai, PRC
Vice president, Board
secretary, director of
our subsidiary and
supervisor of our
subsidiaries
150,000 0.17%
Mr. XIE Hongyu
(ڠߎ)H1118/H1118/H1118/H1118
Room 1103, Building 2,
Lane 29, Zhongjia Road,
Nanxiang Town, Jiading
District, Shanghai, PRC
Vice president and
director of our
subsidiaries
200,000 0.23%
Mr. SHAO
Liangming
(׼)H1118/H1118/H1118/H1118
Room 303, No. 6, Lane
1078, Lianyang Road,
Baoshan District,
Shanghai, PRC
Financial controller 18,250 0.02%
Grantee who is not a connected person of our Company and has been granted options to subscribe for
150,000 Shares
Mr. LIU Yun
(ᄎㄴ) /H1118/H1118/H1118/H1118/H1118
Room 801, No. 2,
Lane 1650, Jinxiu Road,
Pudong New Area,
Shanghai, PRC
Executive president 150,000 0.17%
Notes:
(1) All the options were granted on January 21, 2024, with an exercise price of RMB33.64 per Share. For
details of the exercise period, see “6. Pre-IPO Share Option Scheme — (g) Exercise of Options” in this
section. As of the date of this prospectus, none of the options granted are exercised.
(2) Without taking into account any H Shares which may be issued pursuant to the exercise of the
Over-allotment Option and any Domestic Shares which may be issued pursuant to the exercise of the
options granted under the Pre-IPO Share Option Scheme.
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-31 –


--- page 766 ---
The table below sets out the details of options granted to the remaining 119 grantees, who
are not Directors, senior management or connected persons of our Company, under the Pre-IPO
Share Option Scheme, which are outstanding as of the Latest Practicable Date.
No.
Number/Range of
Domestic Shares
under outstanding
Options granted
Total number
of grantees
Total number of
Domestic Shares
under outstanding
options granted (1)
Approximate percentage
of equity interest in our
Company underlying
the outstanding options
upon completion of the
Global Offering (2)
1./H1118/H1118/H1118/H1118/H1118/H1118/H11181 to 99,999 110 1,160,500 1.35%
2./H1118/H1118/H1118/H1118/H1118/H1118/H1118100,000 9 900,000 1.04%
Notes:
(1) All the options were granted on January 21, 2024, with an exercise price of RMB33.64 per Share. For
details of the exercise of options (including any conditions in respect thereof), see “6. Pre-IPO Share
Option Scheme — (g) Exercise of Options” in this section. As of the date of this prospectus, none of
the options granted are exercised.
(2) Without taking into account any H Shares which may be issued pursuant to the exercise of the
Over-allotment Option and any Domestic Shares which may be issued pursuant to the exercise of the
options granted under the Pre-IPO Share Option Scheme.
(n) Dilution Effect and Impact on Loss per Share
Subject to any adjustment as set out under the Pre-IPO Share Option Scheme in the event
of any capitalization of capital reserve, bonus shares issue, share subdivision, share split, rights
issue or share reduction of our Company that may take place after the Listing, the total number
of Shares to be issued pursuant to the exercise of the options granted under the Pre-IPO Share
Option Scheme shall be no more than 5,267,800 Domestic Shares, representing approximately
6.12% of the total issued share capital of our Company immediately upon completion of the
Global Offering (assuming the Over-allotment Option is not exercised and the options granted
under the Pre-IPO Share Option Scheme are not exercised). Assuming a full exercise of the
options outstanding under the Pre-IPO Share Option Scheme, the shareholding of our
Shareholders immediately following completion of the Global Offering (assuming the
Over-allotment Option is not exercised) will be diluted by approximately 5.31%. There is no
consequential impact on the loss per Share for the five months ended May 31, 2024 as the
options would not be included in the calculation of diluted loss per Share due to anti-dilution.
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-32 –


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7. Disclaimers
(a) Save as disclosed in this section and the section headed “History, Development and
Corporate Structure” in this prospectus, none of our Directors, Supervisors or any
of the parties listed in the paragraph headed “— Other Information — 5.
Qualifications of Experts” in this Appendix is:
(i) interested in our promotion, or in any assets which have been, within two years
immediately preceding the date of this prospectus, acquired or disposed of by
or leased to us, or are proposed to be acquired or disposed of by or leased to
any member of our Company; or
(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 the paragraph
headed “— Other Information — 5. Qualifications of Experts” in this Appendix:
(i) is interested legally or beneficially in any shares in any member of our Group;
or
(ii) has any right (whether legally enforceable or not) to subscribe for or to
nominate persons to subscribe for any securities in any member of our Group;
(c) Save as disclosed in this section and the section headed “Directors, Supervisors and
Senior Management” in this prospectus, none of our Directors or Supervisors is a
director or employee of a company that has an interest in the share capital of our
Company which, once the H Shares are listed on the Hong Kong Stock Exchange,
would have to be disclosed pursuant to Divisions 2 and 3 of Part XV of the SFO;
and
(d) So far as is known to our Directors, none of our Directors or Supervisors or their
respective close associates (as defined under the Listing Rules) or Shareholders who
owns more than 5% of the issued shares of our Company has any interests in the five
largest customers or the five largest suppliers of our Group.
OTHER INFORMATION
1. Estate duty
Our Directors have been advised that no material liability for estate duty is likely to
impose on our Company or any of our subsidiaries under the laws of the PRC.
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-33 –


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2. Litigation
As of the Latest Practicable Date, no member of our Group was involved in any litigation,
arbitration or claim of material importance, and, so far as we are aware, no litigation,
arbitration or claim of material importance is pending or threatened against any member of our
Group, which would have a material adverse effect on our financial condition or results of
operations, taken as a whole.
3. Sole Sponsor
The Sole Sponsor has made an application on behalf of our Company to the Hong Kong
Stock Exchange for the listing of, and permission to deal in, our H Shares. All necessary
arrangements have been made to enable the securities to be admitted into CCASS.
The Sole Sponsor satisfies the independence criteria applicable to sponsors set out in Rule
3A.07 of the Listing Rules. The Sole Sponsor will receive a fee of US$1,000,000 to act as a
sponsor to our Company in connection with the Global Offering.
4. Preliminary expenses
As of the Latest Practicable Date, our Company has not incurred material preliminary
expenses.
5. Qualifications of Experts
The qualifications of the experts (as defined under the Listing Rules and the Companies
(Winding Up and Miscellaneous Provisions) Ordinance) who have given opinions and/or
advice in this prospectus are as follows:
Name Qualifications
China International
Capital
Corporation Hong
Kong Securities
Limited /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Licensed to conduct Type 1 (dealing in securities), Type 2
(dealing in futures contracts), Type 4 (advising on securities),
Type 5 (advising on futures contracts) and Type 6 (advising on
corporate finance) of regulated activities as defined under the
SFO
Ernst & Young /H1118/H1118/H1118/H1118Certified Public Accountants and Registered Public Interest
Entity Auditor
Tian Yuan Law
Firm /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Company’s PRC legal adviser
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-34 –


--- page 769 ---
Name Qualifications
Tian Yuan Law
Firm /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Company’s PRC legal adviser as to PRC cybersecurity and data
privacy protection laws
Frost & Sullivan
(Beijing) Inc.,
Shanghai Branch
Co. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Independent industry consultant
6. Consents
Each of the experts as referred to in the paragraph headed “— Other Information — 5.
Qualifications of Experts” in this Appendix has given and has not withdrawn its respective
written consents to the issue of this prospectus with the inclusion of certificates, letters,
opinions or reports and the references to its name included herein in the form and context in
which it respectively included.
7. Taxation of Holders of H Shares
(1) Hong Kong
The sale, purchase and transfer of H Shares are subject to Hong Kong stamp duty. The
current rate charged on each of the purchaser and seller is 0.1% of the consideration or, if
higher, the fair value of the H Shares being sold or transferred. For further details in relation
to taxation, see Appendix III to this prospectus.
(2) Consultation with professional advisers
Potential investors in the Global Offering are urged to consult their professional tax
advisers if they are in any doubt as to the taxation implications of subscribing for, purchasing,
holding or disposing of or dealing in our H Shares (or exercising rights attached to them). None
of our Company, our Directors, the Sole Sponsor, the Joint Overall Coordinators, the Joint
Global Coordinators, the Joint Bookrunners, the Joint Lead Managers, or any other person or
party involved in the Global Offering accept responsibility for any tax effects on, or liabilities
of, any person, resulting from the subscription, purchase, holding or disposal of, dealing in or
the exercise of any rights in relation to our H Shares.
8. No Material Adverse Change
Our Directors confirm that, as of the date of this prospectus, there has been no material
adverse change in the financial or trading position of our Company since May 31, 2024 (being
the latest balance sheet date of our consolidated financial statements as set out in the
Accountants’ Report).
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-35 –


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9. Promoters
The promoters of our Company are all then 29 shareholders of our Company as of August
20, 2020 before our conversion into a joint stock company with limited liability. Save as
disclosed in the section headed “History, Development and Corporate Structure” in this
prospectus, within the two years preceding the date of this prospectus, no cash, securities or
other benefit has been paid, allotted or given or is proposed to be paid, allotted or given to any
promoter in connection with the Global Offering and the related transactions described in this
prospectus.
10. Restrictions on Repurchase
For details, see Appendices IV and V to this prospectus.
11. Binding Effect
This prospectus shall have the effect, if an application is made in pursuance of it, of
rendering all persons concerned bound by all of the provisions (other than the penal provisions)
of sections 44A and 44B of the Companies (Winding Up and Miscellaneous Provisions)
Ordinance so far as applicable.
12. Bilingual Prospectus
The English and Chinese language versions of this prospectus are being published
separately, in reliance upon the exemption provided under section 4 of the Companies
(Exemption of Companies and Prospectuses from Compliance with Provisions) Notice
(Chapter 32L of the Laws of Hong Kong).
13. Financial Adviser
BNP Paribas Securities (Asia) Limited (“ BNP Paribas ”) has been appointed by our
Company as financial adviser in respect of the Listing and the Global Offering. The
appointment of BNP Paribas is at our Company’s own initiative and not made pursuant to the
requirements of the Listing Rules, and the appointment of BNP Paribas is separate and distinct
from the appointment of the Sole Sponsor (which is required to be made by us pursuant to the
Listing Rules). The role of BNP Paribas in the Listing and the Global Offering is different from
that of the Sole Sponsor in that it focuses on providing general financial advisory services to
our Company in respect of the Listing and the Global Offering, including providing advice
regarding the appropriate corporate structure and investment positioning of our Company, and
the timing and other aspects of the Global Offering. BNP Paribas is a corporation licensed to
conduct Type 1 (dealing in securities), Type 2 (dealing in futures contracts), Type 4 (advising
on securities) and Type 6 (advising on corporate finance) of regulated activities as defined
under the SFO.
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-36 –


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14. Miscellaneous
Save as otherwise disclosed in this section and the sections headed “History,
Development and Corporate Structure” and “Underwriting” in this prospectus:
(a) within the two years preceding the date of this prospectus, (i) our Company has not
issued nor agreed to issue any share or loan capital fully or partly paid either for
cash or for a consideration other than cash; and (ii) no commission, discount,
brokerage or other special term has been granted in connection with the issue or sale
of any shares of our Company;
(b) no Share or loan capital of our Company, if any, is under option or is agreed
conditionally or unconditionally to be put under option;
(c) our Company has not issued nor agreed to issue any founder shares, management
shares or deferred shares;
(d) our Company has no outstanding convertible debt securities or debentures;
(e) there is no arrangement under which future dividends are waived or agreed to be
waived;
(f) there has been no interruption in our business which may have or have had a
significant effect on the financial position in the last 12 months;
(g) our Company is not presently listed on any stock exchange or traded on any trading
system; and
(h) our Company is a joint stock limited company and is subject to the PRC Company
Law.
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-37 –


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DOCUMENTS DELIVERED TO THE REGISTRAR OF COMPANIES IN HONG KONG
The documents attached to a copy of this prospectus and delivered to the Registrar of
Companies in Hong Kong for registration were:
(i) a copy of the material contracts referred to in the paragraph headed “Further
Information about the Business of Our Company — 1. Summary of Material
Contracts” in Appendix VI to this prospectus; and
(ii) the written consents referred to in the paragraph headed “Other Information — 6.
Consents” 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
Hong Kong Stock Exchange at www.hkexnews.hk and our website at www.refire.com during
a period of 14 days from the date of this prospectus:
(a) the Articles of Association;
(b) the Accountants’ Report prepared by Ernst & Young, the text of which is set out in
Appendix I to this prospectus;
(c) the audited consolidated financial statements of our Group for the three financial
years ended December 31, 2021, 2022 and 2023 and the five months ended May 31,
2024;
(d) the report prepared by Ernst & Young on the unaudited pro forma financial
information of our Group, the text of which is set out in Appendix II to this
prospectus;
(e) the industry report issued by Frost & Sullivan referred to in the section headed
“Industry Overview” in this prospectus;
(f) the PRC legal opinion issued by Tian Yuan Law Firm, our legal adviser as to PRC
law, in respect of, among other things, the general matters and property interests of
our Group under the PRC laws;
(g) the legal opinion issued by Tian Yuan Law Firm, our legal adviser as to PRC
cybersecurity and data privacy protection laws;
(h) the material contracts referred to in the paragraph headed “Further Information
about the Business of Our Company — 1. Summary of Material Contracts” in
Appendix VI to this prospectus;
APPENDIX VII DOCUMENTS DELIVERED TO THE REGISTRAR OF
COMPANIES AND A V AILABLE ON DISPLAY
– VII-1 –


--- page 773 ---
(i) the service contracts referred to in the paragraph headed “Further Information about
Our Directors, Supervisors and Substantial Shareholders — 3. Service Contracts” in
Appendix VI to this prospectus;
(j) the Pre-IPO Share Option Scheme;
(k) the written consents referred to in the paragraph headed “Other Information — 6.
Consents” in Appendix VI to this prospectus; and
(l) the PRC Company Law, the PRC Securities Law, the Overseas Listing Trial
Measures and the Guidelines for Articles of Association of Listed Companies ( ɪ
ˏ‘) issued by the CSRC together with unofficial English
translations thereof.
DOCUMENT A V AILABLE FOR INSPECTION
A list of grantees under the Pre-IPO Share Option Scheme, containing all details as
required under the Listing Rules and the Companies (Winding Up and Miscellaneous
Provisions) Ordinance, will be available for inspection at the office of O’Melveny & Myers,
at 31/F, AIA Central, 1 Connaught Road Central, Hong Kong during normal business hours up
to and including the date which is 14 days from the date of this prospectus.
APPENDIX VII DOCUMENTS DELIVERED TO THE REGISTRAR OF
COMPANIES AND A V AILABLE ON DISPLAY
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Cover Size: 210 x 280 mm / Open Size: 457 x 280 mm /       width: 37mm
Re/f_ire PPTUS Cover
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