https:www1.hkexnews.hk:app:sehk:2026:108248:documents:sehk26032900874

prospectus Reference Materials/IPO Prospectus 2026 1.2 MB text added 6/4/2026

The Stock Exchange of Hong Kong Limited and the Securities and Futures Commission take no responsibility for the contents of this Post Hearing Information Pack, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this Post Hearing Information Pack. Post Hearing Information Pack of Victory Giant Technology (HuiZhou) Co., Ltd. (the “Company”) (A joint stock company incorporated in the People’s Republic of China with limited liability) WARNING The publication of this Post Hearing Information Pack is required by The Stock Exchange of Hong Kong Limited (the “Stock Exchange”) and the Securities and Futures Commission (the “Commission”) solely for the purpose of providing information to the public in Hong Kong. This Post Hearing Information Pack is in draft form. The information contained in it is incomplete and is subject to change which can be material. By viewing this document, you acknowledge, accept and agree with the Company, its joint sponsors, overall coordinators, advisers or members of the underwriting syndicate that: (a) this document is only for the purpose of providing information about the Company to the public in Hong Kong and not for any other purposes. No investment decision should be based on the information contained in this document; (b) the publication of this document or supplemental, revised or replacement pages on the Stock Exchange’s website does not give rise to any obligation of the Company, its joint sponsors, overall coordinators, advisers or members of the underwriting syndicate to proceed with a listing in Hong Kong or any other jurisdiction. There is no assurance that the Company will proceed with the listing; (c) the contents of this document or supplemental, revised or replacement pages may or may not be replicated in full or in part in the actual final listing document; (d) the Post Hearing Information Pack is not the final listing document and may be updated or revised by the Company from time to time in accordance with the Rules Governing the Listing of the Securities on The Stock Exchange of Hong Kong Limited; (e) this document does not constitute a prospectus, offering circular, notice, circular, brochure or advertisement offering to sell any securities to the public in any jurisdiction, nor is it an invitation to the public to make offers to subscribe for or purchase any securities, nor is it calculated to invite offers by the public to subscribe for or purchase any securities; (f) this document must not be regarded as an inducement to subscribe for or purchase any securities, and no such inducement is intended; (g) neither the Company nor any of its affiliates, its joint sponsors, overall coordinators, advisers or underwriters is offering, or is soliciting offers to buy, any securities in any jurisdiction through the publication of this document; (h) no application for the securities mentioned in this document should be made by any person nor would such application be accepted; (i) the Company has not and will not register the securities referred to in this document under the United States Securities Act of 1933, as amended, or any state securities laws of the United States; (j) as there may be legal restrictions on the distribution of this document or dissemination of any information contained in this document, you agree to inform yourself about and observe any such restrictions applicable to you; and (k) the application to which this document relates has not been approved for listing and the Stock Exchange and the Commission may accept, return or reject the application for the subject listing. If an offer or an invitation is made to the public in Hong Kong in due course, prospective investors are reminded to make their investment decisions solely based on the Company’s prospectus registered with the Registrar of Companies in Hong Kong, copies of which will be published to the public during the offer period. -- 1 of 431 -- IMPORTANT: If you are in any doubt about any of the contents of this document, you should obtain independent professional advice. Victory Giant Technology (HuiZhou) Co., Ltd. (A joint stock company incorporated in the People’s Republic of China with limited liability) [REDACTED] Number of [REDACTED] under the [REDACTED] : [REDACTED] H Shares (subject to the [REDACTED] and the [REDACTED]) Number of [REDACTED] : [REDACTED] H Shares (including [REDACTED], subject to reallocation) Number of [REDACTED] : [REDACTED] H Shares (including [REDACTED] [REDACTED], subject to reallocation, the [REDACTED] and the [REDACTED]) Maximum [REDACTED] : HK$[REDACTED] per H Share, plus brokerage of 1.0%, SFC transaction levy of 0.0027%, Stock Exchange trading fee of 0.00565% and AFRC transaction levy of 0.00015% (payable in full on application in Hong Kong dollars and subject to refund) Nominal value : RMB1.00 per H Share [REDACTED] : [REDACTED] Joint Sponsors, [REDACTED] Hong Kong Exchanges and Clearing Limited, The Stock Exchange of Hong Kong Limited and Hong Kong Securities Clearing Company Limited take no responsibility for the contents of this document, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this document. A copy of this document, having attached thereto the documents specified in “Appendix VII — Documents Delivered to the Registrar of Companies and Available on Display”, [has been] registered by the Registrar of Companies in Hong Kong as required by section 342C of the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Chapter 32 of the Laws of Hong Kong). The Securities and Futures Commission of Hong Kong and the Registrar of Companies in Hong Kong take no responsibility for the contents of this document or any other document referred to above. The [REDACTED] have not been and will not be registered under the U.S. Securities Act or any state securities laws of the United States and may not be [REDACTED], sold, pledged, or transferred within the United States or to, or for the account or benefit of US persons (as defined in Regulation S), except in transactions exempt from, or not subject to, the registration requirements of the U.S. Securities Act. The [REDACTED] may be [REDACTED], sold or delivered (a) in the United States solely to QIBs in reliance on Rule 144A or another exemption from, or in a transaction not subject to, the registration requirements of the U.S. Securities Act or (b) outside the United States in offshore transactions in reliance on Regulation S. The [REDACTED] is expected to be fixed by agreement between the [REDACTED] (for themselves and on behalf of the [REDACTED]) and us on the [REDACTED]. The [REDACTED] is expected to be on or before [REDACTED] (Hong Kong time). The [REDACTED] will not be more than HK$[REDACTED] per [REDACTED] unless otherwise announced. If, for any reason, the [REDACTED] is not agreed by 12:00 noon on [REDACTED] (Hong Kong time) between the [REDACTED] (for themselves and on behalf of the [REDACTED]) and us, the [REDACTED] will not proceed and will lapse. Prior to making an [REDACTED] decision, [REDACTED] should consider carefully all of the information set out in this document, including the risk factors set out in the section headed “Risk Factors” in this document. The [REDACTED] (for themselves and on behalf of the [REDACTED]) may, where considered appropriate and with our consent, reduce the number of [REDACTED] being [REDACTED] under the [REDACTED] stated in this document at any time on or prior to the morning of the last day for lodging applications under the [REDACTED]. In such case, notices of the reduction in the number of [REDACTED] being [REDACTED] under the [REDACTED] will be published on the websites of the Stock Exchange at www.hkexnews.hk and our Company at www.shpcb.com 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 [REDACTED]. For further information, please see the sections headed “Structure of the [REDACTED]” and “How to Apply for [REDACTED]”. The obligations of the [REDACTED] under the [REDACTED] are subject to termination by the [REDACTED] (for themselves and on behalf of the [REDACTED]) if certain grounds arise prior to 8:00 a.m. on the [REDACTED]. Please see the section headed “[REDACTED]” in this document for further information. [REDACTED] IMPORTANT [REDACTED] THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 2 of 431 -- [REDACTED] IMPORTANT – ii – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 3 of 431 -- [REDACTED] IMPORTANT – iii – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 4 of 431 -- [REDACTED] IMPORTANT – iv – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 5 of 431 -- [REDACTED] EXPECTED TIMETABLE – v – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 6 of 431 -- [REDACTED] EXPECTED TIMETABLE – vi – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 7 of 431 -- [REDACTED] EXPECTED TIMETABLE – vii – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 8 of 431 -- IMPORTANT NOTICE TO PROSPECTIVE [REDACTED] This document is issued by our Company solely in connection with the [REDACTED] and the [REDACTED] and does not constitute an [REDACTED] to sell or a solicitation of an [REDACTED] to [REDACTED] for or buy any security other than the [REDACTED]. This document may not be used for the purpose of, and does not constitute, an [REDACTED] to sell or a solicitation of an [REDACTED] for or buy any security in any other jurisdiction or in any other circumstances. No action has been taken to permit a [REDACTED] of the [REDACTED] or the distribution of this document in any jurisdiction other than Hong Kong. The distribution of this document and the [REDACTED] and sale of the [REDACTED] in other jurisdictions are subject to restrictions and may not be made except as permitted under the applicable securities laws of such jurisdictions pursuant to registration with or authorization by the relevant securities regulatory authorities or an exemption therefrom. You should rely only on the information contained in this document to make your [REDACTED] decision. We have not authorized anyone to provide you with information that is different from what is contained in this document. Any information or representation not included in this document must not be relied on by you as having been authorized by us, the Joint Sponsors, the [REDACTED], the [REDACTED], the [REDACTED], the [REDACTED], the [REDACTED], the [REDACTED], the [REDACTED], any of our or their respective directors, officers, employees, agents or representatives of any of them, or any other person or party involved in the [REDACTED]. Information contained on our website, located at www.shpcb.com, does not form part of this document. Page EXPECTED TIMETABLE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . v CONTENTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . viii SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 GLOSSARY OF TECHNICAL TERMS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 FORWARD-LOOKING STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 RISK FACTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 WAIVERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48 INFORMATION ABOUT THIS DOCUMENT AND THE [REDACTED] . . . . . . . . . . 57 DIRECTORS AND PARTIES INVOLVED IN THE [REDACTED] . . . . . . . . . . . . . . 61 CORPORATE INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67 INDUSTRY OVERVIEW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69 REGULATORY OVERVIEW. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81 CONTENTS – viii – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 9 of 431 -- HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE . . . . . . . . . . . . . . . 109 BUSINESS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 117 RELATIONSHIP WITH OUR LARGEST GROUP OF SHAREHOLDERS . . . . . . . . 153 CONNECTED TRANSACTION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 158 DIRECTORS AND SENIOR MANAGEMENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 159 SUBSTANTIAL SHAREHOLDERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 169 SHARE CAPITAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 170 FINANCIAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 174 FUTURE PLANS AND [REDACTED] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 205 [REDACTED] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 209 STRUCTURE OF THE [REDACTED]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 219 HOW TO APPLY FOR [REDACTED] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 234 APPENDIX I — ACCOUNTANTS’ REPORT . . . . . . . . . . . . . . . . . . . . . . . I-1 APPENDIX II — UNAUDITED [REDACTED] FINANCIAL INFORMATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II-1 APPENDIX III — TAXATION AND FOREIGN EXCHANGE . . . . . . . . . . . . III-1 APPENDIX IV — SUMMARY OF PRINCIPAL LAWS AND REGULATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-1 APPENDIX V — SUMMARY OF THE ARTICLES OF ASSOCIATION . . . . V-1 APPENDIX VI — STATUTORY AND GENERAL INFORMATION . . . . . . . . VI-1 APPENDIX VII — DOCUMENTS DELIVERED TO THE REGISTRAR OF COMPANIES AND AVAILABLE ON DISPLAY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VII-1 CONTENTS – ix – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 10 of 431 -- This summary aims to give you an overview of the information contained in this document. As it is a summary, it does not contain all the information that may be important to you and is qualified in its entirety by, and should be in conjunction with, the full text of this document. You should read the entire document before you decide to [REDACTED] in the [REDACTED]. There are risks associated with any [REDACTED]. Some of the particular risks in [REDACTED] in the [REDACTED] are set out in “Risk Factors” in this Document. You should read that section carefully before you decide to [REDACTED] in the H Shares. OVERVIEW Who We Are We are one of the key players in advanced printed circuit board (“PCB”) products for AI and high-performance computing in terms of sales revenue in 2024 and the first half of 2025, specializing in research and development, manufacturing and sales of high-build-up high-density interconnects (“HDIs”) and high-layer-count multi-layer printed circuit boards (“MLPCBs“). Our technologies, product quality and robust production capabilities position us as a crucial supplier to leading global technology companies. According to Frost & Sullivan, we ranked first globally in terms of sales revenue in the PCB market in the field of AI and high-performance computing in the first half of 2025 with a market share of 13.8% and ranked seventh globally by the same metric in 2024 with a market share of 1.7%, with key applications covering AI accelerator cards, servers, AI servers, data center switches and UBB. We are able to manufacture high-layer-count MLPCBs with more than 100 layers. We are also one of the first companies globally to achieve mass production of 24-layer HDIs with a 6+12+6 build-up, as well as the technical capabilities for 30-layer HDIs with a 10+10+10 build-up, and 16-layer any-layer interconnect HDIs, demonstrating our capability to deliver ultra-complex, high-density PCBs widely used in cutting-edge AI and high-performance computing applications at scale, reinforcing our industry leadership. Our technologies support the evolving needs of fast-growing industries such as AI, EV and high-speed telecommunications equipment, contributing to the advancement of China’s high-end PCB manufacturing industry. The proliferation of AI is driving advancements in AI-related hardware, creating structural growth opportunities for the PCB industry. As a key component supporting computing systems, PCB must meet increasingly stringent standards, including high frequency and speed, low signal loss and enhanced heat dissipation. The PCB content value per unit in AI servers is notably higher than that in traditional servers. As AI applications continue to expand, the demand for high-performance PCBs is expected to grow substantially. According to Frost & Sullivan, the global AI server shipments reached approximately 2.0 million units in 2024 and are projected to grow at a CAGR of over 20% to approximately 5.4 million units by 2029, with their share of total server shipments increasing to approximately 29.0%. Accordingly, we were among the first PCB manufacturers in China to establish smart factories, adopt green manufacturing practices, and expand into emerging sectors. These initiatives increase production output, shorten delivery cycles, reduce energy consumption and lower the labor intensity, ultimately enhancing our overall competitiveness. As we continue to strengthen our core capabilities, we have seized the growth opportunities driven by the development of AI and EV, built a global delivery network to meet rising demand worldwide and rose to the top tier of advanced PCB manufacturers globally. Our Product Portfolio We offer a comprehensive range of products used in a variety of applications. We have expanded our presence in the following key sectors including AI and high-performance computing, smart devices, automotive electronics, telecommunications and medical devices, with a focus on technologies supporting AI computing such as GPUs and CPUs: (i) AI and High-performance Computing: We have developed technologies for applying low-loss materials and optimizing signal SUMMARY – 1 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 11 of 431 -- integrity to support AI and high-performance computing. Our products center on high-build-up HDIs and high-layer-count MLPCBs supporting high-frequency and high-speed signal transmission. They are primarily used in AI accelerator cards, servers (including AI servers), data center switches and high-speed optical modules; (ii) Smart Devices: We focus on the key technological requirements of smart devices, including high integration, slim design and high-speed computing performance. Our products include HDIs and FPCs used in AI-powered PCs, wearables and AR/VR devices; (iii) Automotive Electronics: Our products are designed to meet the requirements of automotive-grade reliability, thermal resistance and signal integrity. Our products include HDIs, high-layer-count MLPCBs and FPCs, which are widely used in EV electrical systems, intelligent driving systems, vehicle body control modules and smart cockpits; (iv) Telecommunications: We focus on the application of materials that support high-frequency, high-speed transmission and technologies to ensure signal integrity. Our products include high-layer-count MLPCBs and high-build-up HDIs designed for use in 5G base stations, optical communication equipment and data center optical modules; and (v) Medical Devices and Other Applications: Our products include MLPCBs, HDIs and FPCs, which are primarily used in advanced medical devices, industrial automation control systems and core control modules of humanoid robots. Our PCB products for humanoid robots have entered production and sales. The following table sets forth our revenue breakdown by the applications of our PCB products for the periods indicated: Application Year Ended December 31, 2023 2024 2025 RMB % RMB % RMB % (in RMB thousands, except for percentages) AI and High-Performance Computing ! ! ! ! ! ! ! ! ! ! ! ! 461,104 5.8 706,522 6.6 8,341,256 43.2 Smart Devices ! ! ! ! ! ! ! ! ! ! ! 3,761,890 47.4 3,632,648 33.9 3,684,429 19.1 Automotive Electronics ! ! ! ! ! 848,314 10.8 2,199,366 20.5 2,591,542 13.4 Telecommunications ! ! ! ! ! ! ! 1,106,202 13.9 1,550,297 14.4 1,916,570 9.9 Medical Devices and Other Applications(1) ! ! ! ! ! 1,281,071 16.2 1,961,929 18.3 1,549,892 8.1 Total PCB products(2) ! ! ! ! ! 7,458,581 94.1 10,050,762 93.7 18,083,689 93.7 Notes: (1) Other applications primarily include products used in power and battery systems, industrial control, avionics, smart security, LCDs, LEDs, memory modules, SSDs and related applications. (2) In addition to generating revenue from the sale of PCB products, we also generated revenues from the sales of scrap materials, primarily copper-bearing etching solutions, which accounted for the majority of our other revenue. Others represented 5.9%, 6.3% and 6.3% of our revenue in 2023, 2024 and 2025, respectively. The revenue of other products was primarily derived from sales to customers in Chinese mainland (excluding special supervision territory). Our Global Strategic Footprint We are committed to strengthening our global presence by continuous domestic and international expansion. Through our network of production centers at home and abroad and strategic mergers and acquisitions, we have built a comprehensive operational network integrating advanced manufacturing, customer service and regional coordination. Research and Development Our products are highly customized. We typically engage with customers at the outset of their end-product cycle and work closely to design and develop customized PCBs in line with their specifications and the design of the end products in which our PCBs will be used. As a result, we are involved throughout the entire product life cycle, serving as a key partner from development through mass production. SUMMARY – 2 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 12 of 431 -- Our Customers Our customers mainly include established global AI technology solution providers, large cloud service providers, data center equipment OEMs, server manufacturers, top-tier EV companies, automotive electronics suppliers, prominent smart device brands and major medical device manufacturers. In each year during the Track Record Period, we had more than 700 customers. In 2023, 2024 and 2025, sales to our five largest customers in each year during the Track Record Period amounted to RMB2,145.6 million, RMB2,690.5 million and RMB9,847.6 million, accounting for 27.1%, 25.1% and 51.0% of our total revenue in the respective period. In the same periods, sales to our largest customer in each year during the Track Record Period amounted to RMB503.5 million, RMB886.4 million and RMB5,737.9 million, accounting for 6.3%, 8.3% and 29.7% of our total revenue in the respective period. We believe that we do not unduly rely on our major customers because it primarily reflects a significant increase in orders placed in connection with our HDI products for AI and high performance computing for the year ended December 31, 2025. This was in line with the overall increase in customer orders during the period and consistent with our broader sales momentum across multiple product categories. See “Business — Sales and Marketing — Our Customers” for further details. Our Suppliers Our suppliers are mainly suppliers of raw materials and equipment. We have established and maintain stable, long-term and sustainable relationships with these major suppliers. In 2023, 2024 and 2025, purchases from our five largest suppliers in each year during the Track Record Period amounted to RMB1,975.3 million, RMB2,428.2 million and RMB5,658.0 million, accounting for 31.4%, 29.3% and 45.2% of our total purchases in the respective periods. In 2023, 2024 and 2025, purchases from our largest supplier in each year during the Track Record Period amounted to RMB731.9 million, RMB782.8 million and RMB1,873.0 million, accounting for 11.6%, 9.4%, and 15.0% of our total purchases in the respective periods. Except for Supplier H from whom we procure production equipment, all these are suppliers of our raw materials. See “Business — Supply Chain — Our Suppliers — Major Suppliers” for further details. MANUFACTURING We manufacture our PCB products in our production centers in (i) Huizhou, Guangdong Province, PRC, (ii) Changsha, Hunan Province, PRC, (iii) Yiyang, Hunan Province, PRC, (iv) Phra Nakhon Si Ayutthaya, Thailand, and (v) Melaka, Malaysia. We have integrated smart manufacturing into various aspects of our production, significantly improving our production efficiency and product yields. OUR COMPETITIVE STRENGTHS We believe the following competitive strengths have contributed to our success and will continue to drive our future growth: (i) Strategy Foresight: Fast and sustainable growth driven by strategic initiatives and innovation efforts; (ii) Leading Technologies: Technological edge driven by strategic foresight and R&D; (iii) Recognized Quality: Ensuring excellence through end-to-end control and process innovation; (iv) Production Capacity and Planning: Adaptable and scalable production capabilities with global reach; (v) Strategic Customer Base: Strategic long-term collaboration with global tech leaders; (vi) Smart Factory: AI-powered smart factory and advanced manufacturing processes; and (vii) Management and Culture: Visionary founder and experienced management team. SUMMARY – 3 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 13 of 431 -- OUR GROWTH STRATEGIES We will pursue the following strategies to drive further growth: (i) strengthening market leadership in AI and high-performance computing PCB; (ii) expanding our product portfolio and targeting emerging sectors; (iii) advancing our global management model; and (iv) continue promoting employee well-being through people first philosophy and team integration. COMPETITION The PCB industry is highly competitive, with global production centered in China while a growing number of manufacturers are also establishing facilities in Southeast Asia to enhance supply chain resilience. The market remains fragmented, with many players across segments. See “Industry Overview” for details relating to our competitive landscape. SUMMARY OF HISTORICAL FINANCIAL INFORMATION The following tables set forth a summary of financial data from our consolidated financial information during the Track Record Period. The summary financial data should be read together with, and is qualified in its entirety by reference to, the consolidated financial statements as set out in the Accountants’ Report in Appendix I to this document, including the related notes. Our consolidated financial information was prepared in accordance with the IFRS Accounting Standards. Results of Operations Year Ended December 31, 2023 2024 2025 RMB % RMB % RMB % (in RMB thousands, except for percentages) Revenue ! ! ! ! ! ! ! ! ! ! ! ! ! ! 7,931,248 100.0 10,731,469 100.0 19,292,313 100.0 Cost of sales ! ! ! ! ! ! ! ! ! ! ! (6,287,951) (79.3) (8,292,806) (77.3) (12,496,889) (64.8) Gross profit ! ! ! ! ! ! ! ! ! ! ! ! 1,643,297 20.7 2,438,663 22.7 6,795,424 35.2 Other (losses)/gains, net ! ! ! ! (11,413) (0.1) 41,846 0.4 (67,840) (0.4) Other income ! ! ! ! ! ! ! ! ! ! ! 43,829 0.6 49,981 0.5 72,589 0.4 Selling and marketing expenses ! ! ! ! ! ! ! ! ! ! ! ! ! (154,408) (1.9) (200,815) (1.9) (257,347) (1.3) Research and development expenses ! ! ! ! ! ! ! ! ! ! ! ! ! (348,304) (4.4) (449,827) (4.2) (777,643) (4.0) (Provision)/reversal of impairment losses on financial assets, net ! ! ! ! ! ! (15,329) (0.2) 2,303 0.0 (36,415) (0.2) Administrative expenses! ! ! ! ! (320,286) (4.0) (456,705) (4.3) (563,528) (2.9) [REDACTED] ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! – – – – [REDACTED] [REDACTED] Operating profit ! ! ! ! ! ! ! ! ! 837,386 10.6 1,425,446 13.3 5,164,209 26.8 Finance costs ! ! ! ! ! ! ! ! ! ! ! ! (88,172) (1.1) (113,623) (1.1) (142,493) (0.7) Profit before income tax! ! ! ! 749,214 9.4 1,311,823 12.2 5,021,716 26.0 Income tax expenses ! ! ! ! ! ! ! (77,868) (1.0) (157,392) (1.5) (709,728) (3.7) Profit for the year attributable to owners of the Company ! ! ! ! ! ! ! ! ! 671,346 8.5 1,154,431 10.8 4,311,988 22.4 SUMMARY – 4 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 14 of 431 -- Revenue During the Track Record Period, we mainly generated revenue from sales of single- and double-layer PCBs, MLPCBs, HDIs and FPCs. By product category Year Ended December 31, 2023 2024 2025 RMB % RMB % RMB % (in RMB thousands, except for percentages) Single- and double-layer PCB ! 647,790 8.2 1,046,788 9.8 1,027,869 5.3 MLPCB ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 5,788,391 73.0 6,172,756 57.5 8,316,217 43.1 HDI ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 929,978 11.7 1,520,773 14.2 7,424,728 38.5 FPC ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 92,422 1.2 1,310,445 12.2 1,314,875 6.8 Others* ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 472,667 5.9 680,707 6.3 1,208,624 6.3 Total ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 7,931,248 100.0 10,731,469 100.0 19,292,313 100.0 Note: * In addition to generating revenue from the sale of PCB products, we also generated revenues from the sales of scrap materials, primarily copper-bearing etching solutions, which accounted for the majority of our other revenue. Others represented 5.9%, 6.3% and 6.3% of our revenue in 2023, 2024 and 2025, respectively. The revenue of other products was primarily derived from sales to customers in Chinese mainland (excluding special supervision territory). During the Track Record Period, MLPCBs were our largest revenue contributor. We also derived increasingly significant revenue from the sales of HDIs, especially HDIs with a build-up of 4+N+4 or above, which we expect to continue to be a major contributor to our total revenue going forward. We also provided single- and double-layer PCBs and FPCs to address customers’ diverse needs. Going forward, with the proliferation of AI technologies, we expect the demand for our high-layer-count MLPCBs and HDIs to remain strong. By geographical location Year Ended December 31, 2023 2024 2025 RMB % RMB % RMB % (in RMB thousands, except for percentages) Chinese Mainland (excluding special supervision territory) ! ! ! ! 2,582,247 32.6 3,517,936 32.8 3,286,380 17.0 Offshore Special supervision territory in China ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 2,610,628 32.9 2,451,044 22.8 2,471,087 12.8 Taiwan ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 193,176 2.4 334,165 3.1 4,915,760 25.5 Hong Kong ! ! ! ! ! ! ! ! ! ! ! ! ! 589,521 7.4 389,051 3.6 433,220 2.2 Vietnam ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 559,152 7.0 1,078,642 10.1 3,233,672 16.8 Asia (Excluding special supervision territory in China, Taiwan, Hong Kong and Vietnam) ! ! ! ! ! ! ! ! ! ! 520,104 6.7 1,216,949 11.3 2,107,802 10.9 North America and Europe(1) ! 332,851 4.2 868,077 8.1 1,535,074 8.0 Other regions and overseas countries(2) ! ! ! ! ! ! ! ! ! ! ! ! 70,902 0.9 194,898 1.9 100,694 0.5 Total PCB products(3) ! ! ! ! ! 7,458,581 94.1 10,050,762 93.7 18,083,689 93.7 SUMMARY – 5 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 15 of 431 -- Notes: (1) In 2023, 2024 and 2025, revenue generated from the U.S. accounted for less than 5% of our revenue in the same periods, respectively. (2) Primarily including sales to South America and Oceania. (3) In addition to generating revenue from the sale of PCB products, we also generated revenues from the sales of scrap materials, primarily copper-bearing etching solutions, which accounted for the majority of our other revenue. Others represented 5.9%, 6.3% and 6.3% of our revenue in 2023, 2024 and 2025, respectively. The revenue of other products was primarily derived from sales to customers in Chinese mainland (excluding special supervision territory). During the Track Record Period, a majority of our revenue was from customers outside Chinese mainland, for whom we completed the customs declarations. A substantial portion of our sales to such customers occurs in special supervision territory in China. For detailed analysis on our customs-related obligations related to special supervision territory in China, see “Financial Information — Principal Components of Results of Operations — Revenue — By geographical location”. Sales Volume and Average Selling Price (“ASP”)* Year Ended December 31, 2023 2024 2025 Sales volume ASP Sales volume ASP Sales volume ASP ’000 sq m RMB/ sq m ’000 sq m RMB/ sq m ’000 sq m RMB/ sq m Single- and double-layer PCB ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 1,420 456 1,779 589 1,653 622 MLPCB ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 5,814 996 6,018 1,026 5,965 1,394 HDI ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 508 1,831 647 2,351 551 13,475 FPC ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 35 2,641 462 2,836 494 2,662 Notes: * For MLPCBs, HDIs and FPCs, sales volume is calculated as the aggregate of the area of specific product types. Within the same product category, products with a higher number of layers or build-up typically have a higher ASP, assuming the same sales area. * ASP is calculated by dividing the revenue in a given product category by the corresponding sales volume. The changes in sales volume and ASP were primarily attributable to shifts in market demand and changes in product mix. It should be noted that our ASP is calculated on a per-square-meter basis. As the number of layers increases, the yield of finished square meters from the same amount of input material decreases. As a result, the ASP per square meter tends to increase more rapidly for higher-layer products. Our single- and double-layer PCB sales volume increase from 2023 to 2024 was mainly attributable to the consolidation of the results of operations of PSL upon the completion of our acquisition in November 2023, and to a lesser extent, an increase in demand for PCB products used in smart devices. Its decrease from 2024 to 2025 was mainly as a result of strategic capacity optimization initiatives to prioritize the production of MLPCBs. Our MLPCB sales volume increased from 2023 to 2024, mainly attributable to the consolidation of the results of operations of PSL upon the completion of our acquisition in November 2023. It decreased from 2024 to 2025 mainly as a result of strategic capacity optimization initiatives to prioritize the production of high-end MLPCBs with more layers. SUMMARY – 6 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 16 of 431 -- Our HDI sales volume increased from 2023 to 2024, primarily driven by a sharp increase in demand for HDIs used in AI computing and other advanced applications. It decreased from 2024 to 2025, mainly due to our strategic focus on producing higher build-up HDIs and the fact that we shifted our capacity towards these products. Its ASP increased from RMB2,351 per square meter in 2024 to RMB13,475 per square meter in 2025 mainly due to an increased proportion of higher build-up HDIs with more advanced designs, processes and materials, which has been a primary driver of the year-on-year increase in ASP. We expect the ASP of our HDI products to remain at a relatively high level in the near term, supported by continued demand for high-end HDI products used in AI computing and other advanced applications, although it may fluctuate from period to period depending on industry trends, customer demand and market conditions. Cost of Sales Year Ended December 31, 2023 2024 2025 RMB % RMB % RMB % (in RMB thousands, except for percentages) Cost of raw materials ! ! ! ! ! ! 3,687,558 58.6 5,197,105 62.7 8,236,815 65.9 Cost of manufacturing ! ! ! ! ! ! 1,692,755 27.0 1,952,565 23.5 2,751,275 22.0 Cost of labor ! ! ! ! ! ! ! ! ! ! ! ! 907,638 14.4 1,143,136 13.8 1,508,799 12.1 Total ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 6,287,951 100.0 8,292,806 100.0 12,496,889 100.0 Gross Profit and Gross Profit Margin By product category Year Ended December 31, 2023 2024 2025 Gross Profit Gross Profit Margin Gross Profit Gross Profit Margin Gross Profit Gross Profit Margin RMB % RMB % RMB % (in RMB thousands, except for percentages) Single- and double-layer PCB ! 88,926 13.7 195,975 18.7 204,387 19.9 MLPCB ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 933,890 16.1 940,864 15.2 2,025,263 24.4 HDI ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 136,891 14.7 342,598 22.5 3,231,680 43.5 FPC ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 24,093 26.1 315,831 24.1 310,056 23.6 Others(1) ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 459,497 97.2 643,395 94.5 1,024,038 84.7 Total/Overall(2) ! ! ! ! ! ! ! ! ! ! 1,643,297 20.7 2,438,663 22.7 6,795,424 35.2 Notes: (1) Mainly attributable to the sale of scrap materials, primarily copper-bearing etching solutions. The gross profit of other products was primarily derived from sales to customers in Chinese mainland (excluding special supervision territory). (2) The overall gross profit margin is calculated as gross profit for the year divided by revenue for the corresponding year and multiplied by 100%. Our gross profit increased significantly from RMB2,438.7 million in 2024 to RMB6,795.4 million in 2025, primarily due to an increase in our revenue and an improvement of our gross profit margin from 22.7% to 35.2%. In particular, driven by the strong demand from AI computing-related applications, we experienced a significant boost in demand for our high-end HDIs and MLPCBs that carry higher gross profit margin than our other products. Our gross profit increased from SUMMARY – 7 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 17 of 431 -- RMB1,643.3 million in 2023 to RMB2,438.7 million in 2024, primarily attributable to the consolidation of the results of operations of PSL upon completion of our acquisition in November 2023 and increased demand for products used in AI-related applications. Our net profit increased by 273.5% from RMB1,154.4 million in 2024 to RMB4,312.0 million in 2025, primarily due to the increase in our gross profit from RMB2,438.7 million in 2024 to RMB6,795.4 million in 2025. Our net profit increased by 72.0% from RMB671.3 million in 2023 to RMB1,154.4 million in 2024, primarily due to the increase in our gross profit from RMB1,643.3 million in 2023 to RMB2,438.7 million in 2024. For detailed analyses on our results of operations, please see “Financial Information — Period-to-Period Comparison of Results of Operations”. Summary of Consolidated Statements of Financial Position As of December 31, 2023 2024 2025 (in RMB thousands) Total non-current assets ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 10,120,496 11,095,315 21,730,694 Total current assets ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 7,263,120 8,079,998 13,513,795 Total current liabilities ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 7,583,189 7,536,563 14,046,996 Total non-current liabilities ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 2,174,697 2,710,817 4,579,885 Net current (liabilities)/assets ! ! ! ! ! ! ! ! ! ! ! ! ! ! (320,069) 543,435 (533,201) Net assets ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 7,625,730 8,927,933 16,617,608 Equity attributable to owners of the Company Share capital ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 862,689 862,689 870,349 Other reserves ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 3,830,180 4,234,220 7,861,823 Retained profit! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 2,932,861 3,831,024 7,885,436 Total equity ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 7,625,730 8,927,933 16,617,608 Taking into account the net [REDACTED] from the [REDACTED] and cash generated from our operating activities available to us, our Directors believe that we have sufficient working capital to meet our present and future cash requirements for at least the next 12 months from the date of publication of this document. See “Financial Information — Liquidity and Capital Resources” for further details. Our net current liabilities as of December 31, 2023 turned to net current assets of RMB543.4 million as of December 31, 2024, primarily due to a decrease in borrowings, an increase in inventories and an increase in trade and other receivables, partially offset by an increase in trade and other payables. Our net current assets as of December 31, 2024 turned to net current liabilities of RMB533.2 million as of December 31, 2025, primarily due to an increase of trade and other payables, a decrease of restricted bank deposits and an increase of borrowings, partially offset by an increase of trade and other receivables, an increase of cash and cash equivalents and an increase of inventories. Our net current liabilities amounted to RMB1,583.6 million as of February 28, 2026, primarily due to an increase in borrowings and a decrease in cash and cash equivalents, partially offset by an increase in inventories. See “Financial Information — Liquidity and Capital Resources — Indebtedness” for further details. Our net assets, being the total equity, increased from RMB6,936.9 million as of January 1, 2023 to RMB7,625.7 million as of December 31, 2023, primarily due to our profit of RMB671.3 million in 2023, partially offset by our dividends paid of RMB162.2 million. Our net assets further increased to RMB8,927.9 million as of December 31, 2024, primarily because of our profit of RMB1,154.4 million in 2024, partially offset by our distribution of RMB163.3 million. Our net SUMMARY – 8 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 18 of 431 -- assets further increased to RMB16,617.6 million as of December 31, 2025, primarily because of our enhanced net profit of RMB4,312.0 million in 2025 as well as the impact of additional capital raised through a non-public share issuance, partially offset by our dividend paid of RMB257.6 million. For further details, see consolidated statements of changes in equity in Accountants’ Report in Appendix I to this document. See “Consolidated Statements of Financial Position” in “Appendix I — Accountants’ Report.” Summary of consolidated statements of cash flows Year Ended December 31, 2023 2024 2025 (in RMB thousands) Operating cash flows before movements in working capital ! ! ! ! ! ! ! 1,525,958 2,209,674 6,169,982 Cash generated from operations ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 1,499,449 2,190,934 5,036,278 Interest received ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 23,126 14,328 24,510 Income tax paid ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! (54,753) (134,146) (440,714) Net cash generated from operating activities! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 1,467,822 2,071,116 4,620,074 Net cash used in investing activities ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! (2,710,207) (646,872) (5,697,525) Net cash generated from/(used in) financing activities ! ! ! ! ! ! ! ! ! ! 1,263,997 (1,253,919) 3,344,582 Net increase in cash and cash equivalents ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 21,612 170,325 2,267,131 Cash and cash equivalents at beginning of the year! ! ! ! ! ! ! ! ! ! ! ! 726,013 749,376 926,746 Effects of foreign exchange rate changes! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 1,751 7,045 12,695 Cash and cash equivalents at end of the year! ! ! ! ! ! ! ! ! ! ! ! ! ! 749,376 926,746 3,206,572 In 2023, 2024 and 2025, we recorded net cash from operating activities of RMB1,467.8 million, RMB2,071.1 million and RMB4,620.1 million, respectively, primarily due to the profits we generated in each of the respective periods, which in turn was due to our successful business expansion. See “Financial Information — Liquidity and Capital Resources — Cash Flows” for further details. Key financial ratios Year Ended/As of December 31, 2023 2024 2025 Gross margin ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 20.7% 22.7% 35.2% Net profit margin ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 8.5% 10.8% 22.4% Return on equity ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 8.8% 12.9% 25.9% Gearing ratio ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 67.4% 48.1% 38.8% Current ratio! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 1.0 1.1 1.0 Debt to equity ratio! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 56.7% 36.9% 18.9% For details of calculation, see “Financial Information — Key Financial Ratios”. Rule 13.46(2) of the Listing Rules requires a PRC issuer to send an annual report or a summary financial report to its shareholders within four months after the end of the financial year to which the report relates. Since (1) this Document already includes the financial information of the Company for the year ended December 31, 2025 as required under Appendix D2 to the Listing Rules in relation to annual reports; (2) we will not be in breach of the Articles of Association, laws and regulations of the PRC or other regulatory requirements as a result of not distributing such annual reports and accounts to our H Shareholders; and (3) we have complied with the applicable code provisions in Part 2 of the Corporate Governance Code as set out in Appendix C1 to the Listing SUMMARY – 9 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 19 of 431 -- Rules, we will not separately prepare and publish and send an annual report to our H Shareholders for the year ended December 31, 2025. In addition, we will issue an announcement by April 30, 2026 stating that we will not separately prepare and send an annual report to our H Shareholders for the year ended December 31, 2025 as the relevant financial information has been included in this Document. We will still comply with the requirements under Rule 13.91(5) of the Listing Rules. RELATIONSHIP WITH OUR LARGEST GROUP OF SHAREHOLDERS As at the Latest Practicable Date, our Largest Group of Shareholders directly held approximately 30.94% of the total issued Shares of our Company, comprising (i) approximately 15.45% of our total issued Shares directly held by Shenghua Xinye, which was held as to 90% and 10% equity interests by Mr. Chen Tao and Ms. Liu Chunlan (spouse of Mr. Chen Tao), respectively; (2) approximately 15.06% of our total issued Shares directly held by Hong Kong Victory Giant, which was wholly-owned by Hongda Investment, which in turn was held as to 70% and 30% by Mr. Chen Tao and Mr. He Lianqi, respectively; and (3) approximately 0.43% of the total issued Shares directly held by Ms. Liu Chunlan. Upon the completion of the [REDACTED] (assuming the [REDACTED] and the [REDACTED] are not exercised), they will collectively exercise voting rights of approximately [REDACTED]% of our total issued Shares. Accordingly, they will remain as our Largest Group of Shareholders immediately upon the completion of the [REDACTED]. See “Relationship with our Largest Group of Shareholders” for further details. RISK FACTORS We face risks including those set out in the section headed “Risk Factors.” As different investors may have different interpretations and criteria when determining the significance of risks, you should read the “Risk Factors” section in its entirety before you decide to [REDACTED] in our H Shares. Some of the major risks that we face include: (i) if we fail to develop new or enhanced products on a timely basis, our ability to attract and retain customers could be impaired, and our competitive position could be harmed; (ii) our growth and profitability depend on general economic conditions, which in turn may influence the development of the industries that our customers are in; (iii) our future growth depends in part on maintaining and building relationships with customers; (iv) if our production capacity is not adequate, our capability to satisfy customer demand could be hindered, and our capacity expansion efforts may not yield the benefits that we expect; and (v) we face intense competition in the global PCB industry. FUTURE PLANS AND [REDACTED] [REDACTED] Assuming an [REDACTED] of HK$[REDACTED] per H Share, we estimate that we will receive [REDACTED] of approximately HK$[REDACTED] million from the [REDACTED] after deducting the [REDACTED] commissions and other estimated expenses paid and payable by us in connection with the [REDACTED] and assuming that the [REDACTED] and the [REDACTED] are not exercised. In line with our strategies, we intend to use our [REDACTED] for the purposes and in the amounts as follows: (i) approximately [REDACTED]% of the [REDACTED], or approximately HK$[REDACTED] million, is expected to be used to expand our production in Chinese mainland, including the purchase of smart manufacturing equipment and the further automation of our manufacturing processes, to further improve production efficiency and expand our market presence; (ii) approximately [REDACTED]% of the [REDACTED], or approximately HK$[REDACTED] million, is expected to be used to further diversify our product portfolio by purchasing smart manufacturing equipment for mSAP and other machines to maintain a competitive edge in advanced PCB technologies; (iii) approximately [REDACTED]% of the [REDACTED], or approximately HK$[REDACTED] million, is expected to be used for R&D activities to strengthen SUMMARY – 10 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 20 of 431 -- our core technological capabilities across a range of fields with a focus on advanced products; and (iv) approximately [REDACTED]% of the [REDACTED], or approximately HK$[REDACTED] million, is expected to be used for working capital and general corporate purposes. [REDACTED] STATISTICS The statistics in the following table are based on the assumptions that (i) the [REDACTED] has been completed and [REDACTED] H Shares are newly issued in the [REDACTED], (ii) the [REDACTED] and the [REDACTED] are not exercised, and (iii) [REDACTED] Shares are [REDACTED] and outstanding following the completion of the [REDACTED]: Based on an [REDACTED] of HK$[REDACTED] per H Share Market capitalization of our H Shares(1) ! ! ! ! ! ! ! ! ! ! ! ! ! HK$[REDACTED] Market capitalization of our Shares upon the completion of the [REDACTED](2) ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! HK$[REDACTED] Unaudited [REDACTED] adjusted consolidated net tangible assets per Share(3)(4) ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! HK$[REDACTED] (RMB[REDACTED]) Notes: (1) The calculation of market capitalization of our H shares is based on [REDACTED] H Shares expected to be issued immediately following the completion of the [REDACTED] (assuming the [REDACTED] and the [REDACTED] are not exercised). For details, see “Share Capital — Upon the Completion of the [REDACTED]” in this Document. (2) The calculation of market capitalization of our Shares is based on [REDACTED] H Shares that will be in [REDACTED] immediately after the completion of the [REDACTED], the total share capital of 872,557,313 A Shares (representing 870,349,313 shares in issue as of December 31, 2025, adding the 2,208,000 shares issued by the Company upon the vesting of restricted shares after the Track Record Period) as of the Latest Practicable Date and excluding 217,443 treasury shares, with an average closing price of RMB[REDACTED] during the five trading days of A Shares immediately preceding the Latest Practicable Date (assuming the [REDACTED] and the [REDACTED] are not exercised). (3) The unaudited [REDACTED] adjusted consolidated net tangible assets per Share is arrived at after the adjustments referred to in the section headed “Unaudited [REDACTED] Financial Information” in Appendix II to this Document and based on a total of [REDACTED] shares (representing 870,349,313 shares in issue as of December 31, 2025, excluding 217,443 treasury shares as of December 31, 2025, adding [REDACTED] under the [REDACTED]), assuming that the [REDACTED] had been completed on December 31, 2025 but does not take into account (i) any Shares which may be allotted and [REDACTED] upon the exercise of the [REDACTED] and the [REDACTED], or (ii) any Shares which may be issued by the Company pursuant to the exercise of the restricted share scheme or the vesting of restricted shares or other awards that have been or may be granted from time to time under the share scheme. (4) The unaudited [REDACTED] adjusted consolidated net tangible assets of the Group attributable to owners of the Company as shown on page II-1 have not been adjusted to illustrate the effect of the following: In March 2026, the Company declared a dividend of approximately RMB1,740,264,000 to the existing shareholders prior to the [REDACTED] on the Company’s retained profits as of December 31, 2025. Had the payment of the declared dividend been made on December 31. 2025, the unaudited [REDACTED] adjusted consolidated net tangible assets of the Group would decrease from RMB30,157,005,000 to RMB28,416,741,000 based on [REDACTED] of HK$[REDACTED] per Share, and the unaudited [REDACTED] adjusted consolidated net tangible assets of the Group attributable to owners of the Company as at December 31, 2025 per Share would be RMB[REDACTED] (equivalent to HK$[REDACTED]) based on [REDACTED] of HK$[REDACTED] per Share. Except for the information as disclosed above, no other adjustments have been made to the unaudited [REDACTED] adjusted consolidated net tangible assets. These amounts are converted from Renminbi to Hong Kong dollars or Hong Kong dollars to Renminbi at an exchange rate of HK$1 to RMB 0.88787. No representation is made that Renminbi/Hong Kong dollars amount have been, could have been or may be converted to Hong Kong dollars/Renminbi at that rate or at all. For the calculation of the unaudited [REDACTED] adjusted consolidated net tangible assets per Share, see the section headed “Unaudited [REDACTED] Financial Information” in Appendix II to this Document. SUMMARY – 11 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 21 of 431 -- [REDACTED] Our [REDACTED] are estimated to be approximately RMB[REDACTED] (including [REDACTED] commission) accounting for [REDACTED] of the gross [REDACTED] of the [REDACTED], assuming that the [REDACTED] and the [REDACTED] are not exercised and based on an [REDACTED] of HK$[REDACTED] per Share. Among our [REDACTED], approximately RMB[REDACTED] is directly attributable to the [REDACTED] of Shares and will be charged to equity upon completion of the [REDACTED], and approximately RMB[REDACTED] has been or will be charged to our consolidated statement of profit or loss and other comprehensive income. The [REDACTED] we incurred in the Track Record Period and expect to incur would consist of approximately RMB[REDACTED] related expenses and fees (including [REDACTED] commissions), approximately RMB[REDACTED] expenses and fees including fees for the legal advisors and reporting accountant and approximately RMB[REDACTED] for other [REDACTED] fees and expenses. During the Track Record Period, approximately [REDACTED] was recognised during the year ended December 31, 2025. The remaining [REDACTED] is expected to be recognised after December 31, 2025 until the completion of the [REDACTED]. DIVIDEND POLICY Subject to PRC laws and regulations, including the PRC Company Law ( ) and the No. 3 Guideline for the Supervision of Listed Companies — Cash Dividend Distribution of Listed Companies (2025 Revision) ( 3 — (2025 ) ), and the Articles of Association, we are required to pay cash dividends of no less than 10% of the distributable profits recorded in the fiscal year. The Group does not, in addition to this, maintain a general dividend policy or a fixed dividend payout ratio. In 2023, 2024 and 2025, we declared dividends amounting to RMB163.3 million, RMB163.3 million and RMB257.6 million, respectively. [REDACTED] Future profit distributions may be carried out in the form of cash dividends or stock dividends or a combination of cash dividends and stock dividends. Any proposed distribution of dividends is subject to the discretion of our Board and the approval at our Shareholders’ meetings. Our Board may recommend a distribution of dividends in the future after taking into account our results of operations, financial condition, operating requirements, capital requirements, shareholders’ interests and any other conditions that our Board may deem relevant. NO MATERIAL ADVERSE CHANGE AND RECENT DEVELOPMENTS Our Directors confirmed that, as of the date of this document, there has been no material adverse change in our financial position since December 31, 2025, and there has been no event since December 31, 2025 that would materially affect the information as set out in the Accountants’ Report in Appendix I to this document. Up to the Latest Practicable Date, there had been no material adverse change in our operations or financial condition, including the sales volume and average selling price of our products, order cancellations, customer payment status or the impact of recent U.S. tariff developments. SUMMARY – 12 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 22 of 431 -- In this document, unless the context otherwise requires, the following terms shall have the meanings set out below. Certain other terms are explained in the section headed “Glossary of Technical Terms” in this document. “2022 Restricted A Share Incentive Scheme” the restricted share incentive plan adopted by our Shareholders in 2022, which permits the grant of restricted Shares to eligible participants, a summary of which is set out in Appendix VI to this document “A Share(s)” ordinary shares issued by our Company, with a nominal value of RMB1.00 each, which are listed on the ChiNext Market of the Shenzhen Stock Exchange and traded in Renminbi “Accountants’ Report” the accountants’ report of our Company, the text of which is set out in Appendix I to this Document “affiliate(s)” with respect to any specified person, any other person, directly or indirectly, controlling or controlled by or under direct or indirect common control with such specified person “AFRC” Accounting and Financial Reporting Council of Hong Kong “APCB” APCB Electronics (Thailand) Co., Ltd. “Articles” or “Articles of Association” the articles of association of our Company conditionally adopted on August 15, 2025, which shall become effective on [REDACTED], as amended from time to time, a summary of which is set out in Appendix V to this document “associate(s)” has the meaning ascribed thereto under the Hong Kong Listing Rules “Audit Committee” the audit committee of our Board, the details of which are described in “Corporate Information” in this document “Board” or “Board of Directors” the board of Directors “Bodaxing” Huizhou Bodaxing Industrial Co., Ltd.* ( ), a limited liability company established in the PRC on December 16, 2010 “Business Day” or “business day” any day (other than a Saturday, Sunday or public holiday) on which licensed banks in Hong Kong are generally open for normal banking business [REDACTED] “CNAS” China National Accreditation Service for Conformity Assessment DEFINITIONS – 13 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 23 of 431 -- “Company” or “our Company” or “the Company” Victory Giant Technology (HuiZhou) Co., Ltd.* ( ( ) ), a limited liability company established in the PRC on July 28, 2006, the A Shares of which have been listed on the ChiNext Market of the Shenzhen Stock Exchange (stock code: 300476) “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 “connected person(s)” has the meaning ascribed thereto under the Hong Kong Listing Rules “connected transaction(s)” has the meaning ascribed thereto under the Hong Kong Listing Rules “core connected person(s)” has the meaning ascribed thereto under the Hong Kong Listing Rules “Corporate Governance Code” or “CG Code” the Corporate Governance Code as set out in Appendix C1 to the Listing Rules “close associate(s)” has the meaning ascribed thereto under the Hong Kong Listing Rules “CSDC” China Securities Depository and Clearing Corporation Limited* ( ) “CSRC” China Securities Regulatory Commission ( ) “Director(s)” the director(s) of our Company “EIT” enterprise income tax “EIT Law” the PRC Enterprise Income Tax Law ( ) [REDACTED] DEFINITIONS – 14 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 24 of 431 -- [REDACTED] “ESG” environmental, social and governance [REDACTED] “Extreme Conditions” the occurrence of “extreme conditions” as announced by the government of Hong Kong in the case where a super typhoon or other natural disaster of a substantial scale seriously affects the working public’s ability to resume work or brings safety concern for a prolonged period [REDACTED] “Frost & Sullivan” or “F&S” Frost & Sullivan (Beijing) Inc., Shanghai Branch Co., our industry consultant, which is an independent third party DEFINITIONS – 15 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 25 of 431 -- “Frost & Sullivan Report” or “F&S Report” an independent market research report commissioned by us and prepared by Frost & Sullivan, a summary of which is set forth in the section headed “Industry Overview” for the purpose of this document [REDACTED] “Group”, “the Group”, “our Group”, “we”, “our” or “us” our Company and its subsidiaries at the relevant time or, where the context otherwise requires, in respect of the period prior to our Company becoming the holding company of its present subsidiaries, such subsidiaries as if they were subsidiaries of our Company at the relevant time “Guide for New Listing Applicants” or the “Guide” the Guide for New Listing Applicants published by the Stock Exchange and as amended, supplemented or otherwise modified from time to time “H Share(s)” overseas [REDACTED] foreign invested ordinary share(s) in the share capital of our Company, with a nominal value of RMB1.00 each, which are to be [REDACTED] for and [REDACTED] in Hong Kong dollars and for which an application has been made for the granting of [REDACTED], and permission to [REDACTED], on the Main Board of the Stock Exchange [REDACTED] DEFINITIONS – 16 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 26 of 431 -- [REDACTED] “Hong Kong” or “HK” the Hong Kong Special Administrative Region of the PRC [REDACTED] “Hong Kong Victory Giant” Victory Giant Technology Holdings (Hong Kong) Limited ( ( ) ), a limited company established in Hong Kong on July 8, 2006, and a member of our Largest Group of Shareholders “Hongda Investment” Huizhou Hongda Investment Development Co., Ltd.* ( ), a limited liability company established in the PRC on September 26, 2011, and a member of our Largest Group of Shareholders “Hongxing International” Hongxing International Technology Limited ( ), a company incorporated in Hong Kong on June 15, 2011 and a wholly-owned subsidiary of our Company “IFRS” the IFRS Accounting Standards, which include standards, amendments and interpretations promulgated by IASB and the International Accounting Standards (IAS) and interpretations issued by the International Accounting Standards Committee (IASC) “independent third party(ies)” a person, persons, a company or companies which is or are independent of, and not our connected person(s) within the meaning under the Listing Rules [REDACTED] DEFINITIONS – 17 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 27 of 431 -- [REDACTED] “Joint Sponsors” the joint sponsors as named in the section headed “Directors and Parties Involved in the [REDACTED]” in this document “Largest Group of Shareholders” refers to Mr. Chen Tao, Ms. Liu Chunlan, Shenghua Xinye, Hongda Investment and Hong Kong Victory Giant “Latest Practicable Date” March 27, 2026, being the latest practicable date for the purpose of ascertaining certain information contained in this Document prior to its publication [REDACTED] “Listing Rules” or “Hong Kong Listing Rules” the Rules Governing the Listing of Securities on the Stock Exchange, as amended or supplemented from time to time “Main Board” the Main Board of the Stock Exchange DEFINITIONS – 18 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 28 of 431 -- “Malaysia” the Federation of Malaysia “MFSM” MFS Technology (M) Sdn Bhd, a company incorporated in Malaysia on January 31, 1958 and a wholly-owned subsidiary of our Company “MFSS” MFS Technology (S) Pte Ltd, a company incorporated in Singapore on October 11, 1988 and a wholly-owned subsidiary of our Company “MIIT” Ministry of Industry and Information Technology ( ) “MOF” Ministry of Finance of the PRC ( ) “MOFCOM” Ministry of Commerce of the PRC ( ) “NDRC” National Development and Reform Commission of the PRC ( ) “Nomination Committee” the nomination committee of our Company, the details of which are described in “Corporate Information” in this document [REDACTED] DEFINITIONS – 19 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 29 of 431 -- [REDACTED] “Overseas Listing Trial Measures” The Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Companies and five supporting guidelines ( ) promulgated by the CSRC on February 17, 2023 and became effective on March 31, 2023 “PBOC” the People’s Bank of China ( ), the central bank of the PRC [REDACTED] “PRC” or “China” the People’s Republic of China, excluding for the purposes of this document only, Hong Kong, the Macau Special Administrative Region of the People’s Republic of China and Taiwan “PRC Company Law” the Company Law of the People’s Republic of China ( ), as amended, supplemented or otherwise modified from time to time DEFINITIONS – 20 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 30 of 431 -- [REDACTED] “PRC government” or “State” the Central People’s Government of the People’s Republic of China, including all governmental subdivisions (including provincial, municipal and other regional or local government entities) and their instrumentalities or, where the context requires, any of them “PRC Legal Advisor” JunHe LLP, the legal advisor to our Company as to PRC laws [REDACTED] “PSL” Pole Star Limited, a limited liability company incorporated in Cayman Islands on October 24, 2017 and a wholly-owned subsidiary of our Company “QIB” or “Qualified Institutional Buyer” a qualified institutional buyer within the meaning of Rule 144A “Regulation S” Regulation S under the U.S. Securities Act “Remuneration and Appraisal Committee” the remuneration and appraisal committee of our Company, the details of which are described in “Corporate Information” in this document “RMB” or “Renminbi” Renminbi, the lawful currency of the PRC “Rule 144A” Rule 144A under the U.S. Securities Act “SAFE” State Administration of Foreign Exchange of the PRC ( ), a PRC governmental agency responsible for matters relating to foreign exchange administration, including local branches, when applicable DEFINITIONS – 21 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 31 of 431 -- “SAT” State Administration of Taxation “SCNPC” the Standing Committee of the National People’s Congress ( ) “Securities Law” the Securities Law of the PRC ( ), as amended, supplemented or otherwise modified from time to time “SFC” the Securities and Futures Commission of Hong Kong “SFO” or “Securities and Futures Ordinance” the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong), as amended or supplemented from time to time “Share(s)” the ordinary share(s) in the share capital of our Company with a nominal value of RMB1.00 each, including our A Shares and H Shares “Shareholder(s)” holder(s) of the Shares “Shenghua Electronics” Shenghua Electronics (Huiyang) Co., Ltd.* ( ( ) ), a company established in the PRC on January 24, 2003, and a wholly-owned subsidiary of our Company “Shenghua Xinye” Shenzhen Shenghua Xinye Investment Co., Ltd.* ( ), a company established in the PRC on September 3, 2001, and a member of our Largest Group of Shareholders “Singapore” the Republic of Singapore [REDACTED] “State Council” State Council of the PRC ( ) “Stock Exchange” or “Hong Kong Stock Exchange” The Stock Exchange of Hong Kong Limited “Strategy and Investment Committee” the strategy and investment committee, the details of which are described in “Corporate Information” in this document “subsidiary(ies)” has the meaning ascribed to it in section 15 of the Companies Ordinance “substantial shareholder(s)” has the meaning ascribed thereto under the Hong Kong Listing Rules “Takeovers Code” or “Hong Kong Takeovers Code” the Codes on Takeovers and Mergers and Share Buy- backs issued by the SFC, as amended, supplemented or otherwise modified from time to time “Thailand” the Kingdom of Thailand DEFINITIONS – 22 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 32 of 431 -- “Thailand VGT” Victory Giant Technology (Thailand) Co., Ltd., a company incorporated in Thailand on July 25, 1990 and a wholly- owned subsidiary of our Company “Track Record Period” the three years ended December 31, 2023, 2024 and 2025 “treasury shares” has the meaning ascribed thereto under the Hong Kong Listing Rules “U.S. dollar(s)”, “US$” or “USD” United States dollar, 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 [REDACTED] “United States” or “U.S.” the United States of America, its territories and possessions, any State of the United States, and the District of Columbia “U.S. person” a U.S. person, as defined under Rule 902 of Regulation S “VAT” value added tax “Vietnam” the Socialist Republic of Vietnam “Vietnam VGT” Victory Giant Technology (Vietnam) Company Limited, a company incorporated in Vietnam on July 4, 2024 and a wholly-owned subsidiary of our Company “Weisheng Circuit Board” Hunan Weisheng Technology Circuit Board Co., Ltd.* ( ), a company incorporated in the PRC on July 24, 1989 and a wholly-owned subsidiary of our Company “Weisheng Technology” Hunan Weisheng Technology Co., Ltd.* ( ), a company incorporated in the PRC on September 12, 2003 and a wholly-owned subsidiary of our Company [REDACTED] “Yiyang Weisheng” Yiyang Weisheng Technology Co., Ltd.* ( ), a company incorporated in the PRC on September 14, 2018 and a wholly-owned subsidiary of our Company “%” percent DEFINITIONS – 23 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 33 of 431 -- For ease of reference, the names of PRC laws and regulations, governmental authorities, institutions, nature persons or other entities (including our subsidiaries) have been included in this document in both the Chinese and English languages and in the event of any inconsistency, the Chinese versions shall prevail. For the purpose of this document, references to “provinces” of China include provinces, municipalities under direct administration of the central government and provincial-level autonomous regions. Unless otherwise stated, 217,443 repurchased A Shares which are held as treasury shares by the Company as of the Latest Practicable Date have been included in the total number of issued shares of the Company as of the Latest Practicable Date and immediately after completion of the [REDACTED]. For details of the repurchased A Shares, see “History, Development and Corporate Structure — Corporate Structure Immediately before the [REDACTED]” and “Substantial Shareholders.” * English translations of company names and other terms from the Chinese language are provided for identification purposes only. In this document, should there be any discrepancy between the Chinese names of the entities or enterprises established in China and its English translation, the Chinese names shall prevail. DEFINITIONS – 24 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 34 of 431 -- This glossary of technical terms contains terms used in this document as they relate to our business. As such, these terms and their meanings may not always correspond to standard industry meaning or usage of these terms. “AGV” automated guided vehicle “AOI” automated optical inspection “APS” advanced planning and scheduling “AR” augmented reality “AVI” automated visual inspection “BGA” ball grid array “BMS” battery management system “CCD” Charge-Coupled Device “CR” current reality “CT” computed tomography “CTE” coefficient of thermal expansion “DDR” double data rate “EMCS” Electromagnetic Compatibility Control System “EV” electric vehicle “FPC” flexible printed circuit “HDI” high-density interconnect “IASB” International Accounting Standards Board “IoT” Internet of Things “IIoT” Industrial Internet of Things “LCD” liquid crystal display “LDI” laser direct imaging “LED” light emitting diode “MCU” motor control unit “MES” Manufacturing Execution System GLOSSARY OF TECHNICAL TERMS – 25 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 35 of 431 -- “Mil” in the context of length, is a unit equal to one-thousandth of an inch, or 0.001 inches. It’s also known as a “thou”. Therefore, 1 mil is equal to 0.0254 millimeters “MLPCB” multi-layer printed circuit board “mSAP” modified semi-additive process “OEM” original equipment manufacturer “PCB” printed circuit board “Pin Lam” a technique used during the PCB lamination process that uses alignment pins to position layers and reduce defects like pits and dents “PLB” pulse plating “Rigid-Flex” a hybrid type of printed circuit board that combines elements of both RPCB and FPC into a single unit “RLI” Rockwell Laser Industries “RPCB” rigid printed circuit board “SBTi” science based targets initiative “SSD” solid state drive “UBB” Universal Baseboard “vias” holes that are drilled through the board to create pathways for electrical connections between different layers “VR” virtual reality “XR” extended reality GLOSSARY OF TECHNICAL TERMS – 26 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 36 of 431 -- This document contains forward-looking statements relating to our plans, objectives, expectations and intentions, which 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 document. You are strongly cautioned that reliance on any forward-looking statements involves known and unknown risks and uncertainties. The risks and uncertainties facing the Company which could affect the accuracy of forward-looking statements include, but are not limited to, the following: (i) our business strategies and plans to achieve these strategies; (ii) changes to the political and regulatory environment in the industry and markets in which we operate; (iii) changes in our customers’ preferences, demands and business performance; (iv) changes in competitive conditions and our ability to compete under these conditions; (v) the actions and development of our competitors; (vi) future developments, trends and conditions in the industry and markets in which we operate; (vii) general economic, political and business conditions in the markets in which we operate; (viii) effects of the global financial markets and economic conditions; (ix) our future debt levels and capital needs; (x) our financial conditions and performance; (xi) our dividend policy; and (xii) 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” and “would” and similar expressions to identify forward-looking statements. In particular, we use these forward-looking statements in this document 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. These forward-looking statements are based on assumptions 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 document might not occur in the way we expect, or at all. Accordingly, you should not place undue reliance on any forward-looking information. All forward-looking statements contained in this document are qualified by reference to this cautionary statement. FORWARD-LOOKING STATEMENTS – 27 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 37 of 431 -- You should carefully consider all of the information in this document, including the risks and uncertainties described below, before making an [REDACTED] in our H Shares. The following is a description of what we consider to be our material risks. Any of the following risks could have a material adverse effect on our business, financial condition and results of operations. In any such case, the [REDACTED] of our H Shares could decline, and you may lose all or part of your [REDACTED]. These factors are contingencies that may or may not occur, and we are not in a position to express a view on the likelihood of any such contingency occurring. The information given is as of the Latest Practicable Date unless otherwise stated, will not be updated after the date hereof, and is subject to the cautionary statements in the section headed ‘‘Forward-Looking Statements’’ in this document. RISKS RELATING TO OUR BUSINESS AND INDUSTRY If we fail to develop new or enhanced products on a timely basis, our ability to attract and retain customers could be impaired, and our competitive position could be harmed. To compete successfully, we must design, develop, market and sell new or enhanced products that provide higher levels of performance and reliability and meet the cost expectations and other needs of our customers. Intense competition, the continuous launch of new and upgraded products or faster product iteration by our competitors, market acceptance of products based on new or alternative technologies, the emergence of new industry standards, or new trends in customer preferences could render our existing or future products obsolete. Our failure to anticipate the next-generation technology roadmap or timely develop new or enhanced products in response to shifts in technology and customer preferences could result in decreased revenue, increased development and rework costs and the risk of losing key customers or our position as their preferred supplier. In particular, we may experience difficulties with product design, development, incorporation of new or advanced materials, marketing or certification, which could delay or prevent our development, introduction or marketing of new or enhanced products or result in a longer time-to-market, resulting in our failure to introduce new or enhanced products that meet the needs of our customers or failure to penetrate new markets in a timely fashion. Our growth and profitability depend on general economic conditions and capital investment cycles in AI infrastructure, which in turn may influence the development of the industries that our customers are in. Our results of operations depend on general economic conditions. More specifically, as our products are primarily used in AI infrastructure and related sectors, our customers’ ability and willingness to adopt and integrate our products directly impact our business performance. Demand for our products is tied to AI infrastructure, in particular surging demand from hyperscalers and technology companies for their global networks of data centers and cloud services, and is influenced by broader economic conditions, including the availability of funding, regulatory developments, and sector-specific trends. A slowdown in AI infrastructure spending could impact demand for our high-end PCBs and thus our business and financial conditions. In addition, a portion of our revenue is derived from the sale of products used in smart devices and automotive electronics. Accordingly, consumer spending patterns play a critical role in shaping demand for our products. These investments and spending in turn are affected by a number of economic and other factors beyond our control. Economic uncertainty and other related factors may exacerbate negative trends in these investments and spendings and may postpone or preclude the investment in AI infrastructure or purchasing of EVs or smart devices, which in turn will negatively affect customer demands for our products. RISK FACTORS – 28 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 38 of 431 -- Similarly, our operating results are affected by cyclicality, either directly or indirectly, in the various industries we serve, including AI infrastructure, automotive electronics and smart devices. In 2023, 2024 and 2025, we derived 47.4%, 33.9% and 19.1% of our revenue from the sale of smart devices, respectively, and 10.8%, 20.5% and 13.4% of our revenue from the sale of automotive electronics, respectively. These industries are highly competitive and to a large extent driven by end-user markets. Fluctuations in price and evolving demands within these industries could lead to reduced sales and declining prices for the end products, which will in turn affect our revenue and profit margins. Specifically, many of our customers face intense competition and constant pressure to cut the selling prices of their end products. Accordingly, many of them may raise new requirements frequently, expect ongoing production cost reductions and increased production efficiency, and we may not be able to meet such expectations. Our growth depends in part on maintaining and building customer relationships. Our products are highly customized to the specifications provided by our customers. To maintain our relationships with these customers, we may be required to develop new products and make modifications to our existing products that involve significant technological challenges, greater design flexibility, as well as participate in lengthy field trials and extensive qualification programs. We cannot assure you that these efforts will result in future orders or long-term business relationships. We also expect these customers to place considerable pressure on us to meet their tight development schedules. In addition, such customers may require extensive, localized technical support, which would require us to significantly expand our customer support capabilities. We may have to devote a substantial amount of our limited resources to these relationships, which could detract from or delay our completion of other important development projects. Such delays could impair our relationships with these customers and negatively impact sales of our products under development. In addition, as customer concentration increases, our business and future growth may become more dependent on our ability to retain key customers and maintain stable order volumes from them. If any such customer delays or cancels orders, changes its sourcing strategy, or demands more favorable pricing or other commercial terms, our business, financial condition and results of operations could be materially and adversely affected. Our production capacity and expansion efforts may be inadequate. If our production capacity cannot meet market demand, especially if we experience increased demand for our products as we grow our customer base, our ability to deliver products to our customers on a timely basis will be affected. Similarly, if we are not able to meet the overall demand for our products, our ability to satisfy our customer demands will be affected. In the future, as our business grows, we may need to expand our production capacity through various measures, including the construction of new production facilities. We cannot assure you that our new premises will be ready in time or our production capacity will otherwise be successfully expanded. Failure to expand our production capacity could hinder our capability to satisfy customer demand. Furthermore, if market demand declines, we may not be able to recoup the costs incurred for the construction of new premises and the maintenance of expanded production capacity. A delay in or cancellation of our expansion plans could also subject us to disputes with various counterparties. We face intense competition in the global PCB industry. The global PCB industry is highly competitive in terms of price and technology. Some peers have achieved substantial market shares, longer operating histories, greater name recognition, larger customer bases and greater financial, sales and marketing, production, distribution, technical and RISK FACTORS – 29 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 39 of 431 -- other resources and experience than we do. Our competitors’ greater size in some cases may provide them with a competitive advantage with respect to production costs due to economies of scale and their ability to purchase raw materials and utilities at lower prices. In addition, our competitors may be able to devote greater resources to the research and development of technologies, processes and products that are more effective than ours. They may also adapt more quickly to new technologies and changes in customer demand and requirements. We may fail to maintain our competitive position with respect to technological advances, to adapt to changing market conditions and customer preference, or to otherwise compete successfully with existing or new competitors. We may be subject to raw material shortage or price increases. The cost of raw materials constitutes the majority of our cost of goods sold. We must obtain sufficient quantities of high-quality raw materials at acceptable prices and in a timely manner to manufacture our products. The main raw materials used in the manufacture of our PCB products include copper-clad laminates, copper foil and copper ball. The pricing of raw materials can be volatile and difficult to predict due to factors beyond our control, including changes in general economic conditions, currency exchange rates, industry cycles and production levels and geopolitical conflicts. For example, the recent regional conflict involving the U.S., Israel and Iran may adversely affect global commodity markets, energy prices and supply chain stability, which could in turn disrupt the supply of, or increase the prices of, certain raw materials such as resin, copper and copper-related materials. Therefore, such price may significantly increase or fluctuate, and we may not be able to compensate for or pass on such costs to customers. In line with industry practice, we generally do not enter into long-term supply contracts with our suppliers. A shortage of any key raw materials could limit the number of units we are able to produce and increase the production costs of our products, thereby depressing the margins for our products to the extent that we are not able to pass on the increased costs to our customers. Moreover, we currently source our main raw materials and key components from a number of third-party suppliers. Deterioration in business relationships with these suppliers may result in our failure to source sufficient quantities of raw materials and components of satisfactory quality at acceptable costs. There can be no assurance that a significant shortage in the supply of raw materials will not take place in the future. We may be subject to the risks associated with international trade policies, export controls and economic sanctions, geopolitics and trade protection measures. We operate within a global supply chain, and our products are sold globally as part of various end products. As such, we face risks associated with international trade regulations and geopolitical developments. Although the primary risk to our business from these measures is indirect, we are exposed to the impact of them through our international customers and global supply chain, since our products are key components in industries that are susceptible to geopolitical developments and trade restrictions, such as AI and high-performance computing. For example, if tariffs or other import restrictions are imposed on our customers’ finished goods exported to the United States or other overseas markets, the increased cost may reduce the competitiveness and market demand for these products. A decline in our customers’ sales could, in turn, lead to reduced order volumes, order cancellations or downward revisions to their forecasts for our products. Furthermore, to mitigate their own exposure, our customers may demand price concessions from us or adjust their supply chain arrangements, which could diminish our role or lead to the loss of business. Any of these developments could materially and adversely affect our customer relationships, revenue and profitability. Recent trade tensions, such as the ongoing U.S.-China trade dispute, have led to broader and substantially higher tariffs, export controls and other restrictive measures targeting high-technology goods, semiconductors and electronics. Regarding tariffs, in February 2025, the United States imposed a 20% tariff on certain categories of Chinese goods (the “Fentanyl Tariff”). Subsequently, on April 2, 2025, the United States imposed a 10% baseline tariff on all imports from its trading RISK FACTORS – 30 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 40 of 431 -- partners, along with additional country-specific tariffs for various countries (the so-called “Reciprocal Tariff”, as adjusted from time to time). These actions have led to a series of retaliatory measures by other countries, including China, and further countermeasures by the United States. On May 12, 2025, the President of the United States issued an executive order that suspended certain retaliatory tariff increases imposed on April 8 and April 9 against China and reinstated the Reciprocal Tariff on imports originating from China, Hong Kong, and Macau for a 90-day period. This resulted in a combined effective tariff rate of approximately 30% on certain of our products sold into the U.S. market during this period. On August 11, 2025, the President of the United States signed an executive order extending the deadline for higher tariffs on China for another 90 days until November 10, 2025. Following a U.S.-China leaders’ meeting on October 30, 2025, the United States and China announced steps to pause certain tariff escalations. On November 4, 2025, the President of the United States issued executive orders that, among other things, reduced the Fentanyl Tariff from 20% to 10%, effective November 10, 2025, and continued the suspension of heightened China-specific Reciprocal Tariff rates through November 10, 2026, thereby maintaining the 10% Reciprocal Tariff baseline on imports from China during that period. At the same time, on May 28, 2025, the U.S. Court of International Trade ruled that many of the tariffs the current administration put in place, including the Reciprocal Tariff and the Fentanyl Tariff, exceeded the president’s legal authority, which was affirmed by the U.S. Court of Appeals for the Federal Circuit on August 29, 2025. On February 20, 2026, the U.S. Supreme Court issued its opinion affirming the lower court’s ruling, striking down the tariffs implemented pursuant to the International Emergency Economic Powers Act (IEEPA), including the Reciprocal Tariff and the Fentanyl Tariff. Following this decision, the administration rescinded the IEEPA-based tariffs but concurrently imposed new 10% tariffs on a global basis for a 150-day period under separate statutory authority and discussed plans to rely on other statutory authority to impose other tariffs. The U.S. tariff policies are rapidly evolving, and the final outcome, including the timing, impact and potential legal challenges regarding any newly implemented tariffs, is highly uncertain. Any additional tariff may increase the price of the end products imported to the U.S. market and reduce their competitiveness. Our customers who import the products may wish to pass on the additional tariff on us, their other suppliers or their customers. Even if the tariff is not passed on to us, the reduced competitiveness of our customers’ end products could lead to the reduction or cancellation of their purchase orders from us, and tariffs could generally negatively affect economic conditions in China and other countries, which could adversely affect our business. Exports, re-exports and transfers of our products must be made in compliance with various economic sanctions and export controls laws in different jurisdictions. In terms of economic sanctions, the most significant controls are those administered by the U.S. Department of the Treasury’s Office of Foreign Assets Control (“OFAC”), which prohibit the provision of products to certain countries or regions, governments, entities and persons targeted by U.S. sanctions. Regarding U.S. export controls, in October 2022, the BIS issued an interim final rule (the “BIS October 2022 IFR”) to limit China’s access to advanced computing integrated circuits, supercomputers, and advanced semiconductor manufacturing. In October 2023, the BIS released another interim final rule (the “BIS October 2023 IFR”) that updated and expanded the restrictions from the BIS October 2022 IFR (together with the BIS’s April 2024 interim final rule, the “BIS 2022/23 IFRs”). Among other measures, the BIS 2022/23 IFRs added certain advanced and high-performance computing integrated circuits and related computer commodities to the Commerce Control List, imposing new or expanded license requirements for items subject to the U.S. Export Administration Regulations (“EAR”) intended for use in developing or producing supercomputers, advanced node integrated circuits, and advanced semiconductor manufacturing equipment in certain jurisdictions, including China. Most recently, in January 2025, the BIS issued an interim final rule (the “BIS January 2025 IFR”) to further limit China’s access to advanced computing integrated circuits and advanced semiconductor manufacturing equipment. In addition to the restrictions introduced above, the BIS also maintains lists of persons that are subject to enhanced export control restrictions. One such list, the Entity List, includes a list of foreign persons on which certain trade restrictions are imposed. In recent years, the United States RISK FACTORS – 31 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 41 of 431 -- has placed an increasing number of entities, including hundreds of entities in China, on the Entity List and other restricted or prohibited party lists. In addition to naming additional persons to these lists, BIS has imposed complex and restrictive rules applicable to doing business with persons on them. The restrictions applicable to Entity List parties include licensing requirements for exports, reexports, or transfers of items on lists of controlled items maintained by the U.S. government, which in most cases prevents these named entities from receiving essentially any item subject to U.S. export controls, including, in some cases through the application of the EAR’s foreign direct product rules, to items produced wholly outside the United States. In addition, from September 29, 2025, the Entity List restrictions apply not only to parties included on the Entity List, but also to any person that is 50% or more owned, directly or indirectly, by parties on the Entity List or certain other restricted party lists (the “BIS Entity List Affiliate Rule”). However, on November 12, the BIS issued a one-year suspension of the BIS Entity List Affiliate Rule, set to end on November 9, 2026, absent a future extension. For details, please refer to “Business — Trade Restrictions, Tariff Policies, and International Sanctions — International Sanctions and Other Trade Restrictions.” We screen our counterparties to determine if they are subject to applicable economic sanctions or export control restrictions and have not identified any sales that involve such sanctioned parties or jurisdictions, including those parties and jurisdictions subject to OFAC-administered sanctions. However, during the Track Record Period, three of our customers were included on the BIS Entity List. The revenue generated from these customers in the aggregate accounted for 0.2%, 0.4% and 0.4% of our total revenue in 2023, 2024 and 2025, respectively. The products sold to these customers are standard PCB products. Our U.S. legal advisor has advised that based on the information we provided, the items that we sold to these customers do not involve the transfer, export or reexport of items subject to the EAR. The Directors believe that the Group is not subject to any trade restrictions or sanctions risks that would materially affect its business operations. The Joint Sponsors confirm that they do not have any reason to disagree with this view. However, these policies have introduced uncertainties to global supply chains, limited access to critical raw materials and components, and increased production and compliance costs and uncertainties for companies operating in affected industries. For instance, restrictions on the export of specific technologies or materials to certain regions could disrupt our ability to procure key inputs or supply products to customers in affected markets, causing operational delays or interruptions. If these trade restrictions or geopolitical tensions escalate, we may face additional risks such as supply chain restraints, reduced access to key markets, strained customer relationships and loss of market opportunities. Increased compliance costs and operational challenges arising from adhering to complex export control regulations and sanctions could still strain our resources. Tariffs, quotas and local content rules may further raise production costs, impacting the profitability and competitiveness of our products. As the Entity List and other sanctions and export control laws and regulations, including the EAR’s de minimis rules and foreign direct product rules, continue to evolve, future sanctions and export controls may significantly impact our business relationships with some of our key customers or suppliers and increase our compliance burdens. For example, if restrictions are imposed on the export of certain computing products from the United States to China, the resulting decline in downstream production or demand may adversely affect our sales of related PCB products. In addition, if export controls restrict our ability to import advanced production equipment or components from certain jurisdictions, our capacity to upgrade or maintain our manufacturing lines may be negatively impacted. If we fail to promptly secure alternative customers or sources of supply on acceptable terms, our business may be materially and adversely affected. In addition, dealing with customers or suppliers that are subject to export control or sanctions may pose significant risks to our business. These risks include potential disruptions in our supply chain, legal and regulatory compliance challenges, and the possibility of financial penalties and reputational damage. We have limited control over the countries, regions, or destinations to which the customers will sell and/or export their end products. If the export sales of the customers’ end solutions are restricted, prohibited or made subject to any export controls or economic sanctions imposed by any jurisdictions, the customers’ demand for our products may decline, and, as a result, our business, financial condition and results of operations may be materially and adversely affected. RISK FACTORS – 32 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 42 of 431 -- We may experience adverse developments in labor supply. Labor costs have been fluctuating and may rise in the future. Labor cost increases may cause our production costs to increase, and we may not be able to pass on such increases to our customers. We also cannot assure you that we will not experience any shortage of labor, especially skilled roles such as production management and quality control, which are critical to maintaining efficient operations and meeting customer specifications. Any such shortage could hinder our ability to maintain our production schedules and maintain or expand our business operations. In addition, we cannot assure you that we will not have any labor disputes in the future. Any deterioration of our labor relations could disrupt our business operations, as well as loss of experience, know-how and trade secrets. We may be unable to maintain our current capacity utilization rates and production yields. Maintaining our current capacity utilization and production yields is crucial to our profitability as it allows us to spread our fixed costs over a substantial volume of products. Decreases in capacity utilization rates and production yields can have an adverse impact on our gross margin. Our ability to maintain or improve our gross margin will continue to depend, in part, on maintaining high capacity utilization rates and production yields. We cannot assure you that our utilization rates and production yields will not be negatively affected by adverse factor. If demand for our products does not meet our expectations, our capacity utilization and gross margin will be adversely affected. In addition, if we fail to maintain high quality production standards, our reputation may suffer, and our customers may cancel their orders or return our products. We may experience operational disruption or machinery breakdown. Any operational disruption, machinery breakdown or failure of newly installed equipment to meet required production standards during initial setup and testing could lead to delays in our production schedule, lower inventory levels, and hinder our ability to fulfill customer orders on time, thus affecting customer satisfaction. Operational disruptions or machinery breakdowns in our production facilities may arise from various unexpected incidents or catastrophic events. Additionally, instability or shortages in electricity supply could halt production activities, causing delays in fulfilling customer orders. In the event of such disruptions, maintaining production volumes and ensuring sufficient stock levels to meet customer demands could be challenging. Identifying and securing alternative facilities or machinery in a timely and cost- effective manner may not always be feasible. Delays in resuming normal operations could also affect the quality and schedule of product deliveries, potentially impacting customer satisfaction and damaging our reputation. Our manufacturing equipment may fail, we may encounter difficulties with our manufacturing technology, and certain of our equipment suppliers may fail to perform their contracts. We purchase substantially all of our equipment from external suppliers based on our technical specifications, and we cannot guarantee that such suppliers will perform their contractual duties as we expect. In particular, only a few companies can produce the laser drilling machines that are necessary to achieve a desirable level of production yields, and their production capacity is limited. Supply shortage due to any reason can hinder our capability to expand our production capacity. To meet the diverse needs of our end customers, we are often required to manufacture customized products. Accordingly, some of our manufacturing equipment is customized to the designs or specifications that we provide to our equipment supplier, who then undertakes a specialized process to procure and assemble the custom equipment. As a result, the equipment is not immediately available from other vendors and may take time to repair or replace if it were damaged to a great extent or stopped working. Inability to make timely repair or replacement of such equipment can result in disruption to our production activities. RISK FACTORS – 33 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 43 of 431 -- Our R&D efforts are not guaranteed to yield the results we anticipate. To maintain our competitive position and continue to grow our business, we need to continuously develop, rapidly update and introduce innovative products for our existing and potential customers. This includes engaging in joint development projects with key customers to ensure our products align with their technical requirements. We dedicate considerable human resources and capital investment to R&D activities. In 2023, 2024 and 2025, our research and development expenses amounted to RMB348.3 million, RMB449.8 million and RMB777.6 million, accounting for 4.4%, 4.2% and 4.0% of our revenue in the respective years. However, we cannot assure you that these efforts will be successful or produce our anticipated results. Even if our R&D efforts are successful, we may not be able to apply the technologies we developed to introduce new products in time to fully capitalize on our first-mover advantage, or at all. Our intellectual properties may be subject to infringement. Our intellectual property is a key asset and failure to protect it could harm our business and prospects. Our success depends in part on obtaining and maintaining effective patent and trade secret protection for our technologies, processes and products and enforcing our rights against infringement, reverse engineering and design theft. If our patents do not adequately cover our technologies or are invalidated or circumvented, we may be unable to prevent competitors from using similar technologies and products. We also rely heavily on unpatented proprietary technologies, processes, know how and data protected mainly through trade secrets and confidentiality arrangements, which are inherently difficult to safeguard and may be breached or independently replicated by competitors. In addition, we may face intellectual property disputes alleging infringement or misappropriation or need to enforce our own rights. Such disputes are costly, time consuming, divert management attention and have uncertain outcomes, and adverse results could allow competitors to use our technologies or sell similar products. We may be subject to delivery failures or disruptions. We use third party logistics service providers to deliver certain of our work-in-progress and products. Disputes with or terminations of our contractual relationships with our logistics service providers could result in delayed delivery of products or increased costs. As we do not have any direct control over these logistics service providers, we cannot guarantee their quality of services. In addition, we may not be able to continue or extend relationships with our current logistics service providers on terms acceptable to us or establish relationships with new logistics service providers to ensure accurate, timely and cost-efficient delivery services. As a result, we may be prevented from offering products in sufficient quantities, on a timely basis, or at prices acceptable to our customers. In addition, our suppliers sometimes deliver materials to us through third party logistics service providers, whose delay could in turn adversely impact our ability to deliver to our customers. Our business depends on the continuing efforts of our key personnel. Our business operations depend on the continuing efforts of our management, particularly the members of our senior management team. If one or more members of our management are unable or unwilling to continue their employment with us, we may not be able to replace them in a timely manner at reasonable costs, or at all. In addition, members of our management may join a competitor or form a competing company. We may be unable to enforce our contractual rights included in employment agreements with our management. As a result, our business may suffer the loss of services of one or more members of our management, which in turn could have a material and adverse impact on our future prospects, business, results of operations and financial condition. RISK FACTORS – 34 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 44 of 431 -- Our business may be impacted by geopolitical uncertainties and disasters. Geopolitical uncertainties, such as tariffs, war, regional conflicts (e.g., the conflict involving the U.S., Israel and Iran) terrorism, public health issues and other business interruptions could cause damage or disruption to international commerce and the global economy, and thus could have a material adverse effect on us, our customers and suppliers. For example, we recorded significant growth in revenue derived from sales to Taiwan and Vietnam in 2025. As a result, we are more exposed to a wider range of potential geopolitical conflicts and tensions in Asia, and any adverse developments in Taiwan, Vietnam or the broader region, including regional conflicts or logistics interruptions, could materially and adversely affect our business, financial condition and results of operations. Our business operations are subject to interruption by, among others, natural disasters, whether as a result of climate change or otherwise, fire, power shortages and other industrial accidents, terrorist attacks and other hostile acts, labor disputes, public health issues, demonstrations or strikes, and other events beyond our control. Such events could decrease demand for our products, make it difficult or impossible for us to make and deliver products to our customers, or to receive materials from our suppliers, and create delays and inefficiencies in our supply chain. U.S. outbound investment regulations and other foreign laws and regulations could have a negative impact on our future ability to access to capital. On October 28, 2024, the U.S. Department of the Treasury (“Treasury”) issued a final rule, codified in the United States Code of Federal Regulations at 31 C.F.R. part 850, to implement the Executive Order 14105 of August 9, 2023 (the “Outbound Investment Rule”). On January 2, 2025, a U.S. outbound investment security program (the “OISP”), implemented by the Treasury under the Outbound Investment Rule, became effective. The OISP imposes investment prohibition and notification requirements on U.S. persons for a wide range of investments in entities associated with China (including Hong Kong and Macau) that are engaged in activities relating to three sectors: (i) semiconductors and microelectronics, (ii) quantum information technologies, and (iii) artificial intelligence systems, collectively defined as “Covered Foreign Persons.” U.S. persons subject to the Outbound Investment Rule are prohibited from making, or required to report, certain investments in Covered Foreign Persons, which are defined as “Covered Transactions,” and include certain acquisitions of an equity interest or contingent equity interest, certain debt financing, joint ventures, and certain investments as a limited partner in a non-U.S. person pooled investment fund. The OISP contains exceptions for certain investments, including those in publicly traded securities, except when the U.S. person investor secures rights that go beyond standard minority shareholder protections. For details, please refer to “Business — Trade Restrictions, Tariff Policies, and International Sanctions — U.S. Outbound Investment Security Program.” We are engaged in the R&D, manufacturing and sales of advanced PCBs for AI and high-performance computing. Although we customize our PCB products to meet the specific needs of downstream customers in AI and other sectors, we are not engaged in the development of any AI systems, and none of our products themselves are integrated circuits or other “semiconductors and microelectronics” that would implicate the relevant “covered activity” definitions related to those technologies. Accordingly, after consulting with our legal adviser as to U.S. law, we have concluded that U.S. persons [REDACTED] H Shares in the [REDACTED] will not be engaging in prohibited or notifiable transaction under the OISP. In addition, adverse changes to foreign laws and regulations, including the Outbound Investment Rule, could also heighten our exposure to legal and business risks, restrict our access to capital, disrupt our operations and affect our results of operations. For example, on February 21, 2025, U.S. President issued a memo entitled the “America First Investment Policy” (the “America First Memo”), indicating that Executive Order 14105 is under review and the U.S. government will consider possible application of the Outbound Investment Rule to a wider range of technology sectors and application of restrictions to a wider range of investments, including publicly traded securities. On December 18, 2025, the U.S. Comprehensive Outbound Investment National Security RISK FACTORS – 35 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 45 of 431 -- Act of 2025 (the “COINS Act”), which will supersede the Outbound Investment Rule, became law. The COINS Act is subject to a rulemaking process, which is required to be completed by March 2027, and there is substantial uncertainty regarding how the new law will be implemented. Possible changes to the Outbound Investment Rule, the COINS Act, or similar laws and regulations could limit or, in the worst-case scenario, eliminate our ability to raise capital or contingent equity capital (such as convertible bonds) from U.S. investors in the future, or our ability to raise such capital may be significantly and negatively affected, which could be detrimental to our capital-raising capacity and our business, financial condition and prospects. In addition, changes to the publicly traded securities exception or other aspects of the Outbound Investment Rule could prohibit the [REDACTED] or [REDACTED] of our H Shares by U.S. persons, impose new notification or other regulatory requirements, or make our H Shares less attractive to such [REDACTED]. In such cases, the [REDACTED] of our H Shares could significantly decline, and our liquidity may be materially and adversely affected. Investors, including those that are U.S. persons or are subsidiaries of U.S. persons, should consult their own legal counsel regarding the applicability of the Outbound Investment Rule, the COINS Act or similar laws and regulations to this [REDACTED] and any potential obligations and exceptions thereunder. Our business is subject to risks associated with operating in various jurisdictions. We derive a significant portion of our revenue overseas. In 2023, 2024 and 2025, we derived 61.5%, 60.9% and 76.8% of our revenue from offshore sales, respectively. Accordingly, we have faced and continue to face numerous risks, including legal, political, and regulatory instability; changes in international trade policies, tax laws, and data privacy rules; and complex compliance obligations regarding matters such as anti-bribery and local investment and labor laws. We also face financial risks from currency fluctuations and customer credit issues, alongside operational challenges in enforcing contracts and intellectual property rights. In addition, we have conducted cross-border-related party transactions in our ordinary course of business, which may result in an increased likelihood of tax audits, possibly leading to challenges in relation to, amongst other things, tax residence, permanent establishment and transfer pricing. Our sales may be influenced by seasonality. Although a significant portion of our revenue is derived from PCBs used in AI and high-performance computing applications, which are generally less sensitive to seasonal trends, we also generate revenue from the sale of PCBs for smart devices. Our results of operations are affected by seasonal fluctuations in the demand for smart devices, which in turn influence our customers’ demands for our products. We usually experience higher sales volume in the second half of a year due to increased shopping activities during the holiday season and the smart devices launch cycle. Accordingly, various aspects of our operations, including sales, working capital and operating cash flows, are exposed to the risks associated with seasonal fluctuations in the demand for our products, and our quarterly or half year results may not reflect our full year results. Our historical financial and results of operations during the Track Record Period are not indicative of future performance. In 2023, 2024 and 2025, our revenue amounted to RMB7,931.2 million, RMB10,731.5 million and RMB19,292.3 million, respectively. In 2023, 2024 and 2025, our net profit amounted to RMB671.3 million, RMB1,154.4 million and RMB4,312.0 million, respectively. Especially, compared with 2024, our revenue and net profit for the period grew by 79.8% and 273.5% in 2025, respectively. However, our historical revenue and net profit may not be indicative of our future growth. There are inherent risks in using such historical financial information of ours to project or estimate our financial performance in the future, as it only reflects our past performance. Furthermore, as the market and our business evolve, we may modify our strategies, including our operations, products and services, and sales and marketing approaches. These changes may not achieve the expected results and may have a material and adverse impact on our results of RISK FACTORS – 36 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 46 of 431 -- operations and financial condition. Accordingly, you should consider our business prospects in light of the risks and difficulties we may encounter as a company operating in emerging markets and dynamic industries, which we may not be able to successfully address. We may fail to timely collect our trade receivables or other receivables. We had total trade and other receivables with net carrying amounts of RMB3,655.6 million, RMB4,271.7 million and RMB6,560.9 million as of December 31, 2023, 2024 and 2025, respectively. In 2023, 2024 and 2025, our trade receivables turnover days were 135.6 days, 122.1 days and 93.3 days, respectively. Any significant delay or default in our collection of trade receivables or other receivables may impose pressure on our cash flow and working capital and reduce the pool of available financial resources relative to our expectations and expenditure plans. We may be subject to impairment of goodwill. As of December 31, 2025, our goodwill amounted to RMB1,193.5 million, primarily as a result of our acquisition of PSL and Thailand VGT. We test the goodwill and intangible assets for impairment on an annual basis and when events occur or circumstances change that indicate that the fair value of the reporting unit may be below its carrying amount. Fair value determinations require considerable judgment and are sensitive to inherent uncertainties and changes in estimates and assumptions regarding revenue growth rates, capital expenditures, working capital requirements, tax rates, benefits associated with a taxable transaction and synergies available to market participants. Declines in market conditions, a trend of weaker than anticipated financial performance of our reporting units, a decline in our share price for a sustained period of time or an increase in the market-based weighted average cost of capital, among other factors, are indicators that the carrying value of our goodwill may be impaired. We are exposed to foreign exchange risk. During the Track Record Period, we derive a substantial portion of our revenue from markets outside of Chinese mainland. As we operate part of our business in various jurisdictions, we have made, and may continue to make, equity and other investments outside of China. Through other gains or losses, we had net foreign exchange gains of RMB11.7 million, RMB78.2 million and a net foreign exchange loss of RMB1.9 million in 2023, 2024 and 2025, respectively. There is no assurance that future fluctuations in exchange rates would not have a material adverse impact on our financial condition and results of operations. We may face significant volatility in these foreign exchange rates and be unable to procure any specific foreign exchange control measures to mitigate such risks. Uncertainty in the valuation of financial assets at fair value through other comprehensive income may affect our financial position. As of December 31, 2023, 2024 and 2025, we had financial assets at fair value through other comprehensive income of RMB765.2 million, RMB1,116.3 million and RMB2,854.3 million, respectively. The fair value of certain of these financial assets is determined using valuation techniques which involve a significant degree of management judgment and the use of unobservable inputs. Such inputs and assumptions may be subject to a high degree of uncertainty and may not reflect prevailing market conditions, particularly in the absence of active markets for these assets, rendering such valuation inaccurate. Our net current liabilities may expose us to certain liquidity risks and could restrain our operational flexibility as well as affect our ability to expand our business. During the Track Record Period, we recorded net current liabilities of RMB320.1 million as of December 31, 2023. As of December 31, 2024, we had net current assets of RMB543.4 million, which turned to net current liabilities of RMB533.2 million as of December 31, 2025. As of February 28, 2026, we had net current liabilities of RMB1,583.6 million. RISK FACTORS – 37 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 47 of 431 -- Net current liabilities may expose us to certain liquidity risks and may constrain our operational flexibility, as well as adversely affect our ability to expand our business. Our future liquidity, the payment of trade and other payables when they become due, will primarily depend on our ability to generate adequate cash inflows from our operating activities and adequate external financing, which will be affected by our future operating and financial performance, the performance of the industry in which we operate and prevailing economic and capital market conditions, among other factors, many of which are beyond our control. Failure to maintain optimal inventory levels could increase our inventory holding costs or cause us to lose sales. To operate our business effectively and meet our consumers’ demands and expectations, we maintain a certain level of inventory to meet the customer needs and ensure timely delivery of our products. As of December 31, 2023, 2024 and 2025, we had inventories of RMB1,376.8 million, RMB2,045.4 million and RMB3,162.4 million, respectively. In 2023, 2024 and 2025, our inventory turnover days were 72.6 days, 75.3 days and 76.1 days, respectively. We determine our level of inventory based on historical sales performance, demand forecasts and supply chain capacity fluctuations. We cannot assure you that we are able to always maintain optimal inventory levels in the future. Therefore, we may experience inventory obsolescence or inventory shortage risk, which may result in inventory write-downs, and we may consequently sell the excess inventory at discounted prices, or delays in delivery. We may require additional funding to finance our operations. We may require additional cash resources to finance our continued growth. To the extent that our funding requirements exceed our financial resources, we will be required to seek additional financing or to defer planned expenditures. We may not be able to obtain additional funds on terms acceptable to us, or at all. In addition, our ability to raise additional funds in the future is subject to a variety of uncertainties, including our future financial condition, results of operations, general market conditions for capital raising and debt financing activities and economic, political and other conditions. Our insurance coverage may be insufficient to cover all of our potential losses. We maintain insurance coverage over our daily operations and the shipment of our products in transportation. We cannot assure you that our insurance will provide adequate coverage for all the risks in connection with our business operations. If we were to incur substantial losses and liabilities that are not covered by our insurance policies, we may be required to bear our losses to the extent that our insurance coverage is insufficient. As a result, we could suffer significant costs and diversion of our resources. We may from time to time become a party to or affected by litigation, other legal and contractual disputes, claims and administrative or other regulatory proceedings against us, our suppliers and other related individuals. We may from time to time be subject to or affected by various litigation, legal or contractual disputes, claims, or administrative proceedings in the ordinary course of our business, which may divert our management’s attention and other resources. Furthermore, any litigation, legal or contractual disputes, claims or administrative proceedings which are initially not of material importance may escalate and become important to us, due to a variety of factors such as the subject matter of the disputes, the likelihood of loss, the monetary amount at stake and the parties involved. If any adverse verdict, judgment or award is rendered against us, our suppliers and other related individuals, or if such parties settle with any third parties, we and the parties involved may be required to pay significant monetary damages or assume other liabilities. In addition, negative publicity arising from litigation, legal or contractual disputes, claims or administrative proceedings may damage the reputation of such parties, including ours. RISK FACTORS – 38 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 48 of 431 -- We may make acquisitions, establish joint ventures and conduct other strategic investments, which may not be successful. To further expand our business and strengthen our market-leading position, we may form strategic cooperation or make strategic investments and acquisitions to fuel business growth. However, the availability of appropriate acquisition or investment targets may be limited due to intense competition in the market. In recent years, the PCB industry has experienced heightened competition for attractive targets, which may result in increased acquisition costs and less favorable terms. As a result, we may not be able to identify or secure appropriate targets on commercially acceptable terms or within our desired time frame, or at all. In addition, acquisitions involve numerous risks, including difficulties in integrating the operations and personnel of the acquired companies, distraction of management from overseeing our existing operations, difficulties in executing new business initiatives, entering markets or lines of business in which we have no or limited direct prior experience, the possible loss of key employees and customers and difficulties in achieving the synergies we anticipated or levels of revenue, profitability, productivity or other benefits we expected. We face risks in relation to the inability to obtain and maintain the approvals, licenses and permits required for our operations. We may experience difficulties, delays, or failures in obtaining the necessary approvals, licenses and permits for our businesses. In addition, there can be no assurance that we will be able to obtain, maintain or renew all of the approvals, licenses and permits required for our existing business operations in a timely manner, or at all, given we lack control over the competent authorities’ accreditation process and timeframe. Complying with government regulations may require substantial expenses, and any non-compliance may expose us to liability. In case of any non-compliance, we may have to incur significant expenses and divert substantial management time and resources to resolving any deficiencies. We may also experience negative publicity arising from such deficiencies. We have awarded and may continue to award equity instruments under equity incentive plans, which may cause shareholding dilution to our Shareholders and result in increased share- based compensations. We adopted the 2022 Restricted A Share Incentive Scheme approved by the Shareholders on August 15, 2022. See “Appendix VI — Statutory and General Information — D. 2022 Restricted A Share Incentive Scheme”. To further incentivize our employees, we may adopt other equity incentive plans and award additional equity incentives in the future. [REDACTED] of Shares with respect to our equity incentive plan may dilute the shareholding of our existing Shareholders and incur substantial share-based compensation. Fluctuations in exchange rates may adversely affect our results of operations. Our foreign currency denominated transactions were primarily conducted in U.S. dollars during the Track Record Period. The value of RMB against the Hong Kong dollar, the U.S. dollar and other currencies fluctuates, is subject to changes resulting from the PRC government’s policies and depends to a large extent on domestic and international economic and political developments as well as supply and demand in the local market, which are hard to predict. For example, from January 1, 2023 to December 31, 2025, the central parity rate of Renminbi against U.S. dollars fluctuated between 6.7130 and 7.2258. The [REDACTED] from the [REDACTED] will be received in Hong Kong dollars, and we expect a portion of which to be spent in RMB. As a result, any appreciation of the RMB against the Hong Kong dollar may result in the decrease in the value of our [REDACTED] from the [REDACTED]. Conversely, any depreciation of the RMB against the Hong Kong dollars may adversely affect the value of, and any dividends payable on, the Shares in foreign currency. In addition, there are limited instruments available for us to reduce our foreign currency risk exposure at reasonable costs. RISK FACTORS – 39 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 49 of 431 -- Failure to comply with the PRC Social Insurance Law and the Regulation on the Administration of Housing Provident Funds or other PRC labor related regulations may subject us to fines and other legal or administrative sanctions. According to applicable PRC laws and regulations, employers must open social insurance registration accounts and housing provident fund accounts and contribute to social insurance funds and housing provident fund for the benefits of their employees. During the Track Record Period, we and certain of our PRC subsidiaries did not make adequate contribution to social insurance and housing provident funds for certain employees as required by relevant PRC laws and regulations. See “Business — Employees” for more details related thereto. There is no assurance that our historical and current practices with respect to the contribution of social insurance plans and housing provident fund will at all times satisfy the government authorities in Chinese mainland. In the event of any such non-compliance, we may be required to pay any shortfall in the contribution of social insurance plans and housing provident fund within a prescribed time period and to pay penalties if we fail to do so. See “Regulatory Overview — Regulations on Employment and Social Welfare” for further details. In addition to the above, if we fail to comply with any other relevant labor laws and regulations in Chinese mainland, we may be exposed to penalties or be required to compensate employees. Given the magnitude, complexity and continuous amendments to these laws and regulations, compliance therewith may be onerous and may involve substantial financial and other resources to establish efficient compliance and monitoring systems. The liabilities, costs, obligations and requirements associated with these laws and regulations may therefore be disruptive to our operations. Non-compliance may even result in substantial penalties or fines, suspension or revocation of our relevant licenses, among other things. We are subject to risks in relation to leased properties. We currently lease several premises in China. Under the PRC laws and regulations, lease agreements in general are required to be registered with the local land and real estate administration bureau. We may be subject to fines if we fail to rectify such non-compliance within the prescribed time frame after receiving notice from the relevant PRC government authorities. The penalty ranges from RMB1,000 to RMB10,000 for each unregistered lease, at the discretion of the relevant authority. As of the Latest Practicable Date, we had not registered 84 lease agreements for our leased properties. If we receive notice from the relevant PRC government authorities requiring us to complete the registration within the prescribed time frame and if we fail to do so, the maximum aggregate amount of potential administrative penalties we would be subject to for the eighty-four lease agreements is RMB840,000. In the event that any fine is imposed on us for our failure to register our lease agreements, we may not be able to recover such losses from the lessors. In addition, as of the Latest Practicable Date, for 15 leased premises used for manufacturing, staff accommodation, canteen and warehousing with an aggregate floor area accounting for approximately 4.0% of the total gross floor area of our owned and leased premises in the PRC, the lessors with whom we enter into lease agreements did not provide the valid property ownership certificates of the leased premises, hence we cannot ensure that they have the rights to lease such premises to us. Therefore, we may need to find alternative locations with similar functionalities as the original locations and at commercially reasonable terms in a timely manner, and failure to do so may incur extra costs for us. Failure to comply with the land use right grant contracts or to obtain proper ownership certificates can result in penalties. We cannot assure you that we will not be subject to penalties, reclamation actions or contractual liabilities in relation to our use, development or construction on certain land parcels or buildings. We have acquired land use rights for certain parcels of land in the PRC for development and construction purposes, subject to the terms of the relevant land use rights grant contracts and RISK FACTORS – 40 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 50 of 431 -- investment agreements. Under such agreements, we are required to complete development and construction on the granted land within prescribed timeframes. As of the Latest Practicable Date, portions of one land parcel in Changsha held by Weisheng Circuit Board and one land parcel in Yiyang held by Yiyang Weisheng has not yet commenced construction, despite the contractual requirements to complete construction within the specified period. Such circumstances preceded our acquisition of the relevant entities in 2023 and occurred primarily given commercial considerations. As of the Latest Practicable Date, we were in the process of building various facilities on the two land parcels, for which Weisheng Circuit Board and Yiyang Weisheng have obtained government approvals in 2025 and 2026. Pursuant to applicable PRC laws and regulations, including the relevant measures for the disposal of idle land, idle land may be subject to the imposition of land idle fees, the reclamation of the land by the competent authorities without compensation, and/or liability for breach of contract. In addition, we have constructed or altered certain buildings in the PRC which, due to historical reasons, did not undergo the required planning approval procedures and have not obtained ownership certificates. As a result, such buildings may be deemed as non-compliant and may be subject to penalties, including fines calculated as a percentage of the construction cost or orders to demolish such structures within a prescribed period. We have already initiated relevant construction and expansion projects to rectify certain historical issues. Upon completion of such rectification works, we plan to demolish the relevant non-compliant structures accordingly, and the remaining non-compliant buildings are also scheduled for timely removal. In addition, we have completed the construction of certain other buildings which, as of the Latest Practicable Date, have not yet obtained real estate ownership certificates due to the existence of nearby non-compliant structures. These buildings will be demolished after the completion of the relevant construction and expansion projects. The preferential tax treatments granted by the PRC government may become unavailable. Certain of our PRC subsidiaries are subject to the PRC corporate income tax at a standard rate of 25% on their taxable income, but the Company and four of our PRC subsidiaries were accredited as “High and New Technology Enterprises,” and are entitled to a preferential income tax rate of 15%. We cannot assure you that the PRC policies on preferential tax treatments will not change or that the current preferential tax treatments we enjoy or will be entitled to enjoy will not be canceled. Moreover, we cannot assure you that relevant entities will be able to renew the same preferential tax treatments upon expiration. If any such change, cancelation or discontinuation of preferential tax treatment occurs, the Company and the relevant PRC subsidiaries will be subject to the standard PRC enterprise income tax. RISKS RELATING TO THE JURISDICTIONS IN WHICH WE OPERATE Changes in economic, political and social conditions could have a material and adverse impact on our future prospects, business, results of operations and financial condition. We derive revenue from and operate in multiple jurisdictions. As such, changes in any of these jurisdictions could have a material and adverse impact on our future prospects, business, results of operations and financial condition. For example, a substantial part of our revenue is derived from our businesses in the PRC during the Track Record Period. Accordingly, our future prospects, business, results of operations, and financial condition are, to a material extent, subject to economic, political and legal developments in the PRC. If the macroeconomic condition in China experiences significant adverse changes, demand for our products and our ability to maintain our operations may suffer, which could consequently lead to a material and adverse impact on our business, results of operations and financial condition. Moreover, if foreign governments implement laws or regulations restricting investment in Chinese entities and we are deemed to be subject to such restrictions, the [REDACTED] and [REDACTED] in our Shares, our business prospects, results of operations, financial conditions and future capital raising may be adversely affected. RISK FACTORS – 41 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 51 of 431 -- China’s economy has experienced significant growth over the past decades. In recent years, the PRC government has implemented measures emphasizing the utilization of market forces in economic reform and the establishment of sound corporate governance practices in business enterprises. These economic reform measures may be adaptively adjusted from industry to industry or across different regions of the country. Changes in the business environment in China and the other jurisdictions in which we operate could have a material and adverse impact on our business, results of operations and financial condition. Any uncertainties embedded in the legal systems of certain geographic markets where we operate could affect our business, financial condition and results of operations. Legal systems of the geographic markets where we operate vary significantly from jurisdiction to jurisdiction. Some jurisdictions have a civil law system based on written statutes and others are based on common law. Unlike the common law system, prior court decisions under the civil law system may be cited for reference but have limited precedential value. We are subject to certain uncertainties embedded in the legal systems of some geographic markets where we operate. Laws and regulations that are recently enacted may not sufficiently cover all aspects of economic activities in such markets. In particular, the interpretation and enforcement of these laws and regulations are subject to future implementations, and the application of some of these laws and regulations to our businesses is not settled. Since local administrative and court authorities are authorized to interpret and implement statutory provisions and contractual terms, it may be difficult to evaluate the outcome of administrative and court proceedings and the level of legal protection we have in many of the geographic markets where we operate. Local courts may have discretion to reject the enforcement of foreign awards or arbitration awards. These uncertainties may affect our judgment on the relevance of legal requirements and our ability to enforce our contractual rights or claims. In addition, the regulatory uncertainties may be exploited through unmerited or frivolous legal actions, claims concerning the conduct of third parties, or threats in attempt to extract payments or benefits from us. Furthermore, many of the legal systems in the geographic markets where we operate are based in part on their respective government policies and internal rules, some of which are not published on a timely basis or at all and may have retroactive effects. There are other circumstances where key regulatory definitions are unclear, imprecise or missing, or where interpretations that are adopted by regulators are inconsistent with interpretations adopted by a court in analogous cases. As a result, we may not be aware of our violation of certain policies or rules until sometime after the violation. In addition, administrative and court proceedings in some of our geographic markets may be protracted, resulting in substantial costs and diversion of resources and management attention. It may be complex to effect service of process upon us or our management or to enforce against them or us any judgments obtained from foreign courts. We are a company incorporated under the PRC laws, and a majority of our assets are located in Chinese mainland. In addition, most of our Directors and senior management reside in Chinese mainland. As a result, it may be complex for [REDACTED] to effect service of process outside of Chinese mainland upon us, our Directors or senior management or to enforce judgments obtained against us in courts outside Chinese mainland. A judgment of a court of another jurisdiction may be reciprocally recognized or enforced in Chinese mainland only if the jurisdiction has a treaty with Chinese mainland or if the jurisdiction has been otherwise deemed by the courts of Chinese mainland to satisfy the requirements for reciprocal recognition, subject to the satisfaction of other requirements. However, Chinese mainland is not a party to treaties providing for the reciprocal enforcement of judgments of courts with certain foreign countries such as the United States, and enforcement in Chinese mainland of judgments of a court in these jurisdictions may consequently be difficult or impossible. See “Appendix IV — Summary of Principal Laws and Regulations — Arbitration and Enforcement of Arbitral Awards” for details. RISK FACTORS – 42 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 52 of 431 -- We may be subject to additional regulatory requirements under new laws and regulations on overseas offerings and listings issued by PRC government authorities. On July 6, 2021, the relevant PRC government authorities issued the Opinions on Strictly Cracking Down Illegal Securities Activities in Accordance with the Law ( ). These opinions emphasized the need to strengthen the administration over illegal securities activities and the supervision on overseas listings by China-based companies and proposed to take effective measures, such as promoting the establishment of relevant regulatory systems to deal with the risks and incidents faced by China-based overseas-listed companies. See “Regulatory Overview — Regulations on Securities and Overseas Listing” for further details. On February 24, 2023, the CSRC, the MOF, the National Administration of State Secrets Protection of China, and the National Archives Administration of China published the Provisions on Strengthening Confidentiality and Archives Administration of Overseas Securities Offering and Listing by Domestic Companies ( ) (the “Archives Rules”), which came into effect on March 31, 2023. The Archives Rules require that, in relation to the overseas securities offering and listing activities of domestic enterprises, either in direct or indirect form, such domestic enterprises, as well as securities companies and securities service institutions providing relevant securities services, are required to strictly comply with relevant requirements on confidentiality and archives management, establish a sound confidentiality and archives system, and take necessary measures to implement their confidentiality and archives management responsibilities. The interpretation and implementation of the Archives Rules may keep evolving, failure to comply with which may materially affect our business, results of operations or financial conditions. We may be subject to the approval, filing or other requirements of the CSRC or other PRC governmental authorities in connection with future capital raising activities. We cannot assure you that any new rules or regulations promulgated in the future will not impose additional requirements or restrictions on us or our financing activities. If it is determined in the future that approval from or filing with the CSRC or other regulatory authorities or other procedures are required, we may fail to obtain such approval, perform such filing procedures or meet such other requirements in a timely manner or at all. We may face sanctions by the CSRC or other PRC regulatory authorities for failure to seek CSRC approval or other government authorization, or perform filing procedures, for our future financing activities, and these regulatory authorities may impose fines and penalties on us, limit our operating activities in the PRC, limit our ability to pay dividends outside the PRC, delay or restrict the repatriation of the proceeds from such future financing activities into the PRC or take other actions to restrict our financing activities, which could have a material and adverse effect on our financial conditions and business prospects. We are subject to the currency exchange regulatory system. The conversion of Renminbi is subject to applicable laws and regulations in the PRC. It cannot be guaranteed that under a certain exchange rate, we will have sufficient foreign exchange to meet our foreign exchange requirements. Under the current PRC foreign exchange regulatory system, foreign exchange transactions under the current account conducted by us, including the payment of dividends, do not require advance approval from the SAFE, but we are required to present documentary evidence of such transactions and conduct such transactions at designated foreign exchange banks within China that have the licenses to carry out foreign exchange business. Under existing foreign exchange regulations, following the completion of the [REDACTED], we will be able to pay dividends in foreign currencies without prior approval from the SAFE by complying with certain procedural requirements. However, there is no assurance that these foreign exchange policies regarding payment of dividends in foreign currencies will continue in the future. In addition, any insufficiency of foreign exchange may restrict our ability to pay dividends to shareholders or to satisfy any other foreign exchange requirements, capitalize our capital expenditure plans, and even our results of operations, financial performance and business prospects may be affected. RISK FACTORS – 43 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 53 of 431 -- We are a Chinese mainland enterprise, and we are subject to Chinese mainland tax on our global income. As such, any gains on the [REDACTED] of H Shares and dividends on the H Shares may be subject to Chinese mainland income taxes. Under the PRC EIT Law and its implementation rules, subject to any applicable tax treaty or similar arrangement between Chinese mainland and a non-Chinese mainland investor’s jurisdiction of residence that provides for a different income tax arrangement, Chinese mainland withholding tax at the rate of 10% is normally applicable to dividends from Chinese mainland sources payable to investors that are non-Chinese mainland resident enterprises, which do not have an establishment or place of business in Chinese mainland, or which have an establishment or place of business in Chinese mainland if the relevant income is not effectively connected with such establishment or place of business. Any gains realized on the transfer of shares by such investors are subject to a 10% Chinese mainland income tax rate if such gains are regarded as income from sources within Chinese mainland unless a treaty or similar arrangement provides otherwise. See “Regulatory Overview — Tax on Dividends”, “Appendix III — Taxation and Foreign Exchange — Taxation in Chinese Mainland” and “Appendix III — Taxation and Foreign Exchange — Shenzhen-Hong Kong Stock Connect Taxation Policy” for details. As of the Latest Practicable Date, the provisions therein have not expressly provided that individual income tax shall be collected from non-Chinese mainland resident individuals on the sale of shares of Chinese mainland resident enterprises listed on overseas stock exchanges. If Chinese mainland income tax is imposed on gains realized from the [REDACTED] of our H Shares or on dividends paid to our non-Chinese mainland resident [REDACTED], the value of your [REDACTED] in our H Shares may be affected. Furthermore, our Shareholders whose jurisdictions of residence do not have tax treaties or arrangements with Chinese mainland may not qualify for benefits under such tax treaties or arrangements. RISKS RELATING TO THE [REDACTED] We will be concurrently subject to [REDACTED] and regulatory requirements of Chinese mainland and Hong Kong. As our A Shares are listed on the ChiNext Market of the Shenzhen Stock Exchange and our H Shares will be [REDACTED] on the Main Board in Hong Kong, we will be required to comply with the listing rules (where applicable) and other regulatory regimes of both jurisdictions, unless an exemption is available or a waiver has been obtained. Accordingly, we may incur additional costs and resources in continuously complying with all sets of listing rules in the two jurisdictions. The characteristics of the A Share and H Share markets may differ. Our A Shares are listed and traded on the ChiNext Market of the Shenzhen Stock Exchange. Following the [REDACTED], our A Shares will continue to be traded on the ChiNext Market of the Shenzhen Stock Exchange and our H Shares will be [REDACTED] on the Hong Kong Stock Exchange. Under current laws and regulations of Chinese mainland, without the approval from the relevant regulatory authorities, our H Shares and A Shares are neither interchangeable nor fungible, and there is no [REDACTED] or settlement between the H Share and A Share markets. With different [REDACTED] characteristics, the H Share and A Share markets have divergent [REDACTED] volumes, [REDACTED] and [REDACTED] bases, as well as different levels of retail and institutional [REDACTED] participation. As a result, the [REDACTED] performance of our H Shares and A Shares may not be comparable. Nonetheless, fluctuations in the price of our A Shares may adversely affect the [REDACTED] of our H Shares, and vice versa. Due to the different characteristics of the H Share and A Share markets, the historical prices of our A Shares may not be indicative of the [REDACTED] of our H Shares. You should therefore not place undue reliance on the trading history of our A Shares when evaluating the [REDACTED] decision in our H Shares. RISK FACTORS – 44 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 54 of 431 -- There has been no prior [REDACTED] for our H Shares. Prior to the completion of the [REDACTED], there has been no [REDACTED] for our H Shares. There can be no guarantee that an [REDACTED] for our H Shares will develop or be sustained after the completion of the [REDACTED]. The [REDACTED] is the result of negotiations between our Company and the [REDACTED] (for themselves and on behalf of the [REDACTED]), which may not be indicative of the [REDACTED] at which our Shares will be [REDACTED] following the completion of the [REDACTED]. The [REDACTED] of our H Shares may drop below the [REDACTED] at any time after completion of the [REDACTED]. The [REDACTED] volume and [REDACTED] of our H Shares may be [REDACTED], which may result in substantial losses for [REDACTED] or [REDACTED] our H Shares pursuant to the [REDACTED]. The [REDACTED] of our H Shares may be [REDACTED] and could fluctuate widely in response to factors beyond our control. In particular, the performance and fluctuation of the market prices of other companies with business operations located mainly in Chinese mainland that have listed their securities in Hong Kong may affect the volatility in the [REDACTED] of and [REDACTED] for our H Shares. A number of Chinese mainland-based companies have listed their securities, and some are in the process of preparing for listing their securities, in Hong Kong. The share prices of some of these companies have experienced significant volatility, including significant price declines after their initial public offerings. The trading performances of the securities of these companies at the time of or after their offerings may affect the overall investor sentiment toward Chinese mainland-based companies listed in Hong Kong and consequently may impact the [REDACTED] performance of our Shares. These factors may significantly affect the [REDACTED] and [REDACTED] of our Shares, regardless of our actual operating performance. Future sales or perceived sales of substantial amounts of our Shares in the [REDACTED] could negatively affect the [REDACTED] of our Shares and our ability to raise additional capital in the future. The [REDACTED] of our H Shares could decline as a result of future [REDACTED] of a substantial number of our Shares or other securities relating to our H Shares in the [REDACTED], the [REDACTED] of new shares or other securities, or the perception that such sales or issuances may occur. Future sales, or perceived sales, of substantial amounts of our securities, including any future [REDACTED], could also materially and adversely affect our ability to raise capital at a specific time and on terms favorable to us. Equity-linked securities [REDACTED] by us may also confer rights and privileges that take priority over those conferred by the Shares. You will incur immediate and significant dilution and may face further dilution if we [REDACTED] additional Shares in the future. The [REDACTED] of the [REDACTED] is higher than the net tangible asset value per Share immediately prior to the [REDACTED]. Therefore, [REDACTED] of the [REDACTED] in the [REDACTED] will experience an immediate dilution in [REDACTED] consolidated net tangible asset value. To expand our business, we may consider [REDACTED] and [REDACTED] additional Shares in the future. [REDACTED] of the [REDACTED] may experience dilution in the net tangible asset value per Share of their Shares if we [REDACTED] additional Shares in the future at a price that is lower than the net tangible asset value per Share at that time. Our Largest Group of Shareholders have significant influence over us and their interests may not always be aligned with the interest of our other Shareholders. Upon the completion of the [REDACTED] (assuming that the [REDACTED] and the [REDACTED] are not exercised), our Largest Group of Shareholders will be interested in and control an aggregate of approximately [REDACTED]% of our enlarged issued share capital. Our Largest Group of Shareholders will, through their voting power at the Shareholders’ meetings and RISK FACTORS – 45 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 55 of 431 -- their delegates or positions on the Board, have significant influence over our business and affairs, including decisions in respect of mergers or other business combinations, acquisition or disposition of assets, [REDACTED] of additional H Shares or other equity securities, timing and amount of dividend payments, and our management. Our Largest Group of Shareholders may not act in the best interests of our minority Shareholders. See “Relationship with our Largest Group of Shareholders” for further details. Our historical dividends may not be indicative of our future dividend policy, and we cannot assure you whether and when we will pay dividends in the future. We have declared dividends in the past. However, we cannot assure you that dividends of any amount will be declared or distributed by us in any year in the future. Under the applicable laws and regulations of Chinese mainland, the payment of dividends may be subject to certain limitations, and the calculation of our profit under the Accounting Standards for Business Enterprises may differ in certain respects from the calculation under IFRS. The declaration, payment and amount of any future dividends are at the discretion of our Directors, after taking into account various factors, including our results of operations, cash flows, capital expenditure requirements, market conditions, our strategic plans and prospects for business development, regulatory restrictions on the payment of dividends and other factors as our Directors may deem relevant, and subject to the approval at Shareholders’ meeting. Any declaration and payment as well as the amount of dividends will be subject to our constitutional documents and the applicable laws and regulations of Chinese mainland. See “Financial Information — Dividend Policy” for further details. No dividend shall be declared or payable except out of our profits and reserves lawfully available for distribution. Payment of dividends, if any, will be subject to relevant regulations. See “Appendix III — Taxation and Foreign Exchange — Foreign Exchange Administration”. Our historical dividends should not be taken as indicative of our dividend policy in the future. You should not place any reliance on any information released by us in connection with the listing of our A Shares on the ChiNext Market of the Shenzhen Stock Exchange. As our A Shares are listed on the ChiNext Market of the Shenzhen Stock Exchange, we have been subject to periodic reporting and other information disclosure requirements in Chinese mainland. As a result, from time to time, we publicly release information relating to us on the ChiNext Market of the Shenzhen Stock Exchange or other media outlets designated by the CSRC. However, the information announced by us in connection with our A Shares listing is based on regulatory requirements of the securities authorities, industry standards and market practices in Chinese mainland, which are different from those applicable to the [REDACTED]. The presentation of financial and operational information for the Track Record Period disclosed on the ChiNext Market of the Shenzhen Stock Exchange or other media outlets may not be directly comparable to the financial and operational information contained in this document. As a result, [REDACTED] in our H Shares should be reminded that, in making their [REDACTED] decisions as to whether to [REDACTED] our H Shares, they should rely only on the financial, operating and other information included in this document. By applying to [REDACTED] our H Shares in the [REDACTED], you will be deemed to have agreed that you will not rely on any information other than that contained in this document and any formal announcements made by us in Hong Kong with respect to the [REDACTED]. Certain statistics contained in this document are derived from publicly available official sources. This document, particularly the section headed “Industry Overview,” contains information and statistics relating to the PCB industry in China and internationally. Such information and statistics have been derived from various official governments. We believe that the sources of such information are appropriate, and we have taken reasonable care in extracting and reproducing such information. We have no reason to believe that such information is false or misleading in any material respect or that any fact has been omitted that would render such information false or RISK FACTORS – 46 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 56 of 431 -- misleading in any material respect. The information and statistics from official government sources have not been independently verified by the Company, the Joint Sponsors, the [REDACTED], the [REDACTED], the [REDACTED], the [REDACTED], the [REDACTED], the [REDACTED], the [REDACTED] any of our or their respective Directors, executive officers or representatives or any other person involved in the [REDACTED] and no representation is given as to their accuracy. You should therefore not place undue reliance on such information. In addition, we cannot assure you that such information is stated or compiled on the same basis or with the same degree of accuracy as or consistent with similar statistics presented elsewhere, and such information may not be complete or up-to-date. In any event, you should consider carefully the importance placed on such information or statistics. You should read the entire document carefully and should not rely on any information contained in press articles or other media regarding us and the [REDACTED]. There have been, prior to the publication of this document, and there may be, subsequent to the date of this document but prior to the completion of the [REDACTED], press and media coverage regarding us, our business, our industry and the [REDACTED]. Such press and media coverage may include references to certain information that does not appear in this document, including certain operating and financial information and projections, valuations and other information. None of us, the Joint Sponsors, the [REDACTED], the [REDACTED], the [REDACTED], the [REDACTED], the [REDACTED], the [REDACTED], the [REDACTED] or any other person involved in the [REDACTED] has authorized the disclosure of any such information in the press or media coverage, or accepts any responsibility for any such press or media coverage or the accuracy or completeness of any such information or publication. Accordingly, [REDACTED] should not rely on any such information or publication in making their decision whether to [REDACTED] in our H Shares. [REDACTED] are reminded that, in making their [REDACTED] decisions as to whether to [REDACTED] our Shares, they should rely only on the financial, operational, and other information included in this document. By applying to [REDACTED] our H Shares in the [REDACTED], you will be deemed to have agreed that you will not rely on any information other than that contained in this document. RISK FACTORS – 47 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 57 of 431 -- In preparation for the [REDACTED], our Company has sought and [has been granted] the following waivers from strict compliance with the relevant provisions of the Listing Rules. WAIVER IN RELATION TO MANAGEMENT PRESENCE IN HONG KONG Pursuant to Rule 8.12 and Rule 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 management, business operations and assets are primarily located outside of Hong Kong. The principal management headquarters of our Group are primarily based in the PRC. Our Company considers that our Group’s management is best able to attend to its functions by being based in the PRC. None of our executive Directors is or will be ordinarily resident in Hong Kong after the [REDACTED]. Our Directors consider that relocating our executive Directors to Hong Kong would be burdensome and costly for our Company, and it may not be in the best interests of our Company and our Shareholders as a whole to appoint additional executive Directors who are ordinarily resident in Hong Kong. As such, we do not have, and for the foreseeable future will not have, sufficient management presence in Hong Kong to satisfy the requirements under Rule 8.12 and Rule 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 Rule 8.12 and Rule 19A.15 of the Listing Rules, provided that our Company implements the following arrangements: (1) We have appointed two authorized representatives pursuant to Rule 3.05 of the Listing Rules, who will act as our principal channel of communication with the Stock Exchange. The two authorized representatives appointed are Mr. Zhao Qixiang ( ) and Ms. Lin Sio Ngo ( ) (“Ms. Lin”). Ms. Lin is situated and based in Hong Kong. Each of our authorized representatives will be available to meet with the Stock Exchange in Hong Kong within a reasonable time frame upon the request of the Stock Exchange and will be readily contactable by telephone, facsimile and email; (2) As and when the Stock Exchange wishes to contact our Directors on any matters, each of our authorized representatives has the means to contact all of our Directors (including the independent non-executive Directors) promptly at all times; (3) Each Director who is not ordinary resident in Hong Kong possesses or can apply for valid travel documents to visit Hong Kong and is able to meet with the Stock Exchange within a reasonable period of time, when required; (4) We have appointed China Securities (International) Corporate Finance Company Limited as our compliance adviser, pursuant to Rule 3A.19 of the Listing Rules, who will have access at all times to our authorized representatives, Directors and senior management, and will act as an additional channel of communication between the Stock Exchange and us; and (5) We have provided the Authorized Representatives and the Stock Exchange with the contact details of each Director (including their respective mobile phone number, office phone number, e-mail address and fax number (as applicable)). Our Company will inform the Stock Exchange as soon as practicable in respect of any change in the authorized representatives, the Directors and/or the compliance adviser in accordance with the Listing Rules. WAIVERS – 48 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 58 of 431 -- JOINT COMPANY SECRETARIES Pursuant to Rules 3.28 and 8.17 of the Listing Rules, our company secretary must be an individual who by virtue of his or her academic or professional qualifications or relevant experience is, in the opinion of the Stock Exchange, capable of discharging the functions of company secretary. 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 Hong Kong 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; (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. Our Company has appointed Ms. Zhu Xiyao ( ) (“Ms. Zhu”), secretary to the Board and vice president of our company, as one of our joint company secretaries, considering her past working experiences within our Group and her thorough understanding of our internal administration, business operations and corporate culture. As such, although Ms. Zhu does not possess the specified qualifications strictly required by Rule 3.28 of the Listing Rules, our Directors believe that Ms. Zhu is capable of discharging the functions of a joint company secretary with the assistance of Ms. Lin Sio Ngo ( ), who meets the requirements under Rule 3.28 of the Listing Rules and has been appointed to act as the other joint company secretary and to assist Ms. Zhu in the compliance matters for the [REDACTED] as well as other Hong Kong regulatory requirements for an initial period of three years from the [REDACTED]. Over such period, we will implement the following measures to assist Ms. Zhu to satisfy the requisite qualifications as prescribed in Rules 3.28 and 8.17 of the Listing Rules: (a) Ms. Lin will assist Ms. Zhu so as to enable her to discharge her duties and responsibilities as a joint company secretary. Given Ms. Lin’s relevant experiences, she will be able to advise both Ms. Zhu and us on the relevant requirements of the Listing Rules as well as other applicable laws and regulations in Hong Kong; (b) Ms. Zhu will be assisted by Ms. Lin for an initial period of three years commencing from the [REDACTED], which should be sufficient for her to acquire the requisite knowledge and experience under Rule 3.28 of the Listing Rules; (c) we will ensure that Ms. Zhu has access to the relevant trainings and support to enable her to familiarize with the Listing Rules and the duties required of a company secretary of an issuer, and Ms. Zhu has undertaken to attend such trainings; (d) Ms. Lin will communicate with Ms. Zhu on a regular basis regarding matters in relation to corporate governance, the Listing Rules as well as other applicable laws and regulations in Hong Kong which are relevant to our operations and affairs. Ms. Lin will work closely with, and provide assistance to Ms. Zhu with a view to discharging her duties and responsibilities as a company secretary, including but not limited to organizing the Board meetings and Shareholders’ meetings; and WAIVERS – 49 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 59 of 431 -- (e) pursuant to Rule 3.29 of the Listing Rules, Ms. Lin and Ms. Zhu will also attend in each financial year no less than 15 hours of relevant professional training courses to familiarize themselves with the requirements of the Listing Rules and other legal and regulatory requirements of Hong Kong. Both Ms. Lin and Ms. Zhu will be advised by our legal advisors as to Hong Kong laws and our compliance advisor as and when appropriate and required. Accordingly, we have applied for, and the Stock Exchange [has granted] us, a waiver from strict compliance with the requirements of Rules 3.28 and 8.17 of the Listing Rules, for an initial period of three years from the [REDACTED] (the “Waiver Period”). Pursuant to paragraph 13 under Chapter 3.10 of the Guide for New Listing Applicants, the waiver is granted on the conditions: (1) our Company appoints Ms. Lin, who meets the requirements under Note 1 to Rule 3.28 of the Listing Rules, as a joint company secretary, to assist Ms. Zhu in discharging her functions as a joint company secretary and in gaining the relevant experience as required under Rule 3.28 of the Listing Rules; and (ii) the waiver will be revoked immediately if Ms. Lin, during the three-year period, ceases to provide assistance to Ms. Zhu, or if there are material breaches of the Listing Rules by our Company. Before the end of the three-year period, we will conduct a further evaluation of the qualification and experience of Ms. Zhu to determine whether the requirements as stipulated in Rules 3.28 and 8.17 of the Listing Rules can be satisfied, and we will demonstrate to and seek the Stock Exchange’s confirmation that Ms. Zhu, having had the benefit of Ms. Lin’s assistance for three years, has acquired the relevant experience within the meaning of Note 2 to Rule 3.28 of the Listing Rules so that a further waiver would not be necessary. For more details of Ms. Lin and Ms. Zhu’s biographies, please refer to the section headed “Directors and Senior Management”. [REDACTED] WAIVERS – 50 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 60 of 431 -- [REDACTED] WAIVERS – 51 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 61 of 431 -- [REDACTED] WAIVERS – 52 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 62 of 431 -- [REDACTED] WAIVERS – 53 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 63 of 431 -- [REDACTED] WAIVERS – 54 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 64 of 431 -- [REDACTED] WAIVERS – 55 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 65 of 431 -- [REDACTED] WAIVERS – 56 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 66 of 431 -- [REDACTED] INFORMATION ABOUT THIS DOCUMENT AND THE [REDACTED] – 57 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 67 of 431 -- [REDACTED] INFORMATION ABOUT THIS DOCUMENT AND THE [REDACTED] – 58 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 68 of 431 -- [REDACTED] INFORMATION ABOUT THIS DOCUMENT AND THE [REDACTED] – 59 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 69 of 431 -- [REDACTED] INFORMATION ABOUT THIS DOCUMENT AND THE [REDACTED] – 60 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 70 of 431 -- DIRECTORS Name Address Nationality Executive Directors Mr. Chen Tao ( ) T32, Block 3, T South, Chunshui’an Phase 5, No. 1 Xiangshan Middle Street, Nanshan District, Shenzhen, Guangdong Province, the PRC Chinese Mr. Zhao Qixiang ( ) Room 103, Building 1222, No. 388 Huibo Avenue, Xiaojinkou Sub-district Office, Huicheng District, Huizhou, Guangdong Province, the PRC Chinese Mr. Chen Yong ( ) No. 01, Building 18, Wanshang Garden, No. 28 Sanhuan South Road, Huicheng District, Huizhou, Guangdong Province, the PRC Chinese Ms. Wang Haiyan ( ) Room 902, Building 16, No. 33 Pingsha Shengping Avenue East, Qianwu Town, Doumen District, Zhuhai, Guangdong Province, the PRC Chinese Non-Executive Director Ms. Liu Chunlan ( ) T32, Block 3, T South, Chunshui’an Phase 5, No. 1 Xiangshan Middle Street, Nanshan District, Shenzhen, Guangdong Province, the PRC Chinese Independent Non-Executive Directors Mr. Xie Lanjun ( ) Room 22D, Building 3, Jiariwan Huating, No. 8 Shahe Chaozhou West Street, Nanshan District, Shenzhen, Guangdong Province, the PRC Chinese DIRECTORS AND PARTIES INVOLVED IN THE [REDACTED] – 61 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 71 of 431 -- Name Address Nationality Dr. Xie Lingmin ( ) Room 820, Mingde Building (School of Economics), Lihu Campus, Shenzhen University, Shenzhen, Guangdong Province, the PRC Chinese Dr. Zhang Jihai ( ) 18D, Block 10, Sangtai Danhuayuan, Taoyuan Street, Nanshan District, Shenzhen, Guangdong Province, the PRC Chinese Mr. Wong Ting Chung ( ) BBS, JP Flat A, 15/F, Tower 2 Mayfair by the Sea I 23 Fo Chun Road Pak Shek Kok Tai Po New Territories, Hong Kong Chinese For further details, please refer to the section headed “Directors and Senior Management”. DIRECTORS AND PARTIES INVOLVED IN THE [REDACTED] – 62 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 72 of 431 -- PARTIES INVOLVED IN THE [REDACTED] Joint Sponsors J.P. Morgan Securities (Far East) Limited 28/F, Chater House, 8 Connaught Road Central, Hong Kong China Securities (International) Corporate Finance Company Limited 18/F, Two Exchange Square, 8 Connaught Place Central, Hong Kong GF Capital (Hong Kong) Limited 27/F, GF Tower, 81 Lockhart Road, Wan Chai, Hong Kong [REDACTED] DIRECTORS AND PARTIES INVOLVED IN THE [REDACTED] – 63 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 73 of 431 -- [REDACTED] DIRECTORS AND PARTIES INVOLVED IN THE [REDACTED] – 64 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 74 of 431 -- Legal Advisors to the Company As to Hong Kong laws: Jun He Law Offices 7/F, AIA Central 1 Connaught Road Central Central Hong Kong As to PRC laws and PRC’s data privacy and cybersecurity law: JunHe LLP 25-28/F, HKRI Centre One, HKRI Taikoo Hui, 288 Shimen Road (No. 1), Shanghai, PRC As to U.S. laws: Cleary Gottlieb Steen & Hamilton (Hong Kong) 37/F, Hysan Place 500 Hennessy Road Causeway Bay Hong Kong As to Malaysian law: Robin Lynn & Lee in collaboration with DFDL B23-8, Level 23, Tower B Vertical Business Suite Avenue 3, Bangsar South No. 8 Jalan Kerinchi 59200 Kuala Lumpur Malaysia As to Singaporean law: CHP LAW LLC 16 Collyer Quay #31-00 Collyer Quay Centre Singapore 049318 As to laws of Thailand: DFDL (Thailand) Limited No. 3, Rajanakarn Building AA Floor, South Sathorn Road Yannawa Sub-District Sathorn District Bangkok Metropolis, 10120 Thailand DIRECTORS AND PARTIES INVOLVED IN THE [REDACTED] – 65 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 75 of 431 -- Legal Advisors to the Joint Sponsors and the [REDACTED] As to Hong Kong and U.S. laws: Freshfields 55th Floor, One Island East Taikoo Place, Quarry Bay Hong Kong As to PRC laws: Jingtian & Gongcheng 34th Floor, Tower 3, China Central Place, 77 Jianguo Road, Chaoyang District, Beijing, PRC Auditor and Reporting Accountants BDO Limited Certified Public Accountants 25th Floor, Wing On Centre, 111 Connaught Road Central, Hong Kong Industry Consultant Frost & Sullivan (Beijing) Inc., Shanghai Branch Co. Room 2504, Wheelock Square No. 1717, West Nanjing Road Jing’an District, Shanghai PRC [REDACTED] DIRECTORS AND PARTIES INVOLVED IN THE [REDACTED] – 66 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 76 of 431 -- Registered Office and Head Office Hangcheng Technology Park, Xinqiao Village, Danshui Town, Huiyang District, Huizhou, Guangdong Province, PRC Principal place of Business in Hong Kong Registered under Part 16 of the Companies Ordinance 40/F, Dah Sing Financial Centre, 248 Queen’s Road East, Wanchai, Hong Kong Joint Company Secretaries Ms. Zhu Xiyao ( ) Room 04, 17th Floor, Building 4, Tianchen Yuanzhu Garden, No. 88, Henan Bank Section, Zhuyuan Road, Henan Bank Street, Huicheng District Huizhou, Guangdong Province the PRC Ms. Lin Sio Ngo ( ) (an associate member of both The Hong Kong Chartered Governance Institute and The Chartered Governance Institute) 40/F, Dah Sing Financial Centre, 248 Queen’s Road East, Wanchai, Hong Kong Authorized Representatives Mr. Zhao Qixiang ( ) Room 103, Building 1222, No. 388 Huibo Avenue, Xiaojinkou Sub-district Office, Huicheng District, Huizhou, Guangdong Province, the PRC Ms. Lin Sio Ngo ( ) 40/F, Dah Sing Financial Centre, 248 Queen’s Road East, Wanchai, Hong Kong Audit Committee Dr. Xie Lingmin (Chairperson) Mr. Xie Lanjun Dr. Zhang Jihai Nomination Committee Mr. Xie Lanjun (Chairperson) Dr. Xie Lingmin Mr. Chen Tao Remuneration and Appraisal Committee Dr. Zhang Jihai (Chairperson) Mr. Xie Lanjun Mr. Zhao Qixiang CORPORATE INFORMATION – 67 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 77 of 431 -- Strategy and Investment Committee Mr. Chen Tao (Chairperson) Mr. Zhao Qixiang Dr. Zhang Jihai Compliance Adviser China Securities (International) Corporate Finance Company Limited 18/F, Two Exchange Square, 8 Connaught Place Central, Hong Kong [REDACTED] Principal Bank Industrial Bank Co., Ltd, Huizhou Branch Xingcheng Technology Park, Xinqiao Village, Shuizhen, Huiyang District, Huizhou, Guangdong Province, the PRC Company’s Website www.shpcb.com (A copy of this document is available on the Company’s website. Except for the information contained in this document, none of the other information contained on the Company’s website forms part of this document) CORPORATE INFORMATION – 68 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 78 of 431 -- The information and statistics set out in this section and other sections of this document were extracted from the F&S Report, which was commissioned by the Company, and from various official government publications and available resources from public market research. The Company engaged Frost & Sullivan to prepare the F&S Report in connection with the [REDACTED]. The information from official government sources has not been independently verified by any of the Joint Sponsors, the [REDACTED], the [REDACTED], the [REDACTED], the [REDACTED], the [REDACTED], the [REDACTED], any of their respective directors and advisers, or any other persons or parties involved in the [REDACTED], and no representation is given as to its accuracy. OVERVIEW OF THE GLOBAL PCB MARKET PCBs are circuit boards with predefined conductive pathways formed on insulating substrates, serving as foundational components that carry and interconnect electronic components in devices. The main function of the PCB is to enable a variety of electronic components to form a predetermined circuit connection, and play a relay transmission role. PCBs are irreplaceable in most electronic devices and products. According to different product, PCBs can be categorized into single- and double-layer PCB, multilayer PCB, HDI PCB, FPC and package substrates. In particular, multilayer PCBs can be further categorized by layer count into: mid-low-layer-count MLPCBs (4-6 layers), and high-layer- count MLPCBs (8 layers and above). PCB manufacturers are mainly provided with copper-clad laminates and copper foil by raw material suppliers, using which they in turn design, manufacture, assemble, and test PCBs. Finished PCBs will primarily be applied in AI and high-performance computing, telecommunications, consumer electronics, automotive electronics and medical devices and other applications. Analysis of Major Applications in the Global PCB Market • AI and high-performance computing: With the rapid growth of AI and emerging technologies, global demand for AI computing continues to rise, driving increased construction of data centers and server shipments. In 2024, the global shipments of AI servers were 2.0 million, and are expected to reach 5.4 million in 2029, representing a CAGR of 21.7% from 2024 to 2029. The sustained demand for data centers and high-performance computing equipment provides a long-term and stable growth driver for the PCB market. In addition, the need to process vast amounts of data in AI and high-performance computing applications is prompting significant technological advancements in PCBs, including improvements in signal transmission, signal integrity, and heat dissipation, thereby enhancing the value of each PCB used in these fields. • Telecommunications: The rollout of 5G has significantly increased the demand for high-end PCBs that support high-frequency signals and high-speed data transmission. Telecommunication devices require low-power, high-density power supplies, as well as high-layer-count MLPCBs paired with high-speed chips to ensure efficient and stable performance. • Consumer electronics: Traditional consumer electronics include home appliances, audio/video equipment, portable electronic devices, etc. With the widespread application of cutting-edge technologies such as AI, smart terminals — as a subset of consumer electronics — have gradually become the key driver for the innovation and development of the consumer electronics industry. Smart devices, including AI- powered smartphones INDUSTRY OVERVIEW – 69 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 79 of 431 -- and PCs, AR/VR devices, and smart home appliances, require PCBs with enhanced performance, especially in terms of signal transmission speed, low latency, heat dissipation, and electromagnetic compatibility. • Automotive electronics: The popularity of new energy vehicles has significantly increased the demand for high-end PCBs. On one hand, as the core of EVs, the three-electric system (battery, motor, and electronic control) requires PCBs to meet high-voltage and high-reliability demands to ensure the vehicle’s power performance and safety. On the other hand, the development of intelligent driving technology necessitates the processing of massive amounts of data from cameras, radars, and lidars, requiring PCBs with high performance in signal transmission, high-frequency low- latency processing, and other aspects. • Others: Beyond these core areas, PCBs are vital in the fields of medical devices, industrial control, and aerospace. In the medical field, PCBs are the basis for key components such as diagnostic imaging equipment, monitors, and implantable medical devices. In the industrial field, PCBs are essential for automation, humanoid robots, IoT, and smart factories. In aerospace and navigation, they support high-reliability control systems in aircraft and spacecraft. Market Size of the Global PCB Market In terms of sales revenue, the market size of the global PCB market has grown from US$62.0 billion in 2020 to US$75.0 billion in 2024, representing a CAGR of 4.9% from 2020 to 2024. It is expected that the global sales revenue of the PCB market will reach US$93.7 billion in 2029, with a CAGR of 4.8% from 2025 to 2029. According to different products, the market size of the global single- and double-layer PCB, multilayer PCB, HDI PCB, FPC and package substrates market, in terms of sales revenue in 2024, has reached US$7.9 billion, US$28.6 billion, US$12.8 billion, US$12.8 billion and US$12.9 billion, respectively. In the future, with the rapid development and wide application of emerging technologies such as AI, 5G communications, and the Internet of Things, the global PCB market size will continue to expand. It is expected that the global sales revenue of single- and double-layer PCB, multilayer PCB, HDI PCB, FPC and package substrates will reach US$9.0 billion, US$34.5 billion, US$16.9 billion, US$15.5 billion and US$17.8 billion, respectively in 2029. Market Size of the Global PCB Market, Categorized by Product (US$ billion, 2020-2029E) Single- and double-layer PCB Multilayer PCB HDI PCB FPC Package substrate CAGR 2020-2024 2025E-2029E Total 4.9% 4.8% Single- and double-layer PCB 0.0% 2.4% Multilayer PCB 5.5% 4.0% HDI PCB 8.0% 5.4% FPC 1.8% 4.9% Package substrate 7.4% 7.0% 0 2020 4040 6060 8080 100100 13.6 17.9 13.1 12.9 13.6 14.5 15.8 17.0 17.8 9.7 13.4 14.3 12.8 12.8 12.8 13.4 14.3 15.1 15.5 11.9 11.3 12.1 11.1 12.8 13.7 14.4 15.4 16.4 16.9 9.4 29.0 31.0 28.2 28.6 29.5 30.7 32.4 34.2 34.5 23.1 9.6 8.9 7.8 7.9 8.2 8.4 8.6 8.8 9.0 7.9 76.9 84.2 73.0 75.0 77.8 81.4 86.5 91.5 93.7 62.0 2020 2021 2022 2023 2024 2025E 2026E 2027E 2028E 2029E Source: Global Electronics Association, Prismark, desk research, expert interview, Frost & Sullivan INDUSTRY OVERVIEW – 70 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 80 of 431 -- Categorized by application, in terms of sales revenue, the market size of the global PCB market under the fields of AI and high-performance computing, telecommunication, consumer electronics as well as automotive electronics in 2024 has reached US$6.0 billion, US$9.5 billion, US$36.7 billion and US$9.4 billion, respectively. In particular, the global sales revenue of PCB market under the field of smart devices has reached US$16.1 billion in 2024, with a CAGR of 2.5% from 2020 to 2024, and is expected to reach US$20.9 billion by 2029, with a CAGR of 6.4% from 2025 to 2029. With the rapid development of global cloud computing and AI technology and applications in recent years, the sustained expansion in demand for cloud infrastructure such as servers and data centers has driven a corresponding increase in the usage of PCBs in the field of AI and high-performance computing, resulting in a further increase in the market size of the global PCB market under the field of AI and high-performance computing to reach US$15.0 billion in 2029, representing a CAGR of 14.9% from 2025 to 2029. The robust growth of the global PCB market in the AI and high-performance computing sector is primarily driven by North American cloud service providers who are continuously raising their capital expenditure to meet the explosive growth of AI computing. In 2024, global data center capital expenditure reached US$455 billion, with North American cloud service providers accounting for over 50% of the total global data center capital expenditures. In the second quarter of 2025, the capital expenditure from these providers saw an overall increase of over 30% compared to the first quarter of 2025. The large-scale capital investment by North American cloud service providers has accelerated the construction and upgrading of a new generation of AI servers and data centers, thereby significantly boosting the demand for high-end PCB products used for high-speed computing and high-density interconnects. Market Size of the Global PCB Market, Categorized by Application (US$ billion, 2020-2029E) 0 20 40 60 80 100 12.6 15.2 13.4 13.4 13.5 13.7 14.1 14.3 13.9 10.4 7.7 10.1 9.1 9.4 9.6 9.8 10.2 10.8 11.1 6.1 44.7 45.2 37.0 36.7 36.3 37.6 39.5 41.4 41.9 36.6 9.2 10.3 9.1 9.5 9.8 10.3 10.9 11.5 11.8 7.3 4.4 6.0 8.6 10.0 11.8 13.5 15.0 1.6 1.6 2.7 2.7 3.4 3.4 76.9 84.2 73.0 75.0 77.8 81.4 86.5 91.5 62.0 2020 2021 2022 2023 2024 2025E 2026E 2027E 2028E 2029E 93.7 CAGR AI and high-performance computing Telecommunications Consumer electronics Automotive electronics Others 2020-2024 2025E-2029E Total 4.9% 4.6% AI and high-performance computing 39.2% 14.9% Telecommunications 6.8% 4.8% Consumer electronics 0.1% 3.7% Automotive electronics 11.2% 3.7% Others 6.5% 0.7% Source: Global Electronics Association, Prismark, desk research, expert interview, Frost & Sullivan Market Drivers and Development Trends of the Global PCB Market • Growing demand for high-end PCBs: With the rapid development of AI, intelligent driving and 5G telecommunications, enterprise customers in various applications have a growing demand for high-end PCBs. High-end PCBs, such as high-build-up HDI PCBs and INDUSTRY OVERVIEW – 71 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 81 of 431 -- high-layer-count MLPCBs, can provide critical support for the stable operation of complex electronic systems and efficient data processing due to their ability to support more complex functions, higher integration, and smaller sizes. • Technical upgrades and integration: PCBs steadily advancing toward higher frequency, higher speed, and greater density. For instance, in the high-frequency communication sector, PCB manufacturers utilize specialized materials and designs to ensure the integrity of signal transmission. Furthermore, the technologies of different PCB structures are gradually converging. For example, combining high-density interconnect technology with high-layer- count MLPCB techniques allows products to support more functions in limited space and enables more complex circuit designs, which not only improves the overall performance of PCBs but also creates opportunities for new application scenarios. • Automation and intelligent manufacturing: Traditional PCB production relied heavily on manual labor, which limited production efficiency, and restricted precision. A growing number of PCB manufacturers are focusing on upgrading their production through automation and smart manufacturing. The introduction of advanced automated equipment and production lines, along with the widespread application of industrial internet and artificial intelligence technologies, helps PCB companies significantly enhance production efficiency, monitor data in real-time, improve yield rates, shorten production cycles, and achieve more efficient resource management. Competitive Landscape of the Global PCB Market The global PCB market is intensely competitive and relatively concentrated. As of 2024, there were over 2,000 PCB manufacturers worldwide, with over 1,000+ manufacturers in Chinese mainland. A comparison of the Group’s primary PCB products offered and the main application scenarios against those of its peers is as follows: Company Primary PCB products offered Main application scenarios The Company ! ! ! ! ! ! ! ! ! ! ! — High-layer-count MLPCB and high- build-up HDI PCB — AI and high-performance computing Company A ! ! ! ! ! ! ! ! ! ! ! ! — High-layer-count MLPCB — AI and high-performance computing and telecommunications Company B ! ! ! ! ! ! ! ! ! ! ! ! — High-layer-count MLPCB and HDI PCB — AI and high-performance computing and telecommunications Company C ! ! ! ! ! ! ! ! ! ! ! ! — MLPCB and FPC — Automotive electronics and telecommunications Company D ! ! ! ! ! ! ! ! ! ! ! ! — MLPCB and HDI PCB — Aerospace and defense, automotive electronics and AI and high- performance computing Company E ! ! ! ! ! ! ! ! ! ! ! ! — FPC — Smart devices such as smartphone and automotive electronics Company F! ! ! ! ! ! ! ! ! ! ! ! ! — MLPCB and high- build-up HDI PCB — Smart devices such as PC and telecommunications INDUSTRY OVERVIEW – 72 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 82 of 431 -- Company Primary PCB products offered Main application scenarios Company G ! ! ! ! ! ! ! ! ! ! ! ! — Package substrates and HDI PCB — Smart devices such as PC, telecommunications and AI and high- performance computing Company H ! ! ! ! ! ! ! ! ! ! ! ! — MLPCB — AI and high-performance computing and telecommunications Company I ! ! ! ! ! ! ! ! ! ! ! ! ! — MLPCB — Server, telecommunications and smart devices Company J ! ! ! ! ! ! ! ! ! ! ! ! ! — MLPCB and HDI PCB — Smart devices and automotive electronics Company K ! ! ! ! ! ! ! ! ! ! ! ! — HDI PCB, FPC and package substrates — Telecommunications and smart devices Company L ! ! ! ! ! ! ! ! ! ! ! ! — MLPCB — Telecommunications and smart devices Company M ! ! ! ! ! ! ! ! ! ! ! ! — HDI PCB — Smart devices such as smartphone, automotive electronics Company N ! ! ! ! ! ! ! ! ! ! ! ! — High-layer-count MLPCB — Server and telecommunications Company O ! ! ! ! ! ! ! ! ! ! ! ! — Mid-low-layer-count MLPCB and HDI PCB — Smart devices such as PC In terms of sales revenue, the Company ranked fifth among the PCB providers in Chinese mainland in 2024 and ranked third in the first half of 2025. In terms of sales revenue of PCBs under the field of AI and high-performance computing in the first half of 2025, the Company ranked first in the global PCB market. The underlying reason for the Group’s ascent from the seventh in 2024 to the top position in the six months ended June 30, 2025 within the global PCB market under the field of AI and high-performance computing is that the Group’s PCB revenue within the AI and high-performance computing sector experienced substantial growth in the first half of 2025, with its year-on-year growth rate significantly exceeding the industry average of 43.3%. This growth is attributable to the Group’s competitive strengths, including its position as one of the first companies globally to achieve mass production of 24-layer HDIs with a 6+12+6 build-up, as well as the technical capabilities for of 28-layer HDIs with an 8+12+8 build-up, and 16-layer any-layer interconnect HDIs. Ranking of the Global PCB Providers, in terms of Sales Revenue of PCBs under the field of AI and High-performance Computing, in 2024 and Six Months Ended June 30, 2025 2024 Six Months Ended June 30, 2025 Ranking Company Sales revenue Market share Ranking Company Sales revenue Market share (RMB million) (%) (RMB million) (%) 1 Company A(1) 2,975 7.1% 1 The Company 3,894 13.8% 2 Company B(2) 1,600 3.8% 2 Company A 1,511 5.3% 3 Company C(3) 1,438 3.4% 3 Company B 1,493 5.3% 4 Company D(4) 1,406 3.3% 4 Company C 1,297 4.6% 5 Company E(5) 1,240 3.0% 5 Company D 1,288 4.6% 6 Company F(6) 1,006 2.4% 6 Company E 1,005 3.6% 7 The Company 707 1.7% 7 Company F 683 2.4% 8 Company G(7) 684 1.6% 8 Company H 673 2.4% 9 Company H(8) 659 1.6% 9 Company G 533 1.9% 10 Company I(9) 390 0.9% 10 Company I 359 1.3% Source: Public filings, websites of market players, expert interview, Frost & Sullivan INDUSTRY OVERVIEW – 73 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 83 of 431 -- Notes: (1) Company A is a public company founded in 1992 and listed on the Shenzhen Stock Exchange, headquartered in Jiangsu, China, committed to the research, development, production, and sale of various PCBs. (2) Company B is a public company founded in 1984 and listed on the Shenzhen Stock Exchange, headquartered in Shenzhen, China, committed to providing PCBs electronic assembly services. (3) Company C is a public company founded in 1993 and listed on the Shanghai Stock Exchange, headquartered in Shenzhen, China, committed to the research, development, production, and sales of PCBs and high-end electronic materials. (4) Company D is a public company founded in 1978 and listed on the NASDAQ, headquartered in USA, committed to providing PCBs, RF and microwave/microelectronic component products, and system integration services. (5) Company E is a public company founded in 1980 and listed on the Shenzhen Stock Exchange, headquartered in Jiangsu, China, It is mainly engaged in the R&D, production, and sales of electronic circuit products, precision components, touch display modules, LED display devices, and other products. (6) Company F is a public company founded in 1973 and listed on Taiwan Stock Exchange, headquartered in Taiwan. It is mainly engaged in the design, manufacture, and sale of PCBs. (7) Company G is a public company founded in 1990 and listed on Taiwan Stock Exchange, headquartered in Taiwan. It primarily engages in the manufacturing and sales of various PCBs, including HDI PCB, FPC, and package substrate. (8) Company H is a public company founded in 1985 and listed on Shanghai Stock Exchange, headquartered in China. Its primary business involves the research, development, production, and sales of a variety of PCBs. (9) Company I is a public company founded in 1981 and listed on the Taiwan Stock Exchange, headquartered in Taiwan. It is mainly engaged in the manufacture and sale of PCBs, computers, electronics, communications products and related equipment, and electronic components. Key Success Factors and Entry Barriers of the Global PCB Market • Customer certification: Major customers, especially in the field of AI and high-performance computing and automotive, require lengthy, rigorous certification processes that include technical audits, on-site inspections and extended product testing. They favor long-term, certified suppliers, which provides stable order flows and deep trust. New entrants face large time and resource costs to pass certifications and still must prove reliability and build relationships, making it difficult to win significant volumes or brand recognition quickly. • Technology and R&D: As PCBs continue to develop towards higher precision and density, leading manufacturers provide customized designs and solutions tailored to specific industry needs, such as high signal transmission speed and automotive reliability. They also excel in achieving high production accuracy, controlling micro-traces, ultra-small apertures, and multi-layer alignment. Additionally, they master specialized materials like high-frequency substrates and advanced thermal dissipation materials to meet strict performance demands. New entrants lack the long-term R&D investment and expertise, resulting in significant gaps in technical performance and product stability. • Manufacturing: High-end PCB production involves hundreds of interconnected processes, requiring advanced automation and strict quality control. Leading firms possess mature, automated, and intelligent manufacturing systems, utilizing cutting-edge equipment like laser imaging and high-precision drilling. Early-stage entrants often experience higher scrap rates, longer cycles, and higher costs, making it tough to meet the demand for quality and capacity from clients. Cost Analysis of the Global PCB Market The main raw material costs for PCB include copper clad laminate, copper foil and copper ball. Copper material costs account for 60% to 70% of the total raw material costs of PCBs, therefore, the cost of PCBs is highly correlated with copper prices. INDUSTRY OVERVIEW – 74 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 84 of 431 -- Copper prices are directly influenced by fluctuations in international copper prices, which are typically closely related to the global macroeconomic situation, industrial production demand, and the development of emerging industries like new energy. The global average copper settlement price has increased from US$5,947 per ton in 2020 to US$8,997 per ton in 2021 and experienced a decrease to US$8,767 per ton in 2024. Looking ahead, with the ongoing global push for industrial upgrading and the increasing momentum for renewable energy and infrastructure development, copper prices are expected to remain relatively stable within a high-level range. OVERVIEW OF THE GLOBAL HIGH-LAYER-COUNT MLPCB MARKET MLPCB can be categorized by layer count into mid-low-layer-count MLPCB (four to six layers), and high-layer-count MLPCB (eight layers and above). Multilayer PCBs can accommodate more complex circuit designs and higher-density component layouts, thereby enabling more functions within a limited space. High-layer-count MLPCBs refer to a type of multilayer PCB with more than 8 layers, higher wiring density, and superior signal transmission performance. High-layer-count MLPCBs require more precise lamination for layer alignment, advanced drilling techniques for smaller vias and higher aspect ratios, and superior materials to meet high-frequency and high-speed signal requirements. Due to increasingly stringent demands on signal integrity and thermal performance from applications such as AI and high-performance computing, high-end communication equipment, and intelligent driving, the demand for high-layer-count MLPCB with 14 layers and above is growing. Higher layer counts enable PCBs to accommodate more circuits, significantly increasing wiring density and enabling more complex functions within a limited space. Market Size of the Global High-layer-count MLPCB Market The number of layers of high-layer-count MLPCBs is typically divided into even numbers. Even-numbered layer designs can ensure uniform material distribution during the hot-press manufacturing process, thereby preventing warping and deformation of the PCB and enhancing product reliability. It is common for many industry participants to adopt a classification criterion where high-layer-count MLPCBs are categorized into “8 to 12 layers” and “14 layers and above”, though there is currently no definitive and universally accepted official standard to categorize high-layer-count MLPCBs based on the counts of layers given the stark differences in product applications and market positioning among the industry participants. However, categorizing high-layer-count MLPCBs into “8 to 12 layers” and “14 layers and above” is reasonable and helpful to reflect the downstream applications of high-layer-count MLPCBs: those with 8 to 12 layers are widely applied in high-end smart devices and communication equipment, such as network switches, medical imaging devices, and high-end laptops due to their ability to achieve high-density wiring and good signal integrity; those with 14 layers and above have a higher technical barrier because they can handle more complex wiring and power management challenges and are therefore primarily used in fields with stricter PCB performance and more sophisticated fabrication process requirements, especially AI and high-performance computing. In these applications, the higher layer count is necessary to meet complex wiring challenges from high-density chip packaging, optimize power management, and ensure stable transmission of high-speed signals for long-term, efficient system operation. In terms of sales revenue, the global market size of high-layer-count MLPCB market has grown from US$9.3 billion in 2020 to US$12.5 billion in 2024, with a CAGR of 7.7% from 2020 to 2024. It is projected that the global sales revenue of high-layer-count MLPCB market will reach US$17.1 billion by 2029, with a CAGR of 5.7% from 2025 to 2029. Categorized by layer count, the global sales revenue of high-layer-count MLPCB with 8-12 layers has reached US$6.9 billion in 2024, while the global market size for high-layer-count MLPCB with 14 layers and above has reached US$5.6 billion in 2024, representing a CAGR of 6.3% and 9.5% from 2020 to 2024, respectively. INDUSTRY OVERVIEW – 75 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 85 of 431 -- Categorized by application, in terms of sales revenue, the global market size for high-layer- count MLPCB with 14 layers and above in 2024 has reached US$1.5 billion in the field of AI and high-performance computing, US$1.1 billion in telecommunication, US$1.7 billion in smart devices, and US$0.8 billion in automotive electronics. Global Market Size for High-layer-count MLPCB with 14 Layers and Above, Categorized by Application (US$ billion, 2020-2029E) 0 2 4 6 8 10 0.6 0.6 0.5 0.5 0.5 0.5 0.6 0.6 0.6 0.5 0.7 0.8 0.7 0.8 0.9 1.0 1.1 1.2 1.2 0.6 2.1 2.0 1.7 1.7 1.7 1.8 1.9 2.1 2.1 1.6 1.0 1.1 1.0 1.1 1.2 1.3 1.5 1.6 1.7 0.8 1.1 1.5 2.3 2.7 3.1 3.6 4.1 0.4 0.4 5.0 0.7 5.3 0.9 5.0 5.6 6.7 7.4 8.2 9.1 3.9 2020 2021 2022 2023 2024 2025E 2026E 2027E 2028E 2029E 9.7 CAGR AI and high-performance computing Telecommunications Smart devices Automotive electronics Others 2020-2024 2025E-2029E Total 9.5% 9.7% AI and high-performance computing 40.3% 15.4% Telecommunications 8.5% 9.0% Smart devices 0.6% 5.3% Automotive electronics 7.2% 6.5% Others 2.1% 2.7% Source: Global Electronics Association, Prismark, desk research, expert interview, Frost & Sullivan Competitive Landscape of the Global High-layer-count MLPCB with 14 Layers and Above Market The global high-layer-count MLPCB with 14 layers and above markets are relatively concentrated, with a large number of participants in the market. In terms of sales revenue in 2024, the Company ranked tenth in the global market for high-layer-count MLPCB with 14 layers and above and ranked fourth among the PCB providers in Chinese mainland. In terms of sales revenue in the first half of 2025, the Company ranked first in the global market for high-layer-count MLPCB with 14 layers and above. In terms of sales revenue of high-layer-count MLPCB with 14 layers and above under the field of AI and high-performance computing, the Company ranked fifth in 2024 and ranked first in the first half of 2025 in the global market for high-layer-count MLPCB with 14 layers and above. Ranking of Global Providers of High-layer-count MLPCB with 14 Layers and Above, in terms of Sales Revenue*, in 2024 and Six Months Ended June 30, 2025 2024 Six Months Ended June 30, 2025 Ranking Company Sales revenue Market share Ranking Company Sales revenue Market share (RMB million) (%) (RMB million) (%) 1 Company A 2,800 7.1% 1 The Company 3,567 16.2% 2 Company B 2,456 6.3% 2 Company A 2,100 9.5% INDUSTRY OVERVIEW – 76 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 86 of 431 -- 2024 Six Months Ended June 30, 2025 Ranking Company Sales revenue Market share Ranking Company Sales revenue Market share (RMB million) (%) (RMB million) (%) 3 Company D 2,021 5.2% 3 Company B 1,440 6.5% 4 Company J(1) 1,572 4.0% 4 Company D 1,158 5.3% 5 Company C 1,198 3.1% 5 Company J 838 3.8% 6 Company K(2) 900 2.3% 6 Company C 710 3.2% 7 Company L(3) 863 2.2% 7 Company L 687 3.1% 8 Company M(4) 748 1.9% 8 Company N(5) 450 2.0% 9 Company F 672 1.7% 9 Company K 410 1.9% 10 The Company 603 1.5% 10 Company I 394 1.8% Source: Public filings, websites of market players, expert interview, Frost & Sullivan Notes: Sales revenue*: The sales revenue of high-layer-count MLPCB with 14 layers and above for ranking includes the sales revenue of HDI PCBs with 14 layers and above that also apply the HDI process, as HDI is one of the processes that can be applied to PCBs with different counts of layers. For example, in addition to the HDI process, which is the most commonly applied method, traditional mechanical drilling can also be applied to manufacture high-layer-count MLPCBs with 14 layers and above. The ranking provided in the table above includes market players who manufacture such products with various processes, including the HDI process and others. (1) Company J is a public company founded in 1991 and listed on the Taiwan Stock Exchange, headquartered in Taiwan. It is mainly engaged in the production and sales of PCBs such as MLPCB and HDI PCB. (2) Company K is a public company founded in 2006 and listed on the Taiwan Stock Exchange, headquartered in Taiwan. It is mainly engaged in the R&D, production, and sales of various PCB products and module products. (3) Company L is a public company founded in 1988 and listed on the Hong Kong Stock Exchange, headquartered in Hong Kong, committed to the manufacturing and sales of copper clad laminates, PCB, chemical products and others. (4) Company M is a public company founded in 1987 and listed on the Vienna Stock Exchange, headquartered in Austria. It is mainly engaged in the design and manufacture of high-end PCBs and semiconductor substrates. (5) Company N is a public company founded in 2002 and listed on the Shenzhen Stock Exchange, headquartered in China. It is mainly engaged in the design and manufacture of MLPCB. OVERVIEW OF THE GLOBAL HIGH-BUILD-UP HDI PCB MARKET HDI PCB refers to PCB products that use high-density printed circuit board technology with fine lines, micro-holes, and thin dielectric layers. By precisely placing buried holes and blind holes, HDI PCB can reduce the number of through-holes, save wiring area on the board, and increase wiring density, thus accommodating more components in a limited space and greatly improving component density. HDI PCBs are categorized into low-build-up HDI PCB and high-build-up HDI PCB, depending on their build-up layers and process complexity. Low-build-up HDI PCB includes 1+HDI (“1+N+1” structure, comprising one additional build-up layer on each side of a standard PCB) and 2+HDI (“2+N+2” structure, comprising two additional build-up layers on each side of a standard PCB), while high-build-up HDI PCB refers to 3+HDI and above (“3+N+3” or above structure, comprising three or more additional build-up layers on each side of a standard PCB). The letter “N” denotes the layer count of the standard through-hole PCB, and the prefix numbers (1/2/3) indicate the additional build-up layers. High-build-up HDI PCBs possess performance advantages such as high density, high frequency, and superior signal processing and speed. This makes them crucial for applications in fields demanding extreme miniaturization and signal integrity, including servers, high-end telecommunication, and automotive electronics. INDUSTRY OVERVIEW – 77 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 87 of 431 -- Market Size of the Global High-build-up HDI PCB Market In terms of sales revenue, the market size of the global HDI PCB market has grown from US$9.4 billion in 2020 to US$12.8 billion in 2024, with a CAGR of 8.0% from 2020 to 2024 and is projected to reach US$16.9 billion by 2029, with a CAGR of 5.4% from 2025 to 2029. Categorized by build-up layers, in terms of sales revenue, the global market size of the low-build-up HDI PCB market was US$6.8 billion in 2024, while the global market size of the high-build-up HDI PCB market was US$6.0 billion in 2024, with CAGR of 6.9% and 9.3% from 2020 to 2024, respectively. Categorized by application, in terms of sales revenue, the market size of the global high-build-up HDI PCB market has reached US$1.3 billion in AI and high-performance computing, US$0.7 billion in telecommunication, US$2.9 billion in smart devices and US$0.6 billion in automotive electronics in 2024. Of which, the field of AI and high-performance computing has shown high growth rate, with CAGR of 39.8% from 2020 to 2024. Looking ahead, the market size of the global high-build-up HDI PCB market, in terms of sales revenue, is projected to reach US$3.2 billion in the field of AI and high-performance computing in 2029, representing a CAGR of 13.9% from 2025 to 2029. Market Size of the Global High-build-up HDI PCB Market, Categorized by Application (US$ billion, 2020-2029E) 0 2 4 6 8 10 0.5 0.5 0.5 0.5 0.5 0.6 0.6 0.6 0.6 0.4 0.4 0.5 0.6 0.5 0.6 0.7 0.7 0.8 0.9 0.9 0.4 2.9 3.1 2.7 2.9 3.0 3.2 3.5 3.9 3.9 2.5 0.6 0.7 0.6 0.7 0.8 0.8 0.9 1.0 1.0 0.5 0.9 1.3 1.9 2.2 2.5 2.9 3.2 0.3 0.3 5.1 5.6 5.2 6.0 6.9 7.5 8.3 9.2 4.2 2020 2021 2022 2023 2024 2025E 2026E 2027E 2028E 2029E 9.6 CAGR AI and high-performance computing Telecommunications Smart devices Automotive electronics Others 2020-2024 2025E-2029E Total 9.3% 8.6% AI and high-performance computing 39.8% 13.9% Telecommunications 8.4% 7.3% Smart devices 3.9% 6.4% Automotive electronics 8.9% 7.8% Others 4.9% 4.4% 0.6 0.7 Source: Global Electronics Association, Prismark, desk research, expert interview, Frost & Sullivan Competitive Landscape of the Global High-build-up HDI PCB Market The global high-build-up HDI PCB markets are relatively concentrated, with a large number of participants in the market. In terms of sales revenue in 2024, the Company ranked fourth among the PCB providers in Chinese mainland for high-build-up HDI PCB market. In terms of sales revenue in the first half of 2025, the Company ranked first in the global high-build-up HDI PCB market. INDUSTRY OVERVIEW – 78 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 88 of 431 -- In terms of sales revenue of high-build-up HDI PCBs under the field of AI and high- performance computing, the Company ranked third in 2024 and ranked first in the first half of 2025 in the global high-end HDI PCB market. Ranking of Global High-build-up HDI PCB Providers, in terms of Sales Revenue of High-build-up HDI PCB under the Field of AI and High-performance Computing, in 2024 and Six Months Ended June 30, 2025 2024 Six Months Ended June 30, 2025 Ranking Company Sales revenue Market share Ranking Company Sales revenue Market share (RMB million) (%) (RMB million) (%) 1 Company D 472 5.3% 1 The Company 2,780 44.6% 2 Company F 315 3.6% 2 Company D 270 4.3% 3 The Company 162 1.8% 3 Company F 152 2.4% 4 Company B 102 1.2% 4 Company B 59 1.0% 5 Company J 59 0.7% 5 Company J 31 0.5% 6 Company M 41 0.5% 6 Company H 27 0.4% 7 Company G 34 0.4% 7 Company M 21 0.3% 8 Company H 34 0.4% 8 Company G 19 0.3% 9 Company O(1) 25 0.3% 9 Company O 16 0.3% 10 Company A 18 0.2% 10 Company A 14 0.2% Source: Public filings, websites of market players, expert interview, Frost & Sullivan Note: (1) Company O is a public company founded in 1989 and listed on the Taiwan Stock Exchange, headquartered in Taiwan. Its primary business involves the research, development, production, and sale of PCBs. OVERVIEW OF THE GLOBAL FPC MARKET FPC refers to a type of PCB product made of flexible copper clad laminates as the basic material. FPC, with its flexible, lightweight, and high-performance characteristics, is widely used in increasingly miniaturized and lightweight electronic products. The primary application areas for FPCs include smart devices, automotive electronics, industrial control, medical devices, and other fields, and are gradually expanding into emerging technology products such as AR/VR devices, smart home appliances, and drones. In terms of sales revenue, the market size of the global FPC market has grown from US$11.9 billion in 2020 to US$12.8 billion in 2024. In the future, the progress of intelligent technologies and the development trends toward integration and lightweight design of products will drive the continued growth of FPCs, which feature thinness, flexibility, and high-density wiring capabilities. It is expected that the global FPC market size will reach US$15.5 billion in 2029, with a CAGR of 4.9% from 2025 to 2029. Market Drivers and Development Trends of the Global FPC Market • Integrating more functions into thinner, lighter smart devices: As smart devices continue to evolve toward being thinner, lighter, and more compact while integrating more complex functions, the demand for FPCs continues to grow. The unique flexibility and high-density routing capability of FPCs make them an ideal choice for connecting various modules and implementing precision circuits in limited spaces, effectively meeting the stringent requirements of end products for miniaturization and functional integration. INDUSTRY OVERVIEW – 79 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 89 of 431 -- • Expanded applications in emerging technology fields: Beyond traditional applications, FPCs demonstrate significant potential in emerging technology fields such as AR/VR devices, foldable screen technology, medical wearable devices, and humanoid robots. These cutting- edge products often have special requirements for internal space utilization, dynamic bending, and signal transmission stability. The flexible characteristics of FPCs make them a key component for achieving these innovative functions, bringing new growth opportunities and development prospects to the FPC market. SOURCE OF INFORMATION We commissioned Frost & Sullivan, an independent global consulting firm that offers industry research and market strategies and provides growth consulting and corporate training to conduct a detailed research on and analysis of the global PCB market, the global high-layer-count MLPCB market, the global high-build-up HDI PCB market and the global FPC market. We have agreed to pay a fee of RMB400,000 to Frost & Sullivan in connection with the preparation of the Frost & Sullivan Report. We have extracted certain information from the Frost & Sullivan Report in this section, as well as in “Summary,” “Business,” “Financial Information,” and elsewhere in this document to provide our [REDACTED] with a more comprehensive presentation of the industries where we operate. During the preparation of the Frost & Sullivan Report, Frost & Sullivan performed both primary and secondary research, and obtained knowledge, statistics, information, and industry insights on the industry trends of the target research markets. Primary research involved discussing the status of the market with leading industry participants and industry experts. Secondary research involved reviewing company reports, independent research reports and data based on Frost & Sullivan’s own database. Frost & Sullivan has independently verified the information, but the accuracy of the conclusions of its review largely relies on the accuracy of the information collected. Frost & Sullivan’s research may be affected by the accuracy of assumptions used and the choice of primary and secondary sources. The Frost & Sullivan Report was compiled based on the following assumptions: (i) the economy of Chinese mainland and the global economy are likely to maintain steady growth in the near future; and (ii) the social, economic, and political environment of Chinese mainland and the world is likely to remain stable from 2024 to 2029. Our Directors confirm that, after making reasonable enquiries, there is no adverse change in the market information since the date of the Frost & Sullivan Report that may qualify, contradict or have a material impact on the information. INDUSTRY OVERVIEW – 80 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 90 of 431 -- APPLICABLE LAWS AND REGULATIONS TO OUR BUSINESS IN THE PRC Regulations and Policies Related to the Printed Circuit Board Industry The Standard Conditions for the Printed Circuit Board Industry ( ) and the Interim Measures for the Administration of Industry Standard Announcements in the Printed Circuit Board Industry ( ) promulgated by the MIIT and became effective on February 1, 2019, establish a quantified standard system for Printed Circuit Board enterprises and projects across multiple dimensions, including capacity layout and project construction, production scale and process technology, intelligent manufacturing, green manufacturing, workplace safety, social responsibility, and other dimensions. According to the Guidance Catalogue for Industrial Structure Adjustment (2024 Edition) ( (2024 ) ) promulgated by the NDRC on December 27, 2023 and became effective on February 1, 2024, the printed circuit boards manufactured by the Company fall under the encouraged industries category. Regulations Relating to Corporation and Foreign Investment The establishment, operation and management of corporate entities in the PRC is governed by the Company Law of the PRC ( ), which was promulgated by the Standing Committee of the National People’s Congress of the PRC (the “SCNPC”) on December 29, 1993 and became effective on July 1, 1994, and was last amended on December 29, 2023 and became effective on July 1, 2024. The Company Law of the PRC generally governs two types of companies, namely limited liability companies and joint stock limited companies. Both types of companies have the status of legal persons, and the liability of shareholders of a limited liability company or a joint stock limited company is limited to the amount of registered capital they have contributed. The Company Law of the PRC shall also apply to foreign invested companies in form of limited liability company or joint stock limited company. Where laws on foreign investment have other stipulations, such stipulations shall apply. On January 1, 2020, the Foreign Investment Law of the PRC ( ) (the “FIL”) and the Regulations on the Implementation of the Foreign Investment Law of the PRC ( ) became effective. The FIL sets out the definition of foreign investment and the framework for promotion, protection and administration of foreign investment activities. On December 30, 2019, the MOFCOM and the State Administration for Market Regulation (the “SAMR”) jointly promulgated the Measures for Reporting of Information on Foreign Investment ( ), which became effective on January 1, 2020 and pursuant to which, the establishment of the foreign invested enterprises by foreign investors and establishment through purchasing the equities of a non-foreign invested enterprise and its subsequent changes are required to submit an initial or change report through the Enterprise Registration System. Pursuant to the FIL, China has adopted a system of national treatment which includes a negative list with respect to foreign investment administration. The negative list will be promulgated by, amended or released upon approval by the State Council, from time to time. The negative list will set forth industries in which foreign investments are prohibited and industries in which foreign investments are restricted. Foreign investment in prohibited industries is not allowed, while foreign investment in restricted industries must satisfy certain conditions stipulated in the negative list. Foreign investments and domestic investments in industries outside the scope of the prohibited industries and restricted industries stipulated in the negative list will be treated equally. The Special Administrative Measures (Negative List) for the Access of Foreign Investment (2024 Edition) ( ( )(2024 ) ) (the “Negative List”), which were promulgated by the NDRC and the MOFCOM on September 6, 2024 and became effective on November 1, 2024 and the Catalogue of Encouraged Industries for Foreign Investment (2025 Edition) ( (2025 ) ) (the “Encouraging Catalog”), which was REGULATORY OVERVIEW – 81 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 91 of 431 -- promulgated by the NDRC and the MOFCOM on December 15, 2025 and became effective on February 1, 2026, listed the categories of encouraged, restricted, and prohibited industries. Any industry not included in the Negative List shall be administered under the principle of equal treatment to domestic and foreign investment. According to the Negative List and the Encouraging Catalog, as of the Latest Practicable Date, our business does not fall within the scope of the Negative List and is not subject to special management measures. Regulations Relating to Customs Declaration The Customs Law of the PRC ( ) was promulgated by the SCNPC on January 22, 1987 and became effective on July 1, 1987, and last amended and became effective on April 29, 2021, stipulate that the customs of the PRC is a governmental organization responsible for supervision and control over all arrivals in and departures from the customs territory. All the transports, goods and articles shall enter into or exit from the territory of the PRC at a place where a customs office is established. The customs declaration and duty payment formalities may be undergone by the consignees or consignors of imported and exported goods, or by the customs clearing enterprises entrusted by such consignees or consignors. The consignees or consignors of imported and exported goods and the customs clearing enterprises shall file records with the customs when undergoing customs declaration formalities, otherwise may be imposed fines by the customs. According to the Administrative Provisions of the Customs of the PRC on Record-Filing of Customs Declaration Entities ( ) promulgated by the General Administration of Customs of the PRC (the “GACC”) on November 19, 2021 and became effective on January 1, 2022, the consignees or consignors of imported and exported goods and the customs clearing enterprise that apply for the filing of records with the customs shall obtain the status of a market entity; where the consignees or consignors of imported and exported goods apply for the filing of records with the customs, the filing of foreign trade dealers shall also be completed. According to the Announcement on Fully Including the Filing of Customs Declaration Entities in the Reform of “Integrating Multiple Certificates into One” ( “ ” ) jointly promulgated by the GACC and the SAMR on December 20, 2021 and became effective on January 1, 2022, where an applicant intends to be filed as a customs declaration entity when undergoing the registration formalities as a market entity with the market regulation authorities, it shall tick the box of filing as a customs declaration entity as required and fill in the relevant information for filing. The market regulation authorities will then complete the registration pursuant to procedures of “Integrating Multiple Certificates into One” and share the relevant information with the GACC on the SAMR level. Such applicants are no longer required to submit applications for filing as a customs declaration entity to the customs. In addition, the Decision of the SCNPC on revising the Foreign Trade Law of the PRC ( ) promulgated by the SCNPC on December 30, 2022, and became effective on the same date, deleted the requirements on the foreign trade dealers engaged in the import and export of goods or technologies to be registered with the competent administrative departments of foreign trade of the State Council or any institutions authorized thereby, namely the filing of foreign trade dealers. Pursuant to the Regulations of the PRC on the Administration of Import and Export of Goods ( ) (the “Regulations on the Administration of Import and Export of Goods”) promulgated by the State Council on December 10, 2001 and last amended on March 10, 2024, and became effective on May 1, 2024, enterprises engaged in the trade activities of importing goods into the territory of the PRC or exporting goods outside of China must comply with the Regulations on the Administration of Import and Export of Goods. Goods whose import or export is prohibited shall not be imported or exported; goods whose import or export is restricted shall be subject to a licensing or quota system; and goods whose import or export is free shall not REGULATORY OVERVIEW – 82 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 92 of 431 -- be subject to restriction. The consignee of imported goods or the consignor of exported goods shall submit an automatic import and export license, an import and export license or a quota certificate to the customs for customs clearance. We have completed the Customs Consignees and Consignors of Imported and Exported Goods Filing ( ) in compliance with the legal requirements. Regulations on Production Safety and Fire Safety Regulations on Production Safety Pursuant to the Production Safety Law of the PRC ( ), or the Production Safety Law, which was last amended on June 10, 2021 by the SCNPC and became effective on September 1, 2021, entities engaged in production and business activities in Chinese Mainland shall comply with the Production Safety Law and other laws and regulations related to production safety. Entities shall strengthen the management, establish and improve responsibility systems and polices, improve conditions, strengthen the standardized and information technology development of work safety, and improve the production level to ensure their production safety. The primary persons in charge of the production and operation entities are fully responsible for the production safety of their entities. Violation of the Production Safety Law may result in imposition of fines and penalties, suspension of operation, an order to cease operation, or even criminal liability in severe cases. In accordance with the Regulations on the Safety Facilities of Construction Projects “Three Simultaneities” Supervision and Management ( “ ” ), promulgated by the former State Administration of Work Safety on April 2, 2015, and became effective on May 1, 2015, safety facilities of new construction, reconstruction and expansion projects must be designed, constructed and put into operation and use simultaneously with the main project. Enterprises are required to conduct safety pre-evaluations for construction projects, entrust preliminarily designed entities with the corresponding qualifications to design the safety facilities simultaneously, prepare safety facility designs, submit them to relevant production safety supervision and management departments for review applications and apply for the acceptance inspection of safety facilities upon completion. Regulations on Fire Safety The Fire Protection Law of the PRC ( ) was promulgated by the SCNPC on April 29, 1998, and became effective on September 1, 1998, and was last amended on April 29, 2021, and became effective on the same date. The Interim Regulations on Fire Protection Design Review and Acceptance Management of Construction Projects ( ) were first promulgated by the Ministry of Housing and Urban-Rural Development of the PRC (“MOHURD”) on April 1, 2020, and were last amended on August 21, 2023, and became effective on October 30, 2023. In accordance with the aforementioned laws and regulations, for construction projects that are required to undergo fire safety acceptance inspections as stipulated by the State Council’s housing and urban-rural development authorities, the construction entity must apply for a fire safety acceptance inspection with the housing and urban-rural development authorities. For other construction projects not specified in the previous provision, the construction entity must report to the housing and urban-rural development authorities for filing after the acceptance inspection. Construction projects that are legally required to undergo a fire safety acceptance inspection must not be put into use if they have not undergone such an inspection or if they fail the inspection. Regulations on Product Quality As per the Product Quality Law of the PRC ( ) promulgated by the SCNPC on February 22, 1993, and was last amended on December 29, 2018, and became effective on the same date, producers shall be responsible for the quality of their products. The REGULATORY OVERVIEW – 83 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 93 of 431 -- product quality shall meet the following requirements: (i) no unreasonable dangers endangering the safety of persons and property; where there are national or industry standards ensuring the health and safety of persons and property, such standards must be complied with; (ii) the product shall possess the properties it is supposed to possess, except where the product’s flaws in their properties are explicitly stated; and (iii) the product shall comply with the product standards stated on the product or its packaging, and meet the quality conditions as represented in product descriptions, physical samples, etc. Regulations on Environmental Protection The Environmental Protection Law of the PRC ( ) was promulgated by the SCNPC on September 13, 1979, became effective on the same date, and was last amended on April 24, 2014, and became effective on January 1, 2015. According to the Environmental Impact Assessment Law of the PRC ( ), which was last amended by the SCNPC on December 29, 2018 and became effective on the same date, the Regulation on the Administration of Environmental Protection of Construction Projects ( ), which was last amended by the State Council on July 16, 2017 and became effective on October 1, 2017, and the Interim Measures for Environmental Protection Acceptance Inspection Upon Completion of Construction Projects ( ), which was promulgated by the former Ministry of Environmental Protection on November 20, 2017 and became effective on the same date, the PRC implements a system to assess the environmental impact of construction projects. The construction entity shall submit an environmental impact report or an environmental impact statement for approval prior to the commencement of the construction project, or an environmental impact registration form as required by the environmental protection competent administrative department of the State Council for record. In addition, after the completion of a construction project for which an environmental impact report or an environmental impact statement has been prepared, the construction entity shall, in accordance with the standards and procedures prescribed by the competent administrative department of environmental protection under the State Council, conduct acceptance inspection on the supporting environmental protection facilities and prepare an acceptance report. For construction projects that are constructed in phases or put into production or used in phases, the corresponding environmental protection facilities shall be inspected and accepted in phases. The construction projects can only be put into production or use after the completed supporting environmental protection facilities have passed the acceptance inspection. Facilities that have not been carried out or have not passed the acceptance inspection shall not be put into production or use. Regulations on Atmospheric Pollution According to the Law of the PRC on the Prevention and Control of Atmospheric Pollution ( ), which was last amended by the SCNPC on October 26, 2018 and became effective on the same date, enterprises, institutions and other production and operation units shall, in accordance with the relevant national regulations and monitoring standards, monitor their emissions of industrial waste gases or toxic and hazardous air pollutants listed in the catalogue published according to Article 78 of the Law of the PRC on the Prevention and Control of Atmospheric Pollution ( ), and keep the original monitoring records. Enterprises and institutions that emit industrial waste gas or toxic and hazardous air pollutants listed in the above-mentioned catalogue, as well as other units that implement administration of pollution discharge permits in accordance with the law, shall obtain a pollutant discharging permit. In addition, enterprises, institutions and other production and operation units constructing projects that have an impact on the atmospheric environment shall carry out environmental impact assessment and make environmental impact assessment documents public in accordance with the law; the units that emit pollutants into the atmosphere must comply with the discharging standard for atmospheric pollutants as well as the requirements on control of the total discharging amount of key atmospheric pollutants. REGULATORY OVERVIEW – 84 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 94 of 431 -- Regulations on Solid Wastes According to the Law of the PRC on Prevention and Control of Environmental Pollution Caused by Solid Wastes ( ), which was last amended on April 29, 2020 by the SCNPC and became effective on September 1, 2020, any entity or individual that generates, collects, stores, transports, utilizes or disposes of solid waste shall take measures to prevent or reduce the pollution of solid waste to the environment, and shall be responsible for the environmental pollution caused in accordance with the law. Where hazardous waste exists in solid waste, it shall be managed in accordance with hazardous waste management. Regulations on Water Pollution According to the Water Pollution Prevention and Control Law of the PRC ( ) which was last amended on June 27, 2017 by the SCNPC and became effective on January 1, 2018, an enterprise or public institution or other business entity which directly or indirectly discharges industrial waste water or medical sewage to waters or waste water or sewage that may be discharged after a pollutant discharge license has been obtained as required shall obtain a pollutant discharge license. Regulations on Pollutant Discharge According to the Regulations on the Management of Pollutant Discharge Permits ( ) promulgated by the State Council on January 24, 2021 and became effective on March 1, 2021, and the Catalogue for the Classified Management of Fixed Pollution Source Discharge Permits (2019 Edition) ( (2019 ) ) promulgated by the Ministry of Ecology and Environment on December 20, 2019 and became effective on the same date, enterprises, institutions and other manufacturers subject to pollutant discharge permit management as stipulated by law must apply for and obtain a pollutant discharge permit. Without this permit, discharging pollutants is prohibited. Pollutant discharging entities with a significant volume of pollutant generation, emissions or environmental impact are subject to key management of pollutant discharge permits. Those with a smaller volume of pollutant generation, emissions and environmental impact are subject to simplified management. Entities with minimal pollutant generation, emissions and environmental impact are subject to pollutant discharge registration management. Regulations on Real Estate The Civil Code of the PRC ( ) (the “Civil Code”) was promulgated by the National People’s Congress of the PRC on May 28, 2020, and became effective on January 1, 2021. According to the Civil Code, the establishment, modification, assignment and extinguishment of real estate property rights are effective upon registration in accordance with the law; unless the law stipulates otherwise, such establishment, modification, assignment and extinguishment shall be ineffective without registration. Real estate registration shall be handled by the registration authority at the location of the property. The Land Administration Law of the PRC ( ) was last amended by the SCNPC on August 26, 2019, and became effective on January 1, 2020. Pursuant to the Land Administration Law, construction entities that have obtained state-owned land use rights through paid leasing must pay the land use right leasing fees and other fees and expenses in accordance with the standards and methods prescribed by the State Council before they can use the land. Construction entities using state-owned land must use the land in accordance with the provisions of the contract for paid use of leased land use right or according to the provisions of the documents of approval concerning the allocation of land use right. If it is necessary to change the purpose of the land use, approval must be obtained from the competent natural resources department REGULATORY OVERVIEW – 85 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 95 of 431 -- of the relevant people’s government and from the people’s government that originally approved the land use. For urban planned areas, changing land use requires prior consent from the relevant urban planning administrative department before seeking approval. The Interim Regulations on Real Estate Registration ( ) which was last amended by the State Council on March 10, 2024 and became effective on May 1, 2024, and the Implementing Rules of the Interim Regulations on Real Estate Registration ( ) which was last amended by the Ministry of Land and Resources on May 9, 2024 and became effective on the same date, provide that, among other things, the State implements a uniform real estate registration system and real estate registration shall follow the principles of strict administration, stability, continuity, and convenience for the masses. The Interim Regulations on the Granting and Assignment of Urban State-Owned Land Use Rights of the PRC ( ) were first promulgated by the State Council on May 19, 1990, and was last amended on November 29, 2020, and became effective on the same date. According to these regulations, the assignment of land use rights refers to the act of the state, in its capacity as the landowner, assigns the land use right for a certain period to land users, who in turn pay fees for the assignment thereof to the state. An assignment contract must be signed for assigning the land use rights. Land users shall develop, utilize and manage the land in accordance with the provisions of the contract for the assignment of land use right and the requirements of urban planning. If the land is not developed and used within the period and conditions as stipulated in the contract, the land administration departments under the people’s governments at the municipal and county levels shall rectify the purpose of the situation and may impose penalties, including warnings, fines or the uncompensated reclamation of land use rights, depending on the circumstances. If a land user needs to change the land use as stipulated in the contract for the assignment of land use right, it shall obtain the consent of the grantor and the approval of the land administration department and urban planning department, sign a new contract for the assignment of land use right, adjust the amount of the assignment fee, and complete the registration. The Administrative Measures for Construction Permits of Building Engineering ( ) were first promulgated by the former Ministry of Construction of the PRC in 1999, and were last amended by MOHURD on March 30, 2021, and became effective on the same date. According to these measures, construction entities engaging in the construction and renovation of various types of buildings and their ancillary facilities, as well as the installation of corresponding lines, pipelines, and equipment and the construction of urban municipal infrastructure projects within the territory of the PRC, shall apply for a construction permit from the competent housing and urban-rural construction department of the local people’s government at or above the county level where the project is located before commencing work. Building projects with an investment of less than RMB300,000 or a construction area of less than 300 sq m may be exempt from applying for a construction permit. The department in charge of housing and urban-rural development under the people’s government of provinces autonomous regions and municipalities directly under the central government may adjust the threshold according to local conditions and report to the Ministry of Housing and Urban-Rural Development of the State Council for record. Construction projects approved for commencement in accordance with the authority and procedures prescribed by the State Council are exempt from obtaining a construction permit. The Administrative Measures for the Record-filing of Completion Acceptance of Building Construction and Municipal Infrastructure Projects ( ) were promulgated by the MOHURD on October 19, 2009, and became effective on the same date. According to these measures, construction entities shall file with the construction department of the local people’s government at or above the county level where the project is located (hereinafter referred to as the filing authority) within 15 days from the date of completion and qualified acceptance of the project, in accordance with these measures. The filing authority, REGULATORY OVERVIEW – 86 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 96 of 431 -- upon receiving the record-filing documents of completion and acceptance submitted by the construction entity and verifying the completeness of the documents, shall sign for receipt on the record-filing form of completion and acceptance of the project. The Regulations on Completion Acceptance of Housing Construction and Municipal Infrastructure Projects ( ) were promulgated by the MOHURD on December 2, 2013, and became effective on the same date. Under these regulations, the construction entity is responsible for organizing and implementing the completion and acceptance of a project. Regulations on the Management of Lease Housing Pursuant to (i) the Law on Administration of Urban Real Estate of the PRC ( ), promulgated by the SCNPC on July 5, 1994 and was last amended on August 26, 2019 and became effective on January 1, 2020, and (ii) the Administrative Measures on Leasing of Commodity Housing ( ), promulgated by the MOHURD on December 1, 2010 and became effective on February 1, 2011, when leasing premises, the lessor and lessee are required to enter into a written lease contract, containing such provisions as the leasing term, use of the premises, rental and repair liabilities, and other rights and obligations of both parties. Both lessor and the lessee shall complete property leasing registration and filing formalities within 30 days from the execution of the property lease contract with the real estate administration department where the leased property is located. If the lessor and lessee fail to go through the registration and filing procedures, both lessor and lessee may be subject to fines. PRC Laws and Regulations on Intellectual Property Rights Patent The Patent Law of the PRC ( ) was promulgated by the SCNPC on March 12, 1984, and was last amended on October 17, 2020, and became effective on June 1, 2021. The Detailed Rules for the Implementation of the Patent Law of the PRC ( ) were promulgated by the State Council on June 15, 2001, became effective on July 1, 2001, and was last amended on December 11, 2023, and became effective on January 20, 2024. According to these laws, regulations and detailed rules, patents in China are categorized into three types: invention patents, utility model patents and design patents. The term of an invention patent right is 20 years, the term of a utility model patent is 10 years, and the term of a design patent is 15 years, all of which are calculated from the filing date. Any entity or individual that exploits another’s patent must conclude a licensing agreement with the patent holder and pay royalties. Exploiting a patent without the permission of the patent holder constitutes an infringement of their patent rights. Trademark The Trademark Law of the PRC ( ) was promulgated by the SCNPC on August 23, 1982, became effective on March 1, 1983, and was last amended on April 23, 2019, and became effective on November 1, 2019. The Regulations for the Implementation of the Trademark Law of the PRC ( ) were promulgated by the State Council on August 3, 2002, became effective on September 15, 2002, and was last amended on April 29, 2014, and became effective on May 1, 2014. According to these laws and regulations, the validity period of a registered trademark is 10 years from the date of approval. To continue using a trademark upon the expiry of its validity, renewal procedures must be completed in accordance with the provisions within the 12 months preceding expiration. If renewal procedures are not completed within this period, a six-month extension is allowed. Each renewal extends the validity period for 10 years, starting from the day following the expiration of the last validity period. Trademark registrants may authorize others to use their registered trademarks by signing trademark licensing agreements. REGULATORY OVERVIEW – 87 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 97 of 431 -- Domain Name The Internet Domain Name Management Measures ( ) were promulgated by the MIIT on August 24, 2017, and became effective on November 1, 2017. According to these management measures, the MIIT is the primary regulatory authority for the management of Internet domain names in China. Domain name registration is processed through domain name root servers and their operating institutions, domain name registration management institutions and domain name registration service institutions established in accordance with the relevant regulations. Computers Software Copyright The Measures for the Registration of Computer Software Copyright ( ), which was promulgated by the National Copyright Administration on February 20, 2002, and became effective on the same date, regulates the registration of software copyright, the exclusive licensing contract and assignment contracts of software copyright. The National Copyright Administration is mainly responsible for the registration and management of national software copyright and designates the China Copyright Protection Center as the agency for software registration. The China Copyright Protection Center will grant certificates of registration to computer software copyright applicants. Regulations on Employment and Social Welfare Employment The major PRC laws and regulations that govern employment relationship are the Labor Law of the PRC ( ), the Labor Contract Law of the PRC ( ) and its implementation, which impose stringent requirements on the employers in relation to entering into fixed-term employment contracts, hiring of part-time employees and dismissal of employees. The Labor Law of the PRC ( ) was promulgated by the SCNPC on July 5, 1994, and became effective on January 1, 1995, and was last amended on December 29, 2018 and became effective on the same date. The Labor Law of the PRC stipulates matters related to promoting employment, labor contracts, working hours, rest and leave, wages, labor safety and hygiene, special protection for female and minor workers, vocational training, social insurance and welfare, labor disputes, supervision and inspection, as well as legal liabilities. The Labor Contract Law of the PRC ( ) was promulgated by the SCNPC on June 29, 2007, and became effective on January 1, 2008, and was last amended on December 28, 2012, and became effective on July 1, 2013. The Implementation Regulation of the Labor Contract Law of the PRC ( ) was promulgated by the State Council on September 18, 2008, and became effective on the same date. According to the aforementioned law and regulation, a written labor contract shall be established when forming a labor relationship. Employers shall not force employees to work overtime and must pay overtime wages according to national regulations if overtime is arranged. Wages must not be lower than the local minimum wage standard and must be paid to employees promptly. Social Insurance The PRC Social Insurance Law ( ) (the “Social Insurance Law”), which was last amended by the SCNPC on December 29, 2018, and became effective on the same date, has established social insurance systems of basic pension insurance, basic medical insurance, work-related injury insurance, unemployment insurance and maternity insurance and has elaborated in detail the legal obligations and liabilities of employers who fail to comply with relevant laws and regulations on social insurance. According to the Social Insurance Law and the REGULATORY OVERVIEW – 88 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 98 of 431 -- Provisional Regulations on Collection and Payment of Social Insurance Premiums ( ) promulgated by the State Council on January 22, 1999, and was last amended on March 24, 2019 and became effective on the same date, enterprises shall register social insurance with local social insurance and pay or withhold relevant social insurance for or on behalf of its employees. Any employer that fails to make social insurance contributions may be ordered to rectify the non-compliance and pay the required contributions within a prescribed time limit and be subject to a late fee. If the employer still fails to rectify the failure to make the relevant contributions within the prescribed time, it may be subject to a fine ranging from one to three times the amount overdue. On July 31, 2025, the PRC Supreme People’s Court promulgated the Interpretation II by the Supreme People ’s Court of the PRC on Legal Issues Concerning the Application of Law in the Trial of Labor Dispute Cases ( ), (the “New Judicial Interpretation”), which took effect on September 1, 2025. Article 19(1) thereof stipulates that if an employer and an employee agree or the employee undertakes that social insurance contributions need not to be paid, the People’s Court shall deem such agreement or undertaking invalid. Furthermore, where an employer fails to pay social insurance contributions in accordance with the law, and the employee seeks to terminate the labor contract and claims economic compensation from the employer pursuant to Article 38(3) of the Labor Contract Law of the PRC, the People’s Court shall support such claims in accordance with the law, which clarifies that employees are entitled to request termination of their labor contracts and receive corresponding economic compensation under the Labor Contract Law of the PRC if the employer fails to make social insurance contributions in accordance with the law. Housing Provident Fund Pursuant to the Regulations on Management of Housing Provident Fund ( ), which was promulgated by the State Council on April 3, 1999, and was last amended on March 24, 2019, and became effective on the same date, employers in Chinese Mainland shall provide their employees with housing provident fund. Employers who fail to contribute to the above housing provident funds may be ordered to make full payment within a prescribed time period by the housing provident fund management center. If an employing entity fails to make the payment towards the housing provident funds within a prescribed time limit, an application may be made to a people’s court for enforcement. Regulations Relating to Overseas Investment According to the Measures for the Administration of Overseas Investment of Enterprises ( ) promulgated by the NDRC on December 26, 2017 and became effective on March 1, 2018, an investor shall, in overseas investment, undergo the formalities for the confirmation or recordation, among others, of an overseas investment project, report the relevant information, and cooperate in supervisory inspection. Pursuant to the Measures for the Administration of Overseas Investment ( ) promulgated by the MOFCOM on March 16, 2009, lastly amended on September 6, 2014 and became effective on October 6, 2014, “overseas investment” means the acts of an enterprise legally formed in China to own a non-financial enterprise or obtain the ownership, control, or right of business management of or any other interest in an existing non-financial enterprise outside of China by formation, acquisition or merger, or other means. The MOFCOM and the provincial counterparts promulgate regulations providing that overseas investment of enterprises to be subject to recordation or confirmation management, depending on the actual circumstances of investment. Overseas investment involving any sensitive country or region or any sensitive industry shall be subject to confirmation management. Overseas investment under other circumstances shall be subject to recordation management. When an overseas enterprise invested by an enterprise conducts overseas reinvestment, the enterprise shall report to the commerce departments after completing the overseas legal procedures. REGULATORY OVERVIEW – 89 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 99 of 431 -- Pursuant to the Provisions on the Foreign Exchange Administration of the Overseas Direct Investment of Domestic Institutions ( ) promulgated by the State Administration of Foreign Exchange (the “SAFE”) on July 13, 2009 and became effective on August 1, 2009 and the Notice on Further Simplifying and Improving Policies for the Foreign Exchange Administration of Direct Investment ( ) promulgated by the SAFE on February 13, 2015, became effective on June 1, 2015 and was partially repealed on December 30, 2019, stipulates that, upon obtaining the approval for overseas investment, the overseas direct investment of PRC enterprises shall apply for foreign exchange registration to the banks at their places of registration. Regulations on Foreign Exchange According to the Notice of the State Administration of Foreign Exchange on Issues concerning the Foreign Exchange Administration of Overseas Listing ( ) promulgated by the SAFE on December 26, 2014, and became effective on the same date, a domestic company shall, within 15 working days after the completion of its overseas listing, go through the registration of overseas listing with the foreign exchange bureau at its place of registration. A domestic issuer may transfer the capital raised through overseas listing to its local bank account or deposit at its overseas account. The [REDACTED] shall be consistent with the purposes disclosed in this document or other public documents. According to the Circular of the State Administration of Foreign Exchange on Reforming and Regulating Policies for the Administration over Foreign Exchange Settlement of Capital Accounts ( ) promulgated by SAFE on June 9, 2016 and became effective on the same date, and the Notice of the State Administration of Foreign Exchange on Further Deepening Reform to Promote Cross-border Trade and Investment Facilitation ( ) promulgated by SAFE on December 4, 2023, and became effective on the same date, the foreign exchange receipts under capital accounts of domestic institutions are subject to discretionary settlement policies. The foreign exchange receipts under capital accounts (including foreign exchange capital, foreign debts, and repatriated funds raised through overseas listing) subject to discretionary settlement as expressly prescribed in the relevant policies may be settled with banks according to the actual need of the domestic institutions for business operation. Domestic institutions may, at their discretion, settle up to 100% of foreign exchange receipts under capital accounts for the time being. SAFE may adjust the above proportion in due time according to the balance of payments. While eligible for the discretionary settlement of foreign exchange receipts under capital accounts, domestic institutions may also opt to use their foreign exchange receipts according to the payment-based settlement system. A bank shall, in handling each transaction of foreign exchange settlement for a domestic institution according to the principle of payment-based settlement, review the authenticity and compliance of the use of the funds settled in the previous foreign exchange settlement (including discretionary settlement and payment- based settlement) of such domestic institution. Domestic institutions’ foreign exchange receipts under the capital account and the Renminbi funds obtained from the settlement thereof shall not, directly or indirectly, be used for expenditure beyond the enterprise’s business scope or expenditure prohibited by laws and regulations of the state. Unless otherwise specified, the funds shall not, directly or indirectly, be used for investments in securities or other investments or wealth management other than banks’ principal-secured products. The funds shall not be used for the granting of loans to non-affiliated enterprises, except where it is expressly permitted in the business scope. The funds shall not be used for the construction or purchase of real estate for purposes other than self-use (except for real estate enterprises). Regulations on Taxation Enterprise Income Tax According to the Enterprise Income Tax Law of the PRC ( ) (the “EIT Law”) which was promulgated by the SCNPC on March 16, 2007 and last amended on December 29, 2018, and became effective on the same date, a unified income tax rate of 25% will REGULATORY OVERVIEW – 90 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 100 of 431 -- be applied towards foreign investment and foreign enterprises which have set up institutions or facilities in the PRC as well as PRC enterprises. Under the EIT Law, enterprises established outside of China whose “de facto management bodies” are located in China are considered “resident enterprises” and will generally be subject to the unified 25% enterprise income tax rate as to their global income. Enterprises that are recognized as high and new technology enterprises in accordance with the Administrative Measures for the Determination of High and New Tech Enterprises ( ) promulgated by the Ministry of Science and Technology, the MOF and the SAT on April 10, 2020, and became effective on the same date, are entitled to enjoy a preferential enterprise income tax rate of 15%, under which the validity period of the high and new technology enterprise qualification shall be three years from the date of issuance of the certificate. An enterprise can re-apply for such recognition as a high and new technology enterprise before or after the previous certificate expires. Tax on Dividends For Individual Investors According to the Individual Income Tax Law of the PRC ( ) (the “Individual Income Tax Law”), which was last amended by the SCNPC on August 31, 2018 and became effective on January 1, 2019, and the Implementation Rules of the Individual Income Tax Law of the PRC ( ) (the “Implementation Rules of the Individual Income Tax Law”), which was last amended by the State Council on December 18, 2018 and became effective on January 1, 2019, dividends paid by PRC companies to individual investors are ordinarily subject to a withholding income tax levied at a flat rate of 20%. Meanwhile, according to the Notice on Issues Concerning Differentiated Individual Income Tax Policies on Dividends and Bonus of Listed Companies ( ) promulgated by the MOF, the SAT and the CSRC on September 7, 2015 and became effective on September 8, 2015, where an individual holds the shares of a listed company obtained from the public offering for more than one year and transfers the stock of the listed company on the stock market, the dividend and bonus income shall be temporarily exempted from individual income tax. Where an individual acquires shares of a listed company from the public offering and transfers the stock of the listed company on the stock market, if the holding period is within one month (inclusive), the dividend income shall be included in the taxable income in full; if the holding period is more than one month but less than one year (inclusive), the dividend income shall be included in the taxable income at the rate of 50%; the aforesaid income shall be subject to individual income tax at a uniform rate of 20%. Pursuant to the Arrangement between the Chinese Mainland and the Hong Kong Special Administrative Region for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income ( ), became effective on August 21, 2006, the PRC government may impose tax on dividends paid by a PRC company to a Hong Kong resident (including natural person and legal entity), but such tax shall not exceed 10% of the total amount of dividends payable. If a Hong Kong resident directly holds 25% or more of the equity interests in a PRC company and the Hong Kong resident is the beneficial owner of the dividends and meets other conditions, such tax shall not exceed 5% of the total amount of dividends payable by the PRC company. The Fifth Protocol to the Arrangement between the Chinese Mainland and the Hong Kong Special Administrative Region for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income ( ) (the “Fifth Protocol”), promulgated by the SAT and became effective on December 6, 2019 provides that such provisions shall not apply to arrangements or transactions made for one of the primary purposes of obtaining such tax benefits. REGULATORY OVERVIEW – 91 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 101 of 431 -- For Enterprise Investors Pursuant to the EIT Law and the Implementation Rules of the Enterprise Income Tax Law of the PRC ( ), which was last amended by the State Council on December 6, 2024, and became effective on January 20, 2025, a non-resident enterprise is subject to a reduced rate of 10% enterprise income tax on PRC-sourced income, including dividends paid by a PRC resident enterprise that issues and lists shares in Hong Kong, if such non-resident enterprise does not have an establishment or place of business in the PRC or has an establishment or place of business in the PRC but the PRC-sourced income is not actually connected with such establishment or place of business in the PRC. The aforesaid income tax payable by non-resident enterprises shall be withheld at source, and the payer shall be the withholding agent, and the tax shall be withheld by the withholding agent from the payment or due payment every time it is paid or due. Such tax may be reduced or exempted pursuant to an applicable treaty for the avoidance of double taxation. Pursuant to the Notice on the Issues Concerning Withholding the Enterprise Income Tax on the Dividends Paid by Chinese Resident Enterprises to H Share Holders which are Overseas Non-resident Enterprises ( H ) promulgated by the SAT on November 6, 2008, and became effective on the same date, a PRC resident enterprise is required to withhold enterprise income tax at a rate of 10% on dividends paid to non-PRC resident enterprise holders of H Shares which are derived out of profit generated since 2008. According to the Arrangement between the Chinese Mainland and the Hong Kong Special Administrative Region for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income ( ), the PRC government may impose tax on dividends paid by a PRC company to a Hong Kong resident (including natural person and legal entity), but such tax shall not exceed 10% of the total dividends payable by the PRC company. If a Hong Kong resident directly holds 25% or more of equity interest in a PRC company and the Hong Kong resident is the beneficial owner of the dividends and meets other conditions, such tax shall not exceed 5% of the total dividends payable by the PRC company. The Fifth Protocol provides that such provisions shall not apply to arrangements or transactions made for one of the primary purposes of obtaining such tax benefits. Pursuant to applicable regulations, we intend to withhold tax at a rate of 10% from dividends paid to non-PRC resident enterprise [REDACTED] of our H Shares (including Hong Kong Securities Clearing Company Nominees Limited). Non-PRC resident enterprises that are entitled to be taxed at a reduced rate under an applicable income tax treaty 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’ verification. Tax related to equity transfer income For Individual Investors Under the Individual Income Tax Law and its implementation rules, individuals are subject to individual income tax at a rate of 20% on gains realized on the sale of equity interests in PRC resident enterprises. Pursuant to the Circular on Continuing the Temporary Exemption of Individual Income Tax on Gains from Share Transfers by Individuals ( ), which was promulgated by the MOF and the SAT on 30 March 1998, and became effective on the same date, from 1 January 1997, income of individuals from the transfer of shares in listed companies continues to be temporarily exempted from individual income tax. The SAT does not specify whether to continue to exempt individuals from personal income tax on the income from the transfer of shares in listed company in the newly revised Individual Income Tax Law and Implementation Rules of the Individual Income Tax Law. REGULATORY OVERVIEW – 92 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 102 of 431 -- For Enterprise Investors Under the EIT Law and its implementation rules, a non-PRC resident enterprise is subject to enterprise income tax at the rate of 10% with respect to PRC-sourced income, including gains derived from the disposal of shares in a PRC resident enterprise, if it does not have an establishment or premises in the PRC or has an establishment or premises in the PRC but the PRC-sourced income is not actually connected with such establishment or premises in the PRC. The aforementioned income tax payable by non- PRC resident enterprises is subject to source withholding, and the payer is the withholding agent. The tax shall be withheld by the withholding agent from the payment or due payment every time it is paid or due. Such tax may be reduced or exempted under applicable tax treaties or arrangements. Regulations on Securities and Overseas Listing Securities Laws and Regulations The Securities Law of the PRC ( ) (the “Securities Law”), which was promulgated by the SCNPC on December 29, 1998, and was last amended on December 28, 2019 and became effective on March 1, 2020, comprehensively regulating activities in the PRC securities market including issuance and trading of securities, takeovers by listed companies, securities exchanges, securities companies and the duties and responsibilities of securities regulatory authorities, etc. The Securities Law further regulates that a domestic enterprise issuing securities overseas directly or indirectly or listing their securities overseas shall comply with the relevant provisions of the State Council and for subscription and trading of shares of domestic companies using foreign currencies, detailed measures shall be stipulated by the State Council separately. The CSRC is the securities regulatory body set up by the State Council to supervise and administer the securities market according to law, maintain order in the market, and ensure the market operates in a lawful manner. Currently, the [REDACTED] and [REDACTED] of H shares are principally governed by the regulations and rules promulgated by the State Council and the CSRC. Overseas Listings On February 17, 2023, the CSRC promulgated the Trial Administrative Measures of the Overseas Securities Offering and Listing by Domestic Enterprises ( ) (the “Overseas Listing Trial Measures”) and relevant five guidelines, which became effective March 31, 2023. According to the Overseas Listing Trial Measures, PRC domestic enterprises that seek to offer and list securities in overseas markets, either in direct or indirect means (the “Overseas Offering and Listing”), are required to fulfill the filing procedure with the CSRC and submit filing reports, legal opinions, and other relevant documents. Subject to specific circumstances, the Overseas Listing Trial Measures 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, the Overseas Listing Trial Measures also provides the circumstances where the Overseas Offering and Listing is explicitly prohibited, including: (i) such securities offering and listing is explicitly prohibited by provisions in laws, administrative regulations and relevant state REGULATORY OVERVIEW – 93 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 103 of 431 -- rules; (ii) the Overseas Offering and Listing may endanger national security as reviewed and determined by competent authorities under the State Council in accordance with law; (iii) the PRC domestic enterprise, or its controlling shareholder(s) and the actual controller, have committed relevant crimes such as corruption, bribery, embezzlement, misappropriation of property or undermining the order of the socialist market economy during the latest three years; (iv) the PRC domestic enterprise is currently under investigations for suspicion of criminal offenses or major violations of laws and regulations, and no conclusion has yet been made thereof; or (v) there are material ownership disputes over equity held by the controlling shareholder(s) or by other shareholder(s) that are controlled by the controlling shareholder(s) and/or actual controller. As advised by our PRC Legal Adviser, we have complied with the Overseas Listing Trial Measures and the relevant guidelines. RELEVANT LAWS AND REGULATIONS IN MALAYSIA Customs Act 1967 The Customs Act 1967 (“CA 1967”) regulates the customs laws of Malaysia. Under the CA 1967, the Minister of Finance of Malaysia (“MOF”) may from time to time fix the custom duties to be levied on any goods imported into or exported from Malaysia and any customs duty payable under CA 1967 may be recovered as a civil debt due to the Government of Malaysia. The MOF also has the power to prohibit the importation and exportation of certain goods absolutely or except under an import or export licence issued by the Director General of Customs and Excise or the proper officer of customs appointed by the Director General of Customs and Excise to act on his behalf at the ministry, department or statutory body as specified in the Customs (Prohibition of Imports) Order 2023 or Customs (Prohibition of Exports) Order 2023. Section 14(2) of the CA 1967 provides the MOF may, in any particular case, (a) exempt any person from the payment of the whole or any part of the customs duties or any other prescribed fees or charges which may be payable by such person on any goods; or (b) direct the refund to any person of the whole or any part of the customs duties or any other prescribed fees or charges which have been paid by such person on any goods. Such exemptions are generally subject to specific terms and conditions imposed by the MOF. Income Tax Act 1967 The Income Tax Act 1967 (“ITA 1967”) imposes income tax which is charged for each year of assessment upon the income of any person accruing in or derived from Malaysia or received in Malaysia from outside Malaysia. A company will be a tax resident in Malaysia if its management and control of its business or any one of its businesses, is exercised in Malaysia. Resident companies with a paid-up capital of more than RM2,500,000 and non-resident companies are subject to a tax rate of 24% during the year of assessment 2023-2024. In cases of resident companies with a paid-up capital of less than RM2,500,000 and gross business income of not more than RM50,000,000, are subject to a tax rate of 15% for the first RM150,000, 17% on the next RM450,000, and subsequently 24% in excess of RM600,000. Pursuant to the Income Tax (Deduction from Remuneration) Rules 1994, every employer shall deduct in each month or the relevant month the monthly deduction in accordance with the Schedule of the ITA 1967 in respect of income on account of tax from the remuneration of each of his employees, unless otherwise directed in writing by the Director General of Inland Revenue. The employer shall then pay to the Director General of Inland Revenue, not later than the 15th day of every calendar month, the total amount of tax deducted or that should have been deducted by him from the remuneration of employees during the preceding calendar month. REGULATORY OVERVIEW – 94 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 104 of 431 -- Every employer shall, for each year, furnish to the Director General of Inland Revenue a return in the prescribed form not later than 31 March in the year immediately following the first-mentioned year containing the details specified in Section 83(1) of the ITA 1967. Any person who without reasonable excuse fails to furnish a return in accordance with Section 83(1) of the ITA 1967 shall be guilty of an offence and shall, on conviction, be liable to a fine of not less than RM200 and not more than RM20,000 or to imprisonment for a term not exceeding six months or to both. Industrial Co-Ordination Act 1975 The Industrial Co-Ordination Act 1975 (“ICA”) which applies throughout Malaysia, amongst others, provide for the co-ordination and orderly development of manufacturing activities in Malaysia. Pursuant to the ICA and the Industrial Co-Ordination (Exemption) Order 1976, a person engaged in a manufacturing activity with shareholders’ fund of RM2,500,000 and above and/or which engages 75 or more full-time paid employees must acquire a manufacturing license issued by the Ministry of Investment, Trade and Industry of Malaysia. The ICA provides that any person who fails to obtain a valid license is guilty of an offence and is liable on conviction to a fine not exceeding RM2,000 or to a term of imprisonment not exceeding 6 months and to a further fine not exceeding RM1,000 for every day during which such default continues. Employment Act 1955 The Employment Act 1955 (“EA 1955”) regulates all labour relations in Peninsular Malaysia and the Federal Territory of Labuan, including contracts of service, payment of wages, rest days, hours of work, termination, lay-off and retirement benefits. Any person who commits any offence under, or contravenes any provision of EA 1955, or any regulations, order or other subsidiary legislation whatsoever made thereunder, in respect of which no penalty is provided, shall be liable, on conviction, to a fine not exceeding RM50,000. Occupational Safety and Health Act 1994 The Occupational Safety and Health Act 1994 (“OSHA 1994”) is an act to make provisions for, amongst others, securing the safety, health and welfare of persons at work and for protecting others against risks to safety or health in connection with the activities of persons at work. By virtue of the OSHA 1994, every employer is under an obligation to ensure, so far as is practicable, the safety, health, and welfare to work of all his employees excluding domestic employment, armed forces and work on board ships. Any person who contravenes the foregoing provisions under the OSHA 1994 is guilty of an offence and is liable on conviction to a fine not exceeding RM500,000 or to imprisonment not exceeding two years or to both. Section 27C of the OSHA 1994 provided that no person shall install or caused to be installed any prescribed plant unless the person ensures that the plant has fulfilled all the requirements prescribed and has obtained the written approval from the Director General of Occupational Safety and Health. Any person who contravenes the foregoing shall be guilty of an offence and shall, on conviction, be liable to a fine not exceeding RM100,000 or to imprisonment not exceeding one year or to both. Pursuant to section 27D of the OSHA 1994, no person shall operate or cause or permit to be operated any plant that has been installed under section 27C of the OSHA 1994 unless the plant has been issued a certificate of fitness. A person who contravenes this requirement shall be guilty an offence and shall, on conviction, be liable to a fine not exceeding RM100,000 or to imprisonment for a term not exceeding one year or to both. REGULATORY OVERVIEW – 95 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 105 of 431 -- The Local Government Act 1976 and Trade By-laws In Malaysia, a private limited company may commence business operations upon registration for incorporation under the Companies Act 2016 (“CA 2016”). Following its registration for incorporation, the company shall obtain a business premise license for each operating premise from the relevant local authority which was empowered under the Local Government Act 1976 (“LGA 1976”). LGA 1976 confers the power to the local authority to make by-laws which provide that no person shall use any premise within the jurisdiction of respective Municipal Council without a license issued by respective Municipal Council. It is provided under LGA 1976 that any person who fails to exhibit or to produce such license shall be liable to a fine not exceeding RM500 or to imprisonment for a term not exceeding six months or to both. The Sale of Goods Act 1957 Sale of Goods Act 1957 (“SOGA 1957”) governs the law on the sale of goods in Malaysia. SOGA 1957 provides that a stipulation in a contract of sale with reference to goods which are the subject thereof may be a condition or warranty. A condition is a stipulation essential to the main purpose of the contract, the breach of which gives rise to a right to treat the contract as repudiated. A warranty is a stipulation collateral to the main purpose of the contract, the breach of which gives rise to a claim for damages but not to a right to reject the goods and treat the contract as repudiated. Whether a stipulation in a contract of sale is a condition or a warranty depends in each case on the construction of the contract. In a contract of sale, unless the circumstances of the contract are such as to show a different intention, there is an implied condition on the part of the seller, that, in the case of a sale, he has a right to sell the goods, and that, in the case of an agreement to sell, he will have a right to sell the goods at the time when the property is to pass; an implied warranty that the buyer shall have and enjoy quiet possession of the goods; and an implied warranty that the goods shall be free from any charge or encumbrance in favour of any third party not declared or known to the buyer before or at the time when the contract is made. Where there is a breach of warranty by the seller, or where the buyer elects or is compelled to treat any breach of a condition on the part of the seller as a breach of warranty, the buyer is not by reason only of such breach of warranty entitled to reject the goods; but he may set up against the seller the breach of warranty in diminution or extinction of the price or sue the seller for damages for breach of warranty. Pursuant to SOGA 1957, it is the duty of the seller to deliver the goods and of the buyer to accept and pay for them in accordance with the terms of the contract of sale. RELEVANT LAWS AND REGULATIONS IN SINGAPORE Companies Act Pursuant to section 23(1) of the Companies Act, a company has full capacity to carry on or undertake any business or activity, do any act or enter into any transaction and full rights, powers and privileges for such purpose, save as provided otherwise under the Companies Act, any other written law or a company’s constitution. In this connection, the Constitution does not contain provisions restricting the Company’s capacity, rights, powers or privileges under section 23(1) of the Companies Act. REGULATORY OVERVIEW – 96 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 106 of 431 -- Regulation of Imports and Exports Act Under the Regulation of Imports and Exports Act 1995 of Singapore (“RIEA”), the Minister for Trade and Industry, may regulate the registration, control, and movement of goods imported into, exported from, transhipped in, or transiting through Singapore, with the Regulation of Imports and Exports Regulations 1999 (RIER) requiring permits for certain controlled goods. While no specific licences or approvals are known to be required for the company’s principal activities, certain products may still be subject to registration requirements imposed by relevant authorities. Under regulation 23(1) of the RIER, either the Singapore Customs or an authorised issuing authority may issue a certificate of origin (“CO”) pursuant to the rules of origin in the free trade agreement or scheme of preference under which a certificate of origin was applied for (for preferential certificates of origin) or the Singapore Customs’ “Handbook on the Rules of Origin for Ordinary Certificate of Origin” (for ordinary certificates of origin), which was last revised on February 2016. Certificates of processing, on the other hand, are not provided for in the RIER or the RIEA but may be issued by the Singapore Customs for goods “which underwent substantial processing in Singapore but are unable to fulfil the rules of origin administered under the ordinary Certificate of Origin scheme”, as indicated by the Singapore Customs in its “Application Procedures for a Certificate of Origin via TradeNet and Related Administrative Matters” (last revised December 2021) (“Application Procedures”). Such “substantial processing” appears to be for the Singapore Customs to determine, as neither certificates of processing nor the definition of “substantial processing” is provided for in the RIER or RIEA. On the basis of the Application Procedures, the shipments which have obtained the certificates of processing have, based on the Singapore Customs’ determination, undergone substantial processing in Singapore. In this regard, the quantity or percentage requirements for the issuance of a certificate of processing are not provided in the RIER or RIEA. Both COs and certificates of processing serve as references for determining the origin of goods for importing countries’ customs requirements, including duties, tariffs, or taxes. Singapore law does not require exported goods with a CO to be labelled “Made in Singapore,” although such labelling is permitted subject to the importing country’s laws. Under the RIEA, any person who imports, exports or tranships any goods and either (i) applies or causes to be applied to the goods an incorrect trade description, or (ii) has in his possession for sale or for any purpose of trade any goods to which an incorrect trade description has been applied, shall be guilty of an offence and shall be liable on conviction to a fine and/or imprisonment. Trade descriptions mean any description, statement or indication which, directly or indirectly and by whatever means given, relates to the place of origin, manufacture or production of the goods. Sale of Goods Act The Sale of Goods Act 1979 of Singapore (“SOGA”) is the main governing law in Singapore in relation to the sale of goods. The SOGA applies to any contract for the sale of goods where the seller transfers or agrees to transfer goods to the buyer for a monetary consideration. Section 13 of the SOGA provides that where there is a contract for the sale of goods by description, there is an implied condition that the goods will correspond with the description. Section 14 of the SOGA provides that for goods sold in the course of business, there is an implied condition that the goods must be of satisfactory quality. However, this condition does not apply to any defect which is specifically drawn to the buyer’s attention before the contract is made, nor if the buyer examines the goods before the contract, to any defect which that examination ought to have revealed. Income Tax Act Under the Income Tax Act 1947 of Singapore (the “ITA”), the prevailing corporate income tax rate is 17%, and a company’s statutory income (for the purposes of determining assessable and chargeable income) is based on the full amount of its income for the year preceding the year of assessment (the “YA”). For the avoidance of doubt, a “year of assessment” refers to a period of twelve (12) months between 1 January and 31 December of a given year. REGULATORY OVERVIEW – 97 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 107 of 431 -- Pursuant to section 65 of the ITA, the Comptroller may give notice to a person requiring such person to complete and return to the Comptroller a return specified in the notice for the purposes of obtaining full information in respect of the person’s income, within not less than thirty (30) days from the date of service of the notice on the person. Further, section 64 of the ITA also provides the Comptroller with the authority to, by written notice, require a person to furnish within a reasonable time limited by such notice fuller and further returns respecting any matter as to which a return is required under the ITA. Section 62(1)(a) of the ITA provides that “The Comptroller may, by notice in the Gazette, require every person to furnish to the Comptroller in such form and manner as the Comptroller may determine, within a reasonable time specified in the notice or such extended time as the Comptroller may allow, a return of income for the year of assessment specified in the notice and such particulars as may be required for the purpose of ascertaining the income (if any) for which the person is chargeable under this Act”. Further, section 63 of the ITA also provides that, any person (not being an individual), who has not made a return required under section 62 of the ITA for any YA must “within 3 months after the end of the accounting period relating to that year of assessment, furnish to the Comptroller an estimate of the person’s chargeable income” unless otherwise exempted. Pursuant to section 85(1) of the ITA, tax for any YA levied in accordance with the provisions of the ITA is (notwithstanding any objections or appeals against the assessment) payable at the place stated in a notice served by the Comptroller (within which the amount of tax payable will be stated, or if no tax is payable, a notice to that effect) (NOA) within one (1) month after the service of the notice. In this regard, in lieu of the Covid-19 pandemic in Singapore, under the Resilience Budget of Singapore announced on 26 March 2020, all companies with corporate income tax payments due in the months of April, May and June 2020 were granted an automatic three (3) month deferment of the payments (i.e., payment was deferred to July, August and September 2020 respectively). Based on the Directors’ Confirmations and to the extent that such matters have been disclosed or set out in the documents referred to hereunder, the Company has, during the Relevant Period, made, declared or given all tax returns, filings, notices and information (including any filings in respect of estimated chargeable income, if required) in respect of corporate income tax which is required by IRAS to IRAS, and that the Company has not incurred any penalties in respect of any late tax notification or payment. Goods and Services Tax Under section 8(1) of the Goods and Services Tax (“GST”) Act 1993 of Singapore (“GST Act”), a person who is or is required to be registered under section 9 of the GST Act is required: (a) to charge GST of 7% from 1 July 2007 to 31 December 2022 (both dates inclusive); (b) to charge GST of 8% from 1 January 2023 to 31 December 2023 (both dates inclusive); and (c) to charge GST of 9% from 1 January 2024 to 31 December 2024 (both dates inclusive), on: (a) the supply of goods or services (including a reverse charge supply), by reference to the value of the supply as determined under the GST Act; and (b) the importation of goods, by reference to the value of the goods as determined under the GST Act. (section 16 of the GST Act). REGULATORY OVERVIEW – 98 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 108 of 431 -- A person is liable to be registered under section 8(2), read together with section 9 and paragraph 1 of the First Schedule of the GST Act either: (a) at the end of any quarter the last day of which is a day before 1 January 2019 in which the total value of all its taxable supplies made in Singapore for that quarter and immediately preceding three quarters or calendar year respectively has exceeded S$1 million; or (b) at the end of the year 2019 or a subsequent calendar year, the total value of all of the following in that calendar year has exceeded S$1 million: (i) the taxable supplies made in Singapore; (ii) if the subsequent calendar year is 2022 or later, the taxable supplies in Singapore under paragraph 3(2)(b)(ii) and (3A) of the Seventh Schedule of the GST Act; or (c) if at any time there are reasonable grounds for it to believe that the total value of all of (A) the taxable supplies made in Singapore; and (B) the taxable supplies under paragraph 3(2)(b)(ii) and (3A) of the Seventh Schedule of the GST Act, in the period the next twelve (12) months will exceed S$1 million. Paragraph 3(2)(b)(ii) of the Seventh Schedule of the GST Act refers to taxable supplies made to a customer who belongs in Singapore from an operator of an electronic marketplace making the supply instead of an overseas underlying supplier, unless such operator provides to the overseas underlying supplier the registration number allocated by the Comptroller. Paragraph (3A) of the Seventh Schedule of the GST Act refers to a supply of distantly taxable goods, including: (a) where the supply is made to a customer and the delivery of the goods is made to a place in the customs territory (including the arrangement or assistance of such delivery); and RELEVANT LAWS AND REGULATIONS IN THAILAND Foreign Business Act (“FBA”) Thai law imposes restrictions on foreigners engaging in certain business activities. The principal law with respect to foreign participation in various business activities is the FBA. The FBA defines the definition of “foreigner” to be (i) a non-Thai natural person; (ii) a legal entity not incorporated in Thailand; (iii) a juristic entity incorporated in Thailand with at least 50% (fifty percent) of share capital owned by foreign individuals or entities; and (iv) a limited partnership or a registered ordinary partnership having a non-Thai natural person as the managing partner or manager. Foreigners therefore are generally allowed to participate and own less than 50% of shares capital unless otherwise particularly prescribed in specific law, in case the company intends to engage in any restricted businesses. Investment Promotion Act (the “Investment Act”) The BOI was set up under the Investment Act for the purpose of encouraging investment in Thailand through several eligible business activities. Thai government has granted full foreign ownership rights to foreign nationals who promise to make major investments and transfer technology to Thailand. Generally, the BOI privileges are granted for manufacturing activities as well as certain non-manufacturing activities which fall within the eligible activities as listed by the BOI. However, to qualify for the BOI privileges, the foreign nationals are obligated to transfer into Thailand the specified capital, technology and equipment technology within the period, and strictly comply with the specific condition. REGULATORY OVERVIEW – 99 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 109 of 431 -- Land Code The Land Code stipulates that foreigners may acquire land by virtue of the provisions of a treaty giving the right to own immovable property, subject to the provisions of the Land Code and, subject to the limitation on rights over land for religious purposes, foreigners may acquire land for residence, commerce, industry, agriculture, burial, public charity or religion under the conditions and procedures prescribed in ministerial regulations and with the permission of the minister. Law and regulations on tax: The Revenue Code of Thailand (the “RC”) The principal law with respect to tax implication in Thailand is the RC governed by the Revenue Department. Corporate income tax (“CIT”) According to the RC, in general, a company is subject to the CIT rate of 20% on net profit. In addition, with respect to Small Medium Enterprises, a company having a paid-up registered capital at the end of the accounting period not exceeding THB 5 million (Five million Thai Baht) and having annual revenue income from business operation not exceeding THB 30 million (Thirty million Thai Baht) per annum shall be entitled to reduction of CIT in which it will be exempted from CIT for the net profit not over THB 300,000, and it will be subject to 15% CIT on net profit range between THB 300,001 – 3,000,000, and 20% CIT on net profit exceeding THB 3,000,000. Value added tax (“VAT”) VAT is an indirect consumption tax levied on the supply of goods and provision of services by a VAT operator and on the import of goods or services. Any person (individual or juristic entity) who conducts business in Thailand and its annual turnover exceeds THB 1.8 million (One million Eight Hundred Thai Baht) is required to register to be a VAT operator. A VAT operator is required to comply with VAT requirements per the RC. Only a registered VAT operator is entitled to claim for prepaid VAT credit or VAT refund. There are also other applicable taxes, for example, the excise tax, withholding tax, special business tax, land and building tax and stamp duty, etc. A company is required to file tax returns to the Revenue Department on a regular basis, including monthly, annual and semi-annual reports. Law and Regulation Relating to Distribution of Dividend Distribution of dividend by a limited company registered in Thailand, regardless of whether or not shareholders are domiciled in or outside Thailand, is subject to the provisions under the Civil and Commercial Code of Thailand (“CCC”). To declare and distribute dividends, a resolution passed by the shareholders is required. However, in situations where the board of directors anticipates that the company’s financial status would be profitable, the board of directors, by a majority vote, may declare and distribute an interim dividend. In addition, at each distribution of dividend, the company must appropriate to a reserve fund of at least 5% of the profits, until the reserved fund reaches the amount of 10% of the registered capital of the company. Dividend payments to shareholders are subject to Thai withholding tax. In Thailand, dividend payments made to foreign shareholders are generally subject to a withholding tax at a rate of 10% (subject also to the terms of the double tax treaty between Thailand and the home jurisdiction of the receiver of the dividend). Personal Data Protection Act Personal Data Protection Act B.E. 2562 (2019) (“PDPA”) serves as Thailand’s primary legislation on personal data protection. It fully came into effect on June 1, 2022. REGULATORY OVERVIEW – 100 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 110 of 431 -- The PDPA regulates the collection, use, and disclosure (collectively, the “process” or its derivative) of personal data of all individuals data subject by data controllers and data processors. Personal data means any information relating to a person, which enables the identification of such person, whether directly or indirectly, but not including the information of the deceased persons. A data controller refers to a person or a juristic person with the authority and duties to make decisions regarding the processing of personal data. A data processor, on the other hand, is a person or a juristic person acts on behalf of or under the instructions of a data controller to process personal data. Under the PDPA, data controllers are generally restricted from collecting, using, or disclosing personal data without obtaining explicit consent from the data subjects prior to or at the time of personal data collection unless otherwise permitted by law or any other lawful basis as provided under the PDPA applies. The PDPA also imposes several obligations on data controllers and data processors, including notifying the purpose of personal data processing, the applicable lawful basis, implementing adequate data security measures, maintaining records of data processing activities. Cross-border data transfers are permitted only when the recipient country or international organization meets the PDPA’s data protection standards or if a legal exemption applies. Regulation on Industrial Product Standard In Thailand, the regulation of industrial product standards is governed by the Industrial Product Standards Act B.E. 2511 (1968) (“IPS Act”) and its subsequent amendments, administered by the Thai Industrial Standards Institute (“TISI”) under the Ministry of Industry. The IPS Act authorizes the TISI to establish and enforce Thailand Industrial Standards (“TIS”), which apply to both mandatory and voluntary product standards to ensure the safety, quality, and performance of industrial products within the country. Under the IPS Act, there are two types of standards: 1. Mandatory Thailand Industrial Standards: These standards apply to industrial products that are subject to a Royal Decree issued under the authority of the IPS Act. Such products must comply with the relevant TIS and obtain a mandatory TIS mark before they are manufactured, imported, or sold in Thailand. Manufacturers and importers of these products are required to obtain a license from TISI prior to the production or importation of these goods. 2. Voluntary Thailand Industrial Standards: These standards apply to industrial products that are not explicitly subject to a Royal Decree. Manufacturers may voluntarily choose to comply with TIS and apply for a voluntary TIS mark if they believe their products meet the applicable standards. Regulation on Product Liability The Product Liability Act B.E. 2551 (2008) (“Product Liability Act”) is designed to protect consumers’ rights in cases where damages are caused by unsafe products. Under this Act, various business operators, including manufacturers, hirers, importers, and sellers of goods (especially when the manufacturer, hirer, or importer cannot be identified), are considered potentially liable parties (“PLPs”) for damages resulting from unsafe products. An “unsafe product” is defined as any product that can cause harm or injury due to a manufacturing defect, design flaw, or insufficient instruction for use, storage methods, warnings, or product information, or where such instructions are provided but are incorrect or unclear as appropriate, taking into account the condition of the products as well as the normal and foreseeable manner of use and storage. REGULATORY OVERVIEW – 101 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 111 of 431 -- According to the Product Liability Act, all PLPs involved with an unsafe product are jointly liable for any damages caused by that product and has been sold to consumers, regardless of whether the harm was due to their intentional acts or negligence. To hold the PLPs liable, the injured consumer only needs to show that they suffered harm from the unsafe product and that they used and maintained the product as intended. However, the Product Liability Act outlines certain exceptions. If the court finds that a consumer was harmed by an unsafe product, it will award compensation to the consumer. Regulation of Factory Operation The Factory Act B.E. 2535 (1992) (“FA”) governs factory operations in Thailand. Under this FA, a “factory” is defined as a building, location, or vehicle that either: (i) uses machinery with a combined capacity of 50 horsepower or more (or its equivalent), or (ii) employs 50 or more workers, regardless of machinery use. FA classifies factories into 3 (three) types based on operational requirements: Non-compliance with these requirements may result in penalties, including fines and/or imprisonment, depending on the type of factory and the nature of the violation. In addition to the notification requirements for Type 2 factories and the licensing requirements for Type 3 factories under FA, factory operators are also obligated to comply with regulations issued by the Ministry of Industry or the Department of Industrial Works. The specific requirements vary based on the industry type and factory size. They may include provisions related to the location and surrounding environment of the factory, the types or specifications of machinery used, the qualifications of personnel or workers employed, and standards and methods for waste management, among other factors. Failure to comply with these requirements or regulations can result in penalties, such as fines, being imposed on the factory operator. Law and Regulation Relating to the Foreign Exchange Thai foreign exchange controls are managed by the Bank of Thailand (“BOT”) on behalf of the Ministry of Finance under the Exchange Control Act B.E. 2485 (1942) (the “ECA”), as amended and relevant rules (“Exchange Control Regulations”). The BOT has authorized commercial banks and certain entities to act as agents for foreign exchange transactions. The BOT has implemented measures to limit specific foreign exchange transactions involving the Baht currency by domestic financial institutions and non-residents, aiming to prevent instability and speculation in the currency market. Exceptions may be granted based on specific financial circumstances. For outward remittances from Thailand, such as (i) dividends after applicable tax payments, (ii) interest on loans from overseas, and (iii) principal payments on such loans, authorized agents must be informed and supporting documents for outward remittances may be required by the authorized agents for verification. Law and Regulation Relating to Employment and Labor Law The primary laws governing employment and labor in Thailand include Sections 575 to 586 of the Civil and Commercial Code (“CCC”), the Labour Protection Act B.E. 2541 (1998) (“LPA”), the Labour Relations Act B.E. 2518 (1975) (“LRA”), the Social Security Act B.E. 2533 (1990) (“SSA”), and the Workmen’s Compensation Act B.E. 2537 (1994) (“WCA”), along with their amendments. REGULATORY OVERVIEW – 102 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 112 of 431 -- The CCC and LPA serve as the main legal frameworks aimed at protecting employees’ working conditions and regulating employment terms and employment agencies. Notably, under these laws, an employment contract is not required to be in written form. The LPA further establishes that employees are entitled to certain rights, including a notice period before termination, leave entitlements, severance payments, and holidays. The SSA and WCA are designed to provide compensation for employees injured during the course of their work. Employers are mandated to contribute to both the Social Security Fund and the Workmen’s Compensation Fund to mitigate the financial risks associated with workplace injuries. Failure to comply with these obligations constitutes a criminal offense, subjecting the employer to potential fines, imprisonment, or both. Foreign investment in Vietnam Under the Law on Investment 2020 and Decree No. 31/2021/ND-CP dated March 26, 2021 of the Government guiding a number of articles of the Law on Investment 2020, as amended (“Decree 31”), foreign investors are entitled to enjoy the market access conditions applicable to domestic investors unless the business activities which are intended by the foreign investors fall into the list of business activities that are conditional or not permitted for foreign investors’ market access as specified under Annex 1 of Decree 31. There are a number of market access conditions applied to foreign investors. Similarly, when conducting investment activities, an economic organization will be considered as a foreign investor equivalent entity (“FIEE”) and subject to the investment procedures and conditions applicable to foreign investors as mentioned above if it falls in any of the following circumstances: (A) foreign investor(s) holds more than 50% of the charter capital of the economic organization or majority of the partners of an economic organization constituted in the form of a partnership are foreign individuals; (B) economic organization(s) referred to in point (A) holds more than 50% of the charter capital of another economic organization; and (C) foreign investor(s) and the economic organization(s) referred to in point (A) jointly hold more than 50% of the charter capital of another economic organization. Investment Registration Certificate At law, a foreign investor or an FIEE is required to obtain an Investment Registration Certificate (“IRC”) for their investment projects in Vietnam (including establishment of a foreign-invested economic organization in Vietnam) from the competent authority. Vietnam Enterprises Law The Law on Enterprises No. 59/2020/QH14 adopted by the National Assembly of Vietnam on June 17, 2020, as amended (the “Law on Enterprises 2020”) regulates the establishment and operation of enterprises in Vietnam (including economic organization established by foreign investors). After foreign investors or FIEE obtains the IRC for their investment project in Vietnam, they will apply to the business registration office of the provincial Department of Finance for setting up the foreign-invested company (“FIC”) to carry out the investment project in Vietnam. Under the Law on Enterprises 2020, any FIC incorporated in Vietnam is required to obtain the Enterprise Registration Certificate (the “ERC”) from the business registration office of the provincial DOF where the head office is located, except for those operating in certain specialized business sectors. Vietnam Land Law The right to use land and the ownership of assets attached to such land are evidenced in the certificate of Land Use Right, Ownership over Residential Houses and Other Assets Attached to Land, or equivalent certificates (“LURC”) issued, from time to time, by (i) the Land Registration REGULATORY OVERVIEW – 103 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 113 of 431 -- Office of the Department of Agriculture and Environment (formerly known as the Department of Natural Resources and Environment (“DAE”) if authorized by competent authority; or (ii) the DAE or relevant People’s Committee in provinces and districts that have not yet established a Land Registration Office. Taxation (a) Corporate income tax Enterprises established under the laws of Vietnam are subject to corporate income tax. The standard corporate income tax rate is 20% up to the 2024 tax year. Starting from the 2025 tax year, corporate income tax rates will vary based on annual revenue thresholds, including 15%, 17% and 20%. In addition, preferential tax rates, tax exemptions or tax reductions may be available to eligible projects in certain industries or locations that are encouraged by the government. (b) Value added tax Organizations and individuals who produce and trade in taxable goods and services in Vietnam or who import taxable goods and services from overseas are liable to pay value added tax. Vietnam has three main VAT rates: 0%, 5%, and 10% (reduced to 8% until the end of 2026 for certain items). (c) Personal income tax Corporate employers in Vietnam are required to withhold, declare and pay the personal income tax on the remuneration paid to their employees. Progressive tax rates from 5% to 35% applied for employees who are Vietnam tax residents, a flat tax rate of 20% applied for Vietnam non-tax residents. (d) Withholding tax Withholding tax applies to certain payments to foreign parties such as interest, service fees and leases. This comprises a combination of corporate income tax and value added tax at varying rates depending on nature of payment. (e) Business license tax Business license tax is payable by enterprises established under the laws of Vietnam on an annual basis. The rate depends on the registered charter capital with a maximum amount currently set at VND3 million. (f) Customs duties Import duty applies to most goods imported into Vietnam, unless exempt under special conditions. Import duty is assessed on an ad valorem (on value) basis, which is determined by multiplying the dutiable value of imported goods by the import duty rate. Import duties fall into three categories: ordinary, preferential, and special preferential rates. Preferential rates apply to goods imported from countries that have “Most Favored Nation” (“MFN”) status with Vietnam. Special preferential tariffs apply to goods imported from countries with a preferential agreement or free trade agreement with Vietnam. Vietnam encourages export-based activities, and most exported goods are exempt from export duties. However, export duties are imposed on certain items, including minerals, forestry products, and scrap metal. Export duty rates can range from 0% to 40%. REGULATORY OVERVIEW – 104 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 114 of 431 -- (g) Dividends and distributions All dividends payable to the foreign investor of a foreign owned enterprise will not be subject to withholding or other taxes under the laws and regulations of Vietnam. In general, the foreign corporate shareholder of the foreign owned enterprise may distribute and repatriate profits if it has fulfilled its financial obligations owed to the government of Vietnam. Foreign investors are permitted to buy foreign currency via bank transfer in order to remit profits and other lawful proceeds in Vietnamese Dong overseas. Foreign Exchange Control The legislation regulating the foreign exchange market in Vietnam is Ordinance No. 28/2005/PL-UBTVQH11 on Foreign Exchange as amended by Ordinance No. 06/2013/UBTVQH13, as amended, and its guidance instruments (“Foreign Exchange Regulations”). A company incorporated under the laws of Vietnam is designated as a resident for exchange control purposes in Vietnam. This includes foreign owned enterprises. (a) Foreign currency payment According to Foreign Exchange Regulations, all current transactions related to payments and remittance of money connected to exports, imports, short-term loans from banks, net income from direct and indirect investment, interest and repayments on foreign loans, and import or export of goods or services, may be conducted freely. However, in the territory of Vietnam, all transactions, payments, displays of prices, advertisements, quotations, pricing, and price writing in contracts and agreements and other similar forms (including conversion or adjustment of prices of goods or services, value of contracts or agreements) must not be conducted in any foreign currency except for limited cases provided by the law. One of such exceptional cases applies to export processing enterprises (“EPEs”). Notably, EPEs are permitted to quote prices, set prices, state prices in contracts, and make and receive payments in foreign currency (by bank transfer) in certain transactions, including: (i) purchases of goods from the domestic market for the purposes of producing, processing, recycling, or assembling export goods or for export (excluding goods subject to export prohibitions); and (ii) transactions with other EPEs. (b) Foreign currency bank account A resident foreign owned enterprise shall open a direct investment capital account in foreign currency with an authorised bank in Vietnam to conduct lawful foreign currency receipts and payments related to foreign direct investment activities in Vietnam, including but not limited to: (i) receipt of foreign currency capital contributions from foreign investors via bank transfer and receipts related to foreign loans of the foreign owned enterprise; (ii) payments in foreign currency via bank transfer related to foreign loans of the foreign owned enterprise; and (iii) remittance of profits and other lawful proceeds from foreign direct investment activities in Vietnam to foreign investors overseas. Vietnam Product Quality Law In Vietnam, there are two (02) types of technical characteristics and management requirements applicable to goods manufactured in Vietnam for exporting purposes: technical regulations (“quy chuẩn kỹ thuật” in Vietnamese) and technical standards (“tiêu chuẩn kỹ thuật” in Vietnamese) pursuant to the Law on Technical Standards and Regulations No. 68/2006/QH11 adopted by the National Assembly of Vietnam on June 29, 2006, as amended (the “Law on Technical Standards and Regulations 2006”) and Decree No. 127/2007/ND-CP dated August 1, 2007 of the Government guiding in details the implementation of this Law, as amended (“Decree 127/2007”). REGULATORY OVERVIEW – 105 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 115 of 431 -- The manufacturing of high-precision PCB is not subject to any specific technical regulations or standards in Vietnam. Rather, manufacturers can voluntarily adopt certain relevant international technical standards, such as IPC-2221. Besides, under the Law on Quality of Good and Products No. 05/2007/QH12 adopted by the National Assembly of Vietnam on November 21, 2007, as amended, organization manufacturing goods for export must ensure that the exported goods comply with the regulations of the importing country, the terms of the contract, or any applicable international treaties or mutual recognition agreements on conformity assessment between the relevant countries or territories. Vietnam Regulations on Industrial Zone and Export Processing Zone In Vietnam, an enterprise located in an export processing zone and engaged in the production of export goods is regarded as an EPE and required to comply with Decree No. 35/2022/ND-CP dated May 28, 2022 of the Government on the management of industrial parks and economic zones, as amended (“Decree 35/2022”), and where applicable, master plan(s) on land use purposes and relevant industries. Under Decree 35/2022, the EPEs are generally entitled to investment incentives and non-tariff zone tax benefits from the date on which the investment objective of establishing an EPE is recorded in the IRC is issued (where applicable). Specifically, goods imported into the export processing zone for the purpose of manufacturing export products, as well as goods produced within such zone and exported, are not subject to the import and export tax duties. In order to qualify for the aforementioned non-tariff zone tax benefits, an EPE must be certified by the Vietnamese customs authority as satisfaction of conditions for customs inspection and supervision upon completion of construction phase and prior to commencement of operation. Vietnam Regulations on Data Privacy In Vietnam, data privacy is primarily regulated by the Law on Personal Data Protection 2025 and Decree No. 356/2025/ND-CP guiding the Law on Personal Data Protection 2025, both of which took effect on 1 January 2026. By law, the data controllers (who determine the purpose and means of personal data processing), data processors (who process personal data at the request of, and pursuant to a contract with, a personal data controller or a personal data controller-cum-processor), or data controller- cum-processors (who determine the purposes and means of, and directly process, personal data) are required to prepare, retain, and send a copy of a data protection impact assessment dossier (“DPIA”) to the Department of Cyber Security and Hi-tech Crime Prevention under the Vietnamese Ministry of Public Security (“DCHCP”) within 60 days from commencement of, or changes to, personal data processing activity. The submission of DPIA can be conducted (i) directly to the headquarters of the DCHCP; (ii) through postal services; or (iii) through online submission via the DCHCP’s portal specialized for data privacy (the “Portal”). Vietnam Environmental Protection Law The Law on Environmental Protection No. 72/2020/QH14 adopted by the National Assembly of Vietnam on November 17, 2020, as amended (collectively, the “Law on Environment Protection 2020”) sets out the legal framework for protection of the environment in Vietnam as well as rights and obligations of related individuals and organizations. Environmental License The environmental license is issued by the competent authority to an organization or individual engaging in production, business or service activities that allow them to discharge wastes into the environment, manage wastes or import scraps for use as production materials, subject to environmental protection requirements and conditions as specified by laws. The investors of Group-I Projects, Group-II Projects and Group-III Projects must obtain the environmental license when officially putting into operation if such projects discharge (i) wastewater, dust, or emissions into the environment that must be treated; or (ii) discharge hazardous wastes that must be managed in accordance with the laws. REGULATORY OVERVIEW – 106 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 116 of 431 -- Vietnam Firefighting and Prevention Law Law on Firefighting, Prevention and Rescue No. 55/2024/QH15 adopted by the National Assembly of Vietnam on November 29, 2024 (the “Law on Firefighting and Prevention 2024”) effective from July 1, 2025 imposes various rules and obligations on firefighting and prevention that an enterprise must comply. Before starting construction of works listed in Annex III of Decree No. 105/2025/ND-CP (which elaborates on certain articles and measures for implementing the Law on Firefighting and Prevention 2024) (“Decree 105”), the owners of construction works must have the firefighting and prevention design appraised by the competent authorities. After completing construction and before commencing operations, the owners must organize the acceptance of the construction works in terms of firefighting and prevention and obtain approval from the competent authorities on the acceptance result. Labor Matters The Labor Code No. 45/2019/QH14 adopted by the National Assembly of Vietnam on November 20, 2019 (the “Labor Code 2019”) sets out the legal framework for labor-related matters. The Government and the Ministry of Labor, War Invalids and Social Affairs (which has since been merged into the Ministry of Home Affairs) have also issued a number of decrees and circulars to implement the Labor Code 2019. Generally, the Labor Code 2019 provides key principles for rights and obligations of employers and employees, labor contracts, requirements on salary, working and rest hours, compulsory insurances, internal labor rule, trade union, and the use of foreign employees, etc. Compulsory Insurances Under the Law on Social Insurance No. 41/2024/QH15 adopted by the National Assembly of Vietnam on June 29, 2024, the Law on Health Insurance No. 25/2008/QH12 adopted by the National Assembly of Vietnam on November 14, 2008 (as amended), the Law on Employment No. 74/2025/QH15 adopted by the National Assembly of Vietnam on June 16, 2025 and the Law on Labor Safety and Hygiene No. 84/2015/QH13 adopted by the National Assembly of Vietnam on June 25, 2015 (as amended), employees and employers are required to make contributions to the compulsory insurance schemes which include social, health, occupational accidents and diseases and unemployment insurances in Vietnam in favor of Vietnamese employees (and certain categories of foreign employees). The contributions are calculated based on the employee’s wage or salary specified under the labor contract and made by both employee and employer in specific percentage set forth by laws. RELEVANT LAWS AND REGULATIONS IN THE U.S. U.S. Outbound Investment Security Program On January 2, 2025, a U.S. outbound investment security program (the “OISP”), implemented by the U.S. Department of Treasury (“Treasury”) under a newly adopted rule (the “Outbound Investment Rule”), became effective. The OISP prohibits or requires notification of certain outbound investment transactions by “U.S. persons” involving “covered foreign persons” that are engaged in specified “covered activities” relating to certain sensitive technologies and products in the (i) semiconductors and microelectronics, (ii) quantum information technologies, and (iii) artificial intelligence (“AI”) sectors. REGULATORY OVERVIEW – 107 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 117 of 431 -- Under the Outbound Investment Rule, • “U.S. persons” are broadly defined, including, among others, U.S.-incorporated entities, U.S. citizens and permanent residents wherever located, branches of U.S. entities outside the United States, and any person in the United States; • “Covered foreign persons” include, in relevant part, (i) companies that are engaged in specified activities within one of these three technology sectors and that are headquartered, incorporated in, or have their principal place of business in a “country of concern” (currently China, including Hong Kong and Macau), (ii) companies that are engaged in specified activities within one of these three technology sectors and that are directly or indirectly owned by the government of a “country of concern” or by certain individuals or entities associated with a “country of concern,” and (iii) companies with significant financial ties to companies described in (i) or (ii); and • “Covered transactions” include certain acquisitions of equity interests and contingent equity interests, debt financing, joint ventures, and investments as a limited partner in a pooled investment fund. The OISP requires U.S. person-entities that are the parents of non-U.S. entities to “take all reasonable steps to prohibit and prevent any transaction” by their non-U.S. entities that would be a prohibited transaction if engaged in by a U.S. person. The notification requirements also apply to U.S. person-entities that are the parents of non-U.S. entities that enter into transactions that would be notifiable transactions if entered into by a U.S. person. The OISP also prohibits U.S. persons from knowingly directing a non-U.S. person to enter into a transaction that would be prohibited if entered into by a U.S. person. The OISP includes exceptions, which, if applicable, exclude from its prohibitions and notification requirements certain transactions that would otherwise be either prohibited transactions or notifiable transactions if engaged in by a U.S. person. These exceptions include one applicable to certain U.S. person-investments in publicly traded securities that are traded on a national stock exchange (such as the [REDACTED] of our H Shares on the Stock Exchange after the completion of the [REDACTED]). Failing to comply with the notification requirements or failing to provide accurate and complete information in a filing under the OISP may subject relevant U.S. persons to civil penalties including fines of up to the greater of two times the transaction value or US$377,700 (as such amount may be adjusted for inflation), and — for willful violations — criminal penalties of fines of up to US$1 million and imprisonment of up to 20 years. However, the OISP is a relatively new regulatory regime, which is subject to changes and interpretations. On December 18, 2025, the U.S. Comprehensive Outbound Investment National Security Act of 2025 (the “COINS Act”), which will supersede the OISP, became law. The COINS Act is subject to a rulemaking process, which is required to be completed by March 2027, and there is substantial uncertainty regarding how the new law will be implemented. We will continue evaluating and monitoring developments with respect to these laws and regulations. [REDACTED], including those that are U.S. persons or are subsidiaries of U.S. persons, should consult their own legal counsel regarding the applicability of the Outbound Investment Rule, the COINS Act or similar laws and regulations to this [REDACTED] and any potential obligations and exceptions thereunder. For associated risks, see “Risk Factors — Risks Relating to Doing Business in the Jurisdictions Where We Operate — U.S. outbound investment regulations and other foreign laws and regulations could have a negative impact on our ability access to capital in the future.” REGULATORY OVERVIEW – 108 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 118 of 431 -- OVERVIEW We are one of the key players in advanced PCB products for AI and high-performance computing, specializing in research and development, manufacturing and sales of high-build-up HDIs and high-layer-count MLPCBs. Our technologies, product quality and robust production capabilities position us as a crucial supplier to leading global technology companies. Milestones The following sets out a summary of our key development milestones: Year Milestones 2003 ! ! Our first Group company, Shenghua Electronics was established. 2011 ! ! We introduced several institutional investors to optimize our equity structure. 2015 ! ! Our Company was officially listed on the ChiNext Market of Shenzhen Stock Exchange (stock code: 300476). Our Company was among the first Chinese PCB manufacturers to establish smart factories in 2015, with a strategic focus on AI servers and automotive electronics. 2018 ! ! We were awarded the title of “National Green Factory ( )” by the MIIT of PRC ( ). We were recognized as one of the top 50 companies listed on China’s ChiNext Market. 2019 ! ! Our HDI Division has been put into operation, laying a solid foundation for high-build-up HDIs. 2021 ! ! Our production capacity of the multilayer board division exceeded 500,000 square meters, improving our strategic positioning in PCB market for AI and high- performance computing. 2023 ! ! We acquired PSL, through which we also owned MFSS, a globally recognized FPC manufacturer. The acquisition expanded our product portfolio to include a full range of products across RPCBs and FPCs and also broadened our customer base to leading companies in sectors such as automotive electronics, industrial control and high-end medical devices. 2024 ! ! We were awarded the “Outstanding Industry Award ( )” at Global Memory Innovation Forum 2024 (GMIF2024 ). We acquired APCB Electronics (Thailand) Co., Ltd. to expand our PCB production capacity in Southeast Asia. 2025 ! ! We upgraded our production lines in Thailand for the manufacturing of high-layer- count MLPCBs and high-build-up HDIs to improve our Group’s capabilities to meet the needs of our global customers and to increase our global delivery ability. HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE – 109 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 119 of 431 -- OUR MAJOR SUBSIDIARIES As of the Latest Practicable Date, the principal business activities, the date of establishment and the jurisdiction of incorporation of each of our major subsidiary (including those acquired by us) are listed below, all of which are wholly-owned subsidiaries. Name of company Principal business activities Date and jurisdiction of establishment Shenghua Electronics ! ! ! Manufacturing and sales of PCBs January 24, 2003 The PRC Hongxing International ! ! Sales of PCBs June 15, 2011 Hong Kong Vietnam VGT ! ! ! ! ! ! ! ! Manufacturing and sales of PCBs July 4, 2024 Vietnam Weisheng Circuit Board ! ! Manufacturing and sales of PCBs July 24, 1989 The PRC Weisheng Technology ! ! ! Manufacturing and sales of PCBs September 12, 2003 The PRC Yiyang Weisheng ! ! ! ! ! ! Manufacturing and sales of PCBs September 14, 2018 The PRC Thailand VGT ! ! ! ! ! ! ! ! Manufacturing and sales of PCBs July 25, 1990 Thailand PSL ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! Holding company of MFSS October 24, 2017 Cayman Islands MFSM ! ! ! ! ! ! ! ! ! ! ! ! ! Manufacturing and sales of PCBs January 31, 1958 Malaysia MFSS ! ! ! ! ! ! ! ! ! ! ! ! ! Sales of PCBs October 11, 1988 Singapore MAJOR SHAREHOLDING CHANGES OF OUR COMPANY A. Early Development of Our Company Our history traces back to January 2003, when Shenghua Electronics was established on January 24, 2003, which was owned as to 70% and 30% by Shenghua Xinye and Bodaxing, respectively. Our predecessor, Victory Giant Technology (Huizhou) Co., Ltd.* ( ( ) ) (“VG Limited”) was established on July 28, 2006 as a wholly foreign-owned enterprise, and its entire share capital was owned by Hong Kong Victory Giant. Upon establishment, the registered capital of VG Limited was USD12,000,000. On December 18, 2010, VG Limited acquired the entire equity interest of Shenghua Electronics through the issuance of our registered capital to Shenghua Xinye and Bodaxing as consideration. At the time of transaction, Shenghua Xinye was owned as to 90% and 10% by Mr. Chen Tao ( ) and Ms. Liu Chunlan ( ) respectively, while Bodaxing was wholly-owned by Mr. He Lianqi ( ). B. Conversion into joint stock limited company and the A-Shares Listing Upon the completion of several rounds of equity transfers and capital injections, on February 27, 2012, pursuant to the promoter’s agreement dated January 16, 2012 entered into by the then Shareholders, VG Limited was converted from a limited liability company to a joint stock company with limited liability registered capital of RMB110,000,000. Our then nine Shareholders consisted of Shenghua Xinye, Hong Kong Victory Giant, Oriental Fortune (Wuhu) Equity Investment Fund (Limited Partnership)* ( ( ) ( )) (“Oriental Fortune”), Bodaxing, Guoke Ruihua Venture Capital Enterprise* ( ) (“Guoke Ruihua”), Oriental Fortune (Wuhu) No. 2 Equity Investment Fund (Limited Partnership)* ( ( ) ( )(“Oriental Fortune No. 2”), Huizhou Kaichuang Venture Capital Partnership (Limited Partnership)* ( ( )) (“Huizhou Kaichuang”), Jiaxing Shidai Jingxuan Venture Capital Partnership (Limited Partnership)* ( ( )) (“Jiaxing Shida”) and Ningbo Fenghai Information Technology Development Co., Ltd.* ( ) (“Ningbo Fenghai”), each holding 36.96%, 29.70%, 10.20%, 7.63%, 5.00%, 4.80%, 2.50%, 1.84% and 1.38% of the then share capital of our Company, respectively. Save for Shenghua Xinye, Hong Kong Victory Giant and Bodaxing, all of the remaining Shareholders are independent third parties. HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE – 110 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 120 of 431 -- On June 11, 2015, our A Shares were listed on the ChiNext Market of Shenzhen Stock Exchange (stock code: 300476) (“A-Shares Listing”). For the initial public offering of our A Shares, we issued a total of 36,670,000 A Shares, accounting for 25% of our Company’s then total issued Shares. Immediately upon the completion of the A-Shares Listing, the shareholding structure of our Company was as follows: No. Name of Shareholder Number of Shares Shareholding Percentage (%) 1. ! ! ! ! Shenghua Xinye 40,651,050 27.72% 2. ! ! ! ! Hong Kong Victory Giant 32,670,000 22.27% 3. ! ! ! ! Oriental Fortune 11,220,000 7.65% 4. ! ! ! ! Bodaxing 8,388,710 5.72% 5. ! ! ! ! Guoke Ruihua 5,500,000 3.75% 6. ! ! ! ! Oriental Fortune No. 2 5,280,000 3.60% 7. ! ! ! ! Huizhou Kaichuang 2,750,000 1.87% 8. ! ! ! ! Jiaxing Shidai 2,023,010 1.38% 9. ! ! ! ! Ningbo Fenghai 1,517,230 1.03% Sub-total 110,000,000 75.00% Other A Shareholders 36,670,000 25.00% Total 146,670,000 100% OUR MAJOR SHAREHOLDING CHANGES (i) Restricted A Share incentive schemes Historically, we have issued certain restricted A Shares to our employees pursuant to the relevant share incentive scheme (each a “Restricted A Share Incentive Scheme”) approved by our Shareholders at general meetings in 2015, 2019 and 2022, respectively. As at the Latest Practicable Date, the terms of the 2015 and 2018 Restricted A Share Incentive Scheme have expired and no additional A Shares will be further granted under any of these Restricted A Share Incentive Schemes. On February 5, 2026, 2,208,000 restricted Shares granted under the 2022 Restricted A Share Incentive Scheme was vested to Directors and senior management. Upon the completion of the vesting of these restricted Shares, our total share capital increased from RMB870,349,313 to RMB872,557,313. Furthermore, no additional A Shares will be granted under the 2022 Restricted A Share Incentive Scheme, for details, please refer to the section headed “Appendix VI — Statutory and General Information — D. 2022 Restricted A Share Incentive Scheme” in this document. The details of the Restricted A Share Incentive Schemes approved in 2015 and 2019 are as follows: Name of scheme Date of issuance of restricted shares Number of employees incentivized Date of general meeting approving the scheme Total number of A Shares issued Changes in total share capital 2015 Restricted A Share Incentive Scheme ! ! ! ! August 24, 2015 40 August 21, 2015 2,890,000 from RMB146,670,000 to RMB149,560,000 August 22, 2016 62 August 21, 2015 777,500 from RMB373,900,000 to RMB374,677,500 2018 Restricted A Share Incentive Scheme ! ! ! ! April 15, 2019 252 March 11, 2019 9,442,000 from RMB769,707,975 to RMB779,149,975 HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE – 111 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 121 of 431 -- (ii) Capitalization issue In April 2016, our total share capital increased from RMB149,560,000 to RMB373,900,000 by way of capitalizing capital reserve on the basis of 15 additional Shares for every 10 existing Shares for all the then Shareholders, resulting in a total issuance of 224,340,000 additional Shares. In March 2018, our total share capital increased from RMB427,615,542 to RMB769,707,975, by way of capitalizing capital reserve on the basis of 8 additional Shares for every 10 existing Shares for all the then Shareholders, resulting in a total issuance of 342,092,433 additional Shares. (iii) Private Placements Following the approval from our Shareholders in June 2016 and the relevant regulatory authority in May 2017, we conducted a round of private placement in August 2017 and issued 52,938,042 A Shares to three qualified subscribers, all of whom are independent third parties. The placement raised net proceeds of approximately RMB1,069.9 million. The net proceeds was utilized for new energy vehicles and IoT circuit board project. Upon its completion, our total share capital was changed from RMB374,677,500 to RMB427,615,542. In 2021, following the approval of our Shareholders and the relevant regulatory authority, we conducted a round of private placement in November 2021 and issued 86,095,566 A Shares to 16 qualified subscribers, all of whom are independent third parties. The placement raised net proceeds of approximately RMB1,985.3 million. The net proceeds were utilized for the Company’s business development. Upon its completion, our total share capital changed from RMB777,561,455 to RMB863,657,021. On November 25, 2024, our Shareholders approved to conduct a new round of private placement which was approved by the Shenzhen Stock Exchange on July 17, 2025 and approved by the CSRC on August 28, 2025. On October 20, 2025, the private placement was completed and we issued 7,660,672 A Shares to 10 qualified subscribers, all of whom are independent third parties. The placement raised net proceeds of approximately RMB1,876.4 million. The net proceeds were utilized for the Company’s business development. Upon its completion, our total share capital changed from RMB862,688,641 to RMB870,349,313. (iv) Repurchase and cancellation of A Shares In September 2020, we repurchased and cancelled a total of 1,588,520 restricted A Shares that were granted to the employees but the vesting conditions thereof could not be met. As a result, our total share capital decreased from RMB779,149,975 to RMB777,561,455, consisting of 777,561,455 A Shares. From May to July 2022, we repurchased an aggregate of 9,108,543 A Shares for the purpose of implementing employee share ownership plans or equity incentives. In December 2022, we repurchased and cancelled an aggregate of 968,380 restricted A Shares that were granted to the employees but the vesting conditions thereof could not be met and our total share capital decreased from RMB863,657,021 to RMB862,688,641. From November 2024 to February 2025, we repurchased an aggregate of 1,643,100 A Shares for the purpose of implementing employee share incentive schemes. OUR LISTING ON THE CHINEXT MARKET OF THE SHENZHEN STOCK EXCHANGE AND REASONS FOR THE [REDACTED] ON THE STOCK EXCHANGE Since June 11, 2015, our Company’s A Shares have been listed on the ChiNext Market of the Shenzhen Stock Exchange. As of the Latest Practicable Date, our Directors confirmed that we had no instances of material non-compliance with the applicable listing rules of the Shenzhen Stock HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE – 112 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 122 of 431 -- Exchange and other applicable securities laws and regulations of the PRC in any material respects since our listing on the Shenzhen Stock Exchange, and, to the best knowledge of our Directors having made all reasonable enquiries, there was no material matter that should be brought to the [REDACTED]’ attention in relation to our compliance record on the ChiNext Market of the Shenzhen Stock Exchange. The PRC Legal Advisor of our Company is of the view that the confirmation of our Directors above with regard to our compliance record is accurate and reasonable. Based on the independent due diligence conducted by the Joint Sponsors, nothing has come to the Joint Sponsors’ attention that would cause them to disagree with our Directors’ confirmation with regard to the compliance records of the Company on the Shenzhen Stock Exchange. We seek to be [REDACTED] on the Hong Kong Stock Exchange in order to provide further capital for the research and development and expansion of our business through the construction of new production lines and promote the implementation of our globalization strategy through strengthen our business profile and market position in the industry, and better attract overseas [REDACTED] and talents. Please refer to “Business — Our Growth Strategies” and “Future Plans and [REDACTED]” for more details. MATERIAL ACQUISITIONS Acquisitions during the Track Record Period During the Track Record Period, we conducted the following acquisitions that we consider material to us. 1. Acquisition of PSL For the purpose of supporting our Company’s strategy of horizontally integrating the PCB industry, driven by expanding FPC markets and the potential offering of a complete PCB product range, our Company (as purchaser) entered into a share transfer agreement on July 25, 2023 with Tree House Limited (as seller, an independent third party), pursuant to which our Company agreed to purchase from the seller all the issued shares of PSL (which is the sole shareholder of MFSS, which in turn wholly-owned MFSM, Weisheng Technology, Weisheng Circuit Board, Yiyang Weisheng, MFS Technology Europe UG (“MFSE”)) for a total acquisition cost not exceeding US$460 million, consisting of base consideration of USD365 million and various adjustments, which was determined after arm’s length negotiation taking into account, among others, PSL’s financial performance, technical capabilities, business volume, and development prospects. The acquisition was properly and legally completed and settled on November 30, 2023, with the final consideration at RMB2,876.7 million (equivalent to approximately USD404.6 million). Upon completion of the acquisition, PSL, together with its subsidiaries, became our wholly owned subsidiaries. MFSS is principally engaged in sales of PCBs. 2. Acquisition of APCB Electronics (Thailand) Co., Ltd. For the purpose of supporting our Company’s globalization efforts and positioning as a manufacturing hub for expanding international business and fulfilling overseas customer demands, our Company and our subsidiaries, Singapore VGT and PSL (both as purchasers) entered into a share purchase agreement on August 9, 2024 with APCB Capital Limited, Red Noble Limited and Smart Explorer Limited (as sellers, each of them an independent third party), pursuant to which Singapore VGT and PSL agreed to purchase from the sellers all the issued shares of APCB Electronics (Thailand) Co., Ltd. at a consideration of RMB278,700,000, which was determined after arm’s length negotiation among the parties taking into account, among others, the target company’s financial performance, technical capabilities, business volume and development prospects. The acquisition was properly and legally completed and settled on September 30, 2024. Upon completion of the acquisition, APCB Electronics (Thailand) Co., Ltd. was renamed as Victory Giant Technology (Thailand) Co., Ltd. and became our wholly owned subsidiary. Thailand VGT is principally engaged in the manufacturing for sale of PCB. HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE – 113 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 123 of 431 -- Save as disclosed in this document, during the Track Record Period and as of the Latest Practicable Date, our Group did not have any other material acquisitions, disposals or mergers. Our Directors confirmed that, none of the abovementioned acquisitions during the Track Record Period would be classified as a major transaction or a very substantial acquisition (based on the applicable percentage ratios as stipulated under Rule 4.05A of the Listing Rules). Accordingly, we are not required to disclose the pre-acquisition financial information of any of the companies acquired by us during the Track Record Period pursuant to Rule 4.05A of the Listing Rules. Post-Track Record Period Acquisitions We have three acquisitions made or in the process of completing after the Track Record Period. These transactions involve subscribing to minority interests in Shenzhen Han’s CNC Technology Co., Ltd. ( ) and Xi’an Taijin New Energy & Materials Sci-Tech Co., Ltd. ( ), and acquiring the entire equity interest in Company X. We have applied to the Hong Kong Stock Exchange for, and the Hong Kong Stock Exchange has [granted] us, a waiver from strict compliance with Rules 4.04(2) and 4.04(4) of the Listing Rules in relation to the proposed acquisitions. See “Waivers — Waiver in respect of Post-Track Record Period Acquisitions” for alternative disclosure of these acquisitions. Additionally, for the purpose of expanding our Company’s production capacity through fixed-asset investment including the purchase of land and associated fixed assets, on January 23, 2026, MFS Technology (S) PTE Ltd, our wholly owned subsidiary, entered into an equity purchase agreement with SunPower Technology Ltd. (“SunPower”) to acquire the entire equity interest of SunPower Malaysia Manufacturing Sdn. Bhd., a wholly owned subsidiary of SunPower, for a total consideration of US$51 million, which was determined after arm’s length negotiation taking into account, among others, the target’s asset status and financial condition (the “Acquisition”). The fixed assets acquired in the Acquisition will be integrated with the Company’s existing production base in Malaysia to scale up output and support overseas delivery commitments. The Acquisition was properly and legally completed and settled on February 13, 2026. Given that (i) the target of the Acquisition is non-operational and asset-driven in substance, and lacks both profit-generating capacity and a forward order book; and (ii) as advised by our reporting accountants, the target lacks the critical inputs and substantive processes that define a business under the recognition criteria of IFRS 3, and possesses neither an organized workforce with the necessary skills to perform core processes, nor active operations, strategic management, or operational protocols that contribute to outputs, the Acquisition should be classified as an asset acquisition instead of a business acquisition. Accordingly, pursuant to Rule 4.02A of the Listing Rules, the provisions of Rule 4.04(2) of the Listing Rules shall not apply. Save as disclosed above, during the Track Record Period and as at the Latest Practicable Date, our Group did not have any material acquisitions, disposals or mergers. PUBLIC FLOAT AND FREE FLOAT Satisfaction of the Public Float Requirement Rule 19A.13A of the Listing Rules provides that, where a new applicant is a PRC [REDACTED] with other [REDACTED] at the time of [REDACTED], this will normally mean that the portion of H shares for which [REDACTED] is sought that are held by the [REDACTED], at the time of [REDACTED], must (a) represent at least 10% of the issuer’s total number of issued shares in the class to which H shares belong (excluding treasury shares); or (b) have an expected market value of not less than HK$3,000,000,000. Our A Shares are listed on the ChiNext Market of the Shenzhen Stock Exchange. The total number of the H Shares to be [REDACTED] pursuant to the [REDACTED] represents approximately [REDACTED]% of the total [REDACTED] share capital of our Company (assuming the [REDACTED] and the [REDACTED] are not exercised). Immediately following the completion of the [REDACTED] (assuming the [REDACTED] and the [REDACTED] are not exercised), based on the maximum [REDACTED] of HK$[REDACTED] per H Share, the market value of the H Shares is expected to be approximately HK$[REDACTED] million, thereby satisfying Rule 19A.13A(2)(b) of the Listing Rules. HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE – 114 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 124 of 431 -- Satisfaction of the Free Float Requirement Rule 19A.13C of the Listing Rules provides that, where a new applicant is a PRC [REDACTED] with other [REDACTED] at the time of [REDACTED], this will normally mean that the portion of H shares for which [REDACTED] is sought that are held by the [REDACTED] and not subject to any disposal restrictions (whether under contract, the Listing Rules, applicable laws or otherwise), at the time of [REDACTED], must: (a) represent at least 5% of the total number of issued shares in the class to which H shares belong at the time of [REDACTED] (excluding treasury shares), with an expected market value at the time of [REDACTED] of not less than HK$50,000,000; or (b) have an expected market value at the time of [REDACTED] of not less than HK$600,000,000. Based on the maximum [REDACTED] of HK$[REDACTED] per H Share, it is expected that immediately following completion of the [REDACTED], the [REDACTED] of the H Shares [REDACTED] on the Stock Exchange that are not subject to any disposal restrictions at the time of the [REDACTED] will satisfy the free float requirement under Rule 19A.13C of the Listing Rules. CORPORATE STRUCTURE OF THE COMPANY Corporate Structure Immediately Before the [REDACTED] The following chart illustrates the simplified shareholding structure and corporate structure of our Group immediately prior to the completion of the [REDACTED] (assuming that no other changes are made to the issued share capital of our Company between the Latest Practicable Date and the [REDACTED]): 10% 90% 70% 30% 100% 100.00% 0.43% 15.45% 15.06% 1.12% 67.94% Other A Shareholders Our Company (PRC) Bodaxing 100% 93% 7% 100% 100% 100% MFSE (Germany) Vietnam VGT (Vietnam) Thailand VGT (Thailand) MFSS (Singapore) Yiyang Weisheng (PRC) 100% MFSM (Malaysia) 100% PSL (Cayman Islands) 100% Shenghua Electronics (PRC) 100% Hongxing International (Hong Kong) Other subsidiaries of our Company(2) 100% Singapore VGT (Singapore) 100% Weisheng Technology (PRC) 100% Weisheng Circuit Board (PRC) Ms. Liu Chunlan(1) Shenghua Xinye(1) Hong Kong Victory Giant(1) Hongda Investment(1) Mr. Chen Tao(1) Mr. He Lianqi HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE – 115 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 125 of 431 -- Notes: (1) As at the Latest Practicable Date, our Largest Group of Shareholders included Mr. Chen Tao, Ms. Liu Chunlan, Shenghua Xinye, Hongda Investment and Hong Kong Victory Giant, who were collectively entitled to exercise the voting rights of approximately 30.94% of the total issued Shares of our Company. Upon the completion of the [REDACTED] (assuming the [REDACTED] and the [REDACTED] are not exercised), they will collectively exercise voting rights of approximately [REDACTED]% of our total issued Shares. (2) Other subsidiaries of our Company include, (a) Shenzhen Shenghong Electronics Co., Ltd.* ( ); (b) Huizhou Victory Giant Technology Research Institute Co., Ltd.* ( ); (c) VGTPCB Inc.; (d) Hongxing International Co., Ltd.* ( ); (e) Huizhou Victory Giant Precision Technology Co., Ltd.,* ( ) (f) SunPower Malaysia Manufacturing Sdn. Bhd. which are all our wholly-owned subsidiaries; and (g) Ningbo Kefa Fuding Venture Capital Partnership Enterprise (Limited Partnership)* ( ( )) (“Ningbo Kefa”) which is owned by us as to 98.97% as its limited partner and Zhejiang Kefa Capital Management Co., Ltd.* ( ) as to 1.03% as its general partner, who is ultimately owned by four individuals, who are all independent third parties. Corporate Structure Immediately Following the Completion of the [REDACTED] The following chart illustrates the shareholding structure and corporate structure of our Group immediately following the completion of the [REDACTED] (assuming that the [REDACTED] and the [REDACTED] are not exercised): 10% 90% 70% 30% 100% 100.00% [REDACTED]% [REDACTED]% [REDACTED]% [REDACTED]% [REDACTED]% 100% 93% 100% 100% MFSE (Germany) Other A Shareholders Our Company (PRC) Bodaxing Vietnam VGT (Vietnam) MFSS (Singapore) Yiyang Weisheng (PRC) 100% PSL (Cayman Islands) 100% Shenghua Electronics (PRC) 100% Hongxing International (Hong Kong) Other Subsidiaries of Our Company(2) 100% Singapore VGT (Singapore) 7% 100% Thailand VGT (Thailand) 100% Weisheng Technology (PRC) 100% Weisheng Circuit Board (PRC) 100% MFSM (Malaysia) [REDACTED]% [REDACTED] Shareholders Ms. Liu Chunlan(1) Shenghua Xinye(1) Hong Kong Victory Giant(1) Hongda Investment(1) Mr. Chen Tao(1) Mr. He Lianqi Note: Please refer to the notes 1 to 2 to the paragraph headed “Corporate Structure Immediately Before the [REDACTED]” above for more information. HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE – 116 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 126 of 431 -- OVERVIEW Who We Are We are one of the key players in advanced PCB products for AI and high-performance computing in terms of sales revenue in 2024 and the first half of 2025, specializing in research and development, manufacturing and sales of high-build-up HDIs and high-layer-count MLPCBs. Our technologies, product quality and robust production capabilities position us as a crucial supplier to leading global technology companies. According to Frost & Sullivan, we ranked first globally in terms of sales revenue in the PCB market in the field of AI and high-performance computing in the first half of 2025 with the market share of 13.8% and ranked seventh globally by the same metric in 2024 with a market share of 1.7%, with key applications covering AI accelerator cards, servers, AI servers, data center switches and UBB. We are able to manufacture high-layer-count MLPCBs with more than 100 layers. We are also one of the first companies globally to achieve mass production of 24-layer HDIs with a 6+12+6 build-up, as well as the technical capabilities for 30-layer HDIs with a 10+10+10 build-up, and 16-layer any-layer interconnect HDIs, demonstrating our capability to deliver ultracomplex, high-density PCBs widely used in cutting-edge AI and high-performance computing applications at scale, reinforcing our industry leadership. Our technologies support the evolving needs of fast-growing industries such as AI, EV and high-speed telecommunications equipment, contributing to the advancement of China’s high-end PCB manufacturing industry. The proliferation of AI is driving advancements in AI-related hardware, creating structural growth opportunities for the PCB industry. As a key component supporting computing systems, PCB must meet increasingly stringent standards, including high frequency and speed, low signal loss and enhanced heat dissipation. The PCB content value per unit in AI servers is notably higher than that in traditional servers. As AI applications continue to expand, the demand for high-performance PCBs is expected to grow substantially. According to Frost & Sullivan, the global AI server shipments reached approximately 2.0 million units in 2024 and are projected to grow at a CAGR of over 20% to approximately 5.4 million units by 2029, with their share of total server shipments increasing to approximately 29.0%. Accordingly, we were among the first PCB manufacturers in China to establish smart factories, adopt green manufacturing practices, and expand into emerging sectors. These initiatives increase production output, shorten delivery cycles, reduce energy consumption and lower the labor intensity, ultimately enhancing our overall competitiveness. As we continue to strengthen our core capabilities, we have seized the growth opportunities driven by the development of AI and EV, built a global delivery network to meet rising demand worldwide and rose to the top tier of advanced PCB manufacturers globally. FY2024 Revenue RMB10.7bn 2015-2024 CAGR 26.6% FY2025 Revenue RMB19.3bn YoY Growth 79.8% Global leading AI computing infrastructure provider Global leading EV and clean energy provider One of the earliest in the industry to develop and scale automation and smart manufacturing systems Customer-focused flexible manufacturing, delivering industry-leading efficiency, precision and speed Technical capability of 30-layer HDIs with a 10+10+10 build-up and R&D for 36-layer HDIs with a 14+8+14 build-up, empowering cutting-edge AI acceleration cards Mass production capability of 70+ layer MLPCBs and technical capability for 100+ layer MLPCBs, enabling next-generation AI servers No. 1 No. 1 Leadership Blue-Chip Customers Research & Development Smart Manufacturing High-end PCB Capacity Growth No. 1 Global large-scale cloud service providers Global AI and high-performance computing PCB market share(1) Global high-build-up HDI PCB market share(2) Global high-layer-count MLPCB with 14 layers and above market share(3) 5.16m square meters High-layer-count MLPCBs with 14 layers and above(4) 600k square meters HDIs with a build-up of 6+N+6 and above(4) One of the world’s largest production networks BUSINESS – 117 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 127 of 431 -- Notes: (1) Measured by sales revenue in the PCB market in the field of AI and high-performance computing in the first half of 2025, according to Frost & Sullivan. (2) Measured by sales revenue from high-build-up HDI from the AI and high-performance computing in the first half of 2025, according to Frost & Sullivan. (3) Measured by sales revenue from high-layer-count MLPCBs with 14 layers and above in the first half of 2025, according to Frost & Sullivan. According to Frost & Sullivan, it is common for many industry participants to adopt a classification criterion where high-layer-count MLPCBs are categorized into “8 to 12 layers” and “14 layers and above” given that it is helpful to reflect the downstream applications of high-layer-count MLPCBs, though there is currently no definitive and universally accepted official standard to categorize high-layer-count MLPCBs based on the counts of layers given the stark differences in product applications and market positioning among the industry participants. (4) Measured by the annual production capacity of high-layer-count MLPCBs with 14 layers and above and advanced HDI products with a build-up of 6+N+6 or above up to the Latest Practicable Date. Our Product Portfolio We offer a comprehensive range of products used in a variety of applications. We have expanded our presence in the following in key sectors including AI and high-performance computing, smart devices, automotive electronics, telecommunications and medical devices, with a focus on technologies supporting AI computing such as GPUs and CPUs: (i) AI and High- performance Computing: We have developed technologies for applying low-loss materials and optimizing signal integrity to support AI and high-performance computing. Our products center on high-build-up HDIs and high-layer-count MLPCBs supporting high-frequency and high-speed signal transmission. They are primarily used in AI accelerator cards, servers (including AI servers), data center switches and high-speed optical modules; (ii) Smart Devices: We focus on the key technological requirements of smart devices, including high integration, slim design and high-speed computing performance. Our products include HDIs and FPCs used in AI-powered PCs, wearables and AR/VR devices; (iii) Automotive Electronics: Our products are designed to meet the requirements of automotive-grade reliability, thermal resistance and signal integrity. Our products include HDIs, high-layer-count MLPCBs and FPCs, which are widely used in EV electrical systems, intelligent driving systems, vehicle body control modules and smart cockpits; (iv) Telecommunications: We focus on the application of materials that support high-frequency, high-speed transmission and technologies to ensure signal integrity. Our products include high-layer-count MLPCBs and high-build-up HDIs designed for use in 5G base stations, optical communication equipment and data center optical modules; and (v) Medical Devices and Other Applications: Our products include MLPCBs, HDIs and FPCs, which are primarily used in advanced medical devices, industrial automation control systems and core control modules of humanoid robots. Our PCB products for humanoid robots have entered production and sales. Data Center Switch Universal Baseboard (UBB) Optical Transceivers AI Accelerator Card SSD/DDR Flexible Printed Circuit High-build-up HDI High-layer-count MLPCB AI Computing Power and Related Components Intelligent Driving System Electronic Control System 5G Base Station Optical Communication Equipment Telecommunications AI PC AR/VR Devices Smart Devices Robot Medical Devices and Other Applications Servo System Vital Signs Monitoring Devices Cockpit Domain Controller Server AI Server REPRESENTATIVE PRODUCTS EXTENSIVE END APPLICATIONS Automotive Electronics Rigid-Flex board BUSINESS – 118 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 128 of 431 -- Our Global Strategic Footprint We are committed to strengthening our global presence by continuous domestic and international expansion. Through our network of production centers at home and abroad and strategic mergers and acquisitions, we have built a comprehensive operational network integrating advanced manufacturing, customer service and regional coordination. Our domestic production hub is located at our headquarters in Huizhou, where we integrate R&D, design, advanced manufacturing and technical support. This production center supports the development and production of a wide range of products including high-layer-count MLPCBs, high-build-up HDIs and other innovative products, with a focus on high-performance PCBs used in AI computing hardware, such as AI accelerator cards, AI servers, high-speed switches and optical modules. We have also invested heavily in establishing multiple production lines in Thailand and Vietnam for the manufacturing of high-layer-count MLPCBs and high-build-up HDIs to meet the needs of our global customers and to increase our global delivery ability. Our strategic acquisitions have accelerated our advancement toward a leading position in global PCB market and enabled us to rapidly expand our overseas production capacity. In 2023, we acquired PSL, which owns MFSS, a globally recognized FPC manufacturer. The acquisition not only expanded our product portfolio to include a full range of both RPCBs (including MLPCBs and HDIs) and FPCs, but also broadened our customer base to companies in sectors such as automotive electronics (including automotive sensors and display modules), industrial control and high-end medical devices. Headquartered in Singapore, MFSS has established production lines and stable supply chains in Malaysia and Changsha and Yiyang in Hunan Province, China, which enhanced our ability to serve global customers with advanced FPC products. In 2024, we acquired APCB in Thailand, expanding our PCB production capacity in Southeast Asia with its established production lines, business, and experienced teams. We also introduced HDI production capabilities to its production centers, allowing us to better meet the needs of our overseas customers and strengthen our global delivery network. Our Financial Performance Our revenue and net profit have grown significantly since 2023. In 2023, 2024 and 2025, our revenue was RMB7,931.2 million, RMB10,731.5 million and RMB19,292.3 million, respectively. Our net profit for the same period was RMB671.3 million, RMB1,154.4 million and RMB4,312.0 million, respectively. Our Growth Opportunities The global PCB market is experiencing structural growth. The transformation of sectors such as AI and high-performance computing, smart devices, automotive electronics and telecommunications has significantly increased the demand for high-performance PCB products, including high-layer-count MLPCBs and HDIs. This shift is generating substantial value growth across the industry. AI and High-performance Computing The growing demand for AI computing power, along with ongoing upgrades to data center servers and switches, is driving the growth in demand for high-layer-count MLPCBs and high-build-up HDIs. According to Frost & Sullivan, the global PCB market for AI and high-performance computing was US$6.0 billion in 2024 and is projected to grow at a CAGR of 20.1% to reach US$15.0 billion by 2029. Within this market, the high-layer-count MLPCBs (with 14 layers and above) segment size was US$1.5 billion in 2024 and is projected to grow at a CAGR of 21.8% to reach US$4.1 billion by 2029; the high-build-up HDI segment size was US$1.3 billion in 2024 and is projected to grow at a CAGR of 20.3% to reach US$3.2 billion by 2029. BUSINESS – 119 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 129 of 431 -- PCBs for AI computing typically have long design cycles and complex designs, which require manufacturers to have extensive technical expertise. We have built a distinct competitive edge in this field, supported by state-of-the-art equipment, advanced production technologies, high- performance products and a track record of reliable large-scale delivery. We believe these strengths will allow us to further expand our share in this rapidly growing market. Smart Devices The evolving technical demands of next-generation smart devices underpin the growing market demand for PCBs that achieve miniaturization, lightweight design, and high performance. According to Frost & Sullivan, the global PCB market for smart devices was US$16.1 billion in 2024 and is projected to grow at a CAGR of 5.4% to reach US$20.9 billion by 2029. Within this market, the high-layer-count MLPCBs (with 14 layers and above) segment size was US$1.7 billion in 2024 and is projected to grow at a CAGR of 5.0% to reach US$2.1 billion by 2029; the high-build-up HDI segment size was approximately US$2.9 billion in 2024 and is projected to grow at a CAGR of 5.8% to reach US$3.9 billion by 2029. Our HDIs are designed to meet the high-density integration requirements of smart devices, while our FPCs support innovative features such as foldable screens and AR micro-modules. We believe our strategic foothold in the PCB market for smart devices positions us well to capture long-term growth opportunities in this market. Automotive Electronics The proliferation of automotive electronics and intelligent driving systems, particularly those used on EVs, is boosting the demand for high-performance PCBs. According to Frost & Sullivan, the global automotive electronics PCB market was US$9.4 billion in 2024 and is projected to grow at a CAGR of 3.4% to reach US$11.1 billion by 2029. Within this market, the high-layer-count MLPCBs (with 14 layers and above) segment size was US$0.8 billion in 2024 and is projected to grow at a CAGR of 8.1% to reach US$1.2 billion by 2029; the high-build-up HDI segment size was US$0.6 billion in 2024 and is projected to grow at a CAGR of 8.6% to reach US$0.9 billion by 2029. Our automotive-grade PCB manufacturing process delivers products that meet the stringent heat resistance and reliability standards required for EVs. Our FPCs, with advantages in lightweight design, integration and reliability, are widely used in BMS, cockpit display drivers and vehicle body sensor systems. Our comprehensive automotive PCB portfolio and advanced technological capabilities give us a strong edge to expand our share in this rapidly expanding market. Telecommunications The increased use of advanced materials and complex multilayer structures in telecommunications equipment for 5G and optical communication is driving PCBs toward greater compactness and higher circuit density. According to Frost & Sullivan, the global telecommunications PCB market was US$9.5 billion in 2024 and is projected to grow at a CAGR of 4.4% to reach US$11.8 billion by 2029. Within this market, the high-layer-count MLPCBs (14 layers and above) segment size was US$1.1 billion in 2024 and is projected to grow at a CAGR of 9.6% to reach US$1.7 billion by 2029; the high-build-up segment size was US$0.7 billion in 2024 and is projected to grow at a CAGR of 8.1% to reach US$1.0 billion by 2029. We are able to manufacture high-layer-count MLPCBs with more than 100 layers and 30-layer HDI with a 10+10+10 build-up, supporting next-generation communication protocols, such as PCIe 6.0 and 224Gbps. These capabilities allow us to fulfill the high-speed, high-frequency transmission requirements of advanced communication equipment. With our leading high-speed interconnect PCB technology, we are poised to reinforce our position in the telecommunications market. BUSINESS – 120 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 130 of 431 -- OUR COMPETITIVE STRENGTHS Strategy Foresight: Fast and sustainable growth driven by strategic initiatives and innovation efforts We are one of the key players in advanced PCB products for AI and high-performance computing in terms of sales revenue in 2024 and the first half of 2025. According to Frost & Sullivan, we ranked first globally in sales revenue for AI and high-performance computing PCBs, high-build-up HDIs and high-layer-count MLPCBs with 14 layers or more, based on our revenue in the first half of 2025. Our management team has demonstrated a clear strategic vision and a strong grasp of evolving industry trends. Accordingly, we have built a forward-looking business guided by our “three core strategies”, namely smart manufacturing, green manufacturing, and excellence in technology, quality and service, as well as “four pillars of innovation”, namely the innovation in mindset, technology, talent and capital investment. These strategic strengths have supported our rapid growth, enabling us to achieve a CAGR of over 25% since our listing on the ChiNext Board of the Shenzhen Stock Exchange in 2015, with our revenue exceeding RMB10 billion in 2024. In recent years, we have focused on critical areas of AI computing, such as GPUs and CPUs, launching R&D initiatives two to three years ahead of market demand. We prioritize breakthroughs in high-growth sectors such as AI computing, AI servers, intelligent driving systems and humanoid robots, while actively advancing the application of next-generation materials and technologies to maintain our technological leadership and strengthen our core competitiveness. Leading Technologies: Technological Edge Driven by Strategic Foresight and R&D As a key player in the PCB industry with strong technological capabilities, we are committed to technology-driven marketing and producing high-quality products. Our innovation system encompasses technology R&D, process optimization and mass production, and we have been focusing on the core technology roadmap of PCBs that support AI computing, particularly GPUs and CPUs. Through early-stage planning and targeted R&D in process technology, manufacturing techniques and advanced materials, we have achieved a series of notable breakthroughs: (i) High-build-up HDIs: We were one of the first companies in the world to commercialize 24-layer HDIs with a 6+12+6 build-up and have initiated R&D for 36-layer HDIs with a 14+8+14 build-up with the line width/spacing of 40/40 μm. We progressed from mass production of HDIs with a 6+N+6 build-up to R&D validation of a 10+N+10 build-up in only 18 months, which is faster than the industry’s typical iteration cycle of 24 to 36 months, according to Frost & Sullivan. Our 28-layer HDIs with an 8+12+8 build-up provides two to three times the wiring density of traditional PCBs, supporting ultra-high-density interconnection, high-speed signal transmission and high integration for cutting-edge AI chips. We are actively advancing R&D for 36-layer HDIs with a 14+8+14 build-up, pushing the limits of line width, via size, and high-precision back drilling; (ii) High-layer-count MLPCBs: We have mass production capabilities for high-layer-count MLPCBs with more than 70 layers and have technical capabilities for MLPCBs with more than 100 layers primarily used in AI servers and high-end switches. Our 15.0-mm thick-board technology achieves an aspect ratio of 40:1 and can accommodate ultra-large chip packaging. We are also developing 14.5 mm ultra-thick boards. Our high-precision back drilling technology has reached an accuracy of 4±2 mil in mass production, significantly reducing signal loss. In addition, we are actively developing 0-stub processes to meet the requirements of next-generation ultra-high-speed signal transmission; (iii) FPCs: We specialize in miniaturized FPCs and are capable of manufacturing products with widths under 2mm and fine trace dimensions of 50μm/50μm. MFSS initiated and is capable of producing 2-meter-long FPC with roll-to-roll processes for medical catheter applications; and (iv) Materials Supporting High-frequency, High-speed Transmission: We have completed the electrical and thermal validation for the use of M8- and M9-grade materials in our products, and we are working toward certification of materials above M9-grade. These advanced BUSINESS – 121 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 131 of 431 -- materials deliver significantly improved dielectric properties and lower signal loss. They support ultra-high-speed transmission of up to 224 Gbps, satisfying the performance requirements of next-generation AI servers and switches. Our core patented technologies focus on the most advanced areas of the PCB industry, with strong technical barriers in product design, key production processes and quality control for high-layer-count MLPCBs, HDIs and FPCs. As of December 31, 2025, we held 381 registered patents, including 194 invention patents, in China and overseas. We have received the China Excellent Patent Award for four consecutive years. Recognized Quality: Ensuring Excellence Through End-to-End Control and Process Innovation Our comprehensive and sophisticated quality management system covers the entire production process, including product design, raw material procurement, precision manufacturing control and final inspection. We have obtained certifications in process, safety and compliance standards from various international organization, including ISO9001, QC080000, IATF16949, UL2799 and ISO27001, supporting compliant manufacturing in high-end sectors such as AI, automotive, telecommunications and medical devices. Our laboratories are designed to meet RLI standards and are accredited under the CNAS national certification scheme. This provides a strong foundation for product quality, offering outstanding accuracy, reliability and credibility in testing. At the same time, we continue to improve our production processes and implement strict end-to-end quality control. To address bottlenecks in key manufacturing stages, we have focused on advancing our blind via capabilities for high-build-up HDIs, improving copper debris suppression techniques and reducing conductive residue content. We have introduced wet-process systems in the plating stage to further stabilize process performance. Additionally, we have invested in advanced equipment, such as PLB flash plating systems and insoluble anode technology for critical process steps, significantly improving the uniformity and consistency of copper thickness. We are also committed to developing an AI-driven smart manufacturing system to enhance automation and inspection capabilities. We have deployed AI-powered detection systems across key stages of PCB production, working in tandem with high-precision sensors to monitor critical parameters in real time. This enables automated decision-making during production, real-time defect detection and statistical analysis, significantly reducing false positives and advancing our goal of zero-defect manufacturing. Through continuous process innovation and technical upgrades, we are able to achieve higher yield rates for our high-end products than industry averages. Our exceptional product reliability allows us to consistently meet the stringent technical and quality standards of leading global technology customers, thereby reinforcing our strong competitive advantage in product quality. Production Capacity and Planning: Adaptable and Scalable Production Capabilities with Global Reach AI computing PCBs are significantly more complex and the processing requirements for which are higher than traditional PCBs. There are strict requirements on material performance, processing precision and interlayer alignment. These elevated technical standards have raised the bar for equipment performance, rendering conventional equipment inadequate for the quality and precision requirements of AI computing PCBs. To address these challenges, we have equipped our production lines with a full suite of advanced systems tailored for AI computing PCB manufacturing. Our smart manufacturing lines offer advanced process capabilities and scale advantages. We have maintained a strong lead in AI computing PCB manufacturing by deploying advanced equipment and cultivating long-term relationships with leading global equipment suppliers, which amplifies our production capabilities and reinforces our competitive strength in manufacturing and production capacity. BUSINESS – 122 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 132 of 431 -- We operate five major R&D and production centers in China and overseas, giving us a competitive edge in global delivery and service capabilities. Our production centers in China are located in Guangdong and Hunan provinces. Each center specializes in specific product categories and is supported by a centralized production system. This structure allows for both flexible production scheduling and rapid response to customer orders, resulting in high operational efficiency and strong coordination across the centers. As our collaborations with leading global technology companies continue to expand, we are accelerating the construction of overseas production centers in Southeast Asia, including Thailand and Vietnam. This strategic initiative aims to build a more agile delivery and support network for our global customers, focusing on meeting the overseas delivery demands for our top customers. Our forward-looking investments in advanced manufacturing equipment and capacity planning have given us a significant production advantage for our high-end products. Our five major production centers have an annual production capacity including 600,000 square meters for HDIs with a build-up of 6+N+6 or above and 5,160,000 square meters for high-layer-count MLPCBs with more than 14 layers up to the Latest Practicable Date. This makes us one of the world’s largest production networks for high-build-up HDIs and high-layer-count MLPCBs, according to Frost & Sullivan. As a result, we are well positioned to carry out large-scale mass production across a diverse product range, supported by our strong technical reserves and capacity planning, laying a strong foundation for deeper collaborations with our customers. Strategic Customer Base: Strategic Long-Term Collaboration with Global Tech Leaders We have established a brand reputation that is widely recognized for our specialized production technology, high-performance products and proven delivery capabilities. We have built long-term, stable relationships with major established players in multiple industries, including global AI technology solution providers, large cloud service providers, data center equipment OEMs, server manufacturers, top-tier EV companies, automotive electronics suppliers, prominent smart device brands and major medical device manufacturers. In particular, we are a key supplier to a leading AI computing infrastructure company, Customer E. Our products are extensively used for its AI accelerator cards, AI servers and high-end graphics cards. We also collaborate closely with leading EV and clean energy companies in in-vehicle HDIs and MLPCBs, supplying products for BMS, MCU and intelligent driving modules. We also have long-standing collaborations with top smart device brands and produce customized ultra-thin HDI and FPC products designed to meet the requirements of smart devices, including high integration, compact size, and strong computing performance. Drawing on our extensive knowledge of AI computing, we collaborate with our customers to develop customized, high-performance PCB products. These efforts ensure stable, efficient and high-quality delivery, enabling our customers to build reliable, high-performance AI computing products, which enhances product performance and strengthens our market competitiveness, fostering long-term relationships with our customers. Smart Factory: AI-powered Smart Factory and Advanced Manufacturing Processes We were among the first in China to build a next-generation smart factory powered by IIoT, and among the earliest in the PCB industry to develop and scale automation and smart manufacturing systems. Compared to traditional production facilities, our smart factory shortens lead time by three to five days, reduces manpower needs by approximately 50% and increases production capacity by approximately 40%. Our smart manufacturing system is built around end-to-end automation, full-process traceability, and AI-assisted decision-making, all tailored to the specific needs of our products and production processes. Key features include (i) the seamless integration of diverse manufacturing equipment, which enables automated data collection, real-time monitoring, and intelligent fault detection for full visibility; (ii) process optimization through a digital operations system for real-time process visibility and an automated material control system to ensure seamless material flow; (iii) smart scheduling, where an automated system allocates production capacity and provides BUSINESS – 123 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 133 of 431 -- real-time tracking; (iv) comprehensive risk control via real-time quality monitoring and a smart warehousing system that ensures precise inventory tracking and minimizes handling errors; and (v) quality enhancement by using AI-integrated inspection systems to automate the quality control process, significantly reducing the need for manual oversight. Such customer-oriented smart manufacturing system integrates flexible, automated production lines, data-driven decision-making, and intelligent warehousing, enabling real-time response to order fluctuations and customization needs while ensuring timely global delivery. Management and Culture: Visionary Founder and Experienced Management Team Our founder and Chairman, Mr. Chen Tao, is widely recognized as an expert and leader in the PCB industry. With his strong technical expertise, sharp industry insight, and decisive strategic leadership, Mr. Chen guided us to grow on the tide of the PCB industry’s shift to the Asia-Pacific region, while consistently staying ahead of the evolving needs of customers. Under his leadership, we were among the first Chinese PCB manufacturers to establish one of the first smart PCB factories in 2015, with a strategic focus on high-growth sectors such as servers and automotive electronics. In 2017, Mr. Chen set our strategic roadmap around key PCB technologies to support AI computing, including those related to GPUs and CPUs. This vision has driven breakthrough developments in advanced HDIs technologies and laid a strong foundation for our leadership in AI computing. Since 2022, Mr. Chen has led us to achieve several notable milestones, including achieving the mass production capability of high-layer-count MLPCBs with 70 layers and the successful development of 30-layer HDIs with a 10+10+10 build-up. He led our internationalization strategy by accelerating global expansion, deepening collaboration with leading global customers and reinforcing our competitive position across the industry value chain. Under Mr. Chen’s leadership, we have built a senior management team with strong technical expertise, extensive industry experience, and a global perspective. The team includes more than 50 technical and management professionals from around the world. Our Vice President and Chief Technology Officer, Mr. Victor J. Taveras, has held senior positions at several leading global PCB companies and is widely recognized as an expert in high-frequency, high-speed materials and high-layer-count MLPCBs manufacturing. Under his leadership, we have achieved breakthroughs in core next-generation technologies, including 36-layer HDIs with a 14+8+14 build-up. We prioritize talent development and have built a system to attract and cultivate technical and managerial talent worldwide, with a focus on areas such as AI computing and new energy vehicles. As part of our global expansion, we have strengthened synergy with MFSS and APCB and aligned our technical standards and management approaches. We promote a results-driven culture and operate a performance- and data-driven management system to support sustainable growth. With the strategic leadership of our Chairman and the strong technical support of our R&D team led by our Chief Technology Officer, we believe we are well-positioned to remain at the forefront of industry developments, achieve our strategic goals, and execute effectively to create sustainable, long-term shareholder value. OUR GROWTH STRATEGIES As we accelerate our business growth, we remain committed to our three core strategies and four pillars of innovation. As AI is expected to transform industries and unlock transformative applications across different sectors, we are committed to embracing the AI era by seizing emerging opportunities, driving technological innovation and reinforcing our leadership in the PCB sector. Therefore, we intend to pursue the following strategic initiatives: Strengthening Market Leadership in AI and High-performance Computing PCB As we embrace the AI era, we are committed to driving innovation and reinforcing our leadership in PCBs for AI applications. To achieve this, we plan to (i) sustain our leadership in AI applications by upgrading our core products for better performance and investing in advanced R&D for complex products, such as high-layer-count MLPCBs and high-density interconnects, leveraging our first-mover advantages in smart manufacturing and mass production of ultra-complex boards; (ii) deepen collaboration with leading global technology companies on product development, stay BUSINESS – 124 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 134 of 431 -- ahead of market trends and enhance customer relationships; (iii) continue prioritizing innovation with increased R&D investment focused on advanced products; and (iv) expand our production capacity in China and Southeast Asia by investing in advanced equipment to improve our global delivery capabilities, strengthen supply chain resilience, and capture more high-end market opportunities. Expanding Our Product Portfolio and Targeting Emerging Sectors We are committed to expanding our portfolio of high-value PCB products and developing products for emerging sectors. To achieve this, we plan to (i) develop a more comprehensive lineup of high-value, differentiated PCB products, such as those utilizing mSAP processes and ultra-high- layer-counts for AI computing; (ii) strategically enter emerging sectors by collaborating with customers on next-generation technologies for humanoid robots, advanced intelligent driving, and low-altitude economy applications to secure first-mover advantages; and (iii) build a more diversified and high-value customer base by leveraging existing relationships to increase our market share across new industries and use cases. Advancing Our Global Management Model We plan to strengthen our global operations by leveraging the capabilities of our headquarters to support production centers worldwide, enhance management coordination and establish a global management structure that improves operational efficiency and customer service across our production and service network. To achieve this, we intend to (i) improve our global management structure by centralizing operations at our Huizhou headquarters to enhance data-driven decision- making and coordination; (ii) integrate AI across the entire production and service chain to optimize resource allocation and improve operational responsiveness; (iii) enhance our global production capacity and supply chain resilience by upgrading overseas production centers to smart manufacturing models, improving delivery and localized services; and (iv) standardize our global customer service with unified processes to ensure consistent, high-quality support and increase customer satisfaction. Continue Promoting Employee Well-Being through People First Philosophy and Team Integration We remain steadfast in our commitment to a people-centered management philosophy, continuously improving our infrastructure and benefits to enhance employee happiness and foster a sense of belonging. Our goal is to create a development framework where we grow and prosper together with our employees. To achieve this, we focus on several key initiatives: (i) creating premium work and living spaces by providing exceptional offices, apartment-style dormitories, and sports facilities to foster a comfortable and healthy lifestyle; (ii) offering comprehensive living support to meet our employees’ diverse needs; (iii) planning for long-term development by expanding our recruitment, training, and recreational facilities to support team growth; and (iv) promoting cultural integration across our global workforce to strengthen collaboration and team cohesion. OUR EVOLUTION We began researching, developing and manufacturing PCBs approximately 20 years ago. With a solid commitment to R&D, we have developed advanced production techniques and established ourselves early on as a reliable supplier of PCB solutions for smart devices, automotive electronics, telecommunications and medical devices for major domestic and international brands. Building on this strong foundation, we have pursued a strategic roadmap centered on advancing AI and high-performance computing since 2017, studying the evolution of GPUs and CPUs and implementing strategic initiatives to capture opportunities in emerging applications such as AI, intelligent driving and next-generation telecommunications and servers. These efforts have come to BUSINESS – 125 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 135 of 431 -- fruition, delivering substantial revenue growth in high-performance MLPCBs and HDIs since late 2024. Our expertise in high-layer-count MLPCBs and high build-up HDIs has made us a supplier to major technology companies worldwide. The rise of AI and high-performance computing in recent years has created a substantial demand for PCBs supporting high-speed, low-latency data transmission. In response, we have developed specialized high-density, high-frequency PCBs tailored for AI servers, data center switches and optical transceiver to meet these needs. At the same time, we have continued to offer a broad range of products for the smart devices, automotive electronics and telecommunication sectors, collaborating with leading customers globally to supply PCBs tailored to their needs. Our technology has helped address the complex challenges of high-demand applications advancements in AI, intelligent driving and next-generation communication technologies. In 2023, we expanded further by acquiring PSL, which owns MFSS, a Singapore-based PCB manufacturer, strengthening our capabilities in FPCs and positioning us to better serve high-growth sectors such as automotive electronics, industrial controls and medical devices. In 2024, we acquired APCB, whose manufacturing facility in Thailand further expands our production capacity, expanding our PCB production capacity in Southeast Asia with its established production lines, business, and experienced teams in Southeast Asia. Together with our facilities in Chinese mainland, we now operate a global manufacturing network designed to meet a broad range of customer delivery needs. OUR PRODUCTS We offer a comprehensive range of PCB products, focusing on customized solutions to deliver end-to-end products and high value-added services to our customers. We offer single- and double-layer PCBs, MLPCBs and HDIs, as well as various types of FPCs, such as Rigid-Flexes. With the rapid development of AI, we have continued to invest in and achieve breakthroughs related to AI and high-performance computing and AI servers. Our products are increasingly used in AI accelerator cards, servers and advanced computing infrastructure, which have stringent requirements for transmission speed, signal integrity, thermal performance and reliability. Application Areas Application Scenarios Core Products Key Features AI and High- Performance Computing! ! ! ! ! ! Primarily used in AI servers, graphics cards, intelligent computing centers, AI accelerator cards, supercomputing centers, AI cloud platforms and switches (i) MLPCBs with 18 to 78 layers (ii) HDIs with a build-up from 4+N+4 to 10+N+10 and 20 to 30 layers (i) MLPCBs with board thickness of 2.5-15.0 mm and maximum aspect ratio of 40:1 (ii) HDIs with board thickness of up to 4.5 mm Smart Devices ! ! ! ! ! Primarily used in AI computers and tablets, household appliances, audio-visual and gaming devices, smart home equipment, wearables and AR/VR devices (i) Any-layer HDIs (ii) FPC A minimum laser via diameter of 75 μm, pad size of D+100 μm, aspect ratio of 1.1:1, line width and spacing of 40/40 μm, optical alignment accuracy of ±50 μm, and a Cpk greater than 1.33. BUSINESS – 126 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 136 of 431 -- Application Areas Application Scenarios Core Products Key Features Automotive Electronics ! ! ! ! ! Primarily used in main control units, inverters, battery management systems and power converters, with broad applications in intelligent driving, EVs, and battery, motor, and electric control. (i) HDIs with a build-up from 1+N+1 to 4+N+4 and 6 to 20 layers (ii) FPC: Rigid-Flex with 4 to 6 layers (iii) MLPCB (i) Meeting automotive camera BGA flatness requirement of !50 μm (ii) Designed to deliver high reliability, enhanced heat dissipation, high voltage resistance and durability in harsh environments Telecommunications ! Primarily used in macro-, micro- and pico-base stations and millimeter- wave antennas in enterprise, household, commercial, and outdoor telecommunication (i) MLPCBs with 4 to 24 layers (ii) HDIs with a build-up from 1+N+1 to 8+N+8 and 12 to 20 layers (i) MLPCBs using embedded copper block technology, with board thickness of 2.0-4.0 mm and patterning accuracy of +/-30 μm (ii) HDIs with any-layer HDI technology applied in millimeter-wave antennas Medical Devices and Other Applications ! Primarily used in continuous glucose monitors, industrial sensors, LED displays, lighting, direct- view displays, with broad applications in industrial automation, intelligent manufacturing, video conference solutions, dynamic display screens and cinemas (i) HDIs with a build-up from 1+N+1 to 3+N+3 (ii) MLPCBs with 4 to 12 layers (iii) FPC: Rigid-Flex with 4 to 6 layers (i) The MLPCBs maintain board warpage below 0.5%, along with strict control over ink color consistency across production batches. (ii) Designed to meet rigorous requirements for technical precision, product stability, durability and safety As a result of our continuous efforts in the field of high-layer-count MLPCBs and high build-up HDIs, our PCBs for AI and high-performance computing have become our largest source of revenue in the year ended December 31, 2025. The following table sets forth our revenue breakdown by the applications of our PCB products for the periods indicated. Application Year Ended December 31, 2023 2024 2025 RMB % RMB % RMB % (in RMB thousands, except for percentages) AI and High-Performance Computing ! ! ! ! ! ! ! ! ! ! ! ! 461,104 5.8 706,522 6.6 8,341,256 43.2 Smart Devices ! ! ! ! ! ! ! ! ! ! ! 3,761,890 47.4 3,632,648 33.9 3,684,429 19.1 Automotive Electronics ! ! ! ! ! 848,314 10.8 2,199,366 20.5 2,591,542 13.4 Telecommunications ! ! ! ! ! ! ! 1,106,202 13.9 1,550,297 14.4 1,916,570 9.9 Medical Devices and Other Applications(1) ! ! ! ! ! ! ! ! ! 1,281,071 16.2 1,961,929 18.3 1,549,892 8.1 Total PCB products(2) ! ! ! ! ! 7,458,581 94.1 10,050,762 93.7 18,083,689 93.7 BUSINESS – 127 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 137 of 431 -- Notes: (1) Other applications primarily include products used in power and battery systems, industrial control, avionics, smart security, LCDs, LEDs, memory modules, SSDs and related applications. (2) In addition to generating revenue from the sale of PCB products, we also generated revenues from the sales of scrap materials, primarily copper-bearing etching solutions, which accounted for the majority of our other revenue. Others represented 5.9%, 6.3% and 6.3% of our revenue in 2023, 2024 and 2025, respectively. The revenue of other products was primarily derived from sales to customers in Chinese mainland (excluding special supervision territory). Our Product Portfolio For our revenue breakdown by PCB product category, changes in our sales volume and average selling price (“ASP”) and reasons related to their fluctuation, see “Financial Information — Principal Components of Results of Operations”. Single- and Double-layer PCB Single-layer PCB is the simplest type of PCB, consisting of one layer of conductive copper foil and one substrate. Single-layer PCB is ideal for applications requiring simple connections. Double-layer PCB contains two layers of conductive copper foil, separated by a substrate. The two layers of copper foil are electrically connected through vias. Double-layer PCB is widely used in devices that require more complex circuit designs. Our single- and double-layer PCBs are widely used in various electronics. Their cost- effectiveness, reliability and simplicity make them well-suited for electronic functions of moderate complexity. MLPCB MLPCB is a type of PCB with four or more conductive copper layers separated by insulating dielectric substrate material. Compared with single- or double-layer PCB, MLPCBs offer benefits including higher component density, better electrical performance, better reliability and greater layout flexibility. In particular, MLPCBs can support complex chips. MLPCBs are widely applied in high-performance computing, smart devices and automotive electronics, offering broad applicability across nearly all categories of electronic products. In AI computing, our MLPCBs use ultra-low-loss M8- or M9-grade materials, achieving transmission rates of 112 Gbps and 224 Gbps and routing density of 60/60 μm line width/spacing. These features are critical for meeting the requirements of high-speed, high-density signal transmission in key hardwares for AI computing, including AI servers, UBB, switches and optical transceivers. In automotive electronics, they enable reliable performance in systems such as intelligent driving controllers and battery-management units. Similarly, high-speed communication systems rely on MLPCBs to support advanced optical modules and telecom equipment, where compact integration and effective heat dissipation are crucial. We primarily focus on high layer-count MLPCBs with more than 8 layers. For the year ended December 31, 2025, MLPCBs with more than 8 layers accounted for approximately 52.1% of our total MLPCBs revenue, and those with more than 14 layers accounted for approximately 18.6%. Our capability to produce MLPCBs with more than 70 layers places us among the few suppliers able to deliver highly complex, high-reliability MLPCBs at scale and meet the most demanding requirements of the electronics industry. According to Frost & Sullivan, as of the Latest Practicable Date, the number of players globally that could produce MLPCBs with more than 70 layers is less than 10. HDI HDIs enable higher wiring density and component integration through the use of advanced via structures, such as blind and buried vias. This frees up more routing space, allows for more compact circuit layouts and improves signal performance. HDIs have a unique build up structure, with a core and multiple layers of building up on each side of the core. The HDI build up is typically expressed BUSINESS – 128 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 138 of 431 -- as 1+N+1, 2+N+2 and 3+N+3 and so on, with the N representing the layer-count of the core. With ongoing technological advancements, leading industry participants have extended HDI applications to PCBs used in AI systems. Compared to traditional PCBs, HDIs, which have more complex structures and high wiring density due to the build-up design, are particularly suited for AI applications due to their high-speed data transmission capability, compact design, enhanced reliability and durability. These features align with the requirements of AI accelerator cards and AI servers for high frequency, high speed and high stability, making them an ideal choice for components such as GPU accelerator modules, CPU motherboards, and high-speed network interface cards in AI servers. At the same time, HDIs are typically small in size and thus commonly used in applications where space and weight are critical, such as in advanced smart devices and medical devices. Our advanced HDI products are made of ultra-low-loss M8- or M9-grade materials, achieving transmission rates of 112 Gbps and 224 Gbps and routing density of 25/25 μm line width/spacing using the mSAP process. They are widely used in AI accelerators cards, AI servers and high-speed optical communication equipment, where their ultra-fine circuit patterns and high-speed interconnection are essential for supporting complex chip architecture, minimizing signal loss and enhancing system performance under demanding, high-frequency conditions. Currently, we are one of the few companies globally capable of mass-producing HDIs with a build-up of 6+N+6 or above. For the year ended December 31, 2025, HDIs with a build-up of 6+N+6 or above accounted for approximately 75.0% of our total HDIs revenue. While HDI and MLPCBs share many similarities, customers choose between them based on how product-specific requirements align with technical capabilities of such PCBs. Even within the same end product, different applications may call for either HDI or MLPCB, with HDI generally preferred where miniaturization, weight reduction and thin form factors are critical due to its high interconnect density and advanced via structures. MLPCBs are favored in applications that prioritize substantial current-carrying capacity, complex signal routing and robust thermal performance. In practice, the selection is ultimately determined by customers’ needs in terms of end products’ electrical, thermal, mechanical and cost requirements. FPC FPC is a type of PCB that uses a flexible substrate laminated with conductive copper foil to form circuit patterns. Unlike RPCBs, FPCs can be bent, folded, twisted or flexed repeatedly without breaking. This characteristic allows them to fit into tight or irregular spaces and move with the device during operation, offering greater design flexibility and weight reduction and making them suitable for compact devices or applications involving movement. Our FPC products primarily include single-layer FPC, double-layer FPC, MLFPC and Rigid-Flex, each designed to meet different levels of circuit complexity and mechanical performance. Our FPC solutions are increasingly adopted in applications such as medical devices, smart devices and automotive electronics. In next-generation medical devices, the flexibility and reliability of our FPCs enable advanced diagnostic and monitoring functions in increasingly miniaturized formats. In smart and wearable devices, our FPCs meet the trend toward slimmer and lighter products. In automotive electronics, they support complex wiring in compact spaces for systems such as battery management and assisted driving modules. RESEARCH AND DEVELOPMENT We continue to make significant investments in research and development to capture new market opportunities, bolster our product portfolio and maintain our position as a leading PCB provider. We believe this is critical in enabling us to deliver innovative and customized products, enhance the performance of our products and develop first-to-market technologies in a rapidly evolving and dynamic PCB industry. BUSINESS – 129 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 139 of 431 -- Product R&D Our products are highly customized. We typically engage with customers at the outset of their end-product cycle and work closely to design and develop customized PCBs in line with their specifications and the design of the end products in which our PCBs will be used. As a result, we are involved throughout the entire product life cycle, serving as a key partner from development through mass production. We begin by identifying the R&D demand and conducting market research to understand technical trends and customer expectations. We begin R&D two to three years before customer product launches, focusing on PCB architecture, material feasibility, front-end design, and verifying key performance indicators. Our engineers create design files and a prototype. We then collaborate with customer R&D teams to refine the product, ensuring it meets all technical and performance requirements. Then, the prototype undergoes detailed testing, and a full project summary is prepared. The evaluation team conducts a final review, and upon approval, the product design is formally released for production. Our smart factories and digital intelligent operation platform greatly enhance production efficiency while monitoring manufacturing data in real time. This approach shortens production lead times, reduce costs and ensures quality and timely fulfillment of customer orders. We pursue next-generation technology R&D and keep iterating solutions in close collaboration with our customers, advancing our technology to keep our products at the forefront of the industry. At the same time, we partner with leading universities and research institutions in China to leverage collective expertise and drive innovation. One of our representative accomplishments that has arisen from such collaborations is a new copper-plating process for aluminum substrates, granted by the Ministry of Science and Technology of China. By developing new formulations and techniques, it effectively addresses adhesion issues of copper plating on aluminum substrates, ensuring strong bonding and uniform coating thickness, improving the suitability for mass industrial production, simplifying manufacturing procedure and enhancing the environmental friendliness, and further improving our competitiveness in PCB manufacturing. Pursuant to the agreement that we enter into with the relevant university, all technical know-how and resulting deliverables arising from these collaborations are subject to strict confidentiality obligations, with ownership and usage rights set out under the relevant agreements. Specifically, we jointly own the intellectual property rights arising from our collaboration with the university and are contractually entitled to promote and apply them in our operation. These contractual terms, together with our relevant patent application, data encryption and access control, and general intellectual property protection measures in “— Intellectual Properties”, protect our rights to the collaboratively developed intellectual property rights. Production Process R&D In addition to product-oriented innovation, we also focus on advancing production process R&D. In particular, manufacturing HDIs with a build-up of 6+N+6 or above involves significant technical challenges, including managing highly complex stack-ups with multiple sequential lamination cycles, ensuring precise layer-to-layer alignment and controlling micron-scale laser- drilled microvias, stacked vias and via-in-pad structures. Each additional build-up cycle increases the risk of defects, making yield management and cost control critical. Furthermore, achieving stable signal integrity and impedance control is a precision engineering challenge with ultra-fine trace widths and tight clearances, compounded by thermal and moisture management issues that can affect board reliability and durability. To address these challenges, we have invested heavily in advanced lamination, drilling, plating and in-line inspection systems and material optimization, enabling us to become one of the very few companies globally capable of mass-producing 6+N+6 build-up or higher HDIs, with high yield and quality. These capabilities allow us to meet the demanding requirements of AI accelerator cards, AI servers and next-generation telecommunication infrastructure. BUSINESS – 130 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 140 of 431 -- Future R&D Focus Our future R&D efforts will focus on several strategic priorities: (i) developing advanced PCB technologies for AI computing, such as 36-layer HDIs and ultra high-layer-count MLPCBs, to meet the complex performance and reliability requirements of AI hardware; (ii) applying advanced materials like M9-grade to enhance electrical performance for high-speed applications; (iii) advancing product development to achieve mass production readiness for high-growth and emerging sectors, including robotics, autonomous driving, and low-altitude aviation; and (iv) enhancing production processes and quality control using technologies like mSAP and back drilling to meet the stringent reliability standards of the AI and next-generation electronics industries. R&D Team Our R&D department is organized into specialized teams to manage the full product lifecycle. The core R&D team and a central laboratory focus on developing new technologies and testing materials. To ensure targeted customer engagement, dedicated development teams manage projects for specific sectors, such as automotive and servers, and for key regions like Europe, North America, and Taiwan. A Project Management Department oversees project planning, coordination, and resource allocation from start to finish. Finally, our Intellectual Property Rights Department is responsible for protecting our innovations and managing funding applications, ensuring our technological advantages are secured. As of December 31, 2025, we had 1,751 experienced research and development personnel, representing 9.7% of our total employees. In 2023, 2024 and 2025, our research and development expenses amounted to RMB348.3 million, RMB449.8 million and RMB777.6 million. Our research and development expenses are not capitalized. SALES AND MARKETING Most of our products are highly bespoke, and therefore substantially all our sales were made directly to our customers during the Track Record Period. In limited circumstances, i.e., when the price of purchase orders proposed by trading companies are acceptable to us, certain purchase orders are placed through trading companies, as certain end customers may choose to engage trading companies to streamline supplier management, which is consistent with industry practice, according to Frost & Sullivan. During each period of the Track Record Period, revenue from such purchases accounted for less than 1.5% of our total revenue. We currently have 13 regional sales and customer service teams covering major markets including the PRC, United States, Japan, Europe and South Korea. In addition to maintaining and strengthening relationships with our existing customers, our sales team also proactively explores new opportunities with potential customers, especially as we expand our offering of products and services. Our Customers We have built long-term and stable partnerships with leading players across multiple industries, including globally leading AI technology solution providers, cloud service providers, internet companies, data center equipment OEMs, server brands, top-tier EV companies and automotive electronics suppliers and prominent smart device brands. These strong relationships provide a solid foundation for our future sales growth. In 2023, 2024 and 2025, sales to our five largest customers in each year during the Track Record Period amounted to RMB2,145.6 million, RMB2,690.5 million and RMB9,847.6 million, accounting for 27.1%, 25.1% and 51.0% of our total revenue. In the same periods, sales to our largest customer in each year during the Track Record Period amounted to RMB503.5 million, RMB886.4 million and RMB5,737.9 million, accounting for 6.3%, 8.3% and 29.7% of our total BUSINESS – 131 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 141 of 431 -- revenue in the respective period. During the Track Record Period, to the best knowledge of our Directors, none of our Directors, their associates or any of our current Shareholders (who, to the knowledge of our Directors, own more than 5% of our share capital) had any interest in our five largest customers in any period during the Track Record Period that are required to be disclosed under the Hong Kong Listing Rules. The tables below set forth certain information of our top five customers for each year during the Track Record Period. For the year ended December 31, 2025 For the year ended December 31, 2024 For the year ended December 31, 2023 Customer Sales amount % of revenue Customer Sales amount % of revenue Customer Sales amount % of revenue (in RMB millions) % (in RMB millions) % (in RMB millions) % Customer A(1) 5,737.9 29.7 Customer A(1) 886.4 8.3 Customer I(5) 503.5 6.3 Customer B(2) 2,030.3 10.5 Customer C(4) 614.2 5.7 Customer A(1) 452.4 5.7 Customer E(3) 747.1 3.9 Customer F(6) 439.4 4.1 Customer F(6) 445.6 5.6 Customer C(4) 686.5 3.6 Customer G(7) 417.9 3.9 Customer J(9) 440.5 5.6 Customer I(5) 645.8 3.3 Customer H(8) 332.6 3.1 Customer H(8) 303.6 3.8 Notes: (1) Customer A is one of the world’s largest original equipment manufacturers for electronics headquartered in Taiwan, with whom we commenced business relationship in 2012. Customer A is listed on the Taiwan Stock Exchange. (2) Customer B is a company engaged in the development and manufacturing of information and communications technology products headquartered in Taiwan, with whom we commenced business relationship in 2011. Customer B is listed on the Taiwan Stock Exchange. (3) Customer E is a global leading technology company focusing on accelerated computing and AI infrastructure headquartered in the United States, with whom we commenced business relationship in 2020. Customer E is listed on the NASDAQ Stock Market. (4) Customer C is a company engaged in the manufacturing and sales of display products and related materials, equipment and products headquartered in Guangdong Province, China, with whom we commenced business relationship in 2012. Customer C is listed on the Shenzhen Stock Exchange. (5) Customer I is an electronics manufacturing solutions provider offering integrated design, manufacturing and supply chain services headquartered in the United States, with whom we commenced business relationship in 2018. Customer I is listed on the New York Stock Exchange. (6) Customer F is a leading manufacturer of personal and industrial computers, servers and integrated cloud hardware and software solutions headquartered in Taiwan, with whom we commenced business relationship in 2018. Customer F is listed on the Taiwan Stock Exchange. (7) Customer G is a consumer electronics and smart manufacturing company focusing on smartphones, smart hardware and IoT platforms headquartered in Beijing, China, with whom we commenced business relationship in 2018. Customer G is listed on the Hong Kong Stock Exchange. (8) Customer H is a technology company engaged in the design, R&D and sales of computers, communication devices, and consumer electronics products headquartered in Taiwan, with whom we commenced business relationship in 2014. Customer H is listed on the Taiwan Stock Exchange. (9) Customer J is a company specialized in the development, design and manufacturing of computer peripheral devices, telecommunication devices and consumer electronics headquartered in Taiwan, with whom we commenced business relationship in 2014. Customer J is listed on the Taiwan Stock Exchange. During the Track Record Period, Customer C, one of our top customers in 2024 and 2025, was also one of our suppliers in 2024 and 2025. Customer C requires its suppliers, including us, to purchase certain raw materials and components used in products manufactured for it from Customer C itself in order to exert better control on the procurement process, lead times, the cost and quality of raw materials, and the timing of delivery. This is commonly referred to in the industry as the buy-and-sell model. We mostly sold our PCBs to Customer C, while our purchases from Customer C were structural parts. In 2024 and 2025, our purchase from Customer C amounted to RMB54.4 BUSINESS – 132 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 142 of 431 -- million and RMB61.9 million, accounting for 0.7% and 0.5%, respectively, of our total purchases. Our sales to and purchases from Customer C were conducted in the ordinary course of business and on commercial terms negotiated on an arm’s length basis. Arrangement with Our Customers We generally enter into framework agreements with our major customers, with actual price and volume specified in individual purchase orders separately. Agreement terms are generally as the following: Duration ! ! ! ! ! ! ! ! ! : One year to two years. These agreements are typically automatically renewed. Pricing ! ! ! ! ! ! ! ! ! ! : Specified in individual purchase orders. Transfer of risks ! ! ! : Risks are transferred to our customers when the products are accepted by them. Payment and credit terms ! ! ! ! ! ! ! ! ! ! : 30 days to 150 days after delivery of products. Minimum purchase requirements ! ! ! ! : None Logistics ! ! ! ! ! ! ! ! ! : We are responsible for delivering products to locations specified by our customers. Returns/exchanges! ! : Our customers are generally entitled to return or exchange products that do not meet their requirements in terms of quality or specifications. Confidentiality ! ! ! ! : We and our customers shall exercise reasonable care and take necessary measures to prevent any confidential information obtained under the framework agreement from being disclosed to any third party. Termination ! ! ! ! ! ! : Mutual agreement, and under certain circumstances such as force majeure, bankruptcy of a party, significant delivery delays or material quality defects. The principal terms of our typical purchase orders primarily include actual quantity and specifications of products to be purchased pursuant to such purchase orders, unit price and total purchase amount, delivery location and expected date, payment terms and method. Product Pricing Our products are customized to meet specific customer needs. We generally determine the price of our products based on the costs of developing and manufacturing such products, including raw material costs. We also consider various other factors when we set prices for our products, such as our relationship with the customer, the complexity of the product both in terms of design and manufacturing, the size of the order, our expected profit margin and competition in rendering our price, which is typically specified in purchase orders. BUSINESS – 133 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 143 of 431 -- Concentration of Our Customers In each year during the Track Record Period, we had more than 700 customers. During the Track Record Period, sales to certain of our top five customers were relatively concentrated. Specifically, Customer A, one of our top customers in each year during the Track Record Period, contributed 5.7%, 8.3%, and 29.7% of our revenue in 2023, 2024 and 2025. The increase in customer concentration during the Track Record Period was primarily attributable to the significant growth in orders from certain major customers, particularly in 2025, driven mainly by strong demand for our MLPCB and HDI products for AI and high-performance computing and other high-end applications. As demand for such products increased, revenue derived from certain key customers increased rapidly, resulting in a higher level of customer concentration. We believe that we do not unduly rely on our major customers because it primarily reflects a significant increase in orders placed in connection with our HDI products for AI and high performance computing in 2025. This was in line with the overall increase in customer orders during the period and consistent with our broader sales momentum across multiple product categories. We expect our customer concentration to remain at a relatively elevated level in the near term if demand for AI and high-performance computing and related infrastructure continues to grow, although it may fluctuate from period to period depending on customer demand, product mix and order patterns. SUPPLY CHAIN Raw Materials The raw materials of PCBs mainly include copper-clad laminates, copper foil and copper ball. We mainly source raw materials from the PRC. Our raw material prices fluctuate due to a variety of factors, including supply and demand dynamics, our ability to negotiate prices with suppliers and others. We usually work with multiple suppliers to reduce risks associated with product supply. During the Track Record Period, we did not experience any significant shortage of raw material supplies, and the raw materials provided by our suppliers did not have any significant quality issues. To mitigate the risk of supply disruptions and adverse raw material price movements, we continuously monitor market conditions and maintain regular communication with our major suppliers regarding supply availability and pricing trends. We may also adjust our procurement plans and product pricing in response to significant raw material price fluctuations. During the Track Record Period, we had not entered into any material hedging arrangements in relation to copper or other key raw materials. Our Suppliers Our suppliers are mainly suppliers of raw materials and equipment. We have established and maintain stable, long-term and sustainable relationships with these major suppliers. Selection and Management of Suppliers We have established rigorous processes for the selection, evaluation and management of our suppliers to ensure suppliers meet our quality and performance standards. We have adopted a multi-tiered supplier risk management framework to ensure the safety, reliability and sustainability of our supply chain. Pursuant to this framework, we consider a number of factors during our supplier selection and qualification process, including each supplier’s financial condition, industry reputation, technical certifications and the price and quality of the products or raw materials they offer, and we evaluate their compliance and ESG records. We assess each potential supplier’s BUSINESS – 134 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 144 of 431 -- qualifications and credentials carefully, and we also conduct on-site visits to potential suppliers’ business premises before we decide to engage the suppliers. Only those suppliers meeting our minimum compliance and performance standards are approved for onboarding. We regularly evaluate the performance of our suppliers, focusing on criteria such as operational performance, including delivery capability, price and quality of the products supplied, their compliance with our policies and requirements, and environmental impact and information security. We classify suppliers by risk level, with those considered at higher risk or supplying critical materials subject to more frequent and rigorous reviews. Suppliers failing to meet our standards are issued rectification notices or may be subject to suspension or removal from our approved vendor list. In cases of repeated underperformance, suppliers may be disqualified from future engagement. Arrangement with our Suppliers We enter into procurement framework agreements with certain of our suppliers, under which we place purchase orders specifying the price, quantity and specifications of raw materials. Agreement terms typically include the following: Duration ! ! ! ! ! ! ! ! ! : No fixed term. They are entered into at the commencement of the business relationship and remain in effect until it ends due to termination events. Pricing ! ! ! ! ! ! ! ! ! ! : Mutually decided at the time of each purchase order based on the prevailing market conditions. Payment and credit terms ! ! ! ! ! ! ! ! ! ! : We make payments to suppliers based on an agreed credit period, with account reconciliation conducted at the end of each month. Suppliers issue invoices based on statements confirmed by both parties, and payment is made in accordance with the agreed credit period after the invoices are verified in our system. Minimum purchase requirements ! ! ! ! : None. Returns/exchanges! ! : We can exchange or return the raw materials or components that do not meet our quality standards. Liability/warranty ! ! : Our suppliers are liable for any non-conforming products and must compensate us for related losses. Logistics ! ! ! ! ! ! ! ! ! : Our suppliers are responsible for delivering the raw materials or components to our warehouses or other designated locations. Termination ! ! ! ! ! ! : The agreement may be terminated by either party. However, if a supplier chooses to terminate the agreement, it is required to continue supplying raw materials or components until we secure an alternative supplier, failing which it will become liable for any losses we incur due to supply shortages. Major Suppliers In 2023, 2024 and 2025, purchases from our five largest suppliers in each year during the Track Record Period amounted to RMB1,975.3 million, RMB2,428.2 million and RMB5,658.0 million, accounting for 31.4%, 29.3% and 45.2% of our total purchases. In 2023, 2024 and 2025, purchases from our largest supplier in each year during the Track Record Period amounted to BUSINESS – 135 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 145 of 431 -- RMB731.9 million, RMB782.8 million and RMB1,873.0 million, accounting for 11.6 %, 9.4% and 15.0% of our total purchases. Except for Supplier H from whom we procure production equipment, all these are suppliers of our raw materials. During the Track Record Period, to the best knowledge of our Directors, none of our Directors, their associates or any of our current Shareholders (who, to the knowledge of our Directors, own more than 5% of our share capital) had any interest in our five largest suppliers in any period during the Track Record Period that are required to be disclosed under the Listing Rules. The tables below set forth certain information of our top five suppliers for each year during the Track Record Period. For the year ended December 31, 2025 For the year ended December 31, 2024 For the year ended December 31, 2023 Supplier Purchase amount % of purchases Supplier Purchase amount % of purchases Supplier Purchase amount % of purchases (in RMB millions) % (in RMB millions) % (in RMB millions) % Supplier A(1) 1,873.0 15.0 Supplier B(2) 782.8 9.4 Supplier B(2) 731.9 11.6 Supplier H(8) 1,267.9 10.1 Supplier E(5) 459.1 5.5 Supplier E(5) 461.2 7.3 Supplier B(2) 1,170.0 9.4 Supplier D(4) 407.8 4.9 Supplier D(4) 298.0 4.7 Supplier C(3) 692.6 5.5 Supplier A(1) 405.2 4.9 Supplier F(6) 264.3 4.2 Supplier D(4) 654.5 5.2 Supplier C(3) 373.3 4.5 Supplier G(7) 220.0 3.5 Notes: (1) Supplier A is a leading global electronic materials provider headquartered in South Korea, with whom we commenced business relationship in 2021. (2) Supplier B is a company focusing on the development of high-end copper-clad laminates headquartered in Guangdong Province, China. Supplier B is listed on the Shanghai Stock Exchange, with whom we commenced business relationship in 2015. (3) Supplier C is a company engaged in the development, production, sales and services of electronic circuit materials headquartered in Taiwan, with whom we commenced business relationship in 2015. Supplier C is listed on the Taiwan Stock Exchange. (4) Supplier D is a company engaged in the research, development production and sale of precious metal compounds, bonding wires and sputtering targets headquartered in Shandong Province, China, with whom we commenced business relationship in 2022. (5) Supplier E is a company focusing on grid investment, power transmission and distribution and energy services headquartered in Guangdong Province, China, with whom we commenced business relationship in 2008. (6) Supplier F is a company engaged in the research, development, production and sale of copper- based new materials headquartered in Jiangxi Province, China, with whom we commenced business relationship in 2019. Supplier F is listed on the Shanghai Stock Exchange. (7) Supplier G is a company engaged in the production of copper-clad laminates and electronic materials headquartered in Taiwan, with whom we commenced business relationship in 2015. Supplier G is listed on the Taiwan Stock Exchange. (8) Supplier H is a company engaged in the research, development and manufacturing of laser intelligent equipment headquartered in Guangdong Province, China, with whom we commenced business relationship in 2009. Supplier H is listed on the Shenzhen Stock Exchange. MANUFACTURING We manufacture our PCB products in our production centers in (i) Huizhou, Guangdong Province, PRC, (ii) Changsha, Hunan Province, PRC, (iii) Yiyang, Hunan Province, PRC, (iv) Phra Nakhon Si Ayutthaya, Thailand and (v) Melaka, Malaysia. We have integrated smart manufacturing into various aspects of our production, significantly improving our production efficiency and product yields. In 2015, we started to establish one of the first smart factories in the Chinese PCB BUSINESS – 136 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 146 of 431 -- industry in Huizhou, which features automated manufacturing, automated logistics, digitized management and intelligent decision making. These allow us to achieve satisfactory production yield, timely fulfillment of customer orders and production cost reduction. In addition, “Green Manufacturing” is one of our core strategies, whereby through technological innovation and strategic planning, we have proactively developed an industry-leading manufacturing system that emphasizes efficiency, cleanliness, low carbon emissions and circularity by implementing technologies for energy conservation and emission reduction. We are one of the first companies in the industry to obtain the “National Green Factory” certification by the MIIT and have been awarded “Clean Production Enterprise in Guangdong Province” and “Advanced Energy Conservation Organization in Guangdong Province”. Production Process Generally, the production of PCB products involves the following processes: (i) Material Preparation. Production begins by cutting core materials to size. This involves rigid copper-clad laminates for most PCBs, while FPCs use flexible substrates like polyimide. The initial circuit patterns are then transferred onto the inner layers and etched; (ii) Lamination and Layer Build-up. For multi-layer boards (MLPCB, HDI), inner layers are bonded together using heat and pressure. HDIs use a sequential “build-up” process, adding layers in cycles to create complex interconnections, while FPCs have protective coverlay films bonded to them; (iii) Via Creation and Plating. Vias are drilled to connect the layers. While standard PCBs use mechanical drilling, HDIs require laser drilling for high-density microvias. The via walls are then cleaned and plated with copper to create reliable electrical pathways between the board’s layers; (iv) Outer-Layer Imaging and Finishing. The outer circuit pattern is defined using photolithography and etched. A protective solder mask is applied to the board, followed by a surface finish to ensure solderability and prevent corrosion. Finally, identification marks are printed onto the surface; (v) Profiling, Testing, and Inspection. Boards are cut to their final shape — a process called profiling for rigid boards or punching for FPCs. Each unit undergoes electrical testing to detect any shorts or opens, followed by a final inspection to ensure product quality; and (vi) Packaging and Shipment. Following a successful final inspection, the finished PCBs are carefully packaged in protective materials and prepared for delivery to the customer. Production Centers We operate six production divisions for MLPCBs and one production division for HDIs. We believe that the design promotes clear division of responsibility while enables mutual support in peak order seasons. The majority of our PCB products were produced in the production center located in Huizhou. In addition, the setup also strengthens our capability to serve the diverse product need of different customers. The following table sets forth certain information regarding our production centers as of December 31, 2025. Production center Primary products Total gross floor area (m2) Huizhou, Guangdong, PRC ! ! ! ! ! Single- and double-layer PCB, MLPCBs and HDIs 351,104.0 Changsha, Hunan, PRC, ! ! ! ! ! ! ! MLPCBs and FPC 47,064.3 Yiyang, Hunan, PRC ! ! ! ! ! ! ! ! ! ! FPC 30,181.0 Phra Nakhon Si Ayutthaya, Thailand ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! MLPCBs 81,653.6 Melaka, Malaysia ! ! ! ! ! ! ! ! ! ! ! ! FPC 31,583.4 BUSINESS – 137 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 147 of 431 -- In addition, we are in the process of constructing new production centers to further enhance our capacity. As of the Latest Practicable Date, we are developing new facilities located in Bắc Ninh, Vietnam which is expected to commence operations in 2026. We are also constructing new facilities in Phra Nakhon Si Ayutthaya, Thailand. Part of these facilities was modified and brought into production in the second half of 2025. The remaining portion is scheduled to commence operations in the second half of 2026. Both facilities will primarily focus on the production of MLPCBs and HDIs. Upon full ramp-up, the new production facility in Bắc Ninh, Vietnam is expected to have an annual production capacity of 150 thousand square meters, and the new production facility in Phra Nakhon Si Ayutthaya, Thailand is expected to have an annual production capacity of 1,500 thousand square meters, which will be flexibly adjusted among different product types based on customer demand and product mix. The following table sets forth the production capacity and utilization rate for our main product categories for the periods indicated. Year Ended December 31, 2023 2024 2025 Capacity(1) Utilization(2) Output Capacity Utilization Output Capacity Utilization Output ’000 sq m % ’000 sq m ’000 sq m % ’000 sq m ’000 sq m % ’000 sq m Single- and double-layer PCB & MLPCBs(3) ! ! ! ! 8,255 88.4 7,298 8,652 90.4 7,822 8,603 81.6 7,017 HDI ! ! ! ! ! ! ! ! ! ! ! ! ! ! 710 71.5 508 930 69.6 647 564 97.7 552 FPC ! ! ! ! ! ! ! ! ! ! ! ! ! ! 54 59.7 32 660 73.0 482 655 79.6 521 Total ! ! ! ! ! ! ! ! ! ! ! ! ! 9,019 86.9 7,838 10,242 87.4 8,951 9,822 82.4 8,090 Notes: (1) We proactively adjust our production capacity periodically based on the orders we receive and our sales forecast. The manufacturing of higher layer-count MLPCBs involves longer production time and more production steps. As such, the capacity would be reduced if we forecast more higher layer-count MLPCBs will be produced in a given period. Similarly, the production of HDIs with higher build-up involves the repetition of certain steps, and the capacity would be reduced when we forecast a large volume of higher build-up HDIs. (2) Utilization rate is calculated by dividing the actual volume of units produced in the period by the production capacity of the period. (3) The production capacity and utilization rate of single- and double-layer PCB and MLPCBs are calculated on a combined basis as they share similar manufacturing processes. Production Planning We typically plan our production monthly based on the forecasted customer demand and the anticipated market trends. We continuously review our production plans and utilization rates and update our production plans at least on a weekly basis, or more frequently on a daily basis if required, pursuant to the utilization rate of our factories in the preceding week and the rolling forecasts of customer orders and expected utilization rates. We also strategically plan our production in advance to prepare for seasonal increases in customer orders. Equipment and Machinery Major equipment and machinery used in our production processes include (i) laser drilling machine, (ii) pressing machine, (iii) etching machine and (iv) other automated equipment. We typically purchase equipment such as mechanical drilling machines, laser drilling machines, LDI systems, Pin Lam presses, plasma surface treatment machines, CCD-guided back drilling machines, BUSINESS – 138 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 148 of 431 -- PLB horizontal electroplating lines, industrial CT scanning systems and through-hole filling lines from leading industry suppliers. We established lasting relationship with global leading equipment suppliers and work with them to ensure that the products they provide meet our requirements and quality standards. We regularly inspect and maintain the material equipment and machinery used in our production processes and replace worn consumable parts and components. Our major production equipment and machinery have an estimated average useful life of 10 years. Inventory Management Our inventories mainly include raw materials, work-in-progress and finished goods. Based on our forecasted orders, our inventory management department conducts a daily check and update of our inventory level and plans our procurement accordingly. We generally maintain raw material inventories based on lead times and production requirements, with inventory levels varying slightly by types of materials to support production activities. We also conduct inventory aging analysis periodically to reduce the risk of inventory obsolescence and employ our intelligent warehousing system to track and manage our inventory aging status. According to Frost & Sullivan, our inventory turnover days during the Track Record Period are in line with industry norm. Logistics Our products are usually stored in our own warehouses located in our production centers before they are delivered to our customers. We primarily use third-party logistics service providers for the delivery of finished goods from our production centers and warehouses to locations specified by our customers. We set strict standards for the transportation of our products that these third-party logistics service providers are required to follow, and we evaluate the third-party logistics service providers periodically on their performance and compliance with our requirements to ensure smooth delivery of products to customers. We usually enter into agreements with our logistics service providers on a biennial basis. Our logistics service providers bear the risks associated with the transportation of our products. Quality Control We believe that product quality is the cornerstone of our business operations and sustainable growth. We are committed to delivering products that meet the highest industry standards and exceed customer expectations. Our comprehensive quality control and quality assurance systems are integrated into every stage of our production process, ensuring consistent and reliable production and delivery of high-quality products. We have established an ISO 9001:2015-certified quality management system and an ISO 14001-certified environmental management system. For PCB products for automotive electronics, we comply with IATF 16949 standards. We conduct regular internal audits and management reviews of our quality control systems to promptly identify and address potential issues, ensuring continuous improvement and refinement of our quality control systems. To ensure product quality, we have a quality control department dedicated to implementing quality control measures throughout the entire production cycle, including raw material inspection, in-process quality control and final product inspection. Our quality control procedures and processes cover our entire production process to ensure that our product quality meets expectations, and we impose stringent requirements after each critical process, including on yield rate, which we closely monitor. WARRANTY AND AFTER SALES SERVICES We generally provide a two- to three-year warranty for our PCBs, which we believe is in line with prevailing industry practice. Our warranties cover the quality of products to ensure they meet the agreed specifications. We make provisions for warranties based on our best estimate of the expected claims under our sales agreements. We have devised a standard operation procedure for customer service. We collect and record customer feedback and complaints from different channels BUSINESS – 139 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 149 of 431 -- and make timely responses in order to achieve customer satisfaction. We accept returns of our products for defects. We have not received any requests for returns during the Track Record Period which individually or in aggregate had a material adverse effect on our business and financial condition. In addition, during the Track Record Period, we had not experienced any material product recall, liability claims or customer complaints that adversely impacted our reputation, business operations or financial condition. INTELLECTUAL PROPERTIES Our research and development efforts have produced 381 patents, including 194 invention patents, 226 registered trademarks, 21 copyrights and 42 domain names as of December 31, 2025. See “Appendix VI — Statutory and General Information — Further Information about the Business — Intellectual Property.” These intellectual properties cover our production processes as well as the design of our products. We rely on a combination of intellectual property protections laws and contractual arrangements, including confidentiality provisions, to establish and protect our proprietary technologies, know-how and other intellectual property rights. Our intellectual property rights department is primarily responsible for protecting our intellectual properties. We proactively manage and expand our intellectual property portfolio by establishing a systematic management framework and use confidentiality and non-compete agreements to protect our intellectual properties and trade secrets. During the Track Record Period, we did not experience any material infringement of our intellectual property rights. Neither our Group nor any of our intellectual properties was the subject of, or to the best of the Directors’ knowledge, is expected to be subject to, any disputes or litigation in relation to the infringement of any intellectual property rights during the Track Record Period. ENVIRONMENTAL, SOCIAL AND GOVERNANCE MATTERS We are committed to advancing ESG as part of our sustainable growth efforts. We have adopted a set of ESG policies aligned with applicable laws, regulations and standards. These policies outline our approaches to corporate governance, environmental management, social responsibility, labor protection and business integrity. ESG Governance Structure We have established a robust ESG management framework that assigns specific ESG responsibilities across different levels of our organization to strengthen ESG management and implementation. The ultimate responsibility for setting ESG strategies, objectives and managing related risks resides with our Board and senior management. Specifically, the Strategy and Investment Committee of the Board is responsible for overseeing ESG and sustainability-related strategies, goals and risks. It meets at least once annually to review major ESG issues, make decisions, approve the annual ESG report, and it provides recommendations on ESG practices to the Board. The ESG Committee, chaired by our Chairman and reporting to the Strategy and Investment Committee, is responsible for implementing, reviewing and evaluating the of ESG strategies, systems, work plans and risk management measures. At the management level, we have set up an ESG task force and sub-task forces, headed by management of various departments, to implement ESG work plans and monitor their effectiveness. The departments execute the ESG goals and report the implementation status on a monthly, quarterly, semi-annual, and annual basis. During the Track Record Period and up to Latest Practicable Date, we were not exposed to any material ESG-related risks or issues. BUSINESS – 140 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 150 of 431 -- ESG Risk Identification, Assessment and Response Summary We have established internal systems and procedures to systematically identify, assess and manage ESG-related risks and opportunities across our operations, guided by our established procedures. Based on this framework, we have identified certain material issues relevant to our operations and implemented targeted measures to address them. To address environmental challenges like extreme weather and policy changes, we reinforce our facilities and optimize energy use. Socially, we focus on employee well-being through workload management and wellness programs, while also analyzing customer feedback to ensure satisfaction. Our governance strategy includes enhancing collaboration with a formal ESG framework, applying strict supplier qualification processes, maintaining robust emergency response plans, and ensuring transparent communication with regulators. The Board is involved in the identification process and prioritization of material ESG issues primarily through the Strategy and Investment Committee’s annual meetings and the ESG task force and sub-task forces’ feedback. In addition, the Strategy and Investment Committee submits to the Board the material ESG issues to ensure supervision, and it conducts analysis and presents the issues for discussion and decision-making. The Strategy and Investment Committee also confirms the allocation of resources to ESG issues and formulate sustainable actions plans. Environmental Indicators and Management We integrate environmental management into our operations, corporate strategy, governance framework and risk management. During the Track Record Period, we were not subject to any material administrative penalties imposed by environmental authorities for violations of environmental laws, regulations or related requirements. Emissions We effectively manage exhaust gases, wastewater, and solid waste by investing in pollution prevention and focusing on source control. For air quality, we use environmentally friendly refrigerants while avoiding ozone-depleting substances. We reduce wastewater through multi-stage rinsing techniques and pre-treat it on-site before discharge. All solid waste is carefully classified and stored in secure, compliant facilities to prevent contamination, ensuring safe and responsible handling. Resource Consumption Our main resources consumed are electricity, natural gas and water. In alignment with our current business operations and industry practices, we have established a series of energy management goals to drive sustainable transformation, including increasing the proportion of clean energy consumption by 16% with renewable energy comprising 16% of total electricity consumption; requiring that all purchased manufacturing equipment meets at least Grade II energy efficiency standards; and promoting boiler waste heat recovery and the use of energy storage batteries. In March 2024, we obtained AWS International Water Stewardship Standard (Gold Level) certification. In September 2023, we were recognized as a Water-Saving Enterprise in Huizhou by Huizhou Municipal Bureau of Industry and Information Technology and Huizhou Municipal Water Resources Bureau. We also set a series of resource consumption targets in guiding our operations. For example, our annual energy intensity target for HDIs in 2025 is 38.78 kgce/m2 (kilograms of coal equivalent per square meter). In setting these targets, we considered our continued expansion in scale, technological advancements, the continued availability of renewable energy and environmentally friendly equipment and parts, and also assumed no material adverse events to the general economy BUSINESS – 141 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 151 of 431 -- and our operations. In 2023, 2024 and 2025, our annual energy intensity for HDIs is 40.22 kgce/m2, 39.50 kgce/m2 and 38.78 kgce/m2, respectively. In 2023, 2024 and 2025, our electricity consumption was 676.5 GWh, 842.1 GWh and 1,072.0 GWh, respectively, and our natural gas consumption was 9.8 million m3, 9.7 million m3 and 12.0 million m3, respectively. Carbon Management In July 2024, we officially established our science-based emission reduction targets under the SBTi framework, committing to reducing our Scope 1 and Scope 2 greenhouse gas emissions by 42% and Scope 3 emissions by 25% by 2030, using 2022 as the baseline year. As part of this commitment, we have set a target of annual 5% reduction in our total Scope 1 and Scope 2 emissions. In setting these targets, we considered our continued expansion in scale, technological advancements, the availability of environmentally friendly equipment and parts, and also assumed no material adverse events to the general economy and our operations. To achieve such goals, we have been installing solar PV systems, adopting energy-efficient equipment, implementing waste heat recovery, and conducting green procurement. We are committed to establishing and enhancing ESG-related policies across our operations. Following our acquisition of APCB in 2024, we have been in the process of gradually implementing our ESG policies within the acquired entity, and such implementation has not yet been fully completed. With the exception of APCB, the Group’s carbon emission from 2023 to 2025, measured in ktCO2e (thousand metric tons of carbon dioxide equivalent), are as follows: Classification 2023 2024 2025 Scope 1 ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 47.1 57.0 57.3 Scope 2 ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 540.2 661.4 665.7 Scope 3 ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 1,030.8 1,080.0 1,028.4 Identification of climate-related opportunities While managing both physical and transition risks, we also actively pursue sustainable growth opportunities by implementing our “Ten Zero-Carbon Strategies,” a framework that integrates climate action into our core business. We are establishing a green manufacturing system by adopting renewable energy, such as PV power, and using energy-saving equipment. Additionally, our products are increasingly used in low-carbon industries like AI servers and electric vehicles, and we continue to invest in R&D to develop high-performance, energy-efficient PCBs for these markets. Social Indicators and Management We are committed to corporate social responsibility by driving positive social impact through fair employment and high safety standards. We maintain a compliant and supportive employment system, ensuring legal working hours and competitive, performance-based compensation. Our approach includes comprehensive welfare programs, training, and accommodations for employees with disabilities. Occupational health and safety are paramount, managed through an ISO 45001 certified system that covers risk identification, emergency response, and regular third-party inspections. We equip all machinery with safety devices, provide personal protective equipment for high-risk roles, and conduct continuous safety training to protect our workforce. Owing to our efforts, during the Track Record Period, we were not subject to any material administrative penalties or non-compliance incidents in relation to labor and employment regulations. And we experienced no material accidents or fatal occupational accidents and were not subject to any material administrative penalties imposed by work safety authorities for violations of production safety laws or regulations. BUSINESS – 142 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 152 of 431 -- Community and Social Welfare Over the years, we have been committed to giving back to society through a range of philanthropic initiatives, regularly organizing volunteer activities and actively participating in community development efforts. In 2024, we donated RMB4.0 million, including RMB2.3 million used for the “Hundreds of Millions Project” to support rural development, RMB1.0 million to support cultural development infrastructure and activities and RMB0.7 million to support the renovation and upgrade of Huiyang District’s community service center. DATA PRIVACY AND CYBERSECURITY In recent years, data privacy and cybersecurity have emerged as critical governance priorities for companies worldwide. In particular, the PRC legislative and government authorities regularly introduce new cybersecurity, data security and privacy laws and regulations. Consequently, our practices regarding the collection, process and transfer of various types of data may come under increased administrative scrutiny. See “Risk Factors — Risk Relating to Our Business Operations — Our information systems may experience system failures, interruptions or security breaches” for further details. Due to our business needs, we collect and store business data, management data and transaction data generated during or in connection with our business operations, including data related to our business and transactions with our customers, suppliers and other relevant parties. We generally do not collect or process individual customers’ personal information since our customers are brand companies rather than individuals. In view of our operations, we prioritize data security and privacy protection, strictly adhering to the Network Security Law, Personal Information Protection Law, Data Security Law and ISO 27001 standards and undergo annual supervision and audits by third-party institutions. Our legal and information technology departments are responsible for developing and implementing our policies and procedures relating to cybersecurity and data security. Attributable to our sustained efforts, we have established a comprehensive data compliance system that consists of organizational structure and internal policies. In recognition of our data security protection efforts, our data security policies have been certified under ISO27001, and we have obtained Tier 3 cybersecurity classification under the TIASX framework. As a result of the aforementioned efforts, (i) As advised by our legal adviser as to PRC cybersecurity and data privacy protection laws, as of the Latest Practicable Date, we were in compliance with applicable PRC data privacy and cybersecurity laws and regulations in all material aspects. The types of data processed by the Group mainly include two categories: 1) personal information of employees, suppliers and customers contacts and visitors, without any end-user’s personal information; 2) data related to product R&D, production and sales. As of the Latest Practicable Date, as advised by our legal adviser as to PRC cybersecurity and data privacy protection laws, no law or regulation with a clear important data catalog has been issued for the industry in which the Group operates, and as confirmed by the Group, the competent authorities have not notified the Group to declare any important data or informed the Group that any data processed by it constitutes important data as of the Latest Practicable Date. Based on the above, the Group believes that it currently does not hold any important data as specified by the applicable PRC laws. During the Track Record Period and up to the Latest Practicable Date, the Group had not experienced any data leakage incident, or received any administrative penalty or investigation related to data privacy and cybersecurity by government authorities. (ii) As advised by our legal advisers as to Thai law, Singaporean law and Malaysian law, during the Track Record Period and up to the Latest Practicable Date, we were in compliance with applicable data privacy laws and regulations in Thailand, Singapore and Malaysia, respectively, in all material aspects, and the cybersecurity laws and regulations in Thailand, Singapore and Malaysia were not applicable to us. (iii) During the Track Record Period and up to the Latest Practicable Date, we did not engage in cross-border data transmission in Vietnam as we remained in the process of constructing facilities in Vietnam. BUSINESS – 143 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 153 of 431 -- INFORMATION TECHNOLOGY Our information technology systems are essential to our business operations. We have developed or employ various information technology systems covering all material aspects of our operations, including sales, supply chain management, inventory management, production and quality control. Our information technology department is responsible for developing and maintaining information technology systems to support our business operations and growth. Our Customer Relationship Management (CRM) system manages client data and sales processes, while the Enterprise Resource Planning (ERP) system provides a unified platform for cross-departmental collaboration and data-driven decisions. We optimize our supply chain with a Supplier Relationship Management (SRM) system and ensure product standards are met using a Quality Management System (QMS) to monitor for and resolve defects early. COMPETITION The PCB industry is highly competitive, with global production centered in China while a growing number of manufacturers are also establishing facilities in Southeast Asia to enhance supply chain resilience. The market remains fragmented, with many players across segments. To maintain and grow our business, we must continue to meet our customers’ requirements and deliver differentiated, high-performance products that meet their evolving needs. If we are unable to keep pace with such advancements or fail to differentiate our products in terms of quality or cost, we risk losing market share to our competitors. See “Industry Overview” for details relating to our competitive landscape. INSURANCE We maintain insurance policies to manage liability. In addition, we have purchased property-related insurance policies covering our facilities, machinery, equipment, inventories and other assets. We review our insurance policies from time to time to assess the adequacy and breadth of coverage. We believe that our existing insurance coverage is adequate for our business operations and is in line with industry standards in the countries in which we operate. Nevertheless, we may be exposed to claims and liabilities which exceed our insurance coverage. See “Risk Factors — Our insurance coverage may be insufficient to cover all of our potential losses” for further details. SEASONALITY Demand for and sales of our products follow the same seasonality pattern as sales of the end products that feature our PCB products. For PCB products applied in AI infrastructure, automotive electronics, telecommunication and medical devices and other applications, the seasonal pattern is less pronounced. In comparison, for PCBs products used in smart devices, we typically experience higher sales in the second half of the year due to the new product launch cycles of smartphones and increased shopping activities during the holiday season. See “Risk Factors — Our sales may be influenced by seasonality” for risks associated with the seasonality of our sales. PROPERTIES As of December 31, 2025, we operated our business through owned and leased properties in 34 locations in the PRC, Thailand, Vietnam, Malaysia and Singapore. We primarily use our owned and leased properties as our production centers and office premises. As of December 31, 2025, we had no single property with a carrying amount of 15% or more of our total assets, and on this basis, we are not required by Rule 5.01A of the Listing Rules to include any valuation report in this document. Pursuant to section 6(2) of the Companies Ordinance (Exemption of Companies and Prospectuses from Compliance with Provisions) Notice, this document is exempted from compliance with the requirements of section 342(1)(b) of the BUSINESS – 144 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 154 of 431 -- Companies (Winding Up and Miscellaneous Provisions) Ordinance in relation to paragraph 34(2) of the Third Schedule to the Companies (Winding Up and Miscellaneous Provisions) Ordinance, which requires a valuation report with respect to all of our interests in land or buildings. As of December 31, 2025, we owned properties in 15 locations with a gross floor area of over 900 thousand square meters in the PRC, Thailand and Malaysia. We mainly use these properties as our production centers, warehouses and office premises. As of the same date, we leased properties in 21 locations with a gross floor area of approximately 100 thousand square meters in the PRC, Malaysia, Vietnam and Singapore, mainly as our production centers, warehouses and office premises. EMPLOYEES As of December 31, 2025, we had 17,989 full-time employees, with approximately 87.4% of our employees located in the PRC. Among them, production, sales and marketing, technical, finance, administrative and other employees amounted to 12,125, 289, 4,040, 89, 663 and 783, respectively, contributing to 67.4%, 1.6%, 22.5%, 0.5%, 3.7% and 4.4% of our workforce as of the same date. We provide our employees with certain benefits including social insurance coverage, housing provident fund contributions, health check-ups, meal allowances, as well as wedding, childbirth and immediate family bereavement payments. We enter into individual employment agreements with our employees to cover matters such as wages, employee benefits, confidentiality and grounds for termination. Our employees’ compensation is determined by job positions, technical skills, performance and market benchmarks. We also conduct annual reviews to adjust compensation levels based on market trends and company performance. We have established a comprehensive career development framework that offers different advancement paths to meet the different career aspirations of our employees and help unlock their potential. To meet this goal, our employee training programs cover onboarding training, job-specific training, annual training plans, promotion training, leadership development programs, quality-focused initiatives and other specialized training projects. We endeavor to ensure that our employees can have their feedback and complaints heard through various channels, including physical suggestion boxes, email, hotlines, meetings with management and employee representatives and a dedicated complaint platform on WeChat. We have established a labor union and a collective bargaining mechanism, and all employees are union members. We believe we maintain good employment relationships across the company. During the Track Record Period, we did not experience any strikes, work stoppages, or labor disputes that had a material adverse effect on our business or operations. According to relevant PRC laws and regulations, we are required to make contributions to the social insurance fund and housing provident fund for the benefit of our employees in China. During the Track Record Period, we and certain of our PRC subsidiaries did not make adequate contributions to the social insurance and housing provident funds with respect to certain of our employees as required by the relevant PRC laws and regulations primarily because there are different interpretations of the relevant laws and regulations by local competent authorities which may deviate from the strict implementation of the relevant laws and regulations, and we followed the local practices and interpretations of the laws and regulations by the local competent authorities. As advised by our PRC Legal Advisor, pursuant to applicable PRC laws and regulations, if an employer fails to make social insurance contributions in full, the relevant authorities could order the employer to pay, within a prescribed time, the outstanding amount with an additional late payment penalty at the daily rate of 0.05%, and if the employer fails to make the overdue contributions within such time limit, a fine equal to one to three times the outstanding amount may be imposed. Additionally, pursuant to applicable PRC laws and regulations, if an employer is overdue in the payment and deposit of, or underpays, the housing provident fund, the relevant authority could order the employer to make the payment and deposit within a prescribed time limit and, failing which, an application may be made to a court in China for compulsory enforcement. According to BUSINESS – 145 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 155 of 431 -- our PRC Legal Advisor, the likelihood that we would be subject to material administrative penalties due to our failure to provide full social insurance and housing provident fund contributions is remote provided that there are no significant changes in current policies, regulations, local government supervision, and law enforcement requirements related to social insurance and housing provident fund and based on the following reasons: (i) during the Track Record Period and up to the Latest Practicable Date, we had not received any notification from relevant government authorities requiring us to pay shortfalls or the penalties with respect to social insurance or housing provident funds; (ii) we had not been subject to any administrative penalties with respect to social insurance or housing provident funds; (iii) we and all of our PRC subsidiaries have obtained written confirmations from competent local government authorities which confirmed that no administrative penalties had been imposed on us with respect to social insurance or housing provident funds during the Track Record Period; and (iv) we will make full contributions or pay any shortfall within a prescribed period if demanded by the relevant government authorities. Furthermore, as advised by our PRC Legal Advisor, the Interpretation II by the Supreme People’s Court of the PRC on Legal Issues Concerning the Application of Law in the Trial of Labor Dispute Cases ( ) ) (the “New Judicial Interpretation”) is not expected to have a material adverse effect on our financial position and business based on that (i) the New Judicial Interpretation is not expected to increase the maximum potential administrative penalty for our shortfall of social insurance contributions during the Track Record Period, (ii) the Company confirmed that it is not aware of any material or large-scale complaints, objections or labor disputes raised by our employees in relation to our social insurance contributions, and (iii) we will make full contributions or pay any shortfall within a prescribed period if demanded by the relevant government authorities. However, if the relevant PRC authorities hold a different view with the PRC Legal Advisor and determine that we are not in compliance with the New Judicial Interpretation, our financial and business performance may be adversely affected. LICENSES, PERMITS AND APPROVALS We are required to obtain or maintain various licenses, permits and approvals in order to operate our business. We believe we have all material licenses, permits and approvals necessary in order to operate our business. We continually monitor our compliance with these requirements in order to ensure that we have all such approvals, licenses and permits as are necessary to operate our business. Material requisite licenses, permits and approvals obtained for our operations include customs registrations for import and export goods consignee/consignor, which are held by the Company, Shenghua Electronics, Yiyang Weisheng, Weisheng Technology and Weisheng Circuit Board with an expiry date of December 31, 2099 and radiation safety licenses, which are held by the Company, Yiyang Weisheng, Weisheng Circuit Board and Weisheng Technology, with validity periods of May 4, 2023 to May 3, 2028, April 29, 2024 to April 28, 2029, January 7, 2025 to January 20, 2030 and August 29, 2025 to August 28, 2030, respectively. According to our PRC Legal Advisor, all material requisite licenses, permits and approvals obtained by the Group had remained in full effect during the Track Record Period and up to the Latest Practicable Date, and there is no material legal impediment in renewal of the expiring licenses, approvals and permits provided that we are in compliance with applicable laws, regulations and rules. We had not experienced any material difficulties in renewing material licenses, permits or approvals during the Track Record Period and do not expect there to be any material difficulties in renewing them upon their expiry. LEGAL PROCEEDINGS As of the Latest Practicable Date, there were no litigation, arbitration or administrative proceedings pending or threatened against us or any of our Directors which could have a material and adverse effect on our financial condition or results of operations. During the Track Record BUSINESS – 146 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 156 of 431 -- Period and up to the Latest Practicable Date, there were no material breaches or violations of laws or regulations applicable to us which are expected to have a material adverse effect on our business, financial condition or results of operations. RISK MANAGEMENT AND INTERNAL CONTROL Our future operating performance may be affected by risks relating to our business. Some of these risks are specific to us while others relate to economic conditions and the general industry in which we operate. See “Risk Factors” for a discussion of these risks. The Board of Directors and our senior management are responsible for establishing and maintaining adequate risk management and internal control systems. Risk management is the process designed to identify potential events that may affect us and to manage risks to be within our risk appetite. Internal control is the process designed to provide reasonable assurance regarding achievement of objectives related to effectiveness and efficiency of operations, reliability of financial reporting and compliance with applicable laws and regulations. We have implemented or will adopt upon [REDACTED] a number of policies and measures to manage our risks and set up proper internal controls. These policies cover areas such as (i) the duties and roles of the Directors, the Board and our senior management; (ii) social and environmental matters, including policies on diversity; (iii) financial reporting; (iv) whistleblowing; (v) prevention of market misconduct; and (vi) compliance with the Listing Rules. Under our risk management and internal control policies, the Board oversees risk management and internal control systems on an ongoing basis and reviews the effectiveness of these systems. In 2025, we engaged an independent consulting firm to perform a review over our internal control. The key areas of review include financial reporting and disclosure, research and development management, management policies over sales, supply chain controls, trade receivables and payables management, product safety control, inventory management, fixed asset management, intangible assets management, human resource and remuneration management, capital management, tax management, insurance management, and information system general control. We have implemented a series of strict internal policies to promote business integrity and prevent corruption, bribery, fraud and money laundering. We also conduct compliance trainings, including anti-corruption, fraud prevention and anti-money laundering sessions, to strengthen employee awareness. During the Track Record Period, we had not recorded any instances of corruption or misconduct that had, or were likely to have, a material adverse effect on our business. IMPACT OF THE COVID-19 PANDEMIC Despite the macroeconomic challenges posed by the COVID-19 pandemic, our business operations and financial condition remained stable during the Track Record Period and were not materially and adversely impacted by the COVID-19 pandemic. Our production activities and supply chain remained stable and were operating without material constraint during the Track Record Period. During the Track Record Period, we did not observe material adverse effects on our third-party service providers (e.g. supply of raw materials, provision of logistic services) either. In addition, we continued to observe healthy demand across our customer base, with no material adverse shift in their purchases that can be directly attributed to the COVID-19 pandemic. During the Track Record Period, we have not encountered any significant cancellations, deferments or abnormal pricing pressures linked to factors related to the COVID-19 pandemic. TRADE RESTRICTIONS, TARIFF POLICIES, AND INTERNATIONAL SANCTIONS Trade Restrictions and International Sanctions The United States and other jurisdictions or organizations, have, through executive order, legislation or other governmental means, implemented measures that impose economic sanctions against certain countries and other jurisdiction, targeted industry sectors, companies and persons. Most notably, these include U.S. economic sanctions as implemented by the U.S. Department of the Treasury’s Office of Foreign Assets Control (the “OFAC”). BUSINESS – 147 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 157 of 431 -- In addition to economic sanctions, in recent years, the United States has expanded export controls restrictions on China through the Export Administration Regulations (the “EAR”), which is administered by the Bureau of Industry and Security of the United States Department of Commerce (the “BIS”). These include controls on items exported from the United States, items of U.S. origin (wherever located), and, under the EAR’s “de minimis rules,” on certain non-U.S.-made items that incorporate controlled U.S.-origin items or incorporate or are bundled with U.S.-origin software or technology. Also, under the EAR’s “foreign direct product rules,” the EAR applies to items manufactured outside the United States that are the direct product of certain controlled U.S.-origin technology or software when exported, reexport or transferred to specific destinations and end-users. In addition to country-based restrictions, BIS maintains lists of persons that are subject to enhanced export control restrictions. One such list, the Entity List, includes a list of foreign persons on which certain trade restrictions are imposed. In recent years, the United States has placed an increasing number of entities, including hundreds of entities in China, on the Entity List and other restricted or prohibited party lists. In addition to naming additional persons to these lists, BIS has imposed complex and restrictive rules applicable to doing business with persons on them. The restrictions applicable to Entity List parties include licensing requirements for exports, reexports, or transfers of items on lists of controlled items maintained by the U.S. government, which in most cases prevents these named entities from receiving essentially any item subject to U.S. export controls, including, in some cases through the application of the EAR’s foreign direct product rules, to items produced wholly outside the United States. In addition, from September 29, 2025, under the BIS Entity List Affiliate Rule, the Entity List restrictions apply not only to parties included on the Entity List, but also to any person that is 50% or more owned, directly or indirectly, by parties on the Entity List or certain other restricted party lists. However, on November 12, the BIS issued one-year suspension of the BIS Entity List Affiliate Rule, set to end on November 9, 2026, absent a future extension. We screen our counterparties to determine if they are subject to applicable economic sanctions or export control restrictions and have not identified any sales that involve such sanctioned parties or jurisdictions, including those parties and jurisdictions subject to OFAC- administered sanctions. However, during the Track Record Period, three of our customers were included on the BIS Entity List. The revenue generated from these customers in the aggregate accounted for 0.2%, 0.4% and 0.4% of our total revenue in 2023, 2024 and 2025, respectively. The products sold to these customers are standard PCB products. Our U.S. legal advisor has advised that based on the information we provided, the items that we sold to these customers do not involve the transfer, export or reexport of items subject to the EAR. The Directors believe that the Group is not subject to any trade restrictions or sanctions risks that would materially affect its business operations. The Joint Sponsors confirm that they do not have any reason to disagree with this view. However, given the complexity of these regulations and sudden and unpredictable nature of changes to them, it is difficult to predict developments in this area and we have no ability to influence such determinations. Considering these issues, we discontinued sales to Entity List-designated customers from October 2025. For associated risks, see “Risk Factors — Risks Relating to Our Business and Industry — We may be subject to the risks associated with international trade policies, export controls and economic sanctions, geopolitics and trade protection measures.” Tariff Policies There is currently significant uncertainty about the tariff policies in the United States and certain other countries. In February 2025, the president of the United States imposed 20% tariffs (the “Fentanyl Tariffs”) on Chinese goods. On April 2, 2025, the president of the United States imposed a 10% across-the-board tariff on all imports from the U.S.’s trading partners, along with additional country-specific tariffs for various countries (the “Reciprocal Tariffs”, as adjusted from time to time, and, together with the above-mentioned tariffs, the “Additional U.S. Tariffs”). On April 9, 2025, it was announced that the Reciprocal Tariffs would be paused for 90 days for all countries but China. On April 10, 2025, the Reciprocal Tariffs on China were raised to 125%. The United States and China continued to engage in trade discussions, and on May 12, 2025, the United States stated that they would lower the Reciprocal Tariffs on China to 10% for 90 days. On August BUSINESS – 148 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 158 of 431 -- 11, 2025, such tariff suspension was further extended for another 90 days. Therefore, the total Additional U.S. Tariffs on China would be 30% while the Reciprocal Tariffs lowered during the 90 days. Following a U.S.-China leaders’ meeting on October 30, 2025, the United States and China announced steps to pause certain tariff escalations. On November 4, 2025, the President of the United States issued executive orders that, among other things, reduced the Fentanyl Tariff from 20% to 10%, effective November 10, 2025, and continued the suspension of heightened China-specific Reciprocal Tariff rates through November 10, 2026, thereby maintaining the 10% Reciprocal Tariff baseline on imports from China during that period. On May 28, 2025, the U.S. Court of International Trade ruled that the Additional U.S. Tariffs exceeded the president’s legal authority, which was affirmed by the U.S. Court of Appeals for the Federal Circuit on August 29, 2025. On February 20, 2026, the U.S. Supreme Court issued its opinion affirming the lower court’s ruling, striking down the tariffs implemented pursuant to the International Emergency Economic Powers Act (IEEPA), including the Reciprocal Tariff and the Fentanyl Tariff. Following this decision, the administration rescinded the IEEPA-based tariffs but concurrently imposed new 10% tariffs on a global basis for a 150-day period under separate statutory authority and discussed plans to rely on other statutory authorities to impose additional tariffs. The U.S. tariff policies are rapidly evolving, and the final outcome, including the timing, impact and potential legal challenges regarding any newly implemented tariffs, is highly uncertain. We believe that the implemented and proposed U.S. tariffs, including the corresponding tariff policies introduced by other countries, assuming they are enforced as proposed, will not have a material and adverse direct impact on our business and results of operations, on the bases that (i) we make very limited direct exports to the United States, and therefore have insignificant direct exposure to the tariffs imposed by the United States; (ii) our customers, who import the end products incorporating our products in the United States, are responsible for the tariffs; and (iii) we have also proactively taken measures to mitigate our risks in view of the changing industry landscape. In addition, from the first quarter to the second quarter of 2025, our revenue and net profit increased by 9.4% and 32.8%, respectively, showing our resilience and growth despite such tariffs. However, higher tariffs could generally negatively affect economic conditions in China and other countries, which could adversely affect our business. With respect to the applicable U.S. tariff rates on PCB products from Thailand, Malaysia and Vietnam, based on the current U.S. tariff regime following Learning Resources, Inc. v. Trump and the latest administrative actions of the current U.S. administration, PCB products originating from Thailand, Malaysia and Vietnam are generally subject to a 10% tariff. By comparison, double-layer and four-layer MLPCBs originating from the PRC are also subject to a 10% tariff, making their tariff treatment broadly comparable to that of PCB products imported from Thailand, Malaysia and Vietnam. Other PCB products originating from the PRC are subject to a 35% tariff and face significantly effective U.S. import tariff rates. As a result, PCB products manufactured in Thailand, Malaysia and Vietnam generally enjoy a relatively more favorable U.S. tariff position than PCB products manufactured in the PRC. This may, over time, influence sourcing decisions and supply chain configurations of certain customers whose end products are exported to the United States, and may encourage them to consider, or increase, procurement from PCB manufacturers with production capabilities outside the PRC. However, the U.S. tariff policies and rates remain highly uncertain. Other than the tariffs imposed by the United States, PCB products with six layers or fewer exported to India are subject to a 30% anti-dumping duty. Based on the revenue derived from our exports to India, the exports of our products to India are not material. As a result, the Directors believe that our products are generally not subject to any other material international tariffs or trade restrictions and consider the impact of these tariffs on its overall financial performance to be immaterial. The Joint Sponsors confirm that they do not have any reason to disagree with this view. At the same time, notwithstanding our limited direct exports to the United States as discussed below, a portion of our customers export end products incorporating our products to the United States or other overseas jurisdictions and may therefore be indirectly affected by the evolving global BUSINESS – 149 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 159 of 431 -- trade environment and trade restrictions. Such measures may increase our customers’ overall export costs, impact their margins or overseas demand and lead them to adjust their production and procurement plans, which in turn could affect their order volumes and product mix purchased from us. Moreover, given that our products are key components used in industries that are susceptible to geopolitical developments and trade restrictions, such as AI and high-performance computing, if tariffs or other import restrictions are imposed on our customers’ finished goods exported to the United States or other overseas markets, the resulting increase in costs may reduce the competitiveness and market demand for these products. A decline in our customers’ sales could, in turn, lead to reduced order volumes, order cancellations or downward revisions to their forecasts for our products. Furthermore, to mitigate their own exposure, our customers may demand price concessions from us or adjust their supply chain arrangements, which could reduce our share of their procurement or result in a loss of business. Any of these developments could materially and adversely affect our customer relationships, revenue and profitability. Based on information currently available to us, during the Track Record Period and up to the Latest Practicable Date, we are not aware of any material cancellations of orders or significant reductions in procurement from us that are directly attributable to the additional U.S. tariffs or other recent trade restrictions, nor have we experienced any material adverse impact on our revenue, gross profit margin or overall results of operations that we can directly attribute to such measures. However, if global trade tensions escalate, additional tariffs or non-tariff barriers are imposed or existing measures are tightened or prolonged, our customers’ export activities and competitiveness may be adversely affected, which may in turn negatively impact our sales volume, product mix and margins. We will continue to monitor developments in the global trade environment and our customers’ strategies and will make further disclosure if any such developments are reasonably likely to have a material adverse effect on our business, financial condition or results of operations. Our Limited Direct Exports to the United States In 2023, 2024 and 2025, revenue generated from the U.S. accounted for less than 5% of our revenue in the same periods, respectively. During the same periods, we rarely exported our products directly to the United States. Rather, our products are integrated into various types of end products, which are in turn imported into the United States by relevant customers. Since most of our major customers are located outside of the United States, our products are rarely exported directly to the United States. As such, our direct sales to the United States accounted for an insignificant portion of our revenue during the Track Record Period. The insignificant scale of our direct export to the United States limits our risk exposure to U.S. tariffs. United States tariffs, including the Additional U.S. Tariffs when they were applicable, are only payable on the direct export into the United States. In addition, the customers who took delivery of our products in the special supervision territory, which is physically located in China, are typically fully responsible for the subsequent tariffs imposed by the export destination selected by such customers. Given that our revenue contribution from direct sales to the United States is very limited, even if we experience a decrease in our direct sales to the United States as a result of higher U.S. Tariffs, it is not expected to result in a material and adverse change in our business and results of operations as a whole. Our Sales and Procurement in Special Supervision Territory in China During the Track Record Period, a substantial portion of our exported products were delivered in special supervision territory in China for further processing or assembling by other manufacturers. In particular, in 2023, 2024 and 2025, 32.9%, 22.8% and 12.8% of our revenue was recorded from sales to special supervision territory. These include sales to our major customers headquartered in the United States. Special supervision territories is special customs supervision zones in China that are approved by the State Council of the PRC with specific tax and regulatory policies. Products exported by us through the special supervision territory are primarily delivered to downstream customers. Products BUSINESS – 150 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 160 of 431 -- entering the special supervision territory from places other than the special supervision territory in China are treated as exports and thus eligible for export tax rebates. As advised by our PRC Legal Advisor, under the PRC regulations, most exported goods are exempt from export tariffs, with the applicable export tariff rate being zero. Products exported by us into the special supervision territory qualify for this 0% tariff treatment. Our customs-related obligations, liabilities or responsibilities are fully released and discharged upon completion of delivery within the special supervision territory in China. All subsequent customs-related obligations, including any tariffs imposed by the United States if the customer determines to import their products to the United States, shall become the sole responsibility of the downstream customers. In addition, as advised by our PRC Legal Advisor, under the PRC regulations, materials imported by us through the special supervision territory entering and stored in the special supervision territory from overseas are not treated as import and thus exempt from import tax. The import tax liability shall only attach to and become payable upon such materials’ import from the special supervision territory into other place other than the special supervision territory in China. Materials imported through the special supervision territory into places other than the special supervision territory in China shall have their import tariff rates determined according to the rules of origin principle, meaning tariff rates are based on the source country or region of such materials. For materials entering the special supervision territory from overseas, which are further processed into finished or semi-finished products within the special supervision territory before entering places other than the special supervision territory in China, the import tariff rates shall be determined based on the final state of the processed products, which may differ from the tariff rates applicable to original materials imported directly into the special supervision territory. Our Customers Are Responsible for the Tariffs As explained above, we rarely export our products directly from China to the United States, and our customers, who import the end products into the United States, including through special supervision territory in China, are responsible to pay any tariffs imposed by the United States for importing goods into the United States. While a tariff on the end product may filter upstream or downstream, none of our current contracts with our customers allow for price adjustment due to tariffs payable by our customers. As of the Latest Practicable Date, we had not experienced any material adverse changes in our sales volume, ASP, customer payment or logistics arrangements, nor have we received any requests to cancel orders or suspend delivery of our products because of the imposition of Additional U.S. Tariffs. Our Active Measures to Mitigate Risk The Additional U.S. Tariffs and other threatened U.S. tariffs have accelerated both the reorganization of supply chains and the advancement of higher-end product offerings in our industry. Faced with actual and perceived cost pressures, customers increasingly demand premium and customized products to increase unit value of products, which in turn requires PCB manufacturers to accelerate technological breakthroughs and innovation. Therefore, industry- leading PCB manufacturers are uniquely positioned to navigate the evolving trade landscape with greater agility given their technological edge, established presence, substantial track record, proven customer demand, and familiarity with the local markets. In view of the changing industry landscape and our assessment detailed above, we are taking active measures to mitigate the risks from the changing tariff and international trade landscape. including: (i) Empowering our overseas production capacity. We have been expanding and strengthening our production capacity globally by establishing new production facilities for HDIs and MLPCBs in Thailand and Vietnam and further automating our production processes in Melaka, Malaysia. See “Our Growth Strategies” for further details. Southeast Asia, including Thailand and Vietnam, offers cost advantages, a maturing industrial ecosystem, and growing investment appeal, making it an ideal region for capacity expansion. As a result, many global players in the PCB industry have been enhancing their production capacity in Southeast Asia, which provides BUSINESS – 151 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 161 of 431 -- advantages including supply chain resilience. Furthermore, it is reported that both these countries are negotiating a favorable tariff arrangement with the United States. Our track record of serving overseas customers from this region serves as a testament to our ability to meet global customers’ needs. Therefore, we believe that our enhancement of production capacity in these countries can help address the Additional U.S. Tariffs without significantly impacting our overall profitability or business operations; (ii) Localizing and diversifying our supply chain. Our suppliers primarily provide to us raw materials and production equipment. During the Track Record Period, we mainly sourced raw materials from the PRC. In addition, during each period during the Track Record Period, none of our five largest suppliers was headquartered in the U.S., whereas most of them were headquartered in the PRC. We expect increases in localization and diversification to further reduce our risk exposure to tariffs, and we do not foresee any difficulty in procuring key equipment and raw materials outside of the United States at reasonable costs; and (iii) Driving customer dependency through value creation. We seek to deepen customer relationships by delivering differentiated value through technological leadership and global service capabilities. Building on our position as a key supplier to leading technology companies, we are investing in R&D to pioneer advanced PCB technologies, including premium high-layer-count MLPCBs and high-build-up PCBs for AI and high-performance computing applications. We also plan to expand our product portfolio into emerging sectors such as intelligent driving systems, humanoid robots, and low-altitude economy applications. By aligning closely with customers on technology development and product planning, we aim to enhance responsiveness, strengthen long-term partnerships, and secure first-mover advantages in next-generation markets. U.S. Outbound Investment Security Program On January 2, 2025, a U.S. outbound investment security program (the “OISP”), implemented by the U.S. Treasury under a newly adopted rule (the “Outbound Investment Rule”), became effective. The OISP prohibits or requires notification of certain outbound investment transactions by “U.S. persons” involving “covered foreign persons” that are engaged in “covered activities” relating to certain sensitive technologies and products in the (i) semiconductors and microelectronics, (ii) quantum information technologies, and (iii) artificial intelligence (“AI”) sectors. For details, please refer to “Regulatory Overview — Relevant Laws and Regulations in the U.S. — U.S. Outbound Investment Security Program.” We are engaged in the research and development, manufacturing and sales of advanced PCBs for AI and high-performance computing. Although we customize our PCB products to meet the specific needs of downstream customers in AI and other sectors, we are not engaged in the development of any AI systems, and none of our products themselves are integrated circuits or other “semiconductors and microelectronics” that would implicate the relevant “covered activity” definitions related to those technologies. Accordingly, after consulting with our legal adviser as to U.S. law, we have concluded that U.S. persons [REDACTED] H Shares in the [REDACTED] will not be engaging in prohibited or notifiable transaction under the OISP. Our Directors further confirm that the Outbound Investment Rule has not had any material adverse impact on our operations or financial condition, and we do not anticipate any such adverse impacts on the [REDACTED] or the [REDACTED]. However, the OISP is a relatively new regulatory regime, which is subject to changes and interpretations. On December 18, 2025, the U.S. Comprehensive Outbound Investment National Security Act of 2025 (the “COINS Act”), which will supersede the OISP, became law. The COINS Act is subject to a rulemaking process, which is required to be completed by March 2027, and there is substantial uncertainty regarding how the new law will be implemented. We will continue evaluating and monitoring developments with respect to these laws and regulations. [REDACTED], including those that are U.S. persons or are subsidiaries of U.S. persons, should consult their own legal counsel regarding the applicability of the Outbound Investment Rule, the COINS Act or similar laws and regulations to this [REDACTED] and any potential obligations and exceptions thereunder. For associated risks, see “Risk Factors — Risks Relating to Doing Business in the Jurisdictions Where We Operate — U.S. outbound investment regulations and other foreign laws and regulations could have a negative impact on our ability access to capital in the future.” BUSINESS – 152 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 162 of 431 -- OUR LARGEST GROUP OF SHAREHOLDERS As at the Latest Practicable Date, our Largest Group of Shareholders directly held approximately 30.94% of the total issued Shares of our Company, comprising (i) approximately 15.45% of our total issued Shares directly held by Shenghua Xinye, which was held as to 90% and 10% equity interests by Mr. Chen Tao and Ms. Liu Chunlan (spouse of Mr. Chen Tao), respectively; (2) approximately 15.06% of our total issued Shares directly held by Hong Kong Victory Giant, which was wholly-owned by Hongda Investment, which in turn was held as to 70% and 30% by Mr. Chen Tao and Mr. He Lianqi, respectively; and (3) approximately 0.43% of the total issued Shares directly held by Ms. Liu Chunlan. Upon the completion of the [REDACTED] (assuming the [REDACTED] and the [REDACTED] are not exercised), they will collectively exercise voting rights of approximately [REDACTED]% of our total [REDACTED] Shares. Accordingly, they will remain as our Largest Group of Shareholders immediately upon the completion of the [REDACTED]. Despite Mr. Chen Tao and Mr. He Lianqi held 70% and 30% equity interest of Hongda Investment, respectively, which in turn is the sole shareholder of Hong Kong Victory Giant holding approximately [REDACTED]% of our total [REDACTED] Shares as at the Latest Practicable Date, Mr. He Lianqi is not a member of our Largest Group of Shareholders on the following bases: (1) Mr. He Lianqi, in spite of his shareholding in Hongda Investment, is a passive investor. Mr. Chen Tao is the sole director of each of Hongda Investment and Hong Kong Victory Giant and thus controls the management decisions of these companies; (2) The articles of association of Hongda Investment do not contain any special rights for shareholders. Thus, Mr. Chen Tao as the majority shareholder of Hongda Investment holding more than two third of the voting rights can control the decisions of the matters to be considered at its general meetings, through which Mr. Chen can also control the general meetings of Hong Kong Victory Giant; and (3) No acting in concert or voting proxy arrangements exist between Mr. He Lianqi and our Largest Group of Shareholders. EXCLUDED BUSINESS As of the Latest Practicable Date, Mr. Chen Tao (an executive Director and chairman of the Board), Ms. Liu Chunlan (a non-executive Director) and Shenghua Xinye had material interests in certain companies outside of our Group, details of which are set out below: Company name Principal business Date and place of Incorporation Ownership Wenxian Chen’s Manor Hotel Management Co., Ltd.*(Note 1) ( )! ! ! ! ! Hotel management August 29, 2017 The PRC 60% and 40% held by Mr. Chen Tao and Ms. Liu Chunlan, respectively. Longshang Jiangnan Tourism Development Co., Ltd.*(Note 1) ( ) ! ! ! ! ! ! ! Tourism project development; hotel management; and garden construction September 29, 2017 The PRC 95%, 3% and 2% held by Shenghua Xinye, Mao Xiaolong ( ) and Chen Bisheng ( ) (uncle of Mr. Chen Tao), respectively. Mao Xiaolong is an independent third party. RELATIONSHIP WITH OUR LARGEST GROUP OF SHAREHOLDERS – 153 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 163 of 431 -- Company name Principal business Date and place of Incorporation Ownership Gansu Longtai Wine Co., Ltd.*(Note 1) ( ) ! ! ! ! ! ! ! ! ! ! Liquor production and sales November 8, 2017 The PRC 74%, 20%, 2%, 2% and 2% held by Shenghua Xinye, Ms. Liu Chunlan, Chen Bisheng ( ), Mao Xiaolong ( ) and Chen Biquan ( ) (uncle of Mr. Chen Tao), respectively. Mao Xiaolong is an independent third party. Gansu Xinglongshang Wine Co., Ltd.*(Note 2) ( )! ! ! ! ! Sales of food and alcohol January 19, 2023 The PRC 100% held by Ms. Liu Chunlan Notes: (1) As at the Latest Practicable Date, Mr. Chen Tao is the sole director of these companies. (2) As at the Latest Practicable Date, Ms. Liu Chunlan is the supervisor of this company. Given that the above-listed business of our Largest Group of Shareholders is distinctively different from our Company, none of Mr. Chen Tao, Ms. Liu Chunlan or Shenghua Xinye had intention to inject their interests in these companies into our Group after the [REDACTED]. Each of our Largest Group of Shareholders confirms that as of the Latest Practicable Date, they did not have any interest in a business, apart from the business of our Group, which competes or is likely to compete, directly or indirectly, with our business that would require disclosure under Rule 8.10 of the Listing Rules. NON-COMPETITION UNDERTAKINGS For the purpose of listing our A Shares on the ChiNext Market of the Shenzhen Stock Exchange, on August 31, 2012, Shenghua Xinye and Mr. Chen Tao entered into an undertaking pursuant to which, among others:– (a) none of Shenghua Xinye, Mr. Chen Tao or any company controlled by it/him is currently or will in the future directly or indirectly engaged in any business that competes or may potentially compete with the business operated by our Company and our subsidiaries, nor have them invested or will invest in any other entity whose business competes or may potentially compete with that of our Company and our subsidiaries; and (b) if any of the above commitments is proven to be untrue or has not been complied with, Shenghua Xinye and Mr. Chen Tao will compensate our Company for all direct and indirect losses incurred and bear the corresponding legal liabilities. INDEPENDENCE FROM OUR LARGEST GROUP OF SHAREHOLDERS Taking into consideration the following factors, our Directors are of the view that we are capable of carrying on our business independently from our Largest Group of Shareholders and their close associates after completion of the [REDACTED]. RELATIONSHIP WITH OUR LARGEST GROUP OF SHAREHOLDERS – 154 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 164 of 431 -- Management Independence (a) Our Board consists of nine Directors, including four executive Directors, one non- executive Director and four independent non-executive Directors. Save for Mr. Chen Tao, our executive Director, and Ms. Liu Chunlan, our non-executive Director, who are also members of our Largest Group of Shareholders, there is no overlap of directors and members of the senior management between our Company and our Largest Group of Shareholders and their respective close associates. Despite the overlapping roles of Mr. Chen and Ms. Liu, we believe that our Directors and senior management can independently perform their duties in our Company and we can operate independently from our Largest Group of Shareholders for the following reasons: (i) Ms. Liu is a non-executive Director, who will be mainly responsible for providing recommendations on the strategic development of our Group and will not be involved in the day-to-day management and operations of our Company; (ii) our daily operational and management decisions are made collectively by our Board and our senior management, all of whom have substantial experience in the industry and will therefore be able to make business decisions that are in the best interests of our Company; (iii) each Director is aware of his/her fiduciary duties as a director which require, among other things, that he/she acts for the benefit and in the interest of our Company and does not allow any conflict between his/her duties as a Director and his/her personal interests; (iv) 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 at relevant Board meetings and shall not be counted towards the quorum for the voting; and (v) save for Mr. Chen Tao, Mr. Chen Yong (brother of Mr. Chen Tao) and Ms. Liu Chunlan (spouse of Mr. Chen Tao), all of the other Directors are independent from our Largest Group of Shareholders, and decisions of the Board require the approval of a majority vote from the Board. (b) Our Board has a balanced composition of executive Directors, non-executive Director and independent non-executive Directors which ensures the independence of our Board in making decisions affecting our Company. Specifically, (a) our independent non- executive Directors are not associated with our Largest Group of Shareholders or each of his/her/its or its associates; (b) our independent non-executive Directors account for at least one-third of the Board; and (c) our independent non-executive Directors individually and collectively possess the requisite knowledge and experience as independent directors of [REDACTED] companies and will be able to provide professional and experienced advice to our Company. In conclusion, our Directors believe that our independent non-executive Directors are able to bring impartial and sound judgment to the decision-making process of our Board and protect the interest of our Company and our Shareholders as a whole; and (c) We will establish a series of corporate governance measures and adopt sufficient and effective control mechanisms to manage conflicts of interest, if any, between our Group and our Largest Group of Shareholders, which would support our independent management. For details, please refer to “— Corporate Governance” in this section. RELATIONSHIP WITH OUR LARGEST GROUP OF SHAREHOLDERS – 155 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 165 of 431 -- Based on the above, our Directors believe that the Board as a whole and together with our senior management are able to perform the managerial role in our Group independently from our Largest Group of Shareholders and their close associates after the [REDACTED]. Operational Independence Our Group holds all the relevant material intellectual property rights, licenses, qualifications and permits required for conducting our Group’s business. Our Group has sufficient capital, facilities and employees to operate our business independently from our Largest Group of Shareholders and each of their close associates. Our Group also has independent access to our customers. We have our own accounting and financial department, human resources and administration department, internal control department and technology department. We have also established a set of internal control procedures and adopted corporate governance practices to facilitate the effective operation of our business. Based on the above, our Directors believe that we are able to operate independently from our Largest Group of Shareholders and their close associates. Financial Independence Our Group has its own internal control, accounting, funding, reporting and financial management system as well as an accounting and finance department. Moreover, our Group opens and manages bank accounts independently, and does not share any bank accounts with our Largest Group of Shareholders. Our Group has independent taxation registration according to the relevant laws, and makes tax payments independently according to the applicable PRC taxation laws and regulations. Our Group has never made any tax payment jointly with Largest Group of Shareholders or any other entities controlled by it. As of the Latest Practicable Date, our Group does not rely on our Largest Group of Shareholders and/or their close associates for any financing activities. Our Directors confirm that as of the Latest Practicable Date, on the one hand, none of our Largest Group of Shareholders or their close associates had provided any loans, guarantees or pledges to our Group and, on the other hand, our Group did not provide any loans, guarantees or pledges to our Largest Group of Shareholders or their close associates. Based on the above, our Directors believe that we are financially independent from, and do not place undue reliance on, our Largest Group of Shareholders or their close associates after the [REDACTED]. CORPORATE GOVERNANCE Our Company will comply with the provisions of the Corporate Governance Code, which sets out principles of good corporate governance. Our Directors recognize the importance of good corporate governance in the protection of our Shareholders’ interests. We would adopt the following measures to safeguard good corporate governance standards and to avoid potential conflicts of interest between our Group and our Largest Group of Shareholders: (a) Where a Shareholders’ meeting is held for considering proposed transactions in which our Largest Group of Shareholders have a material interest, our Largest Group of Shareholders shall abstain from voting on the relevant resolutions and shall not be counted in the quorum for the voting. RELATIONSHIP WITH OUR LARGEST GROUP OF SHAREHOLDERS – 156 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 166 of 431 -- (b) Where a Board meeting is held for the matters in which a Director has a material interest, such Director shall abstain from voting on the relevant resolutions and shall not be counted in the quorum for the voting. (c) In the event that our independent non-executive Directors are requested to review any conflict of interest between our Group and our Largest Group of Shareholders, our Largest Group of Shareholders shall provide the independent non-executive Directors with all necessary information and our Company shall disclose the decisions of the independent non-executive Directors either in its annual reports or by way of announcements. (d) Our Directors (including the independent non-executive Directors) will seek independent and professional opinions from external advisors at our Company’s cost as and when appropriate in accordance with the Corporate Governance Code. (e) Any transactions between our Company and its connected persons shall be in compliance with the relevant requirements of Chapter 14A of the Listing Rules, including the announcement, annual reporting and independent shareholders’ approval requirements (if applicable) under the Listing Rules. (f) We have appointed China Securities (International) Corporate Finance Company Limited as our compliance advisor, which will provide advice and guidance to us in respect of compliance with the applicable laws and the Listing Rules, including various requirements relating to directors’ duties and corporate governance. Based on the above, our Directors are satisfied that sufficient corporate governance measures have been put in place to manage conflicts of interest between our Group and our Largest Group of Shareholders, and to protect minority Shareholders’ interests after the [REDACTED]. RELATIONSHIP WITH OUR LARGEST GROUP OF SHAREHOLDERS – 157 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 167 of 431 -- OVERVIEW Upon [REDACTED], transaction(s) between members of our Group and our connected person(s) will constitute continuing connected transaction(s) of our Company under Chapter 14A of the Listing Rules. CONNECTED PERSON We have entered into certain transaction with the following connected person, which will constitute our continuing connected transaction upon [REDACTED]: Connected Person Connected Relationship Gansu Xinglongshang Wine Co., Ltd.* ( ) (“Xinglongshang Wine”) ! ! ! ! ! ! ! ! ! Ms. Liu Chunlan, our non-executive Director and one of our Largest Group of Shareholders, is the sole shareholder of Xinglongshang Wine. FULLY EXEMPT CONTINUING CONNECTED TRANSACTION Procurement of Products Agreement On [●], 2026, our Company entered into an agreement (the “Procurement of Products Agreement”) with Xinglongshang Wine, pursuant to which Xinglongshang Wine will supply to our Company products including but not limited to wines. The pricing of such products is to be determined by our Company and Xinglongshang Wine on normal commercial terms, negotiated on arm’s length basis, subject to applicable laws and regulations and with reference to, among others, the costs, the quantities and quality of the products, the prevailing market conditions and the principle of fairness. For each of the years ended December 31, 2023, 2024 and 2025, the total transaction amount on the procurement of products by our Group from Xinglongshang Wine was approximately RMB2.7 million, RMB2.8 million and RMB3.5 million respectively. The initial term of the Procurement of Products Agreement will commence on the [REDACTED] and end on December 31, 2026 (both days inclusive), subject to renewal upon the mutual consent of both parties and compliance with the requirements of the Listing Rules and applicable laws and regulations. Our Directors estimated that the annual transaction amount payable by our Company to Xinglongshang Wine under the Procurement of Products Agreement for the year ending December 31, 2026 will not exceed RMB5.0 million. As the applicable percentage ratios calculated under Chapter 14A of the Listing Rules will be less than 0.1%, the Procurement of Products Agreement will be fully exempt from all of the reporting, annual review, announcement, circular and independent shareholders’ approval requirements under Chapter 14A of the Listing Rules pursuant to Rule 14A.76(1) of the Listing Rules. CONNECTED TRANSACTION – 158 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 168 of 431 -- BOARD OF DIRECTORS Our Board comprises nine Directors, including four executive Directors, one non-executive Director and four independent non-executive Directors. Pursuant to our Articles of Association, Directors are elected by the Shareholders for a term of three years and are eligible for reappointment after their term concludes. Name Position(s) Age Date of appointment as Director Time of joining the Group Role and responsibilities Relationship with other Directors and senior management Mr. Chen Tao ( ) ! ! ! ! ! Chairman of the Board and executive Director 53 July 2006 January 2003 Overall management, strategic planning and decision-making for key business and operational matters of our Group Mr. Chen Yong and Ms. Liu Chunlan are his brother and his spouse, respectively. Ms. Liu Chunlan ( ) ! ! ! Non-executive Director 48 April 2016 January 2003 Providing recommendations on the strategic development of our Group Mr. Chen Tao is her spouse and Mr. Chen Yong is her brother-in-law. Mr. Zhao Qixiang ( ) ! ! ! Executive Director and president 48 January 2025 October 2008 Implementing of the strategic planning and overseeing the business and daily operations of our Group Nil Mr. Chen Yong ( ) ! ! ! ! ! Executive Director and vice president 46 December 2010 January 2003 Responsible for the management of the sales department of our Group Mr. Chen Tao is his brother and Ms. Liu Chunlan is his sister-in-law. Mr. Xie Lanjun ( ) ! ! ! Independent non-executive Director 60 March 2025 March 2025 Supervising and providing independent opinion and judgment to the Board Nil Dr. Xie Lingmin ( ) ! ! ! Independent non-executive Director 40 March 2025 March 2025 Supervising and providing independent opinion and judgment to the Board Nil Dr. Zhang Jihai ( ) ! ! ! Independent non-executive Director 50 March 2025 March 2025 Supervising and providing independent opinion and judgment to the Board Nil Mr. Wong Ting Chung ( ) BBS JP ! Independent non-executive Director 64 [REDACTED] [REDACTED] Supervising and providing independent opinion and judgment to the Board Nil Ms. Wang Haiyan ( ) ! ! ! Executive Director and employees’ representative Director 47 August 2025 June 2020 Responsible for the management of the engineering department of our Group Nil Executive Directors Mr. Chen Tao ( ), aged 53, is our chairman of the Board and an executive Director. Mr. Chen is primarily responsible for the overall management, strategic planning and decision-making for key business and operational matters of our Group. Mr. Chen founded our Group and has been serving as our chairman of the Board since July 2006 and executive director of Shenghua Xinye since January 2003. Mr. Chen was our general manager from February 2012 to August 2024. Mr. DIRECTORS AND SENIOR MANAGEMENT – 159 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 169 of 431 -- Chen was redesignated as our executive Director in July 2025 with effect from the [REDACTED]. He currently holds directorships in a number of subsidiaries of our Group, including serving as a director of Shenghua Electronics since January 2003. Mr. Chen graduated from Sun Yat-Sen University ( ), having completed the Executive Master of Business Administration (EMBA) program in November 2006. Mr. Chen was awarded the title of “Guangdong Outstanding Entrepreneur ( )” by Guangdong Economists and Entrepreneurs Association* ( ) and Guangdong Entrepreneurs Council* ( ) in August 2011 and was recognized as a “2013 Outstanding Entrepreneur in Promoting Independent Innovation in Guangdong Province (2013 )” by Guangdong Provincial Federation of Enterprises* ( ) and Guangdong Entrepreneurs Association* ( ) in November 2013. Mr. Chen received a “Guangdong Province May 1st Labor Medal ( )” by the Guangdong Federation of Trade Unions* ( ) in April 2018 and was honored as a “2018 National Electronic Information Industry Outstanding Entrepreneur (2018 )” by China Electronics Enterprises Association* ( ) in December 2018. Mr. Zhao Qixiang ( ), aged 48, is our executive Director and the president of our Company. Mr. Zhao is primarily responsible for implementing of the strategic planning and overseeing the business and daily operations of our Group. Mr. Zhao joined our Group in October 2008. From February 2012 to August 2024, he served as a vice general manager and secretary to the Board of our Company. Mr. Zhao has been serving as our Director and the president of our Company since January 2025 and August 2024, respectively. Mr. Zhao was redesignated as our executive Director in July 2025 with effect from the [REDACTED]. From April 2002 to June 2008, Mr. Zhao served as the head of the management department of Bocheng Electronics (Huiyang) Co., Ltd.* ( ( ) ). Mr. Zhao has been serving as a director of Founder Technology Group Co., Ltd.* ( ), a company listed on the Shanghai Stock Exchange (stock code: 600601) since April 2023. Mr. Zhao graduated from Mianyang Economic and Technical College ( ) in July 1999 and graduated from Beijing Institute of Technology ( ) by way of online learning in January 2021. Mr. Chen Yong ( ), aged 46, is our executive Director and a vice president of our Company. Mr. Chen is primarily responsible for the management of the sales department of our Group. Mr. Chen joined our Group in January 2003. Mr. Chen has been serving as our Director and vice president since December 2010. Mr. Chen was redesignated as our executive Director in July 2025 with effect from the [REDACTED]. Mr. Chen Yong is currently enrolled in the Master of Business Administration (MBA) program offered by the Hong Kong Asia Business College ( ). Ms. Wang Haiyan ( ), aged 47, is our executive Director. Ms. Wang is primarily responsible for the management of the engineering department of our Group. Ms. Wang joined our Group in June 2020 and served various positions in our Company, including as deputy director and the director of the engineering department as well as head of the multilayer board division. She was promoted to the director of the engineering center in January 2025. From April 2022 to August 2025, Ms. Wang served as the chairman of our supervisory committee. Ms. Wang was appointed as our Director and our employees’ representative Director since August 2025 and was redesignated as our executive Director with effect from the [REDACTED]. DIRECTORS AND SENIOR MANAGEMENT – 160 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 170 of 431 -- Ms. Wang worked in Jiangmen Benlida Circuit Co., Ltd.* ( ). Ms. Wang worked in Huizhou China Eagle Electronic Technology Co., Ltd.* ( ), a company listed on the Shenzhen Stock Exchange (stock code: 002579). Ms. Wang graduated from Northwestern Polytechnical University ( ) by way of online learning in July 2011. Non-Executive Director Ms. Liu Chunlan ( ), aged 48, is our Director since April 2016 and was redesignated as a non-executive Director in July 2025 with effect from the [REDACTED]. Ms. Liu joined our Group in January 2003. Ms. Liu is primarily responsible for providing recommendations on the strategic development of our Group. Ms. Liu served as the general manager of Hongda Investment and Shenghua Xinye since September 2011 and June 2012, respectively. Ms. Liu completed the executive Master of Business Administration (EMBA) program at Peking University ( ). Independent Non-executive Directors Mr. Xie Lanjun ( ), aged 60, is our independent Director since March 2025 and was redesignated as our independent non-executive Director in July 2025 with effect from the [REDACTED]. Mr. Xie is primarily responsible for supervising and providing independent opinion and judgment to the Board. He has been serving as an equity partner and party branch secretary of Beijing Zhongyin (Shenzhen) Law Firm ( ( ) ) since January 2009. From October 2018 to September 2024, Mr. Xie served as an independent director of Dynagreen Environmental Protection Group Co., Ltd.* ( ), a company listed on the Shanghai Stock Exchange (stock code: 601330). From May 2020 to May 2025, Mr. Xie served as an independent director of Rayitek Hi-Tech Film Company Ltd., Shenzhen,* ( ) a company listed on the Shanghai Stock Exchange (stock code: 688323). Mr. Xie has been serving as an independent director of Shenzhen Institute of Building Research Co., Ltd.* ( ), a company listed on the Shenzhen Stock Exchange (stock code: 300675), since November 2020. Mr. Xie graduated from Lanzhou University ( ) with a bachelor of laws degree in June 1988. Mr. Xie completed a finance course of the Senior Executive Program in Capital Operations from the School of Engineering Project Management, Tsinghua University ( ) in December 2006, and further completed a finance course in relation to private equity from Peking University HSBC Business School ( ) in September 2011. From June 2017 to June 2022, he served as a people’s supervisor ( ) of Shenzhen People’s Procuratorate. ( ). He has been serving as a member of the planning and budget committee of the 7th Shenzhen Municipal People’s Congress ( ) and an arbitrator of Shenzhen Court of International Arbitration ( ) since May 2021 and February 2022, respectively. Mr. Xie has been qualified as a lawyer in PRC and obtained the certificate of futures qualification by China Futures Association since June 1991 and September 2008, respectively. Dr. Xie Lingmin ( ), aged 40, is our independent Director since March 2025 and was redesignated as our independent non-executive Director in July 2025 with effect from the [REDACTED]. Dr. Xie is primarily responsible for supervising and providing independent opinion and judgment to the Board. DIRECTORS AND SENIOR MANAGEMENT – 161 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 171 of 431 -- Dr. Xie served as the associate professor of accounting, school of economics, Shenzhen University ( ) and deputy director of the Finance and Financial Management Experiment Center at the same university since July 2023 and November 2023, respectively. Dr. Xie has been serving as an independent director of Shenzhen Longood Intelligent Electric Co., Ltd* ( ), a company listed on the Shenzhen Stock Exchange (stock code: 300543) since December 2024. Dr. Xie has been serving an independent director of Shenzhen Zhenye (Group) Co., Ltd. ( ( ) ), a company listed on the Shenzhen Stock Exchange (stock code:000006) since August 2025. From July 2017 to June 2023, Dr. Xie served as an assistant professor at the Department of Accounting, School of Economics, Shenzhen University. Dr. Xie graduated from Shenzhen University with a bachelor of finance in June 2009. Dr. Xie graduated from Lingnan University (Hong Kong) ( ) with a master of science in international banking and finance in October 2010 and a master of philosophy in business from the same university in December 2013. In addition, Dr. Xie graduated from City University of Hong Kong ( ) with a doctoral degree in philosophy in February 2017. Dr. Xie was qualified as a certified management accountant (CMA) in January 2015. Dr. Zhang Jihai ( ), aged 50, has been serving as our independent Director since March 2025 and was redesignated as our independent non-executive Director in July 2025 with effect from the [REDACTED]. Dr. Zhang is primarily responsible for supervising and providing independent opinion and judgment to the Board. Dr. Zhang has been a lecturer, associate professor and professor for the School of Economics, Shenzhen University ( ) since July 2006. Dr. Zhang graduated from Liaoning Institute of Technology ( ), currently known as Liaoning University of Technology ( ), with a bachelor of engineering degree in July 1998. Dr. Zhang graduated from Liaoning University ( ) with a master’s degree in finance in June 2003 and received a doctorate degree in product economics ( ) from Shandong University ( ) in June 2006. Dr. Zhang obtained the certificate of legal professional qualification of the PRC in March 2004. Mr. Wong Ting Chung ( ) BBS, JP, aged 64, was appointed as our independent non-executive Director in August 2025 with effect from the [REDACTED]. Mr. Wong is primarily responsible for supervising and providing independent opinion and judgment to the Board. Mr. Wong has over 40 years of experience in textile manufacturing industry. He established his business through Ever-Grow Knitwears Factory Limited ( ), a company mainly engaged in the knitwear production in 1982 and was responsible for overall management of the company. Mr. Wong founded Nameson Group Limited in September 1990. Mr. Wong served as the chairman of the board of directors, executive director and chief executive officer of Nameson Holdings Limited, a company listed on the Stock Exchange (stock code: 1982) from August 2015 to April 2021. Mr. Wong has been appointed as the chairman of the board of directors of Million Cities Holdings Limited, a company listed on the Stock Exchange (stock code: 2892) since November 2016 and he has been serving as an executive director of Million Cities Holdings Limited with effect from April 2021. Mr. Wong has been serving as the chairman of the board of directors and chief executive officer of Kings (H.K.) Health Food Limited ( ( ) ) since September 2024. Mr. Wong has been serving as a Hong Kong member of the 14th National Committee of the Chinese People’s Political Consultative Conference ( ) and the chief president of Hong Kong Industrial and Commercial Association ( ) since 2023 and 2009 respectively. He served as a deputy to the 12th and 13th National People’s Congress DIRECTORS AND SENIOR MANAGEMENT – 162 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 172 of 431 -- of the PRC ( ) from 2013 to 2023. He was awarded a Bronze Bauhinia Star, Justice of Peace in Hong Kong and Silver Bauhinia Star by the government of the Hong Kong Special Administrative Region of the PRC in 2011, July 2015 and 2025 respectively. SUPERVISORY COMMITTEE Pursuant to our 2025 fourth extraordinary general meeting on August 15, 2025, our Shareholders approved a resolution that our Company would no longer set up the supervisory committee with effect from August 15, 2025, and the powers of the supervisory committee will be exercised by the Audit Committee. Accordingly, the term of our current supervisors and the supervisory committee has been terminated. Our PRC Legal Advisor has confirmed that such arrangements comply with the relevant PRC laws and regulations. Each of our Directors confirms with respect to himself or herself, to the best of his or her knowledge, information and belief, that he or she (1) did not hold other long positions or short positions in the Shares, underlying Shares, debentures of our Company or any associated corporation (within the meaning of Part XV of the SFO) as at the Latest Practicable Date; (2) had no other relationship with any Directors, senior management or substantial Shareholders of our Company as at the Latest Practicable Date; (3) did not hold any other directorships in the three years prior to the Latest Practicable Date in any public companies of which the securities are listed on any securities market in Hong Kong and/or overseas; and (4) there are no other matters concerning our Director’s appointment that need to be brought to the attention of our Shareholders and the Stock Exchange or shall be disclosed pursuant to Rules 13.51(2)(h) to (v) of the Listing Rules as at the Latest Practicable Date. SENIOR MANAGEMENT Our senior management is responsible for the day-to-day management of our business. The table below sets out certain information in respect of the senior management of our Group: Name Position(s) Age Date of Appointment Date of joining the Group Role and responsibilities Relationship with other Directors and senior management Mr. Zhao Qixiang ( ) ! ! ! ! President 48 August 2024 October 2008 Overseeing business and daily operations of our Group Nil Mr. Chen Yong ( ) ! ! ! ! ! Vice president 46 December 2010 January 2003 Responsible for the management of the sales department of our Group Mr. Chen Tao is his brother and Ms. Liu Chunlan is his sister-in-law. Mr. Wang Hui ( ) ! ! ! ! ! Executive vice president 50 January 2025 August 2019 Responsible for our Company’s operating system, including production, technology research and development and quality management Nil Mr. Victor Jose Taveras! ! ! ! ! Vice president and chief technology officer 66 July 2025 August 2024 Responsible for research and development of our Group’s technology Nil Mr. Zhou Dingzhong ( ) ! ! ! ! Vice president 43 January 2025 September 2004 Responsible for productions of our Group Nil DIRECTORS AND SENIOR MANAGEMENT – 163 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 173 of 431 -- Name Position(s) Age Date of Appointment Date of joining the Group Role and responsibilities Relationship with other Directors and senior management Ms. Zhu Xiyao ( ) ! ! ! ! Vice president, secretary to the Board and a joint company secretary 31 August 2024 June 2021 Responsible for corporate governance and compliance of our Group Nil Mr. Zhu Guoqiang ( ) ! ! ! ! Chief financial officer 53 February 2012 November 2008 Overseeing the overall financial management of our Group Nil Mr. Zhao Qixiang ( ) and Mr. Chen Yong ( ), please refer to sub-section headed “— Board of Directors — Executive Directors” for details. Mr. Wang Hui ( ), aged 50, is our executive vice president since January 2025. Mr. Wang is primarily responsible for our Company’s operating system, including production, technology research and development and quality management. Mr. Wang joined our Group in August 2019 and has held various positions in the Company including, vice president of our general manager’s office and vice president of the Company. From April 2000 to July 2018, Mr. Wang served for Compeq Manufacturing (Hui Zhou) Co., Ltd. ( ( ) ). Mr. Wang graduated from Xi’an Jiaotong University ( ) with a bachelor’s degree in material forming and control engineering in July 1999. Mr. Victor Jose Taveras, aged 66, has been serving as our vice president and chief technology officer since July 2025 and August 2024, respectively. Mr. Taveras is primarily responsible for research and development of our Group’s technology. Mr. Taveras worked in Sanmina Corporation Sdn. Bhd with his last position being its managing director. From 2003 to 2009, Mr. Taveras was appointed as a business unit director of PCB Business Unit of Unimicron Technology Corporation, a company listed on the Taiwan Stock Exchange (stock code: 3037). From 2009 to 2014, Mr. Taveras served as the general manager of Viasystems Group* ( ). From 2016 to 2021, Mr. Taveras served as the general manager of Blue Technology Limited. Mr. Taveras graduated from Cornell University with a bachelor of arts degree in May 1982. Mr. Zhou Dingzhong ( ), aged 43, is our vice president. Mr. Zhou joined our Group in September 2004 and has been serving as our vice president since January 2025. Mr. Zhou is primarily responsible for productions of our Group. Mr. Zhou graduated from Sun Yat-sen University ( ) by way of online learning in January 2017. Mr. Zhou has been certified as a senior engineer by China Printed Circuit Association (CPCA) in November 2018. Ms. Zhu Xiyao ( ), aged 31, is our vice president and secretary to our Board since August 2024 and one of the joint company secretaries since July 2025. Ms. Zhu joined our Group in June 2021 and is primarily responsible for corporate governance and compliance of our Group. Ms. Zhu has worked in Donghai Funds Management Co., Ltd.* ( ). DIRECTORS AND SENIOR MANAGEMENT – 164 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 174 of 431 -- Ms. Zhu graduated from Xiamen University ( ) in July 2016 and from the University of Southampton with a master’s degree in finance and economics in December 2018. Mr. Zhu Guoqiang ( ), aged 53, has been serving as our chief financial officer since February 2012. Mr. Zhu joined our Group in November 2008. Mr. Zhu is primarily responsible for overseeing the overall financial management of our Group. Mr. Zhu graduated from Central South University of Technology ( ) now known as Central South University ( ) in June 1995. FURTHER INFORMATION ABOUT OUR DIRECTORS In September 2018, Ms. Liu Chunlan (“Ms. Liu”) received a regulatory letter from the Shenzhen Stock Exchange (“2018 Regulatory Letter”), in relation to an inadvertent operational error that resulted in the disposal of 10,600 A Shares. Pursuant to applicable securities laws in the PRC, disposal of A shares after acquisition within six months, or acquisition of A shares subsequent to disposal within six months constitute short-swing trading which is prohibited for a Director of an A-share listed company. In March 2021, the Shenzhen Stock Exchange issued a regulatory letter (the “2021 Regulatory Letter”, together with the 2018 Regulatory Letter, “the Regulatory Letters”) to Shenghua Xinye and Hong Kong Victory Giant, Ms. Liu, and Mr. Chen Yong, brother of Mr. Chen Tao (the “Relevant Shareholders”), reminding them of their obligation to file their notification report when their shareholdings reduced by 5%. This incident arose due to Shenghua Xinye’s previous understanding of the requirements acquired during the Company’s A Share Listing and was unintentional. The Relevant Shareholders have promptly corrected its approach and fully complied with the relevant requirement thereafter. For details of the incident from 2018 Regulatory Letter, please refer to the Company’s A-Share announcements dated July 19, 2018 and July 26, 2018. For details of the incident from the 2021 Regulatory Letter, please refer to the Company’s A-Share announcements dated December 30, 2020 and January 21, 2021. For details of the contents of the Regulatory Letters, please refer to the Company’s A-Share announcement dated April 29, 2021. As advised by our PRC Legal Advisor, the Regulatory Letters were not regarded as a form of administrative penalty and were not considered a material non-compliance. The incident referenced in the 2018 Regulatory Letter resulted from an inadvertent operational error, while the incident addressed in the 2021 Regulatory Letter stemmed from Shenghua Xinye’s prior interpretation of the relevant disclosure requirements during the Company’s A Share listing process and was likewise unintentional. Remediation measures have been promptly taken by the parties involved and there have been no other instances of non-compliances with the rules or regulations of the Shenzhen Stock Exchange or the relevant laws and regulations in the PRC in all material respects. Accordingly, the Company is of the view that the aforementioned incidents would not affect Ms. Liu and/or Mr. Chen Yong’s suitability to continue to act as Directors of the Company. Based on the view of the Directors and the PRC Legal Advisor above and the key due diligence conducted by the Joint Sponsors, nothing has come to the Joint Sponsors’ attention to cause the Joint Sponsors to disagree with the Company’s view set out above. JOINT COMPANY SECRETARIES Ms. Zhu Xiyao ( ), please refer to sub-section headed “Senior Management” above for details. Ms. Lin Sio Ngo ( ) is a manager of SWCS Corporate Services Group (Hong Kong) Limited, a professional services provider specializing in corporate services. Ms. Lin has over 20 years of experience in the corporate secretarial and administration management fields. She has been providing professional corporate services to Hong Kong listed companies as well as private companies. Ms. Lin is currently serving as the company secretary or joint company secretary of several companies listed on the Main Board of the Stock Exchange. DIRECTORS AND SENIOR MANAGEMENT – 165 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 175 of 431 -- Ms. Lin obtained a bachelor’s degree in business administration and a master’s degree in corporate governance from Hong Kong Metropolitan University in June 2000 and June 2004 respectively. Ms. Lin is an associate member of both The Hong Kong Chartered Governance Institute and The Chartered Governance Institute. BOARD COMMITTEES Our Board delegates certain responsibilities to various Board committees. In accordance with the relevant PRC laws and regulations, the Articles and the Listing Rules, we have established the Audit Committee, Remuneration and Appraisal Committee, Nomination Committee and Strategy and Investment Committee. Audit Committee We have established the Audit Committee with written terms of reference in compliance with Rule 3.21 of the Listing Rules and paragraph D.3 of the Corporate Governance Code. The Audit Committee consists of Dr. Xie Lingmin, Mr. Xie Lanjun and Dr. Zhang Jihai, with Dr. Xie Lingmin serving as the chairperson of the committee. The primary function of the Audit Committee is to assist our Board in providing an independent view of our financial reporting process, internal control and risk management system, overseeing the audit process and performing other duties and responsibilities as assigned by our Board. Remuneration and Appraisal Committee We have established the Remuneration and Appraisal Committee with written terms of reference in compliance with Rule 3.25 of the Listing Rules and paragraph E.1 of the Corporate Governance Code. The Remuneration and Appraisal Committee consists of Dr. Zhang Jihai, Mr. Xie Lanjun and Mr. Zhao Qixiang, with Dr. Zhang Jihai serving as the chairperson of the committee. The primary function of the Remuneration and Appraisal Committee is to develop remuneration policies for our Directors, evaluate the performance, make recommendations on the remuneration packages of our Directors and senior management and evaluate and make recommendations on employee benefit arrangements. Nomination Committee We have established the Nomination Committee with written terms of reference in compliance with Rule 3.27A of the Listing Rules and paragraph B.3 of the Corporate Governance Code. The Nomination Committee consists of Mr. Xie Lanjun, Dr. Xie Lingmin and Mr. Chen Tao, with Mr. Xie Lanjun serving as the chairperson of the committee. The primary function of the Nomination Committee is to make recommendations to our Board in relation to the appointment and removal of Directors. Strategy and Investment Committee We have established the Strategy and Investment Committee with written terms of reference. The primary duties of the Strategy and Investment Committee are to conduct research and make recommendations to our Board on the Company’s medium and long-term development strategies, major investment decisions, sustainable development, and ESG policies. The Strategy and Investment Committee comprises three members, namely Mr. Chen Tao, Mr. Zhao Qixiang and Dr. Zhang Jihai, with Mr. Chen Tao serving as the chairperson of the Strategy and Investment Committee. DIRECTORS AND SENIOR MANAGEMENT – 166 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 176 of 431 -- CONFIRMATION FROM OUR DIRECTORS Rule 8.10 of the Listing Rules Each of our Directors (other than the independent non-executive Directors) confirms that as at the Latest Practicable Date, he or she did not have any interest in a business which competes or is likely to compete, either directly or indirectly, with our Company’s business which would require disclosure under Rule 8.10 of the Listing Rules. Rule 3.09D of the Listing Rules Each of our Directors confirms that he or she (i) has obtained the legal advice referred to under Rule 3.09D of the Listing Rules on July 29, 2025, and (ii) understands all the requirements under the Listing Rules that are applicable to him or her as a director of a [REDACTED] issuer and the possible consequences of making a false statement or providing false information to the Stock Exchange. Rule 3.13 of the Listing Rules Each of the independent non-executive Directors has confirmed (i) his or her independence as regards each of the factors referred to in Rules 3.13(1) to (8) of the Listing Rules, (ii) he or she had no past or present financial or other interest in the business of the Company or its subsidiaries or any connection with any core connected person of the Company under the Listing Rules as of the Latest Practicable Date, and (iii) that there are no other factors that may affect his or her independence at the time of his or her appointment. CORPORATE GOVERNANCE Our Company is committed to achieving high standards of corporate governance with a view to safeguarding the interests of our Shareholders. To accomplish this, our Company complies or intends to comply with the corporate governance requirements under the Corporate Governance Code after the [REDACTED]. Our Directors recognize the importance of incorporating elements of good corporate governance in the management structures and internal control procedures of our Group to achieve effective accountability. Our Company intends to comply with all code provisions in the Corporate Governance Code after the [REDACTED]. Board Diversity The Board has adopted a board diversity policy (the “Board Diversity Policy”) prior to the [REDACTED] in order to enhance the effectiveness of our Board and to maintain a high standard of corporate governance. Our Company recognizes and embraces the benefits of having a diverse Board. Pursuant to the Board Diversity Policy, in reviewing and assessing suitable candidates to serve as a Director of the Company, the Nomination Committee will consider a range of diversity perspectives with reference to the Company’s business model and specific needs, including but not limited to gender, age, language, cultural and educational background, professional qualifications, skills, knowledge, industry and experience and/or length of service. All board appointments will be based on meritocracy, and candidates will be considered against objective criteria, having due regard for the benefits of diversity on the Board. As at the Latest Practicable Date, our Board consists of six male members and three female members with ages ranging from 40 years old to 64 years old. Our Directors have a balanced portfolio of knowledge and skills, including production of electronic components and products, property investment, property development, legal and education. They obtained degrees in various fields such as business administration, engineering, law and finance. Our Company has reviewed the membership, structure and composition of the Board, and is of the opinion that the structure of the Board is reasonable, and the experiences and skills of the Directors in various aspects and fields can enable our Company to maintain high standard of operation. DIRECTORS AND SENIOR MANAGEMENT – 167 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 177 of 431 -- Upon the [REDACTED], the Nomination Committee will from time to time review the Board Diversity Policy, develop and review measurable objectives for implementing the policy, and monitor the progress on achieving these measurable objectives in order to ensure that the policy remains effective. The 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. EMOLUMENT OF DIRECTORS AND SENIOR MANAGEMENT We offer our Directors and senior management members, emolument in the form of salaries, allowances, bonuses and benefits in kind. Our independent non-executive Directors receive emolument based on their responsibilities. The aggregate amount of remuneration which was paid to our Directors for the three years ended December 31, 2023, 2024 and 2025 were approximately RMB8.7 million, RMB9.9 million and RMB16.0 million, respectively. The aggregate amount of remuneration which was paid to our top five individuals for the three years ended December 31, 2023, 2024 and 2025 included three, four and four directors, respectively. The emoluments (including salaries and other benefits, performance based bonuses, retirement benefit scheme contributions and share-based payment expenses) of the remaining two, one and one individual(s) for the same years/period were RMB3.7 million, RMB1.5 million and RMB1.8 million, respectively. It is estimated that the aggregate amount of remuneration payable to Directors for the year ending December 31, 2026 will be approximately RMB16.0 million under arrangements in force at the date of this document. None of our Directors, our former Director or any of our five highest paid individuals has been paid any sum of money for the three years ended December 31, 2023, 2024 and 2025 as (a) an inducement to join or upon joining the Company; or (b) for loss of office as a director of any member of the Group or of any other office in connection with the management of the affairs of any member of the Group. There has been no arrangement under which a Director has waived or agreed to waive any emoluments for the three years ended December 31, 2023, 2024 and 2025. Save as disclosed above, no other payments have been paid, or are payable, by our Company or any of our subsidiaries to our Directors or the five highest paid individuals of our Group during the Track Record Period. COMPLIANCE ADVISER We have appointed China Securities (International) Corporate Finance Company 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 in the following circumstances: (a) before the publication of any regulatory announcement, circular or financial report; (b) where a transaction, which might constitute a notifiable or connected transaction under the Listing Rules, is contemplated, including share [REDACTED], sales or transfers of treasury shares and share [REDACTED]; (c) where we propose to use the [REDACTED] of the [REDACTED] in a manner different from that detailed in this document or where our business activities, developments or results deviate from any forecast, estimate or other information in this document; and (d) where the Stock Exchange makes an inquiry of us regarding unusual price movement and trading volume or other issues under Rule 13.10 of the Listing Rules. The term of appointment of the compliance adviser will commence on the [REDACTED] and is expected to end on the date on which our Company complies with Rule 13.46 of the Listing Rules in respect of its financial results for the first full financial year commencing after the [REDACTED]. DIRECTORS AND SENIOR MANAGEMENT – 168 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 178 of 431 -- So far as our Directors are aware, immediately following the completion of the [REDACTED] (assuming the [REDACTED] and the [REDACTED] are not exercised), the following persons will have interests and/or short positions in the Shares or underlying Shares of our Company which would fall to be disclosed to the Company and the Stock Exchange pursuant to the provisions of Divisions 2 and 3 of Part XV of the SFO, or, directly or indirectly, be interested in 10% or more of the issued voting shares of our Company. Shareholder/ Ultimate Shareholder Nature of Interest Class and number of Shares directly or indirectly held Approximate % of shareholding in our A Shares as at the Latest Practicable Date Approximate % of shareholding in our A Shares immediately after the [REDACTED](3) Approximate % of shareholding in the total share capital of our Company immediately after the [REDACTED](3) Mr. Chen Tao ! ! ! ! ! Interest in controlled corporation(1) 266,269,191 A Shares (L) 30.52% [REDACTED]% [REDACTED]% Interest of Spouse(2) 3,791,642 A Shares (L) 0.43% [REDACTED]% [REDACTED]% Ms. Liu Chunlan ! ! ! Beneficial owner 3,791,642 A Shares (L) 0.43% [REDACTED]% [REDACTED]% Interest of Spouse(2) 266,269,191 A Shares (L) 30.52% [REDACTED]% [REDACTED]% Shenghua Xinye ! ! ! ! Beneficial owner(1) 134,837,190 A Shares (L) 15.45% [REDACTED]% [REDACTED]% Hong Kong Victory Giant ! ! ! ! ! ! ! ! Beneficial owner(1) 131,432,001 A Shares (L) 15.06% [REDACTED]% [REDACTED]% Hongda Investment ! ! Interest in controlled corporation(1) 131,432,001 A Shares (L) 15.06% [REDACTED]% [REDACTED]% Notes: (1) As at the Latest Practicable Date, (a) Mr. Chen Tao and Ms. Liu Chunlan (spouse of Mr. Chen Tao) holds 90% and 10% of Shenghua Xinye, which holds 134,837,190 A Shares; and (b) Mr. Chen Tao holds 70% of Hongda Investment, which in turns is the sole shareholder of Hong Kong Victory Giant which holds 131,432,001 A Shares. As such, Mr. Chen Tao will be deemed to be interested in the A Shares held by Shenghua Xinye and Hong Kong Victory Giant. (2) As of the Latest Practicable Date, Ms. Liu Chunlan, the spouse of Mr. Chen Tao, is interested in 3,791,642 A Shares, while Mr. Chen Tao will be deemed to be interested in 266,269,191 A Shares. According to SFO, Ms. Liu Chunlan will be deemed to be interested in the A Shares held by Mr. Chen Tao and vice versa. (3) The calculation is based on the total number of [REDACTED] Shares, consisting of 872,557,313 A Shares and [REDACTED] H Shares in [REDACTED] immediately after completion of the [REDACTED] (assuming the [REDACTED] and the [REDACTED] are not exercised). The calculation of the percentage includes 217,443 A Shares being held as treasury Shares repurchased by our Company pursuant to the repurchase mandates approved by Shareholders, accounting for approximately 0.02% of the total number of A Shares in issue as of the Latest Practicable Date. (4) The letter “L” denotes the person’s long position in the Shares. For further information on any person who will be, immediately following completion of the [REDACTED], directly or indirectly, interested in 10% or more of the issued voting shares of any other member of our Group, see section headed “Appendix VI — Statutory and General Information — C. Further Information About Our Directors and Substantial Shareholders — 1. Disclosure of Interests — (b) Interests of Substantial Shareholders” in this document. SUBSTANTIAL SHAREHOLDERS – 169 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 179 of 431 -- SHARE CAPITAL Immediately before the [REDACTED] As at the Latest Practicable Date, the total issued share capital of the Company was 872,557,313 A Shares of nominal value of RMB1.00 each, which are listed on the ChiNext Market of Shenzhen Stock Exchange. Description of Shares Number of Shares Approximate % of issued share capital A Shares in issue(Note) ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 872,557,313 100% Note: Including 217,443 A Shares being held as treasury Shares repurchased by our Company pursuant to the repurchase mandates approved by Shareholders, accounting for approximately 0.02% of the total number of A Shares in issue as of the Latest Practicable Date. Upon the Completion of the [REDACTED] Immediately following the completion of the [REDACTED], assuming the [REDACTED] and the [REDACTED] are not exercised, the share capital of our Company will be as follows: Description of Shares Number of Shares Approximate % of the enlarged issued share capital after the [REDACTED] A Shares in issue(Note) ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 872,557,313 [REDACTED]% H Shares to be [REDACTED] pursuant to the [REDACTED] ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! [REDACTED] [REDACTED]% Total ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! [REDACTED] 100% Note: Including 217,443 A Shares being held as treasury Shares repurchased by our Company pursuant to the repurchase mandates approved by Shareholders, accounting for approximately 0.02% of the total number of A Shares in issue as of the Latest Practicable Date. Immediately following the completion of the [REDACTED], assuming that the [REDACTED] is fully exercised but the [REDACTED] is not exercised, the share capital of our Company will be as follows: Description of Shares Number of Shares Approximate % of the enlarged issued share capital after the [REDACTED] A Shares in issue(Note) ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 872,557,313 [REDACTED]% H Shares to be [REDACTED] pursuant to the [REDACTED] ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! [REDACTED] [REDACTED]% Total ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! [REDACTED] 100% Note: Including 217,443 A Shares being held as treasury Shares repurchased by our Company pursuant to the repurchase mandates approved by Shareholders, accounting for approximately 0.02% of the total number of A Shares in issue as of the Latest Practicable Date. SHARE CAPITAL – 170 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 180 of 431 -- Immediately following the completion of the [REDACTED], assuming that the [REDACTED] is fully exercised but the [REDACTED] is not exercised, the share capital of our Company will be as follows: Description of Shares Number of Shares Approximate % of the enlarged issued share capital after the [REDACTED] A Shares in issue(Note) ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 872,557,313 [REDACTED]% H Shares to be [REDACTED] pursuant to the [REDACTED] ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! [REDACTED] [REDACTED]% Total ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! [REDACTED] 100% Note: Including 217,443 A Shares being held as treasury Shares repurchased by our Company pursuant to the repurchase mandates approved by Shareholders, accounting for approximately 0.02% of the total number of A Shares in issue as of the Latest Practicable Date. Immediately following the completion of the [REDACTED], assuming that the [REDACTED] and the [REDACTED] are exercised in full, the share capital of our Company will be as follows: Description of Shares Number of Shares Approximate % of the enlarged issued share capital after the [REDACTED] A Shares in issue(Note) ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 872,557,313 [REDACTED]% H Shares to be [REDACTED] pursuant to the [REDACTED] ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! [REDACTED] [REDACTED]% Total ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! [REDACTED] 100% Note: Including 217,443 A Shares being held as treasury Shares repurchased by our Company pursuant to the repurchase mandates approved by Shareholders, accounting for approximately 0.02% of the total number of A Shares in issue as of the Latest Practicable Date. OUR SHARES Our H Shares in [REDACTED] upon completion of the [REDACTED], and our A Shares, are ordinary Shares in our share capital and are considered as one class of Shares. Shenzhen-Hong Kong Stock Connect has established a stock connect mechanism between Chinese mainland and Hong Kong. Our A Shares can be [REDACTED] for and [REDACTED] by mainland Chinese investors, qualified foreign institutional investors or qualified foreign strategic investors and must be traded in Renminbi. As our A Shares are eligible securities under the Northbound Trading Link, they can also be [REDACTED] for and [REDACTED] by Hong Kong and other overseas [REDACTED] pursuant to the rules and limits of Shenzhen-Hong Kong Stock Connect. Our H Shares can be [REDACTED] for or [REDACTED] by Hong Kong and other overseas [REDACTED] and qualified domestic institutional [REDACTED]. If our H Shares are eligible securities under the Southbound Trading Link, they can also be [REDACTED] for and [REDACTED] by mainland Chinese [REDACTED] in accordance with the rules and limits of Shenzhen-Hong Kong Stock Connect or Shanghai-Hong Kong Stock Connect. SHARE CAPITAL – 171 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 181 of 431 -- RANKING Our H Shares and A Shares are regarded as one class of Shares under our Articles of Association and will rank pari passu with each other in all other respects and, in particular, will rank equally for all dividends or distributions declared, paid or made after the date of this document. All dividends in respect of our H Shares are to be paid by us in Hong Kong dollars whereas all dividends in respect of our A Shares are to be paid by us in Renminbi. In addition to cash, dividends may also be distributed in the form of Shares. [REDACTED] of our H Shares will receive share dividends in the form of H Shares, and holders of A Shares will receive dividends in the form of A Shares. NO CONVERSION OF OUR A SHARES INTO H SHARES FOR [REDACTED] AND [REDACTED] ON THE HONG KONG STOCK EXCHANGE Our A Shares and our H Shares are generally neither interchangeable nor fungible, and the [REDACTED] of our A Shares and our H Shares may be different after the [REDACTED]. The Guidelines on Application for “Full Circulation” of Domestic Unlisted Shares of H-share Companies ( H “ ” ) announced by the CSRC are not applicable to companies dual-listed in the PRC and on the Hong Kong Stock Exchange. As of the Latest Practicable Date, there were no relevant rules or guidelines from the CSRC providing that A Shareholders may convert A Shares held by them into H Shares for [REDACTED] and [REDACTED] on the Hong Kong Stock Exchange. APPROVAL FROM HOLDERS OF A SHARES REGARDING THE [REDACTED] Approval from holders of A Shares is required for our Company to [REDACTED] H Shares and seek the [REDACTED] of H Shares on the Hong Kong Stock Exchange. Such approval was obtained by us at the 2025 fourth extraordinary general meeting of our Company held on August 15, 2025 and is subject to the following conditions: (i) Size of the [REDACTED]. The proposed number of H Shares to be [REDACTED] shall not exceed 10% of the total [REDACTED] share capital enlarged by the H Shares to be [REDACTED] pursuant to the [REDACTED] (before the exercise of the [REDACTED]). The number of H Shares to be [REDACTED] pursuant to the full exercise of the [REDACTED] shall not exceed [REDACTED]% of the number of H Shares to be [REDACTED] initially under the [REDACTED]. (ii) Method of [REDACTED]. The method of [REDACTED] shall be by way of an [REDACTED] to institutional [REDACTED] and a [REDACTED] for [REDACTED] in Hong Kong. (iii) Target [REDACTED]. The H Shares shall be [REDACTED] to public [REDACTED] in Hong Kong under the [REDACTED] and international [REDACTED], qualified domestic institutional [REDACTED] in Chinese mainland and other [REDACTED] who are approved by mainland Chinese regulatory bodies to [REDACTED] abroad in the [REDACTED]. (iv) [REDACTED] basis. Fully considering the interests of the Company’s existing shareholders, the acceptability of [REDACTED], the risks related to the [REDACTED], and adopting a market-based pricing method in line with the domestic and international [REDACTED] conditions at the time of [REDACTED], the general valuation level of the Company’s industry, market [REDACTED], roadshows and bookkeeping results. (v) Validity period. The [REDACTED] of H Shares and [REDACTED] of H Shares on the Hong Kong Stock Exchange shall be completed within 24 months from the date when the 2025 fourth extraordinary general meeting was held on August 15, 2025. Save as disclosed in the section headed “History, Development and Corporate Structure — Our Major Shareholding Changes — (iii) Issuance of new A Shares”, there are no other approved [REDACTED] plans for our Shares except the [REDACTED]. SHARE CAPITAL – 172 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 182 of 431 -- SHAREHOLDERS’ GENERAL MEETINGS For details of the circumstances under which a Shareholders’ general meeting is required, please refer to “Appendix IV — Summary of Principal Laws and Regulations” to this document. SHARE SCHEMES For details of our 2022 A Share Incentive Scheme, see “Appendix VI — Statutory and General Information — D. 2022 Restricted A Share Incentive Scheme” in Appendix VI to this document. SHARE CAPITAL – 173 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 183 of 431 -- The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and the related notes included in the Accountants’ Report in Appendix I to this document. Our consolidated financial statements have been prepared in accordance with IFRS. The following discussion and analysis contain forward-looking statements that involve risks and uncertainties. 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 we believe are appropriate under the circumstances. You should not place undue reliance on any such statements. Our actual future results and timing of selected events could differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under “Risk Factors,” “Forward-Looking Statements” and elsewhere in this document. For the purpose of this section, unless the context otherwise requires, reference to the years of 2023, 2024 and 2025 refer to the years ended December 31, 2023, 2024 and 2025, respectively. OVERVIEW We are one of the key players in advanced PCB products for AI and high-performance computing in terms of sales revenue in the first half of 2025, specializing in research and development, manufacturing and sales of high-build-up HDIs and high-layer-count MLPCBs. Our industry-leading technologies, product quality and robust production capabilities position us as a crucial supplier to leading global technology companies. We offer a comprehensive range of products used in a variety of applications. We have expanded our presence in key sectors including AI and high-performance computing, smart devices, automotive electronics, telecommunications, and medical devices, with a focus on technologies supporting AI computing such as GPUs and CPUs. In 2023, 2024 and 2025, our revenue amounted to RMB7,931.2 million, RMB10,731.5 million and RMB19,292.3 million, respectively. In 2023, 2024 and 2025, our profit for the period amounted to RMB671.3 million, RMB1,154.4 million and RMB4,312.0 million, respectively. SIGNIFICANT FACTORS AFFECTING OUR RESULTS OF OPERATIONS Our business, results of operations and financial condition are affected by a number of general factors influencing the overall performance of the industry where we operate. These factors include macroeconomic trends, industry development and competitive landscape in the market. Any adverse development can have a negative impact on our results of operations. In addition to these general factors, our results of operations are affected by the following specific factors: Product Application Our products are designed for applications across a wide spectrum of end markets, including AI and high-performance computing, smart devices, automotive electronics, telecommunications, medical devices and other applications. The development and market acceptance of end products within these markets can have a significant and direct impact on our business and financial results. These markets are characterized by intense competition and are largely driven by the evolving needs and preferences of the end users. The continuous innovation and evolution of end products often introduce new and more complex technical requirements for our high-performance PCBs. For example, the rise of AI and high-performance computing in recent years created significant demand for PCBs supporting FINANCIAL INFORMATION – 174 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 184 of 431 -- high-speed, low-latency data transmission. In response, we have developed specialized high- density, high-frequency PCBs tailored for AI accelerator cards, AI servers, data center switches, and optical modules to meet these needs. This led to a significant growth in our revenue in the year ended December 31, 2025 compared with the same period in 2024, particularly that attributable to our high-layer-count MLPCBs and high-build-up HDIs. To stay ahead in this dynamic environment, we have been proactively developing and launching new or enhanced products that meet these emerging demands and maintain our competitive edge. Moreover, our success remains subject to the commercial success of end products incorporating our products, which in turn depends on broader factors such as end-user preferences, pricing, brand reputation, and overall economic conditions affecting end users. Development of new products and end uses can generate significant growth opportunities for us. See “Industry Overview” for further details. Conversely, a decline in demand for certain end products could lead to reduced orders for our products. Customer Base Expansion The industries we serve, including smart devices, automotive electronics, telecommunications, and, increasingly, AI and high-performance computing, are characterized by rapid product cycles and constant pressure on customers to launch or upgrade products or services that reflect technological advancement and cater to market demand. In particular, we have seen a notable increase in revenue from AI-related products and customers, driven by the growing demand for high-frequency and high-density PCBs used in AI servers, data centers and other related applications. This, in turn, requires us to continue enhancing our production technologies to help customers bring next generation products to the market. Our ability to consistently deliver high quality products that meet our customers’ performance and delivery expectations will directly impact our success in strengthening existing customer relationships. The PCB industry is highly competitive, with global production centered in China while a growing number of manufacturers are also establishing facilities in Southeast Asia to enhance supply chain resilience. The market remains fragmented, with many players across segments. To maintain and grow our business, we must continue to meet our customers’ requirements and deliver differentiated, high-performance products that meet their evolving needs. To better meet the delivery and localization requirements of our leading global customers, we are also expanding our overseas production footprint and are currently developing new facilities in Thailand and Vietnam. In addition to deepening relationships with existing customers, our business performance and financial results also depend on our ability to win new customers. We actively seek to expand our customer base by offering our products designed to meet customized technical requirements. Our ability to attract new customers is further influenced by our marketing and branding efforts, as well as the broader competitive landscape within the global PCB market. Product Mix and Pricing Our revenue and profitability are affected by the mix of products we sell across various applications. We currently offer (i) single- and double-layer PCBs, (ii) MLPCBs, (iii) HDIs, and (iv) FPCs used in AI accelerator cards, computing servers, smart devices, automotive electronics, telecommunications equipment and medical devices. Our product mix may vary in response to changes in market conditions, customer preferences and technological advancements in end products that contain our PCBs. These product categories have different selling prices and margin profiles, influenced by differences in technical complexity, production requirements, customer specifications, market competition, raw material costs and product positioning. For example, in recent years, our overall gross margin has consistently improved, driven by a shift toward higher-margin products and increased production scale. This trend has been supported in particular by growing sales of HDIs used in high-end applications such as AI servers, which typically have higher prices and deliver stronger margins. For example, we recorded a gross margin of 43.5% for our HDIs for the year ended December 31, 2025 as a result of the substantial increases in revenue contribution from sales FINANCIAL INFORMATION – 175 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 185 of 431 -- of HDIs for AI and high-performance computing. Meanwhile, we recorded a gross margin of 19.9% for our single- and double-layer PCBs for the same period, which was lower than our overall gross margin, reflecting the stronger pricing pressure attributable to their respective end-use industries. While we strive to maintain competitive pricing to support market share and volume growth, we also focus on optimizing our product mix toward higher margin and value-added products. As we deepen our relationship with our existing downstream customers and further enhance our market-leading position, we expect to be able to optimize our portfolio of products sold to these downstream customers by supplying more premium products to them. If we are unable to effectively manage our product portfolio, satisfy changing customer demands or price our products appropriately, our business operations, profitability and financial condition could be adversely affected. Raw Material Supply and Price Volatility Our results of operations are influenced by the availability and pricing of key raw materials used in our production, including copper-clad laminates, copper anodes and copper foil, which together represent a significant portion of our product costs. In 2023, 2024 and 2025, raw material costs represented approximately 58.6%, 62.7% and 65.9% of our cost of sales, respectively. These raw material costs are a critical factor in determining our product pricing. However, our selling prices may not fluctuate entirely in tandem with raw material costs, which may contribute to fluctuation in our results of operations. The prices and supply of our raw materials are closely linked to international commodity markets and global supply-demand dynamics. If we encounter tightened raw material supply or substantial price surges and are unable to offset them through technological improvements or process innovations, we may face supply constraints or margin compression. Such developments could materially and adversely affect our production efficiency, profitability and overall financial performance. Research and Development Capabilities Research and development are critical to our long-term competitiveness and sustained business growth. We collaborate closely with customers to co-develop products tailored to their requirements, and our ability to meet customer needs depends on our ability to develop and implement new technologies, advance product performance, improve reliability and enhance production efficiency. Therefore, we have been investing and will continue to invest in research and development. In 2023, 2024 and 2025, our research and development expenses amounted to RMB348.3 million, RMB449.8 million and RMB777.6 million, representing 4.4%, 4.2% and 4.0% of our total revenue in the same period, respectively. Our research and development are aligned with strategic priorities aimed at reinforcing our position as a key player in advanced PCB technologies in terms of sales revenue in 2024 and the first half of 2025, particularly in emerging industries and high-growth application areas. Therefore, our R&D achievements affect our business in multiple ways, such as (i) whether we will be successful in maintaining our relationships with our existing customers and acquiring new customers, (ii) whether we can expand our portfolio of products and services and (iii) whether we can increase production efficiency by employing more advanced and automated production equipment. Foreign Exchange Fluctuations Our reporting currency is the RMB. Several of our subsidiaries have foreign currency sales, trade and other receivables, bank deposits and cash and bank balances, trade and other payables, and borrowings which expose us to foreign currency risk. Such foreign currencies include the U.S. FINANCIAL INFORMATION – 176 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 186 of 431 -- dollar (“USD”), euro (“EUR”), Hong Kong dollar (“HKD”), Thai baht (“THB”) and New Zealand dollar (“NZD”). Consequently, foreign currency exchange rates have a significant impact on our consolidated financial information. Foreign currency transactions are translated into the functional currency using the exchange rates at the end of the previous month. At the end of each reporting period, monetary items denominated in foreign currencies are retranslated at the rates prevailing at that date. Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rates prevailing on the date when the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated. In 2023, 2024 and 2025, we recorded net foreign exchange gain of RMB11.7 million, RMB78.2 million and a net foreign exchange loss of RMB1.9 million, respectively. BASIS OF PRESENTATION Our historical financial information has been prepared based on the accounting policies set out in Note 4 to “Appendix I — Accountants’ Report” which conform with all applicable IFRS Accounting Standards issued by International Accounting Standards Board (“IASB”). In addition, our historical financial information also complies with the applicable disclosures requirements of the Hong Kong Companies Ordinance and the Listing Rules. The IASB has issued a number of new and revised IFRSs. For the purpose of preparing our historical financial information, we have adopted the accounting policies which conform with all applicable new and revised IFRS Accounting Standards that are effective during the Track Record Period, consistently throughout the Track Record Period. MATERIAL ACCOUNTING POLICIES AND ESTIMATES Please refer to Note 4 to “Appendix I — Accountants’ Report” to this document, which sets forth certain material accounting policy information that are important for understanding our financial conditions and results of operations. Some of our accounting policies require us to apply estimates and assumptions as well as complex judgments relating to accounting items. The estimates and assumptions we use and the judgments we make in applying our accounting policies have a significant impact on our financial position and results of operations. Our management continually evaluates such estimates, assumptions and judgments based on historical experience and other factors that are considered to be relevant. There has not been any material deviation between our management’s estimates or assumptions and actual results, and we have not made any material changes to these estimates or assumptions during the Track Record Period. We do not expect any material changes in these estimates and assumptions in the foreseeable future. See Note 5 to “Appendix I — Accountants’ Report”. Impairment test for goodwill and trademark with an indefinite useful life Goodwill is tested for impairment annually or more frequently if events or changes in circumstances indicate that the carrying value may be impaired. For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each of our Group’s cash generating units (“CGUs”), that are expected to benefit from the synergies of the combination, irrespective of whether our other assets or liabilities are assigned to those units. Impairment is determined by assessing the recoverable amount of the CGU to which the goodwill relates. Where the recoverable amount of the CGU is less than the carrying amount, an impairment loss is recognised. An impairment loss recognised for goodwill is not reversed in a subsequent period. FINANCIAL INFORMATION – 177 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 187 of 431 -- We conducted an impairment review on our goodwill and trademark with an indefinite useful life according to IAS36 Impairment of Assets. For the purpose of impairment review, the recoverable amount of Pole Star Limited and its subsidiaries (“MFS CGU”) and Victory Giant Technology (Thailand) Co., Ltd (“VGT Thailand CGU”) is determined based on value-in-use calculations. The calculations use pre-tax cash flow projections based on financial budgets approved by management covering a five-year period. Cash flows beyond the five-year period are extrapolated using the estimated growth rates stated below. The growth rate does not exceed the long-term average growth rate for the respective industry in which the CGU operates. The following tables set out the key assumptions used for value in use calculations of MFS CGU and VGT Thailand CGU: MFS CGU: Year ended December 31, 2023 2024 2025 Revenue growth rate over the forecast period ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 0%-24% 9%-12% 0%-42% Terminal revenue growth rate ! ! ! ! ! ! ! ! ! 0% 0% 0% Net profit margin before tax and interests ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 9%-11% 13% 13%-14% Pre-tax discount rate ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 12% 13% 13% VGT Thailand CGU: Year ended December 31, 2023 2024 2025 Revenue growth rate over the forecast period ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! N/A 13%-49% 16%-59% Terminal revenue growth rate ! ! ! ! ! ! ! ! ! N/A 0% 0% Net profit margin before tax and interests ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! N/A 5%-11% 3%-17% Pre-tax discount rate ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! N/A 15% 16% As of December 31, 2023, 2024 and 2025, the recoverable amount of MFS CGU and VGT Thailand CGU was determined based on discount cash flow method. Various factors were taken into consideration when determine the appropriate terminal revenue growth rate beyond the five-year forecasting period. This growth rate does not exceed the long-term average growth rate for the market in which the relative business operates. Management determined budgeted profit margins and revenue growth rates based on historical performance and its expectations of the market development. The pre-tax discount rates reflected the current market assessment of the time value of money and the risks specific to the business. As of December 31, 2023, 2024 and 2025, the recoverable amount of MFS CGU were approximately RMB3,402.2 million, RMB3,203.2 million and RMB3,451.8 million respectively. The headroom measured by the excess of the recoverable amount over the carrying amount of MFS CGU were RMB568.6 million, RMB531.6 million and RMB549.5 million as of December 31, 2023, 2024 and 2025 respectively. Based on the results of the impairment assessments, no impairment loss on the goodwill and trademark with an indefinite useful life relating to MFS CGU was recognised as of December 31, 2023, 2024 and 2025. FINANCIAL INFORMATION – 178 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 188 of 431 -- As of December 31, 2024 and 2025, the recoverable amount of VGT Thailand CGU were approximately RMB383.4 million and RMB1,059.4 million. The headroom measured by the excess of the recoverable amount over the carrying amount of VGT Thailand CGU were RMB114.0 million and RMB210.8 million as of December 31, 2024 and 2025 respectively. Based on the results of the impairment assessments, no impairment loss on the goodwill relating to MFS CGU was recognised as of December 31, 2024 and 2025. We performed sensitivity analysis based on the assumption that the pre-tax discount rate and the annual growth rate of revenue have been changed. Has the estimated key assumptions during the forecast period been changed as below, headroom would have decreased to the following: MFS CGU December 31, 2023 December 31, 2024 December 31, 2025 RMB’000 RMB’000 RMB’000 Annual growth rate of revenue decreased by 1%! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 482,372 381,599 445,364 Pre-tax discount rate increased by 1% ! ! ! 278,829 206,269 449,498 VGT Thailand CGU December 31, 2023 December 31, 2024 December 31, 2025 RMB’000 RMB’000 RMB’000 Annual growth rate of revenue decreased by 1%! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! N/A 74,591 131,064 Pre-tax discount rate increased by 1% ! ! ! N/A 68,145 3,338 Considering there was sufficient headroom based on the assessment, the Directors believe that any reasonable possible change in any of the key assumptions would not cause the carrying amount of the MFS CGU or VGT Thailand CGU to exceed its recoverable amount as of December 31, 2023, 2024 and 2025, respectively. RESULTS OF OPERATIONS Year Ended December 31, 2023 2024 2025 RMB % RMB % RMB % (in RMB thousands, except for percentages) Revenue ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 7,931,248 100.0 10,731,469 100.0 19,292,313 100.0 Cost of sales ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! (6,287,951) (79.3) (8,292,806) (77.3) (12,496,889) (64.8) Gross profit ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 1,643,297 20.7 2,438,663 22.7 6,795,424 35.2 Other (losses)/gains, net ! ! ! ! ! ! ! ! ! ! ! ! (11,413) (0.1) 41,846 0.4 (67,840) (0.4) Other income ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 43,829 0.6 49,981 0.5 72,589 0.4 Selling and marketing expenses ! ! ! ! ! ! ! ! (154,408) (1.9) (200,815) (1.9) (257,347) (1.3) Research and development expenses ! ! ! ! ! (348,304) (4.4) (449,827) (4.2) (777,643) (4.0) (Provision)/reversal of impairment losses on financial assets, net ! ! ! ! ! ! ! ! ! ! ! ! ! ! (15,329) (0.2) 2,303 0.0 (36,415) (0.2) Administrative expenses ! ! ! ! ! ! ! ! ! ! ! ! (320,286) (4.0) (456,705) (4.3) (563,528) (2.9) [REDACTED] ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! – – – – [REDACTED] (0.0) Operating profit ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 837,386 10.6 1,425,446 13.3 5,164,209 26.8 Finance costs ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! (88,172) (1.1) (113,623) (1.1) (142,493) (0.7) Profit before income tax! ! ! ! ! ! ! ! ! ! ! ! 749,214 9.4 1,311,823 12.2 5,021,716 26.0 Income tax expenses ! ! ! ! ! ! ! ! ! ! ! ! ! ! (77,868) (1.0) (157,392) (1.5) (709,728) (3.7) Profit for the year attributable to owners of the Company ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 671,346 8.5 1,154,431 10.8 4,311,988 22.4 FINANCIAL INFORMATION – 179 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 189 of 431 -- Our net profit increased by 72.0% from RMB671.3 million in 2023 to RMB1,154.4 million in 2024, primarily due to the increase in our gross profit from RMB1,643.3 million in 2023 to RMB2,438.7 million in 2024. Our net profit increased by 273.5% from RMB1,154.4 million in 2024 to RMB4,312.0 million in 2025, primarily due to the increase in our gross profit from RMB2,438.7 million in 2024 to RMB6,795.4 million in 2025. PRINCIPAL COMPONENTS OF RESULTS OF OPERATIONS Revenue By product category Year Ended December 31, 2023 2024 2025 RMB % RMB % RMB % (in RMB thousands, except for percentages) Single- and double-layer PCB ! ! ! ! ! ! ! ! ! 647,790 8.2 1,046,788 9.8 1,027,869 5.3 MLPCB ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 5,788,391 73.0 6,172,756 57.5 8,316,217 43.1 HDI ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 929,978 11.7 1,520,773 14.2 7,424,728 38.5 FPC ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 92,422 1.2 1,310,445 12.2 1,314,875 6.8 Others* ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 472,667 5.9 680,707 6.3 1,208,624 6.3 Total ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 7,931,248 100.0 10,731,469 100.0 19,292,313 100.0 Note: * In addition to generating revenue from the sale of PCB products, we also generated revenues from the sales of scrap materials, primarily copper-bearing etching solutions, which accounted for the majority of our other revenue. Others represented 5.9%, 6.3% and 6.3% of our revenue in 2023, 2024 and 2025, respectively. The revenue of other products was primarily derived from sales to customers in Chinese mainland (excluding special supervision territory). During the Track Record Period, MLPCBs were our largest revenue contributor. We also derived increasingly significant revenue from the sales of HDIs, especially HDIs with a build-up of 4+N+4 or above, which we expect to continue to be a major contributor to our total revenue going forward. We also provided single- and double-layer PCBs and FPCs to address customers’ diverse needs. Going forward, with the proliferation of AI technologies, we expect the demand for our high-layer-count MLPCBs and HDIs to remain strong. By geographical location Year Ended December 31, 2023 2024 2025 RMB % RMB % RMB % (in RMB thousands, except for percentages) Chinese Mainland (excluding special supervision territory) ! ! ! ! 2,582,247 32.6 3,517,936 32.8 3,286,380 17.0 Offshore Special supervision territory in China ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 2,610,628 32.9 2,451,044 22.8 2,471,087 12.8 Taiwan ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 193,176 2.4 334,165 3.1 4,915,760 25.5 Hong Kong ! ! ! ! ! ! ! ! ! ! ! ! ! 589,521 7.4 389,051 3.6 433,220 2.2 Vietnam ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 559,152 7.0 1,078,642 10.1 3,233,672 16.8 FINANCIAL INFORMATION – 180 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 190 of 431 -- Year Ended December 31, 2023 2024 2025 RMB % RMB % RMB % (in RMB thousands, except for percentages) Asia (Excluding special supervision territory in China, Taiwan, Hong Kong and Vietnam) ! ! ! ! ! ! ! ! ! ! 520,104 6.7 1,216,949 11.3 2,107,802 10.9 North America and Europe(1) ! ! 332,851 4.2 868,077 8.1 1,535,074 8.0 Other regions and overseas countries(2) ! ! ! ! ! ! ! ! ! ! ! ! 70,902 0.9 194,898 1.9 100,694 0.5 Total PCB products(3) ! ! ! ! ! 7,458,581 94.1 10,050,762 93.7 18,083,689 93.7 Notes: (1) In 2023, 2024 and 2025, revenue generated from the U.S. accounted for less than five percent of our revenue in the same periods, respectively. (2) Primarily including sales to South America and Oceania. (3) In addition to generating revenue from the sale of PCB products, we also generated revenues from the sales of scrap materials, primarily copper-bearing etching solutions, which accounted for the majority of our other revenue. Others represented 5.9%, 6.3% and 6.3% of our revenue in 2023, 2024 and 2025, respectively. The revenue of other products was primarily derived from sales to customers in Chinese mainland (excluding special supervision territory). During the Track Record Period, a majority of our revenue was from customers outside Chinese mainland, for whom we completed the customs declarations. A substantial portion of our sales to such customers occurs in special supervision territory in China, which are special customs supervision zones in China that are approved by the State Council of the PRC with specific tax and regulatory policies. Products entering the special supervision territory from places other than the special supervision territory in China are treated as exports and thus eligible for export tax rebates. Our customs-related obligations, liabilities or responsibilities are fully released and discharged upon completion of delivery within the special supervision territory in China. All subsequent customs-related obligations, including any tariffs imposed by the United States if the customer determines to import their products to the United States, shall become the sole responsibility of the downstream customers, instead of ours. Sales Volume and Average Selling Price (“ASP”)* Year Ended December 31, 2023 2024 2025 Sales volume ASP Sales volume ASP Sales volume ASP ’000 sq m RMB/ sq m ’000 sq m RMB/ sq m ’000 sq m RMB/ sq m Single- and double-layer PCB ! ! ! ! ! ! ! ! ! 1,420 456 1,779 589 1,653 622 MLPCB ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 5,814 996 6,018 1,026 5,965 1,394 HDI ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 508 1,831 647 2,351 551 13,475 FPC ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 35 2,641 462 2,836 494 2,662 Notes: * For MLPCBs, HDIs and FPCs, sales volume is calculated as the aggregate of the area of specific product types. Within the same product category, products with a higher number of layers or build-up typically have a higher ASP, assuming the same sales area. * ASP is calculated by dividing the revenue in a given product category by the corresponding sales volume. FINANCIAL INFORMATION – 181 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 191 of 431 -- The changes in sales volume and ASP were primarily attributable to shifts in market demand and changes in product mix. It should be noted that our ASP is calculated on a per-square-meter basis. As the number of layers increases, the yield of finished square meters from the same amount of input material decreases. As a result, the ASP per square meter tends to increase more rapidly for higher-layer products. The ASP of HDI increased significantly from 2024 to 2025 mainly due to an increased proportion of higher build-up HDIs with more advanced designs, processes and materials. We expect the ASP of our HDI products to remain at a relatively high level in the near term, supported by continued demand for high-end HDI products used in AI computing and other advanced applications, although it may fluctuate from period to period depending on industry trends, customer demand and market conditions. Cost of Sales Year Ended December 31, 2023 2024 2025 RMB % RMB % RMB % (in RMB thousands, except for percentages) Cost of raw materials ! ! ! ! ! ! ! ! ! ! ! ! ! 3,687,558 58.6 5,197,105 62.7 8,236,815 65.9 Cost of manufacturing ! ! ! ! ! ! ! ! ! ! ! ! ! 1,692,755 27.0 1,952,565 23.5 2,751,275 22.0 Cost of labor ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 907,638 14.4 1,143,136 13.8 1,508,799 12.1 Total ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 6,287,951 100.0 8,292,806 100.0 12,496,889 100.0 Gross Profit and Gross Profit Margin By product category Year Ended December 31, 2023 2024 2025 Gross Profit Gross Profit Margin Gross Profit Gross Profit Margin Gross Profit Gross Profit Margin RMB % RMB % RMB % (in RMB thousands, except for percentages) Single- and double-layer PCB ! ! ! ! ! ! ! ! ! 88,926 13.7 195,975 18.7 204,387 19.9 MLPCB ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 933,890 16.1 940,864 15.2 2,025,263 24.4 HDI ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 136,891 14.7 342,598 22.5 3,231,680 43.5 FPC ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 24,093 26.1 315,831 24.1 310,056 23.6 Others(1)! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 459,497 97.2 643,395 94.5 1,024,038 84.7 Total/Overall(2) ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 1,643,297 20.7 2,438,663 22.7 6,795,424 35.2 Notes: (1) Mainly attributable to the sale of scrap materials, primarily copper-bearing etching solutions. The gross profit of other products was primarily derived from sales to customers in Chinese mainland (excluding special supervision territory). (2) The overall gross profit margin is calculated as gross profit for the year divided by revenue for the corresponding year and multiplied by 100%. Our gross profit increased significantly from RMB2,438.7 million for the year ended December 31, 2024 to RMB6,795.4 million for the year ended December 31, 2025, primarily due to an increase in our revenue and an improvement of our gross profit margin from 22.7% to 35.2%. In particular, driven by the strong demand from AI computing-related applications, we experienced FINANCIAL INFORMATION – 182 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 192 of 431 -- a significant boost in demand for our high-end HDIs and MLPCBs that carry higher gross profit margin than our other products. Our gross profit increased from RMB1,643.3 million in 2023 to RMB2,438.7 million in 2024, primarily attributable to the consolidation of the results of operations of PSL upon completion of our acquisition in November 2023 and increased demand for products used in AI-related applications. Other (Losses)/Gains, Net Year Ended December 31, 2023 2024 2025 RMB % RMB % RMB % (in RMB thousands, except for percentages) Fair value change on financial assets at FVTPL ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 2,346 20.6 (3,491) (8.3) – – Interest income from wealth management product ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 40,561 355.4 8,638 20.6 1,489 2.2 Net foreign exchange gain/(loss)(1) ! ! ! ! ! ! 11,731 102.8 78,156 186.8 (1,886) (2.8) Write-back of provision(2) ! ! ! ! ! ! ! ! ! ! ! – – 55,115 131.7 – – Impairment loss on property, plant and equipment ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! – – (10,741) (25.7) (253) (0.4) Donation ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! (6,750) (59.1) (4,382) (10.5) (10,387) (15.3) Loss on disposal/written off of property, plant and equipment ! ! ! ! ! ! ! ! ! ! ! ! ! (7,778) (68.2) (47,615) (113.8) (21,589) (31.8) Loss on disposal of intangible assets ! ! ! ! ! (2) (0.0) (103) (0.2) – – Loss on disposal of land use rights ! ! ! ! ! ! (32,418) (284.0) – – – – Written down of inventories ! ! ! ! ! ! ! ! ! ! (16,135) (141.4) (13,177) (31.3) (33,630) (49.6) Gain on early termination of leases ! ! ! ! ! – – 114 0.3 (716) (1.1) Others ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! (2,968) (26.1) (20,668) (49.6) (868) (1.3) Total ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! (11,413) 100.0 41,846 100.0 (67,840) 100.0 Notes: (1) Net foreign exchange gain/(loss) represents the exchange differences arising from the settlement of foreign currency transactions and the translation of monetary balances in accordance with our accounting policies. (2) We had write-back of provisions for litigation claims amounted to RMB55.1 million during 2024 due to the finalization of certain legal proceedings. Other Income Year Ended December 31, 2023 2024 2025 RMB % RMB % RMB % (in RMB thousands, except for percentages) Interest income ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 23,126 52.8 14,328 28.7 24,510 33.8 Government subsidies* ! ! ! ! ! ! ! ! ! ! ! ! ! 20,703 47.2 23,891 47.8 42,195 58.1 VAT input tax deduction ! ! ! ! ! ! ! ! ! ! ! ! – – 7,482 15.0 4,959 6.8 Others ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! – – 4,280 8.5 925 1.3 Total ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 43,829 100.0 49,981 100.0 72,589 100.0 Note: * Government subsidies recognized here primarily represent income-related government subsidies, which are generally not subject to specific conditions and are one-off in nature. FINANCIAL INFORMATION – 183 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 193 of 431 -- Selling and Marketing Expenses Year Ended December 31, 2023 2024 2025 RMB % RMB % RMB % (in RMB thousands, except for percentages) Salaries and compensations! ! ! ! ! ! ! ! ! ! ! 81,230 52.6 111,340 55.4 152,917 59.4 Promotion and advertising expenses ! ! ! ! ! ! 33,691 21.8 31,501 15.7 34,025 13.2 Insurance expenses ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 14,430 9.3 20,206 10.1 30,929 12.0 Travel, transportation and vehicle expenses ! 14,475 9.4 15,420 7.7 17,039 6.6 Consultancy fees ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 4,596 3.0 3,599 1.8 3,998 1.6 Warehousing expenses! ! ! ! ! ! ! ! ! ! ! ! ! ! 563 0.4 1,351 0.7 1,094 0.4 Depreciation ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 212 0.1 239 0.1 1,424 0.6 Others ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 5,211 3.4 17,159 8.5 15,921 6.2 Total ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 154,408 100.0 200,815 100.0 257,347 100.0 as % of total revenue ! ! ! ! ! ! ! ! ! ! ! ! ! 1.9 1.9 1.3 Research and Development Expenses Year Ended December 31, 2023 2024 2025 RMB % RMB % RMB % (in RMB thousands, except for percentages) Salaries and compensations! ! ! ! ! ! ! ! ! ! ! 184,427 53.0 229,683 51.1 303,756 39.1 Product R&D expenses ! ! ! ! ! ! ! ! ! ! ! ! ! 159,057 45.7 201,575 44.8 458,354 58.9 Depreciation of properties and equipment ! ! 3,817 1.1 8,017 1.8 11,757 1.5 Others ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 1,003 0.2 10,552 2.3 3,776 0.5 Total ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 348,304 100.0 449,827 100.0 777,643 100.0 as % of total revenue ! ! ! ! ! ! ! ! ! ! ! ! ! 4.4 4.2 4.0 (Provision)/Reversal of Impairment Losses on Financial Assets, Net Our impairment losses under expected credit loss model, net of reversal, represent net impairment losses recognized on trade and bills receivables and other receivables. In 2024, our reversal of impairment loss amounted to RMB2.3 million; in 2023 and 2025, our provision of impairment loss amounted to RMB15.3 million and RMB36.4 million, respectively. Administrative Expenses Year Ended December 31, 2023 2024 2025 RMB % RMB % RMB % (in RMB thousands, except for percentages) Salaries and compensations! ! ! ! ! ! ! ! ! ! ! 123,369 38.5 176,521 38.7 240,121 42.6 Depreciation ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 40,953 12.8 55,559 12.2 58,826 10.4 Consultancy fees ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 26,734 8.3 34,459 7.5 18,661 3.3 Amortization of low-value consumables ! ! ! 4,421 1.4 6,484 1.4 19,880 3.5 Insurance expenses ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 7,548 2.4 11,181 2.5 13,572 2.4 Business hospitality expenses ! ! ! ! ! ! ! ! ! 12,887 4.0 10,752 2.4 21,110 3.7 Amortization of intangible assets ! ! ! ! ! ! ! 5,839 1.8 32,254 7.1 41,226 7.3 FINANCIAL INFORMATION – 184 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 194 of 431 -- Year Ended December 31, 2023 2024 2025 RMB % RMB % RMB % (in RMB thousands, except for percentages) Environmental protection fees ! ! ! ! ! ! ! ! ! 3,764 1.2 3,839 0.8 4,244 0.8 Office expenses ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 5,328 1.7 8,414 1.8 9,710 1.7 Repair and maintenance expenses ! ! ! ! ! ! ! 3,888 1.2 5,959 1.3 5,222 0.9 Travel and transportation expenses ! ! ! ! ! ! 3,675 1.1 7,099 1.6 10,761 1.9 Depreciation of right-of-use assets ! ! ! ! ! ! 403 0.1 1,231 0.3 1,236 0.2 Business and other tax ! ! ! ! ! ! ! ! ! ! ! ! ! 52,133 16.3 64,467 14.1 64,120 11.4 Others ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 29,344 9.2 38,486 8.4 54,839 9.7 Total ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 320,286 100.0 456,705 100.0 563,528 100.0 as % of total revenue ! ! ! ! ! ! ! ! ! ! ! ! ! ! 4.0 4.3 2.9 Finance Cost Year Ended December 31, 2023 2024 2025 RMB % RMB % RMB % (in RMB thousands, except for percentages) Interest expenses on borrowings ! ! ! ! ! ! ! ! 83,676 94.9 107,234 94.4 132,984 93.3 Interest expenses on lease liabilities! ! ! ! ! ! 1,624 1.8 3,197 2.8 4,794 3.4 Others ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 2,872 3.3 3,192 2.8 4,715 3.3 Total ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 88,172 100.0 113,623 100.0 142,493 100.0 as % of total revenue ! ! ! ! ! ! ! ! ! ! ! ! ! 1.1 1.1 0.7 Income Tax Expenses For tax rates in the jurisdictions in which we operate, see Note 12 to “Appendix I — Accountants’ Report”. We recorded income tax expenses of RMB77.9 million, RMB157.4 million, and RMB709.7 million in 2023, 2024 and 2025, respectively. During the Track Record Period and up to the Latest Practicable Date, we had fulfilled all our tax obligations and did not have any unresolved tax disputes. PERIOD-TO-PERIOD COMPARISON OF RESULTS OF OPERATIONS Year Ended December 31, 2025 Compared to Year Ended December 31, 2024 Revenue Our revenue increased from RMB10,731.5 million in 2024 to RMB19,292.3 million in 2025 due to an increase in revenue for all our product categories, primarily driven by rising demand for high-performance PCB products attributable to the rapid development of AI-related applications, including MLPCBs with more than 14 layers and HDIs with a build-up of 4+N+4 or above, which typically have higher ASP. FINANCIAL INFORMATION – 185 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 195 of 431 -- Single- and Double-layer PCB Our revenue from sales of single- and double-layer PCBs decreased from RMB1,046.8 million in 2024 to RMB1,027.9 million in 2025, primarily due to a change in product mix, as we sold a higher portion of advanced products for year ended December 31, 2025, leading to a decrease in the sales volume from 1,779 thousand square meters in 2024 to 1,653 thousand square meters in 2025 as a result of strategic capacity optimization initiatives to prioritize the production of high-end MLPCBs, partially offset by an increase in ASP from RMB589 per square meter in 2024 to RMB622 per square meter in 2025, mainly as a result of a higher proportion of advanced products in our sales mix. MLPCB Our revenue from sales of MLPCBs increased from RMB6,172.8 million in 2024 to RMB8,316.2 million in 2025, primarily due to a shift in product mix toward MLPCBs with more than 14 layers, which generally have higher unit prices, leading to an increase in the ASP from RMB1,026 per square meter in 2024 to RMB1,394 per square meter in 2025, partially offset by a decrease in the sales volume from 6,018 thousand square meters in 2024 to 5,965 thousand square meters in 2025, mainly as a result of strategic capacity optimization initiatives to prioritize the production of high-end MLPCBs with more layers. HDI Our revenue from sales of HDIs increased significantly from RMB1,520.8 million in 2024 to RMB7,424.7 million in 2025, primarily because HDIs used for AI computing and other advanced applications, particularly high-build-up HDIs, are typically high-end products with significantly higher prices, leading to an increase in the ASP from RMB2,351 per square meter in 2024 to RMB13,475 per square meter in 2025 mainly due to an increased proportion of higher build-up HDIs with more advanced designs, processes and materials, partially offset by a decrease in sales volume from 647 thousand square meters in 2024 to 551 thousand square meters for year ended December 31, 2025, mainly due to our strategic focus on producing higher build-up HDIs and the fact that we shifted our capacity towards these products. FPC Our revenue from sales of FPCs remained stable in 2024 and 2025 as a result of an increase in sales volume from 462 thousand square meters in 2024 to 494 thousand square meters in 2025, partially offset by a decrease in ASP from RMB2,836 per square meter in 2024 to RMB2,662 per square meter in 2025. Others Our revenue from sales of other products increased from RMB680.7 million in 2024 to RMB1,208.6 million in 2025, primarily due to an increase in sales volume driven by increased production volume of high-layer-count MLPCBs and high-build-up HDIs and an increase in price of scrap materials. Cost of Sales Our cost of sales increased from RMB8,292.8 million in 2024 to RMB12,496.9 million in 2025, primarily due to (i) a 58.5% increase in the cost of raw materials, (ii) a 40.9% increase in the cost of manufacturing and (iii) a 32.0% increase in the cost of labor. Such increases were due to an increase in our production volume and a shift toward more advanced PCBs. FINANCIAL INFORMATION – 186 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 196 of 431 -- Gross Profit and Gross Profit Margin Our gross profit increased significantly from RMB2,438.7 million in 2024 to RMB6,795.4 million in 2025, primarily due to an increase in our revenue and an improvement of our gross profit margin from 22.7% to 35.2%. In particular, driven by the strong demand from AI computing related applications, we experienced a significant boost in demand for our high-end HDIs and MLPCBs that carry higher gross profit margin than our other products. Single- and Double-layer PCB Our gross profit from single- and double-layer PCBs increased by 4.3% from RMB196.0 million in 2024 to RMB204.4 million in 2025, primarily due to an increase in gross profit margin from 18.7% in 2024 to 19.9% in 2025, driven by a change in product mix as we sold a higher proportion of higher-margin single- and double-layer PCBs in 2025, partially offset by a 1.8% decrease in revenue from sales of single- and double-layer PCBs. MLPCB Our gross profit from MLPCBs increased by 115.3% from RMB940.9 million in 2024 to RMB2,025.3 million in 2025, primarily due to (i) a 34.7% increase in revenue from sales of MLPCBs and (ii) an increase in gross profit margin from 15.2% in 2024 to 24.4% in 2025, driven by a higher proportion of high-performance MLPCBs in our product mix. In particular, we experienced strong demand for high-layer-count MLPCBs that carries higher sales price and profit margins used in AI-related applications in 2025. HDI Our gross profit from HDIs increased significantly by 843.3% from RMB342.6 million in 2024 to RMB3,231.7 million in 2025, primarily due to (i) a 388.2% increase in revenue from sales of HDIs and (ii) an increase in gross profit margin from 22.5% in 2024 to 43.5% in 2025, driven by a higher proportion of high-build-up HDIs in our product mix. In particular, we saw a surge in demand for high-end HDIs used in AI-related applications, which generally have higher average sales prices and profit margin in 2025. FPC Our gross profit from FPCs decreased by 1.8% from RMB315.8 million in 2024 to RMB310.1 million in 2025, primarily due to a decrease in gross margin from 24.1% in 2024 to 23.6% in 2025. Others Our gross profit from other products increased by 59.2% from RMB643.4 million in 2024 to RMB1,024.0 million in 2025, primarily due to an increase in our production volume and the price of scrap materials. Other (Losses)/Gains, Net We recorded other gains of RMB41.8 million in 2024 and other losses of RMB67.8 million in 2025, primarily due to (i) an increase of RMB80.0 million in net foreign change loss, (ii) a decrease of RMB55.1 million in write-back of provisions and (iii) an increase of RMB20.5 million in written down of inventories, partially offset by a decrease of RMB26.0 million in loss on disposal/written off of property, plant and equipment. FINANCIAL INFORMATION – 187 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 197 of 431 -- Other Income Our other income increased from RMB50.0 million in 2024 to RMB72.6 million in 2025, primarily due to (i) an increase of RMB18.3 million in government subsidies and (ii) an increase of RMB10.2 million in interest income, partially offset by a decrease of RMB3.4 million in others. Selling and Marketing Expenses Our selling and marketing expenses increased from RMB200.8 million in 2024 to RMB257.3 million in 2025, primarily due to (i) an increase of RMB41.6 million in salaries and compensations, (ii) an increase of RMB10.7 million in insurance expenses and (iii) an increase of RMB1.6 million in travel, transportation and vehicle expense. As a percentage of our revenue, our selling and marketing expenses decreased from 1.9% in 2024 to 1.3% in 2025 as we benefited from improved economies of scale. Research and Development Expenses Our research and development expenses increased from RMB449.8 million in 2024 to RMB777.6 million in 2025, primarily due to (i) a RMB256.8 million increase in product R&D expenses, driven by increased spending on the development of high-end MLPCBs and HDIs and (ii) a RMB74.1 million increase in salaries and compensations driven by increased headcount. Our research and development expenses as a percentage of our total revenue remained stable during the period. (Provision)/Reversal of Impairment Losses on Financial Assets, Net Our impairment losses under expected credit loss model, net of reversal, shifted from reversal of impairment loss of RMB2.3 million in 2024 to a provision of impairment loss of RMB36.4 million in 2025, primarily due to provision made on increasing balance of our trade and notes receivables and other receivables as of December 31, 2025 compared to December 31, 2024. Administrative Expenses Our administrative expenses increased from RMB456.7 million in 2024 to RMB563.5 million in 2025, primarily due to (i) an increase of RMB63.6 million in salaries and compensations, (ii) an increase of RMB13.4 million in amortization of low-value consumables and (iii) an increase of RMB10.4 million in business hospitality expenses, partially offset by a decrease of RMB15.8 million in consultancy fees. Our administrative expenses as a percentage of our total revenue decreased from 4.3% in 2024 to 2.9% in 2025 due to improved economies of scale. Finance Costs Our finance costs increased from RMB113.6 million in 2024 to RMB142.5 million in 2025, primarily due to an increase in borrowings to support our business growth. Profit for the Year As a result of the foregoing, our profit for the period increased from RMB1,154.4 million in 2024 to RMB4,312.0 million in 2025, and our net profit margin increased from 10.8% in 2024 to 22.4% in 2025. FINANCIAL INFORMATION – 188 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 198 of 431 -- Year Ended December 31, 2024 Compared to Year Ended December 31, 2023 Revenue Our revenue increased from RMB7,931.2 million in 2023 to RMB10,731.5 million in 2024, due to an increase in revenue in all our product categories. We experienced an across-the-board increase in sales volume for all our product categories, primarily due to the consolidation of the results of operations of PSL upon the completion of our acquisition in November 2023. Single- and Double-layer PCB Our revenue from sales of single- and double-layer PCBs increased from RMB647.8 million in 2023 to RMB1,046.8 million in 2024 primarily due to an increase in sales volume from 1,420 thousand square meters in 2023 to 1,779 thousand square meters in 2024, and a change in product mix, mainly attributable to the consolidation of the results of operations of PSL upon the completion of our acquisition in November 2023, and to a lesser extent, an increase in demand for PCB products used in smart devices, leading to an increase in the ASP from RMB456 per square meter in 2023 to RMB589 per square meter in 2024. MLPCB Our revenue from sales of MLPCBs increased from RMB5,788.4 million in 2023 to RMB6,172.8 million in 2024, primarily due to an increase in sales volume from 5,814 thousand square meters in 2023 to 6,018 thousand square meters in 2024, and a change in product mix, mainly attributable to the consolidation of the results of operations of PSL upon the completion of our acquisition in November 2023, leading to an increase in the ASP from RMB996 per square meter in 2023 to RMB1,026 per square meter in 2024. HDI Our revenue from sales of HDIs increased from RMB930.0 million in 2023 to RMB1,520.8 million in 2024, primarily due to an increase in sales volume from 508 thousand square meters in 2023 to 647 thousand square meters in 2024, primarily driven by a sharp increase in demand for HDIs used in AI computing and other advanced applications in the fourth quarter of 2024 and a change in product mix as HDIs used for AI computing and other advanced applications are typically high-end products with higher selling prices, leading to an increase in the ASP from RMB1,831 per square meter in 2023 to RMB2,351 per square meter in 2024. FPC Our revenue from sales of FPCs increased from RMB92.4 million in 2023 to RMB1,310.4 million in 2024, primarily attributable to an increase in the sales volume from 35 thousand square meters in 2023 to 462 thousand square meters in 2024 and an increase in the ASP from RMB2,641 per square meter in 2023 to RMB2,836 per square meter in 2024, primarily due to the consolidation of the results of operations of PSL upon the completion of our acquisition in November 2023. Others Our revenue from other products increased from RMB472.7 million in 2023 to RMB680.7 million in 2024, primarily due to the consolidation of the results of operations of PSL upon the completion of our acquisition in November 2023 and an increase in price of scrap materials. FINANCIAL INFORMATION – 189 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 199 of 431 -- Cost of Sales Our cost of sales increased from RMB6,288.0 million in 2023 to RMB8,292.8 million in 2024, primarily due to (i) a 40.9% increase in the cost of raw materials driven by higher production volume and a shift toward more advanced, higher-cost PCBs, (ii) a 15.3% increase in costs of manufacturing and (iii) a 25.9% increase in cost of labor. Such increases were due to the consolidation of the results of operations of PSL upon the completion of our acquisition in November 2023. Gross Profit and Gross Profit Margin Our gross profit increased from RMB1,643.3 million in 2023 to RMB2,438.7 million in 2024, primarily attributable to the consolidation of the results of operations of PSL upon completion of our acquisition in November 2023 and increased demand for products used in AI-related applications. Single- and Double-layer PCB Our gross profit from single- and double-layer PCBs increased by 120.5% from RMB88.9 million in 2023 to RMB196.0 million in 2024, primarily due to (i) a 61.6% increase in revenue from sales of single- and double-layer PCBs and (ii) an increase in gross profit margin from 13.7% in 2023 to 18.7% in 2024, mainly attributable to the consolidation of the results of operations of PSL upon the completion of our acquisition in November 2023, whose products are used in applications with higher profit margins. MLPCB Our gross profit from MLPCBs increased by 0.7% from RMB933.9 million in 2023 to RMB940.9 million in 2024, primarily due to a 6.6% increase in revenue from sales of MLPCBs, mainly attributable to higher sales volume due to the consolidation of the results of operations of PSL upon the completion of our acquisition in November 2023, partially offset by a slight decrease in gross margin due to raw material price fluctuations. HDI Our gross profit from HDIs increased by 150.3% from RMB136.9 million in 2023 to RMB342.6 million in 2024, primarily due to (i) a 63.5% increase in revenue from sales of HDIs and (ii) an increase in gross profit margin from 14.7% in 2023 to 22.5% in 2024, reflecting increasing demand for HDIs used in AI and other advanced applications. FPC Our gross profit from FPCs increased by 1,210.4% from RMB24.1 million in 2023 to RMB315.8 million in 2024, primarily due to a 1,317.9% increase in revenue from sales of FPCs, mainly attributable to the consolidation of the results of operations of PSL upon the completion of our acquisition in November 2023, which significantly expanded our FPC products and production scale, partially offset by a slight decrease in gross margin due to raw material price fluctuations. Others Our gross profit from other products increased by 40.0% from RMB459.5 million in 2023 to RMB643.4 million in 2024, primarily due to the consolidation of the results of operations of PSL upon the completion of our acquisition in November 2023 and an increase in price of scrap materials. FINANCIAL INFORMATION – 190 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 200 of 431 -- Other (Losses)/Gains, Net We recorded other losses of RMB11.4 million in 2023 and other gain of RMB41.8 million in 2024, primarily due to (i) an increase of RMB66.4 million in net foreign exchange gain, (ii) a RMB55.1 million in reversal of provision and (iii) a decrease of RMB32.4 million in loss on disposal of land use rights, partially offset by (i) an increase of RMB39.8 million in loss on disposal of property, plant and equipment and (ii) a decrease of RMB31.9 million in interest income from wealth management product. Other Income Our other income increased from RMB43.8 million in 2023 to RMB50.0 million in 2024, primarily due to (i) an increase of RMB7.5 million in VAT input tax deduction and (ii) an increase of RMB3.2 million in government subsidies, partially offset by a decrease of RMB8.8 million in interest income. Selling and Marketing Expenses Our selling and marketing expenses increased from RMB154.4 million in 2023 to RMB200.8 million in 2024, primarily due to (i) an increase of RMB30.1 million in salaries and compensations, (ii) an increase of RMB11.9 million in other expenses and (iii) an increase of RMB5.8 million in insurance expenses, mainly attributable to the consolidation of the results of operations of PSL upon the completion of our acquisition in November 2023. As a percentage of our revenue, our selling and marketing expenses remained stable. Research and Development Expenses Our research and development expenses increased from RMB348.3 million in 2023 to RMB449.8 million in 2024, primarily due to (i) an increase of RMB45.3 million in salaries and compensations and (ii) an increase of RMB42.5 million in product R&D expenses, mainly attributable to R&D investments by PSL due to the consolidation of the results of operations of PSL upon completion of our acquisition in November 2023. As a percentage of our revenue, our research and development expenses remained stable. (Provision)/Reversal of Impairment Losses on Financial Assets, Net Our impairment losses under expected credit loss model, net of reversal, shifted from a provision of impairment loss of RMB15.3 million in 2023 to reversal of impairment loss of RMB2.3 million in 2024, primarily due to the reversal of losses on trade and other receivables as of December 31, 2024 compared to December 31, 2023. Administrative Expenses Our administrative expenses increased from RMB320.3 million in 2023 to RMB456.7 million in 2024, primarily due to (i) an increase of RMB53.2 million in salaries and compensations, (ii) an increase of RMB26.4 million in amortization of intangible assets related to administrative function and (iii) an increase of RMB14.6 million in depreciation of properties and equipment, and (iv) an increase of RMB12.3 million in business and other tax. These increases were driven by the acquisition of PSL, which resulted in additional administrative costs related to its operations. As a percentage of our total revenue, our administrative expenses increased slightly for the same reason. Finance Costs Our finance costs increased from RMB88.2 million in 2023 to RMB113.6 million in 2024, primarily due to an increase in interest expenses on borrowings attributable to higher proportion of unpledged borrowings, which generally bear higher interest rates. FINANCIAL INFORMATION – 191 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 201 of 431 -- Profit for the Year As a result of the foregoing, our profit for the year increased from RMB671.3 million in 2023 to RMB1,154.4 million in 2024, and our net profit margin increased from 8.5% in 2023 to 10.8% in 2024. DISCUSSION OF SELECTED ITEMS FROM CONSOLIDATED STATEMENTS OF FINANCIAL POSITION As of December 31, 2023 2024 2025 (in RMB thousands) ASSETS AND LIABILITIES Non-current assets Property, plant and equipment ! ! ! ! ! ! ! ! ! ! ! ! ! 7,184,377 7,476,552 12,876,416 Right-of-use assets ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 209,358 211,026 469,943 Intangible assets ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 616,181 615,123 587,624 Goodwill ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 1,156,331 1,217,339 1,193,532 Financial assets at fair value through other comprehensive income ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 765,228 1,116,269 2,854,295 Deferred tax assets ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 76,739 52,466 343,263 Other non-current assets ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 112,282 406,540 3,405,621 Total non-current assets ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 10,120,496 11,095,315 21,730,694 Current assets Inventories ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 1,376,834 2,045,403 3,162,360 Financial assets at fair value through profit or loss ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 3,549 – 137,000 Derivative financial assets ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 31,318 15,796 – Trade and other receivables ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 3,655,625 4,271,749 6,560,911 Other current assets ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 54,498 85,024 373,877 Restricted bank deposits ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 1,391,920 735,280 73,075 Cash and cash equivalents ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 749,376 926,746 3,206,572 Total current assets ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 7,263,120 8,079,998 13,513,795 Current liabilities Borrowings! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 3,294,401 1,907,771 2,473,826 Lease liabilities ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 16,536 14,832 22,114 Trade and other payables! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 4,005,013 5,473,479 11,143,930 Other current liabilities ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 177,146 18,846 15,108 Contract liabilities ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 5,222 3,798 11,423 Deferred income ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 7,244 6,076 8,085 Income tax payable ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 77,569 111,761 370,774 Derivative financial liabilities ! ! ! ! ! ! ! ! ! ! ! ! ! 58 – 1,736 Total current liabilities ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 7,583,189 7,536,563 14,046,996 Net current (liabilities)/assets ! ! ! ! ! ! ! ! ! ! ! ! (320,069) 543,435 (533,201) Total assets less current liabilities ! ! ! ! ! ! ! ! ! 9,800,427 11,638,750 21,197,493 FINANCIAL INFORMATION – 192 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 202 of 431 -- As of December 31, 2023 2024 2025 (in RMB thousands) Non-current liabilities Borrowings! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 1,777,135 2,310,038 3,867,436 Lease liabilities ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 53,673 60,231 82,320 Trade and other payables! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! – 5,585 5,171 Provisions ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 58,252 13,936 10,891 Deferred income ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 41,847 35,654 72,186 Other non-current liabilities ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 1,227 1,192 1,172 Deferred tax liabilities ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 242,563 284,181 540,709 Total non-current liabilities ! ! ! ! ! ! ! ! ! ! ! ! ! ! 2,174,697 2,710,817 4,579,885 Net assets ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 7,625,730 8,927,933 16,617,608 EQUITY Equity attributable to owners of the Company Share capital! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 862,689 862,689 870,349 Other reserves ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 3,830,180 4,234,220 7,861,823 Retained profit ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 2,932,861 3,831,024 7,885,436 Total equity ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 7,625,730 8,927,933 16,617,608 Property, Plant and Equipment Property, plant, and equipment primarily consisted of property and buildings, land, machinery, transportation vehicle, electronic equipment, construction in progress and leasehold improvement. Property, plant, and equipment increased from RMB7,184.4 million as of December 31, 2023 to RMB7,476.6 million as of December 31, 2024, primarily due to increase in our property and buildings and the acquisition of land, which reflected the further expansion of our production capacity to meet the increasing demand. Property, plant, and equipment increased from RMB7,476.6 million as of December 31, 2024 to RMB12,876.4 million as of December 31, 2025, primarily due to increase in our construction in progress and machinery, which reflected the further expansion of our production capacity to meet the increasing demand. For details on our production facilities, see “Business — Manufacturing — Production Centers” for further details. Inventories Our inventories include raw materials, finished goods, and work in progress. The table below sets forth the breakdown of our inventories as of the dates indicated. As of December 31, 2023 2024 2025 (in RMB thousands) Raw materials! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 321,118 520,413 935,219 Work in progress ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 435,020 879,227 1,275,517 Finished goods ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 713,781 739,159 1,051,302 Less: write-down of inventory ! ! ! ! ! ! ! ! (93,085) (93,396) (99,678) Total ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 1,376,834 2,045,403 3,162,360 FINANCIAL INFORMATION – 193 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 203 of 431 -- Our inventories increased from RMB1,376.8 million as of December 31, 2023 to RMB2,045.4 million as of December 31, 2024, primarily due to (i) an increase in work in progress from RMB435.0 million as of December 31, 2023 to RMB879.2 million as of December 31, 2024 and (ii) an increase in raw materials from RMB321.1 million as of December 31, 2023 to RMB520.4 million as of December 31, 2024 due to a build-up of inventory in anticipation of future sale as our operational scale continued to grow. Our inventories increased from RMB2,045.4 million as of December 31, 2024 to RMB3,162.4 million as of December 31, 2025, primarily due to (i) an increase in raw materials from RMB520.4 million as of December 31, 2024 to RMB935.2 million as of December 31, 2025, (ii) an increase in work in progress from RMB879.2 million as of December 31, 2024 to RMB1,275.5 million as of December 31, 2025 and (iii) an increase in finished goods from RMB739.2 million as of December 31, 2024 to RMB1,051.3 million as of December 31, 2025 generally in line with the substantial growth in our orders. The table below sets forth an aging analysis of our inventory as of the dates indicated. As of December 31, 2023 2024 2025 (in RMB thousands) Within 1 year ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 1,304,250 1,986,913 3,006,053 Over 1 year to 2 years ! ! ! ! ! ! ! ! ! ! ! ! ! ! 60,241 44,107 146,761 Over 2 years to 3 years ! ! ! ! ! ! ! ! ! ! ! ! ! ! 8,740 6,496 5,356 Over 3 years! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 3,603 7,887 4,190 Total ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 1,376,834 2,045,403 3,162,360 In 2023, 2024 and 2025, our inventory turnover days were 72.6 days, 75.3 days and 76.1 days, respectively. Inventory turnover days for each year equals the average of the beginning and ending balances of inventory for that period divided by cost of sales for that year and multiplied by 365 days. Through out the Track Record Period, our inventory turnover days remained relatively stable. According to Frost & Sullivan, our inventory turnover days during the Track Record Period are in line with industry norm. As of February 28, 2026, 64.6% of our total inventories as of December 31, 2025, or RMB2,042.0 million, were utilized or sold. Based on our assessments during the Track Record Period, we have made adequate provisions for our inventories to account for potential uncertainties. Trade and Other Receivables Trade receivables mainly arise from sales of our products on credit. We periodically conduct credit evaluations of customers who trade on credit. We usually grant credit periods ranging from 30 to 150 days to our customers, depending on their operating situations, financial condition and expected transaction volume. The table below sets forth the breakdown of our trade and other receivables as of the dates indicated. As of December 31, 2023 2024 2025 (in RMB thousands) Trade receivables – Third parties ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 3,250,758 3,927,102 5,933,087 FINANCIAL INFORMATION – 194 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 204 of 431 -- As of December 31, 2023 2024 2025 (in RMB thousands) Less: loss allowance for trade receivables! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! (44,967) (40,498) (61,908) Notes receivables – Commercial ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 49,148 60,516 96,526 – Bank ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 168,072 133,960 95,166 Less: loss allowance for notes receivables ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! (2,009) (1,945) (1,917) Bills receivables measured at fair value through other comprehensive income ! ! 122,797 37,371 69,600 Other receivables – Third parties ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 90,108 133,350 380,887 Less: loss allowance for other receivables ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! (15,779) (12,502) (28,789) Prepayments ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 37,497 34,395 78,259 Total ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 3,655,625 4,271,749 6,560,911 Our trade and other receivables increased from RMB3,655.6 million as of December 31, 2023 to RMB4,271.7 million as of December 31, 2024 and further increased to RMB6,560.9 million as of December 31, 2025, primarily due to an increase in the sales of our products in line with our business growth. Our other receivables mainly comprise export tax rebate receivables and deposits and security margins. Our other receivables increased from RMB133.4 million to RMB380.9 million, primarily due to an increase in receivables relating to export tax rebates. The table below sets forth an aging analysis of our trade receivables as of the dates indicated. For further details, see Note 26 to “Appendix I — Accountants’ Report”. As of December 31, 2023 2024 2025 (in RMB thousands) Within 90 days ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 2,436,195 3,047,146 4,682,181 91 to 180 days ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 755,003 851,855 1,211,208 181 days to 1 year ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 16,630 25,193 35,973 Over 1 year to 2 years ! ! ! ! ! ! ! ! ! ! ! ! ! ! 36,632 988 1,817 Over 2 year to 3 years ! ! ! ! ! ! ! ! ! ! ! ! ! ! 6,298 1,920 78 Over 3 years to 4 years ! ! ! ! ! ! ! ! ! ! ! ! ! – – 1,830 Total ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 3,250,758 3,927,102 5,933,087 In 2023, 2024 and 2025, our trade receivables turnover days were 135.6 days, 122.1 days and 93.3 days, respectively. Trade receivables turnover days for each year equals the average of the beginning and ending balances of trade receivables for that year divided by revenue for that year and multiplied by 365 days for 2023, 2024 and 2025. In 2023 and 2024, our trade receivables turnover days remain relatively stable. Our trade receivables turnover days decreased to 93.3 days in 2025, primarily due to following the negotiation of shorter payment terms with our customers. As of February 28, 2026, 49.5% of our total trade and other receivables as of December 31, 2025, or RMB3,245.7 million, were settled. FINANCIAL INFORMATION – 195 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 205 of 431 -- Trade and Other Payables Our trade and other payables primarily represent outstanding amounts owed to third parties, including suppliers, salary and bonus payables, utilities, dividends, and taxes. Our suppliers usually grant us a credit period ranging from 30 to 180 days from invoice date. The table below sets forth the breakdown of our trade and other payables as of the dates indicated. As of December 31, 2023 2024 2025 (in RMB thousands) Trade payables ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 1,860,242 2,760,653 7,141,945 Notes payables ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 1,745,068 2,202,380 3,383,996 Other payables ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 399,703 516,031 623,160 Less: non-current portion ! ! ! ! ! ! ! ! ! ! ! ! – (5,585) (5,171) Total ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 4,005,013 5,473,479 11,143,930 Our trade and other payables increased from RMB4,005.0 million as of December 31, 2023 to RMB5,473.5 million as of December 31, 2024, primarily due to increases in (i) trade and notes payables as a result of increased payables for raw material purchases and a build-up of inventory in anticipation of future sale and (ii) salary and bonus payables as a result of increased employee compensation expenses, in line with our business growth and increase in orders. Our trade and other payables increased from RMB5,473.5 million as of December 31, 2024 to RMB11,143.9 million as of December 31, 2025, primarily due to increases in trade and notes payables as a result of increased procurement in line with our overall business expansion. The table below sets forth the aging analysis of the trade payables. As of December 31, 2023 2024 2025 (in RMB thousands) Within 90 days ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 1,204,904 2,047,020 5,510,401 91 days to 180 days ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 560,071 580,570 1,195,150 181 days to 1 year ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 57,366 112,028 419,775 Over 1 year to 2 years ! ! ! ! ! ! ! ! ! ! ! ! ! ! 31,992 11,499 7,343 Over 2 years to 3 years ! ! ! ! ! ! ! ! ! ! ! ! ! ! 3,167 5,012 2,532 Over 3 years to 4 years ! ! ! ! ! ! ! ! ! ! ! ! ! ! 2,742 4,524 2,751 Over 4 years to 5 years ! ! ! ! ! ! ! ! ! ! ! ! ! ! – – 3,993 Total ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 1,860,242 2,760,653 7,141,945 In 2023, 2024 and 2025, our trade payables turnover days were 101.5 days, 101.7 days and 144.6 days, respectively. Trade payables turnover days for each year equals the average of the beginning and ending balances of trade payables for that year divided by cost of sales for that year and multiplied by 365 days. Our trade payables turnover days increased to 144.6 days in 2025, primarily due to the extension of supplier payment terms. As of February 28, 2026, 31.0% of our trade and other payables outstanding as of December 31, 2025, or RMB3,455.8 million, were settled. FINANCIAL INFORMATION – 196 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 206 of 431 -- Goodwill As of December 31, 2023 2024 2025 (in RMB thousands) Carrying values ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 1,156,331 1,217,339 1,193,532 Goodwill acquired in a business combination of PSL and Thailand VGT is tested for impairment annually. For the purposes of impairment testing, goodwill has been allocated to CGU that are expected to benefit from the synergies of the combination, irrespective of whether other assets or liabilities of the Group are assigned to those units. Our management conducted an impairment review on the goodwill according to IAS 36 Impairment of assets, which requires the Company to allocate the goodwill to the CGU and compare the unit’s carrying amount with its recoverable amount. The goodwill represented to the CGU attributed from PSL is RMB1,156.3 million, RMB1,170.4 million and RMB1,144.4 million as of December 31, 2023, 2024 and 2025, respectively. The goodwill represented to the CGU attributed from Thailand VGT is RMB46.9 million and RMB49.1 million as of December 31, 2024 and 2025, respectively. Restricted Bank Deposits We had restricted bank deposits of RMB1,391.9 million, RMB735.3 million and RMB73.1 million as of December 31, 2023, 2024 and 2025, respectively, primarily related to pledged borrowings, with fluctuations mainly due to the expiration of existing arrangements and the signing of new contracts. LIQUIDITY AND CAPITAL RESOURCES During the Track Record Period, we financed our operations primarily through a combination of cash generated from operations and borrowings. As of December 31, 2025, we had cash and cash equivalents of RMB3,206.6 million. Going forward, we believe our liquidity requirements will be satisfied by using funds from a combination of cash generated from operations and [REDACTED] from the [REDACTED]. Taking into account the [REDACTED] from the [REDACTED] and cash generated from our operating activities available to us, our Directors believe that we have sufficient working capital to meet our present and future cash requirements for at least the next 12 months from the date of publication of this document. Cash Flows The table below sets forth our cash flows for the years indicated. Year Ended December 31, 2023 2024 2025 (in RMB thousands) Operating cash flows before movements in working capital ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 1,525,958 2,209,674 6,169,982 Cash generated from operations ! ! ! ! ! ! ! ! 1,499,449 2,190,934 5,036,278 Interest received ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 23,126 14,328 24,510 Income tax paid ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! (54,753) (134,146) (440,714) FINANCIAL INFORMATION – 197 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 207 of 431 -- Year Ended December 31, 2023 2024 2025 (in RMB thousands) Net cash generated from operating activities ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 1,467,822 2,071,116 4,620,074 Net cash used in investing activities ! ! ! ! (2,710,207) (646,872) (5,697,525) Net cash generated from/(used in) financing activities ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 1,263,997 (1,253,919) 3,344,582 Net increase in cash and cash equivalents ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 21,612 170,325 2,267,131 Cash and cash equivalents at beginning of the year ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 726,013 749,376 926,746 Effects of foreign exchange rate changes ! 1,751 7,045 12,695 Cash and cash equivalents at end of the year ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 749,376 926,746 3,206,572 Operating Activities In 2025, we had net cash generated from operating activities of RMB4,620.1 million. This was primarily attributable to our profit before income tax of RMB5,021.7 million, adjusted by items mainly including (i) non-cash and non-operating items, primarily comprising (a) depreciation of property, plant and equipment and (b) interest expenses, and (ii) change in working capital, primarily including (a) increase in trade and notes payables, (b) increase in trade and notes receivables and (c) decrease in inventories. In 2024, we had net cash generated from operating activities of RMB2,071.1 million. This was primarily attributable to our profit before income tax of RMB1,311.8 million, adjusted by items mainly including (i) non-cash and non-operating items, primarily comprising (a) depreciation of property, plant and equipment and (b) interest expenses, and (ii) change in working capital, primarily including (a) increase in trade and notes payables, (b) increase in inventories, and (c) increase in trade and notes receivables. In 2023, we had net cash generated from operating activities of RMB1,467.8 million. This was primarily attributable to our profit before tax of RMB749.2 million, adjusted by items mainly including (i) non-cash and non-operating items, primarily comprising (a) depreciation of property, plant and equipment and (b) interest expenses, and (ii) change in working capital, primarily including (a) decrease in trade and notes payables and (b) increase in other current liabilities. Investing Activities In 2025, we had net cash used in investing activities of RMB5,697.5 million, primarily consisting of purchase of property, plant and equipment, partially offset by (i) net redemption of restricted bank deposits and (ii) proceeds from disposal of property, plant and equipment. In 2024, we had net cash used in investing activities of RMB646.9 million, primarily consisting of (i) purchase of property, plant and equipment and (ii) net cash outflow arising from acquisitions of subsidiaries, partially offset by (i) net redemption of restricted bank deposits and (ii) proceeds from disposal of derivative financial instruments. In 2023, we had net cash used in investing activities of RMB2,710.2 million, primarily consisting of (i) net cash outflow arising from the acquisitions of subsidiaries, (ii) net placement of restricted bank deposits and (iii) purchase of property, plant and equipment, partially offset by (i) proceeds from disposal of financial assets at amortized cost and (ii) proceeds from disposal of financial assets at fair value through profit or loss. FINANCIAL INFORMATION – 198 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 208 of 431 -- Financing Activities In 2025, we had net cash generated from financing activities of RMB3,344.6 million, primarily consisting of (i) proceeds from bank borrowings and (ii) proceeds from issue of new shares, partially offset by repayment of bank borrowings. In 2024, we had net cash used in financing activities of RMB1,253.9 million, primarily consisting of (i) repayment of bank borrowings and (ii) dividend paid, partially offset by proceeds from bank borrowings. In 2023, we had net cash generated from financing activities of RMB1,264.0 million, primarily consisting of proceeds from bank borrowings, partially offset by (i) repayment of bank borrowings, (ii) dividends paid and (iii) interest paid. Net Current Assets/Liabilities The table below sets forth our current assets and liabilities as of the dates indicated. As of December 31, As of February 28, 2023 2024 2025 2026 (in RMB thousands) (unaudited) Current assets: Inventories ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 1,376,834 2,045,403 3,162,360 3,968,999 Financial assets at fair value through profit or loss ! ! ! ! ! ! 3,549 – 137,000 543,674 Derivative financial assets ! ! ! ! 31,318 15,796 – – Trade and other receivables ! ! ! 3,655,625 4,271,749 6,560,911 6,409,947 Other current assets ! ! ! ! ! ! ! ! 54,498 85,024 373,877 464,301 Restricted bank deposits ! ! ! ! ! 1,391,920 735,280 73,075 193,309 Cash and cash equivalents ! ! ! ! 749,376 926,746 3,206,572 1,985,482 Total current assets ! ! ! ! ! ! ! ! 7,263,120 8,079,998 13,513,795 13,565,712 Current liabilities: Borrowings! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 3,294,401 1,907,771 2,473,826 3,767,511 Lease liabilities ! ! ! ! ! ! ! ! ! ! ! 16,536 14,832 22,114 19,438 Trade and other payables! ! ! ! ! 4,005,013 5,473,479 11,143,930 11,140,865 Other current liabilities ! ! ! ! ! ! 177,146 18,846 15,108 9,931 Contract liabilities ! ! ! ! ! ! ! ! ! 5,222 3,798 11,423 23,059 Deferred income ! ! ! ! ! ! ! ! ! ! ! 7,244 6,076 8,085 8,727 Income tax payable ! ! ! ! ! ! ! ! ! 77,569 111,761 370,774 179,769 Derivative financial liabilities ! 58 – 1,736 – Total current liabilities ! ! ! ! ! 7,583,189 7,536,563 14,046,996 15,149,300 Net current (liabilities)/assets ! ! ! ! ! ! ! ! (320,069) 543,435 (533,201) (1,583,588) Comparison between December 31, 2025 and December 31, 2024 Our net current assets/liabilities changed from net current assets of RMB543.4 million as of December 31, 2024 to net current liabilities of RMB533.2 million as of December 31, 2025, primarily due to an increase of trade and other payables from RMB5,473.5 million to RMB11,143.9 million, a decrease of restricted bank deposits from RMB735.3 million to RMB73.1 million and an increase of borrowings from RMB1,907.8 million to RMB2,473.8 million, partially offset by an increase of trade and other receivables from RMB4,271.7 million to RMB6,560.9 million and an increase of cash and cash equivalents from RMB926.8 million to RMB3,206.6 million. FINANCIAL INFORMATION – 199 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 209 of 431 -- Comparison between December 31, 2024 and December 31, 2023 We turned from net current liabilities of RMB320.1 million as of December 31, 2023 to net current assets of RMB543.4 million as of December 31, 2024, primarily due to decrease in borrowings from RMB3,294.4 million to RMB1,907.8 million, an increase in inventories from RMB1,376.8 million to RMB2,045.4 million, and an increase in trade and other receivables from RMB3,655.6 million to RMB4,271.7 million partially offset by an increase in trade and other payables from RMB4,005.0 million to RMB5,473.5 million. INDEBTEDNESS The table below sets forth the indebtedness as of the dates indicated. As of December 31, As of February 28, 2023 2024 2025 2026 (in RMB thousands) (unaudited) Current Borrowings! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 3,294,401 1,907,771 2,473,826 3,767,511 Lease liabilities ! ! ! ! ! ! ! ! ! ! ! 16,536 14,832 22,114 19,438 Subtotal ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 3,310,937 1,922,603 2,495,940 3,786,949 Non-current Borrowings! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 1,777,135 2,310,038 3,867,436 4,087,986 Lease liabilities ! ! ! ! ! ! ! ! ! ! ! 53,673 60,231 82,320 82,490 Subtotal ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 1,830,808 2,370,269 3,949,756 4,170,476 Total ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 5,141,745 4,292,872 6,445,696 7,957,425 Borrowings The table below sets for the categories of our borrowings as of the dates indicated. As of December 31, As of February 28, 2023 2024 2025 2026 (in RMB thousands) (unaudited) Current Portion Pledged bank and other borrowings ! ! ! ! ! ! ! ! ! ! ! ! ! 1,554,834 838,412 527,516 705,869 Unpledged bank and other borrowings ! ! ! ! ! ! ! ! ! ! ! ! ! 1,736,472 1,066,474 1,941,827 3,042,549 Interest payables ! ! ! ! ! ! ! ! ! ! ! 3,095 2,885 4,483 19,093 Subtotal ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 3,294,401 1,907,771 2,473,826 3,767,511 Non-current Portion Pledged bank borrowings! ! ! ! ! 1,002,840 835,680 820,490 770,149 Unpledged bank borrowings ! ! 774,295 1,474,358 3,046,946 3,317,837 Subtotal ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 1,777,135 2,310,038 3,867,436 4,087,986 Total ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 5,071,536 4,217,809 6,341,262 7,855,497 FINANCIAL INFORMATION – 200 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 210 of 431 -- During the Track Record Period, our borrowings primarily represented bank borrowings. As of December 31, 2023, 2024 and 2025, our borrowings amounted to RMB5,071.5 million, RMB4,217.8 million and RMB6,341.3 million respectively. We recorded borrowings of RMB7,855.5 million as of February 28, 2026, being the most recent practicable date for determining our indebtedness. During the Track Record Period, our borrowings were obtained from commercial banks and financial institutions, with the effective interest rates ranging from 0.6% to 2.7% per annum. Our bank borrowings agreements contain standard terms, conditions and covenants that are customary for commercial bank loans. For details, see Note 29 to “Appendix I — Accountants’ Report”. As of February 28, 2026, 30.5% of our total banking facilities as of December 31, 2025, or RMB6,634.4 million, were utilized in the borrowings. Lease Liabilities Our lease liabilities, including current and non-current portions, were primarily in relation to our lease of land use rights and buildings used in its operations. As of December 31, 2023, 2024, and 2025 and February 28, 2026, the balance of our lease liabilities, including both current and non-current portions, was RMB70.2 million, RMB75.1 million, RMB104.4 million and RMB101.9 million, respectively. These changes primarily reflect the expansion of our facilities in line with business growth, as well as adjustments to our leasing portfolio over time, including the termination or renewal of certain leases, addition of new leased spaces, and modifications to lease terms. CONTINGENT LIABILITIES As of February 28, 2026, we did not have any material contingent liabilities. During the Track Record Period and up to the Latest Practicable Date, save as disclosed above, we did not have any bank and other loans, or any issued and outstanding or agreed to be issued loan capital, bank overdrafts, borrowings or similar indebtedness, liabilities under acceptances (other than ordinary trade bills), acceptance credits, debentures, mortgages, charges, hire purchase commitments or finance lease commitments, guarantees or other material contingent liabilities. Our Directors confirm that we have not experienced any difficulty in obtaining additional debt or equity financing during the Track Record Period and up to the Latest Practicable Date. Our Directors confirm that there has not been any material change in our indebtedness since January 15, 2026, and up to the Latest Practicable Date. Our Directors confirm that during the Track Record Period and up to the Latest Practicable Date, we did not have any material defaults or breaches of covenants in repayment of indebtedness. CAPITAL EXPENDITURE AND COMMITMENTS Capital Expenditure The table below sets forth the capital expenditure for the periods indicated. As of December 31, 2023 2024 2025 (in RMB thousands) Purchase of property, plant and equipment ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 261,683 1,116,063 6,363,688 Purchase of intangible assets ! ! ! ! ! ! ! ! ! ! 7,975 5,469 25,297 Total ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 269,258 1,121,532 6,388,985 FINANCIAL INFORMATION – 201 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 211 of 431 -- During the Track Record Period, our capital expenditure was primarily for purchase of property, plant and equipment used in our production. We plan to continue capital expenditures to support our business growth and expansion strategy. See “Future Plans and [REDACTED] — [REDACTED]” for further details. We intend to fund these expenditures with available financial resources, including cash generated from operations, [REDACTED] from the [REDACTED], and potential future equity or debt financing. Capital Commitments The table below sets forth the capital commitments as of the dates indicated. As of December 31, 2023 2024 2025 (in RMB thousands) Acquisition of property, plant and equipment ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 67,776 386,457 8,788,609 KEY FINANCIAL RATIOS Year Ended/As of December 31, 2023 2024 2025 Gross margin(1) ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 20.7% 22.7% 35.2% Net profit margin(2) ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 8.5% 10.8% 22.4% Return on equity(3) ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 8.8% 12.9% 25.9% Gearing ratio(4) ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 67.4% 48.1% 38.8% Current ratio(5) ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 1.0 1.1 1.0 Debt to equity ratio(6) ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 56.7% 36.9% 18.9% Notes: (1) Calculated as gross profit for the year divided by revenue for the corresponding year and multiplied by 100%. (2) Calculated as net profit for the year divided by revenue for the corresponding year and multiplied by 100%. (3) Calculated based on the total profit for the relevant year divided by the ending balance of total equity and multiplied by 100%. (4) Calculated based on the borrowings and lease liabilities divided by the ending balance of total equity and multiplied by 100%. (5) Calculated based on the total current assets divided by the total current liabilities as of the relevant dates. (6) Calculated based on interest-bearing bank and other borrowings net of cash and cash equivalents divided by total equity as of the relevant date and multiplied by 100%. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT FINANCIAL RISK The main risks arising from our financial instruments are currency risk, interest rate risk and price risk. See Note 39 to “Appendix I — Accountants’ Report”. Currency Risk Currency risk arises when recognized financial assets and liabilities are denominated in a currency that is not the same as an entity’s functional currency. We have certain foreign currency sales, trade and other receivables, bank deposits and cash and bank balances, trade and other payables and borrowings, which exposes us to currency risk. We manage and monitor our exposure to currency risk to ensure appropriate measures are implemented in a timely and effective manner. FINANCIAL INFORMATION – 202 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 212 of 431 -- Interest Rate Risk Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. We are exposed to cash flow interest rate risk in relation to our interest-bearing borrowings and fair value interest rate risk in relation to our fixed-rate borrowings and lease liabilities with fixed rates. We monitor the level of interest rates and regularly review our strategy on interest rate risk management in the light of the prevailing market condition. Price Risk Price risk refers to the risk of fluctuations in the fair value of financial instruments due to changes in market prices, whether caused by factors specific to individual instruments or general market movements. Our price risk exposures primarily relate to our financial investments at FVOCI. Specifically, if the price of the financial assets at FVOCI increase or decrease by 10%, our other comprehensive income would increase or decrease by RMB76.5 million, RMB111.6 million and RMB285.4 million for 2023 and 2024 and 2025, respectively. We monitor the pricing change of these equity securities during each reporting period to manage the price risk. Capital Management The primary objectives of our capital management are to safeguard our ability to continue as a going concern while maximizing the return to shareholders through the optimization of the debt and equity balance. Our overall strategy remains unchanged throughout the Track Record Period. Our capital structure consists of lease liabilities, borrowings (net of cash and bank balances) and equity attributable to owners of the Company (comprising capital and reserves). Our management regularly reviews the capital structure on a continuous basis taking into account the cost of capital and the risks associated with each class of capital. We will balance its overall capital structure through the payment of dividends, new share issues as well as the issue of new debts. See Note 38 to “Appendix I — Accountants’ Report”. OFF-BALANCE SHEET ARRANGEMENTS We have not entered into, nor do we expect to enter into, any off-balance sheet arrangements. We also have not entered into any financial guarantees or other commitments to guarantee the payment obligations of manufacturing partners. In addition, we have not entered into any derivative contracts that are indexed to our equity interests and classified as owners’ equity. We do not have any variable interest in any unconsolidated entity that provides financing, liquidity, market risk or credit support to us or engages in leasing or hedging or research and development services with us. DIVIDEND POLICY Subject to PRC laws and regulations, including the PRC Company Law ( ) and the No. 3 Guideline for the Supervision of Listed Companies — Cash Dividend Distribution of Listed Companies (2025 Revision) ( 3 — (2025 ) ), and the Articles of Association, we are required to pay cash dividends of no less than 10% of the distributable profits recorded in the fiscal year. The Group does not, in addition to this, maintain a general dividend policy or a fixed dividend payout ratio. In 2023, 2024 and 2025, we declared dividends amounting to RMB163.3 million, RMB163.3 million and RMB257.6 million, respectively. [REDACTED] FINANCIAL INFORMATION – 203 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 213 of 431 -- Future profit distributions may be carried out in the form of cash dividends or stock dividends or a combination of cash dividends and stock dividends. Any proposed distribution of dividends is subject to the discretion of our Board and the approval at our Shareholders’ meetings. Our Board may recommend a distribution of dividends in the future after taking into account our results of operations, financial condition, operating requirements, capital requirements, shareholders’ interests and any other conditions that our Board may deem relevant. DISTRIBUTABLE RESERVE As of December 31, 2025, our consolidated retained profit amounted to RMB7,885.4 million, which is available for distribution to our Shareholders. DISCLOSURE REQUIRED UNDER RULES 13.13 TO 13.19 OF THE LISTING RULES Our Directors confirm that, as of the Latest Practicable Date, they were not aware of any circumstances that would give rise to a disclosure requirement under Rules 13.13 to Rules 13.19 of the Listing Rules. UNAUDITED [REDACTED] FINANCIAL INFORMATION The unaudited [REDACTED] statement of adjusted consolidated net tangible assets of the Group attributable to owners of the Company prepared in accordance with paragraph 4.29 of the Listing Rules is set out to illustrate the effect of the [REDACTED] (as defined in this document) on the audited consolidated net tangible assets of the Group attributable to owners of the Company as at December 31, 2025 as if the [REDACTED] had taken place on that date. For details, see “Appendix II — Unaudited [REDACTED] Financial Information”. [REDACTED] EXPENSES [REDACTED] expenses represent professional fees, [REDACTED] commission and fees incurred in connection with the [REDACTED] and the [REDACTED]. Our [REDACTED] expenses are estimated to be approximately [REDACTED] million (including [REDACTED] commission) accounting for [REDACTED]% of the gross [REDACTED] of the [REDACTED], assuming that the [REDACTED] and the [REDACTED] are not exercised and based on an [REDACTED] of HK$[REDACTED] per Share. Among our [REDACTED] expenses, approximately [REDACTED] million is directly attributable to the [REDACTED] of Shares and will be charged to equity upon completion of the [REDACTED], and approximately RMB[REDACTED] million has been or will be charged to our consolidated statement of profit or loss and other comprehensive income. The [REDACTED] expenses we incurred in the Track Record Period and expect to incur would consist of approximately [REDACTED] million [REDACTED] related expenses and fees (including [REDACTED] commissions), approximately [REDACTED] million [REDACTED] expenses and fees including fees for the legal advisors and reporting accountant and approximately [REDACTED] million for other [REDACTED] fees and expenses. During the Track Record Period, approximately [REDACTED] million was recognised during the year ended December 31, 2025. The remaining [REDACTED] million is expected to be recognised after December 31, 2025 until the completion of the [REDACTED]. The [REDACTED] expenses above are the latest practicable estimate for reference only, and the actual amount may differ from this estimate. NO MATERIAL ADVERSE CHANGE AND RECENT DEVELOPMENTS Our Directors confirmed that, as of the date of this document, there has been no material adverse change in our financial position since December 31, 2025, and there has been no event since December 31, 2025 that would materially affect the information as set out in the Accountants’ Report in Appendix I to this document. FINANCIAL INFORMATION – 204 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 214 of 431 -- FUTURE PLANS For a detailed description of our future plans, see “Business — Our Growth Strategies”. [REDACTED] Assuming an [REDACTED] of HK$[REDACTED] per H Share, we estimate that we will receive [REDACTED] of approximately HK$[REDACTED] million from the [REDACTED] after deducting the [REDACTED] commissions and other estimated expenses paid and payable by us in connection with the [REDACTED] and assuming that the [REDACTED] and the [REDACTED] are not exercised. In line with our strategies, we intend to use our [REDACTED] for the purposes and in the amounts set forth below. • approximately [REDACTED]% of the [REDACTED], or approximately HK$[REDACTED] million, is expected to be used to expand our production in Chinese mainland: ! approximately [REDACTED]%, or approximately HK$[REDACTED] million, is expected to be used to purchase and install manufacturing equipment. Specifically, ! approximately [REDACTED]%, or approximately HK$[REDACTED] million, is expected to be used in further enhancing our smart factory infrastructure in Huizhou through the construction of new production lines at a pace of approximately 40% : 60% in a two-year period. We expect such efforts to complete ramping up three years after construction completion. Once fully ramped up, we expect to increase the annual production capacity of our Huizhou production center by approximately 1,020 thousand square meters of high-layer-count MLPCBs. We expect to purchase new manufacturing equipment for our infrastructure enhancement effort in Huizhou, primarily including exposure and imaging systems, coating and lamination equipment, and automated inspection systems to increase our production efficiency. ! approximately [REDACTED]%, or approximately HK$[REDACTED] million, is expected to be used in further enhancing our smart factory infrastructure in Changsha and Yiyang, with [REDACTED] allocated at a ratio of approximately 60% : 40% between Changsha and Yiyang. For each production facility, the usage of [REDACTED] is expected to occur at a pace of approximately 40% : 60% in a two-year period. We expect such efforts to complete ramping up three years after construction completion. Once fully ramped up, we expect to increase the annual production capacity of our Changsha and Yiyang production centers primarily by approximately 1,392 thousand square meters of single- and double- layer PCBs, 72 thousand square meters of HDIs and approximately 360 thousand square meters of MLPCBs. We expect to purchase new manufacturing equipment for infrastructure enhancement efforts in Changsha and Yiyang that is functionally substantially similar to the equipment that we purchase for our infrastructure enhancement efforts in Huizhou; and ! approximately [REDACTED]%, or approximately HK$[REDACTED] million, is expected to be used for the upgrade and transformation of our existing production lines in Huizhou to expand our production capacity for high-layer-count MLPCB and high-build-up HDI at a pace of approximately 40% : 60% in a two-year period. We expect the production capacity expansion in Huizhou to complete ramping up three years after construction completion. Once fully ramped up, we expect to FUTURE PLANS AND [REDACTED] – 205 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 215 of 431 -- expand the annual production capacity of our Huizhou production center by approximately 150 thousand square meters of high-layer-count MLPCBs and approximately 100 thousand square meters of high-build-up HDIs. We expect to purchase new manufacturing equipment for our new production facilities in Huizhou. Currently, we expect such purchases to primarily include drilling and laser systems, lamination and pressing equipment, plating and surface finishing lines and automated optical inspection and electrical test systems. After procurement and installation, such equipment is expected to empower high- precision microvia formation and layer alignment, secure multilayer bonding, advanced surface treatment, and automated inspection and testing. ! approximately [REDACTED]%, or approximately HK$[REDACTED] million, is expected to be used for the construction of production and ancillary facilities, as well as other related expenses, such as upgrading the quality control and information security systems at our production centers in China. Specifically, approximately [REDACTED]%, or approximately HK$[REDACTED] million, is expected to be used in Huizhou for our infrastructure enhancement efforts, approximately [REDACTED]%, or approximately HK$[REDACTED] million, is expected to be used in Changsha and Yiyang at a ratio of approximately 60% : 40% between Changsha and Yiyang. The usage of [REDACTED] for all these projects is expected to occur at a pace of approximately 70% : 30% in a two-year period. As of the Latest Practicable Date, our production capacity expansion in Huizhou was under construction. As of the same date, our infrastructure enhancement in Huizhou was preparing for construction, and our infrastructure enhancement in Changsha and Yiyang was under construction. • approximately [REDACTED]% of the [REDACTED], or approximately HK$[REDACTED] million, is expected to be used to further diversify our product portfolio by purchasing smart manufacturing equipment for mSAP and other machines to maintain a competitive edge in advanced PCB technologies. Specifically, smart manufacturing equipment primarily include (i) approximately 250 laser and mechanical drilling-related machines, such as laser and mechanical drilling machines, at a total cost of approximately HK$[REDACTED] million to enable microvia formation for mSAP HDIs, which is critical for high-density interconnects; (ii) approximately 100 photo-imaging and patterning-related machines, such as LDI exposure machines and develop-etch-strip machines, at a total cost of approximately HK$[REDACTED] million to enhance dimensional control, yield, and reliability required for mSAP manufacturing; (iii) approximately 50 plating and surface treatment-related machines, such as via-filling and through-hole machines, at a total cost of approximately HK$[REDACTED] million to support advanced copper filling and uniform plating for high-reliability PCBs; and (iv) approximately 150 lamination-related machines, such as single- and double-layer lamination systems, at a total cost of approximately HK$[REDACTED] million to improve the yield and reliability of mSAP HDIs, ensuring signal integrity and mechanical robustness. Other machines primarily include around 150 machines used in other production processes and improve infrastructure & utilities at a total cost of approximately HK$[REDACTED] million. The procurement of the aforementioned equipment will enhance our ability in ultra-fine line patterning, microvia accuracy, and plating uniformity, which are key for mSAP and HDI technologies. Such improvements are expected to enhance our products’ competitiveness in AI, EV and high-speed telecommunications equipment applications because they enable higher circuit density, improve signal integrity, and lead to superior reliability, which are essential to improve the performance of PCBs. Enhanced product competitiveness is in turn expected to increase our customer recognition in help us increase our high-end PCB sales, which may further improve our profitability. As of the Latest Practicable Date, our mSAP project was under construction. FUTURE PLANS AND [REDACTED] – 206 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 216 of 431 -- • approximately [REDACTED]% of the [REDACTED], or approximately HK$[REDACTED] million, is expected to be used for R&D activities over a five-year period. Specifically, o approximately [REDACTED]%, or approximately HK$[REDACTED] million, is expected to be used for R&D materials. The procurement of critical materials is expected to support prototype builds and process optimization that will not only advance our R&D projects but also improve our production lines’ mass production readiness. Such materials primarily include advanced laminates and substrates, conductive elements, imaging and protective chemicals, and essential consumables used in the manufacturing and testing processes. o approximately [REDACTED]%, or approximately HK$[REDACTED] million, is expected to be used for recruiting and training globally leading talents and experienced R&D personnel to drive innovation in both products and production processes. We will primarily focus on recruiting talents with substantial R&D and working experience, including the following: (i) Five R&D directors to oversee technology strategy and lead major R&D initiatives across AI computing, automotive electronics, and next-generation PCB technologies. We expect to recruit five of such R&D directors in total; (ii) 55 PCB design engineers to develop high-speed, high-density PCB layouts and ensure signal integrity for AI servers, automotive systems, and wireless communication boards; (iii) 91 hardware development engineers to design hardware architectures and integrate advanced PCB solutions for AI computing platforms, robotics, and smart devices; (iv) 144 process engineers to optimize HDI, mSAP, and rigid-flex manufacturing processes to support high-speed, high-reliability PCB production for emerging applications; (v) 180 testing engineers to conduct electrical, thermal, and mechanical testing to ensure reliability and compliance of PCBs for AI, automotive, and wireless communication applications; and (vi) 288 assistant engineers to provide technical support in design, process, and testing functions to accelerate R&D cycles and prototype validation. Subsequent to the recruitment of such R&D personnel, we are committed to using approximately [REDACTED], or approximately HK$[REDACTED] million of the [REDACTED] to provide them with ongoing training in technical skills, soft skills, and industry-specific training opportunities to keep their edge in the PCB industry. Therefore, we expect to incur training costs for our technical and R&D personnel averaging around RMB25 thousand per person per year. o approximately [REDACTED]%, or approximately HK$[REDACTED] million, is expected to be used for advanced equipment procurement and installation, upgrading our core manufacturing and testing capabilities used in our R&D projects. Such procurement and installation relate to equipment for precision microvia formation and layer registration, multilayer bonding, surface treatment, and automated inspection and testing, all aimed at improving production quality, reliability, and efficiency in high-performance circuit board development. Installation costs are expected to cover the integration, utilities, and calibration of the aforementioned equipment in our production centers. • approximately [REDACTED]% of the [REDACTED], or approximately HK$[REDACTED] million, is expected to be used for working capital and general corporate purposes. Certain regulatory approvals are applicable to our expansion of production capacity in the PRC. As advised by our PRC Legal Adviser, our proposed expansion and operation of our PCB manufacturing facility in the PRC may be subject to certain regulatory approvals, including without limitation, (i) the construction permit, (ii) the acceptance inspection of safety facilities upon completion; (iii) the fire safety acceptance inspection upon completion; and (iv) the approval of environmental impact report or an environmental impact statement prior to the commencement of the construction project, and the acceptance inspection on the supporting environmental protection facilities after the completion. According to our PRC Legal Advisor, there are no legal impediments under current laws and regulations that would prevent our relevant subsidiaries from obtaining the FUTURE PLANS AND [REDACTED] – 207 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 217 of 431 -- necessary approvals or licenses, provided that all applicable requirements are duly complied with and there are no significant changes in current policies, regulations, local government supervision, and law enforcement requirements. In total, the aforementioned production capacity expansion is currently expected to increase our annual production capacity primarily by approximately 1,392 thousand square meters of single- and double-layer PCBs, 1,530 thousand square meters of MLPCBs, 172 thousand square meters of HDIs, and 216 thousand square meters of FPCs once all fully ramped up. Such projections may be subject to proactive adjustment depending on layer count and build-up, as we proactively adjust our production capacity periodically based on the orders we receive and our sales forecast. The additional [REDACTED] that we would receive if the [REDACTED] and the [REDACTED] were exercised in full would be HK$[REDACTED] million. If the [REDACTED] were exercised in full, we intend to apply the additional [REDACTED] to the above purposes on a pro rata basis. To the extent that the [REDACTED] from the [REDACTED] are not immediately applied to the above purposes and to the extent permitted by applicable law and regulations, 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 Securities and Futures Ordinance or the applicable laws and regulations in other jurisdictions). We will issue an appropriate announcement if there is any material change to the above [REDACTED]. FUTURE PLANS AND [REDACTED] – 208 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 218 of 431 -- [REDACTED] [REDACTED] – 209 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 219 of 431 -- [REDACTED] [REDACTED] – 210 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 220 of 431 -- [REDACTED] [REDACTED] – 211 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 221 of 431 -- [REDACTED] [REDACTED] – 212 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 222 of 431 -- [REDACTED] [REDACTED] – 213 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 223 of 431 -- [REDACTED] [REDACTED] – 214 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 224 of 431 -- [REDACTED] [REDACTED] – 215 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 225 of 431 -- [REDACTED] [REDACTED] – 216 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 226 of 431 -- [REDACTED] [REDACTED] – 217 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 227 of 431 -- [REDACTED] [REDACTED] – 218 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 228 of 431 -- [REDACTED] STRUCTURE OF THE [REDACTED] – 219 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 229 of 431 -- [REDACTED] STRUCTURE OF THE [REDACTED] – 220 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 230 of 431 -- [REDACTED] STRUCTURE OF THE [REDACTED] – 221 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 231 of 431 -- [REDACTED] STRUCTURE OF THE [REDACTED] – 222 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 232 of 431 -- [REDACTED] STRUCTURE OF THE [REDACTED] – 223 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 233 of 431 -- [REDACTED] STRUCTURE OF THE [REDACTED] – 224 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 234 of 431 -- [REDACTED] STRUCTURE OF THE [REDACTED] – 225 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 235 of 431 -- [REDACTED] STRUCTURE OF THE [REDACTED] – 226 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 236 of 431 -- [REDACTED] STRUCTURE OF THE [REDACTED] – 227 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 237 of 431 -- [REDACTED] STRUCTURE OF THE [REDACTED] – 228 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 238 of 431 -- [REDACTED] STRUCTURE OF THE [REDACTED] – 229 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 239 of 431 -- [REDACTED] STRUCTURE OF THE [REDACTED] – 230 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 240 of 431 -- [REDACTED] STRUCTURE OF THE [REDACTED] – 231 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 241 of 431 -- [REDACTED] STRUCTURE OF THE [REDACTED] – 232 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 242 of 431 -- [REDACTED] STRUCTURE OF THE [REDACTED] – 233 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 243 of 431 -- [REDACTED] HOW TO APPLY FOR [REDACTED] – 234 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 244 of 431 -- [REDACTED] HOW TO APPLY FOR [REDACTED] – 235 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 245 of 431 -- [REDACTED] HOW TO APPLY FOR [REDACTED] – 236 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 246 of 431 -- [REDACTED] HOW TO APPLY FOR [REDACTED] – 237 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 247 of 431 -- [REDACTED] HOW TO APPLY FOR [REDACTED] – 238 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 248 of 431 -- [REDACTED] HOW TO APPLY FOR [REDACTED] – 239 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 249 of 431 -- [REDACTED] HOW TO APPLY FOR [REDACTED] – 240 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 250 of 431 -- [REDACTED] HOW TO APPLY FOR [REDACTED] – 241 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 251 of 431 -- [REDACTED] HOW TO APPLY FOR [REDACTED] – 242 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 252 of 431 -- [REDACTED] HOW TO APPLY FOR [REDACTED] – 243 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 253 of 431 -- [REDACTED] HOW TO APPLY FOR [REDACTED] – 244 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 254 of 431 -- [REDACTED] HOW TO APPLY FOR [REDACTED] – 245 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 255 of 431 -- [REDACTED] HOW TO APPLY FOR [REDACTED] – 246 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 256 of 431 -- [REDACTED] HOW TO APPLY FOR [REDACTED] – 247 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 257 of 431 -- [REDACTED] HOW TO APPLY FOR [REDACTED] – 248 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 258 of 431 -- [REDACTED] HOW TO APPLY FOR [REDACTED] – 249 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 259 of 431 -- The following is the text of a report set out on pages I-1 to I-3, received from the Company’s reporting accountants, BDO Limited, Certified Public Accountants, Hong Kong, for the purpose of incorporation in this document. It is prepared and addressed to the directors of the Company and to the Joint Sponsors pursuant to the requirements of 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. Tel : +852 2218 8288 Fax : +852 2543 1051 www.bdo.com.hk 朅宝 : +852 2218 8288 ⟂ऱ : +852 2543 1051 www.bdo.com.hk 25th Floor Wing On Centre 111 Connaught Road Central Hong Kong 尩ଳИٴ࢔௚ 111 垹 ڶИ؍ࡋ 25 㶣 ACCOUNTANTS’ REPORT ON HISTORICAL FINANCIAL INFORMATION TO THE DIRECTORS OF VICTORY GIANT TECHNOLOGY (HUIZHOU) CO., LTD., J.P. MORGAN SECURITIES (FAR EAST) LIMITED, CHINA SECURITIES (INTERNATIONAL) CORPORATE FINANCE COMPANY LIMITED AND GF CAPITAL (HONG KONG) LIMITED Introduction We report on the historical financial information of Victory Giant Technology (HuiZhou) Co., Ltd. (the “Company”) and its subsidiaries (together the “Group”) set out on pages I-4 to I-83, which comprises the consolidated statements of financial position of the Group and the statements of financial position of the Company as at December 31, 2023, 2024 and 2025, and the consolidated statements of profit or loss and other comprehensive income, the statements of changes in equity and the statements of cash flows of the Group for each of the years ended December 31, 2023, 2024 and 2025 (the “Track Record Period”), and material accounting policy information and other explanatory information (together, the “Historical Financial Information”). The Historical Financial Information set out on pages I-4 to I-83 forms an integral part of this report, which has been prepared for inclusion in the document of the Company dated [Date] (the “Document”) in connection with the [REDACTED] of shares of the Company on the Main Board of The Stock Exchange of Hong Kong Limited (the “Stock Exchange”). Directors’ Responsibility for the Historical Financial Information The directors of the Company are responsible for the preparation of Historical Financial Information that gives a true and fair view in accordance with the basis of preparation set out in Note 2 to the Historical Financial Information, and for such internal control as the directors determine is necessary to enable the preparation of Historical Financial Information that is free from material misstatement, whether due to fraud or error. APPENDIX I ACCOUNTANTS’ REPORT – I-1 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 260 of 431 -- Reporting Accountants’ Responsibility Our responsibility is to express an opinion on the Historical Financial Information and to report our opinion to you. We conducted our work in accordance with Hong Kong Standard on Investment Circular Reporting Engagements 200 “Accountants’ Reports on Historical Financial Information in Investment Circulars” issued by the Hong Kong Institute of Certified Public Accountants (“HKICPA”). This standard requires that we comply with ethical standards and plan and perform our work to obtain reasonable assurance about whether the Historical Financial Information is free from material misstatement. Our work involved performing procedures to obtain evidence about the amounts and disclosures in the Historical Financial Information. The procedures selected depend on the reporting accountants’ judgement, including the assessment of risks of material misstatement of the Historical Financial Information, whether due to fraud or error. In making those risk assessments, the reporting accountants consider internal control relevant to the entity’s preparation of Historical Financial Information that gives a true and fair view in accordance with the basis of preparation set out in Note 2 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 Group’s and the Company’s financial position as at December 31, 2023, 2024 and 2025 and of the Group’s financial performance and cash flows for the Track Record Period in accordance with the basis of preparation set out in Note 2 to the Historical Financial Information. Report on Matters under the Rules Governing the Listing of Securities on the Stock Exchange of Hong Kong Limited and the Companies (Winding Up and Miscellaneous Provisions) Ordinance Adjustments In preparing the Historical Financial Information, no adjustments to the Underlying Financial Statements as defined on page I-4 have been made. APPENDIX I ACCOUNTANTS’ REPORT – I-2 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 261 of 431 -- Dividends We refer to Note 16 to the Historical Financial Information which contains information about the dividends paid by the Company in respect of the Track Record Period. BDO Limited Certified Public Accountants [●] Practising Certificate no. P[●] Hong Kong [Date] APPENDIX I ACCOUNTANTS’ REPORT – I-3 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 262 of 431 -- I. HISTORICAL FINANCIAL INFORMATION OF THE GROUP Preparation of Historical Financial Information Set out below is the Historical Financial Information which forms an integral part of this accountants’ report. The consolidated financial statements of the Group for the Track Record Period, on which the Historical Financial Information is based, were audited by BDO Limited in accordance with Hong Kong Standards on Auditing issued by the Hong Kong Institute of Certified Public Accountants (“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 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 263 of 431 -- CONSOLIDATED STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME Year ended December 31, Note 2023 2024 2025 RMB’000 RMB’000 RMB’000 Revenue ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 6 7,931,248 10,731,469 19,292,313 Cost of sales ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! (6,287,951) (8,292,806) (12,496,889) Gross profit ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 1,643,297 2,438,663 6,795,424 Other (losses)/gains, net ! ! ! ! ! ! ! ! ! ! ! 7 (11,413) 41,846 (67,840) Other income! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 8 43,829 49,981 72,589 Selling and marketing expenses ! ! ! ! ! ! (154,408) (200,815) (257,347) Administrative expenses ! ! ! ! ! ! ! ! ! ! ! (320,286) (456,705) (563,528) Research and development expenses ! ! (348,304) (449,827) (777,643) (Provision)/reversal of impairment losses on financial assets, net! ! ! ! ! ! 9 (15,329) 2,303 (36,415) [REDACTED] ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! [REDACTED] [REDACTED] [REDACTED] Operating profit! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 837,386 1,425,446 5,164,209 Finance costs ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 10 (88,172) (113,623) (142,493) Profit before income tax ! ! ! ! ! ! ! ! ! ! 11 749,214 1,311,823 5,021,716 Income tax expenses ! ! ! ! ! ! ! ! ! ! ! ! ! ! 12 (77,868) (157,392) (709,728) Profit for the year attributable to owners of the Company ! ! ! ! ! ! ! ! ! 671,346 1,154,431 4,311,988 Other comprehensive income, net of tax Items that will not be reclassified subsequently to profit or loss: Fair value change on financial assets at fair value through other comprehensive income, net of tax! 84,741 298,385 1,477,322 Items that may be reclassified subsequently to profit or loss: Currency translation differences ! ! ! ! (1,896) 28,509 (50,478) Other comprehensive income for the year! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 82,845 326,894 1,426,844 Total comprehensive income for the year attributable to owners of the Company ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 754,191 1,481,325 5,738,832 Earnings per share attributable to owners of the Company during the year (expressed in RMB) Basic earnings per share ! ! ! ! ! ! ! ! ! ! ! 15 0.79 1.34 5.01 Diluted earnings per share ! ! ! ! ! ! ! ! ! ! 15 0.79 1.34 5.00 APPENDIX I ACCOUNTANTS’ REPORT – I-5 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 264 of 431 -- CONSOLIDATED STATEMENTS OF FINANCIAL POSITION As at December 31, Note 2023 2024 2025 RMB’000 RMB’000 RMB’000 ASSETS AND LIABILITIES Non-current assets Property, plant and equipment ! ! ! ! ! ! ! 18 7,184,377 7,476,552 12,876,416 Right-of-use assets ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 19 209,358 211,026 469,943 Intangible assets ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 20 616,181 615,123 587,624 Goodwill ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 21 1,156,331 1,217,339 1,193,532 Financial assets at fair value through other comprehensive income ! ! ! ! ! ! 22 765,228 1,116,269 2,854,295 Deferred tax assets ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 23 76,739 52,466 343,263 Other non-current assets ! ! ! ! ! ! ! ! ! ! ! 24 112,282 406,540 3,405,621 Total non-current assets ! ! ! ! ! ! ! ! ! ! 10,120,496 11,095,315 21,730,694 Current assets Inventories ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 25 1,376,834 2,045,403 3,162,360 Financial assets at fair value through profit or loss ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 22 3,549 – 137,000 Derivative financial assets ! ! ! ! ! ! ! ! ! ! 22 31,318 15,796 – Trade and other receivables ! ! ! ! ! ! ! ! ! 26 3,655,625 4,271,749 6,560,911 Other current assets ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 27 54,498 85,024 373,877 Restricted bank deposits ! ! ! ! ! ! ! ! ! ! ! 28 1,391,920 735,280 73,075 Cash and cash equivalents ! ! ! ! ! ! ! ! ! ! 28 749,376 926,746 3,206,572 Total current assets ! ! ! ! ! ! ! ! ! ! ! ! ! ! 7,263,120 8,079,998 13,513,795 Current liabilities Borrowings ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 29 3,294,401 1,907,771 2,473,826 Lease liabilities ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 30 16,536 14,832 22,114 Trade and other payables ! ! ! ! ! ! ! ! ! ! ! 31 4,005,013 5,473,479 11,143,930 Other current liabilities ! ! ! ! ! ! ! ! ! ! ! ! 177,146 18,846 15,108 Contract liabilities ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 32 5,222 3,798 11,423 Deferred income ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 33 7,244 6,076 8,085 Income tax payables ! ! ! ! ! ! ! ! ! ! ! ! ! ! 77,569 111,761 370,774 Derivative financial liabilities ! ! ! ! ! ! ! 58 – 1,736 Total current liabilities ! ! ! ! ! ! ! ! ! ! ! 7,583,189 7,536,563 14,046,996 Net current (liabilities)/assets ! ! ! ! ! ! (320,069) 543,435 (533,201) Total assets less current liabilities! ! ! 9,800,427 11,638,750 21,197,493 APPENDIX I ACCOUNTANTS’ REPORT – I-6 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 265 of 431 -- As at December 31, Note 2023 2024 2025 RMB’000 RMB’000 RMB’000 Non-current liabilities Borrowings ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 29 1,777,135 2,310,038 3,867,436 Lease liabilities ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 30 53,673 60,231 82,320 Trade and other payables ! ! ! ! ! ! ! ! ! ! ! 31 – 5,585 5,171 Provisions ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 58,252 13,936 10,891 Deferred income ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 33 41,847 35,654 72,186 Other non-current liabilities! ! ! ! ! ! ! ! ! 1,227 1,192 1,172 Deferred tax liabilities ! ! ! ! ! ! ! ! ! ! ! ! ! 23 242,563 284,181 540,709 Total non-current liabilities! ! ! ! ! ! ! ! 2,174,697 2,710,817 4,579,885 Net assets ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 7,625,730 8,927,933 16,617,608 EQUITY Equity attributable to owners of the Company Share capital ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 34 862,689 862,689 870,349 Other reserves ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 35, 36 3,830,180 4,234,220 7,861,823 Retained earnings ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 36 2,932,861 3,831,024 7,885,436 Total equity ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 7,625,730 8,927,933 16,617,608 APPENDIX I ACCOUNTANTS’ REPORT – I-7 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 266 of 431 -- CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY Share capital Treasury shares Capital reserve Surplus reserve Exchange reserve Other reserves Retained earnings Total (note 34) (note 35) (note 36) (note 36) (note 36) (note 36) (note 36) RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 Balance at January 1, 2023 ! ! ! ! ! ! ! ! ! 862,689 (150,106) 3,258,101 317,266 (3,805) 161,491 2,491,227 6,936,863 Profit for the year ! ! ! ! ! ! ! ! ! ! ! ! ! – – – – – – 671,346 671,346 Fair value change on financial assets at fair value through other comprehensive income, net of tax ! ! ! ! ! ! ! ! ! ! ! ! – – – – – 84,741 – 84,741 Exchange differences arising from translation of foreign operations ! ! ! ! ! ! ! ! ! ! ! – – – – (1,896) – – (1,896) Total comprehensive income for the year ! ! – – – – (1,896) 84,741 671,346 754,191 Dividend paid ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! – – – – – – (163,264) (163,264) Shared-based payment expenses ! ! ! ! ! ! ! – – 25,035 – – – – 25,035 Increase in other reserves* ! ! ! ! ! ! ! ! ! – – – – – 5,804 – 5,804 Transferred to surplus reserve ! ! ! ! ! ! ! ! – – – 66,448 – – (66,448) – Exercise of share options under 2022 Restricted Share Scheme ! ! ! ! ! ! ! ! ! – 94,031 (26,930) – – – – 67,101 Balance at December 31, 2023 ! ! ! ! ! ! ! 862,689 (56,075) 3,256,206 383,714 (5,701) 252,036 2,932,861 7,625,730 * Increase in other reserves represented increase in safety fund reserve. Share capital Treasury shares Capital reserve Surplus reserve Exchange reserve Other reserves Retained earnings Total (note 34) (note 35) (note 36) (note 36) (note 36) (note 36) (note 36) RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 Balance at January 1, 2024 ! ! ! ! ! ! ! ! ! 862,689 (56,075) 3,256,206 383,714 (5,701) 252,036 2,932,861 7,625,730 Profit for the year ! ! ! ! ! ! ! ! ! ! ! ! ! – – – – – – 1,154,431 1,154,431 Fair value change on financial assets at fair value through other comprehensive income, net of tax ! ! ! ! ! ! ! ! ! ! ! ! – – – – – 298,385 – 298,385 Exchange differences arising from translation of foreign operations ! ! ! ! ! ! ! ! ! ! ! – – – – 28,509 – – 28,509 Total comprehensive income for the period ! – – – – 28,509 298,385 1,154,431 1,481,325 Dividend paid ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! – – – – – – (163,264) (163,264) Shared-based payment expenses ! ! ! ! ! ! ! – – 10,709 – – – – 10,709 Increase in other reserves* ! ! ! ! ! ! ! ! ! – – – – – 1,762 – 1,762 Transferred to surplus reserve ! ! ! ! ! ! ! ! – – – 93,004 – – (93,004) – Repurchase of shares ! ! ! ! ! ! ! ! ! ! ! ! – (28,329) – – – – – (28,329) Balance at December 31, 2024 ! ! ! ! ! ! ! 862,689 (84,404) 3,266,915 476,718 22,808 552,183 3,831,024 8,927,933 * Increase in other reserves represented increase in safety fund reserve. APPENDIX I ACCOUNTANTS’ REPORT – I-8 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 267 of 431 -- Share capital Treasury shares Capital reserve Surplus reserve Exchange reserve Other reserve Retained earnings Total (note 34) (note 35) (note 36) (note 36) (note 36) (note 36) (note 36) RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 Balance at January 1, 2025 ! ! ! ! ! ! ! ! ! 862,689 (84,404) 3,266,915 476,718 22,808 552,183 3,831,024 8,927,933 Profit for the year ! ! ! ! ! ! ! ! ! ! ! ! ! – – – – – – 4,311,988 4,311,988 Fair value change on financial assets at fair value through other comprehensive income, net of tax ! ! ! ! ! ! ! ! ! ! ! ! – – – – – 1,477,322 – 1,477,322 Exchange differences arising from translation of foreign operations ! ! ! ! ! ! ! ! ! ! ! – – – – (50,478) – – (50,478) Total comprehensive income for the year ! ! – – – – (50,478) 1,477,322 4,311,988 5,738,832 Dividend paid ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! – – – – – – (257,576) (257,576) Shared-based payment expenses ! ! ! ! ! ! ! – – 11,201 – – – – 11,201 Deferred tax asset recognised on share-based payment ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! – – 306,677 – – – – 306,677 Issue of shares ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 7,660 – 1,868,727 – – – – 1,876,387 Increase in other reserves* ! ! ! ! ! ! ! ! ! – – – – – 1,421 – 1,421 Repurchase of share ! ! ! ! ! ! ! ! ! ! ! ! – (41,682) – – – – – (41,682) Exercise of share options under 2022 Restricted Share Scheme ! ! ! ! ! ! ! ! ! – 120,652 (66,237) – – – – 54,415 Balance at December 31, 2025 ! ! ! ! ! ! ! 870,349 (5,434) 5,387,283 476,718 (27,670) 2,030,926 7,885,436 16,617,608 * Increase in other reserves represented increase in safety fund reserve. APPENDIX I ACCOUNTANTS’ REPORT – I-9 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 268 of 431 -- CONSOLIDATED STATEMENTS OF CASH FLOWS Year ended December 31, Note 2023 2024 2025 RMB’000 RMB’000 RMB’000 Operating activities Profit before income tax ! ! ! ! ! ! ! ! ! ! ! 749,214 1,311,823 5,021,716 Adjustments for: Depreciation of property, plant and equipment ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 18 623,010 716,505 882,792 Impairment loss on property, plant and equipment ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 11 5,554 10,741 253 Depreciation of right-of-use assets! ! ! ! 19 14,438 21,682 30,940 Amortisation of intangible assets ! ! ! ! ! 20 11,974 34,827 40,558 Fair value change on financial assets at FVTPL! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 7 (2,346) 3,491 – Bank interest income ! ! ! ! ! ! ! ! ! ! ! ! ! ! 8 (23,126) (14,328) (24,510) Interest income from wealth management product ! ! ! ! ! ! ! ! ! ! ! ! 7 (40,561) (8,638) (1,489) Interest expenses ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 10 85,300 110,431 137,778 Loss on disposal/written off of property, plant and equipment ! ! ! ! ! 7 7,778 47,615 21,589 Loss on disposal of land use rights ! ! ! 7 32,418 – – Loss on disposal of intangible assets ! ! 7 2 103 – Share-based payment expenses ! ! ! ! ! ! 11 25,035 10,709 11,201 Early termination of lease ! ! ! ! ! ! ! ! ! ! 7 – (114) 1,417 Written down of inventories ! ! ! ! ! ! ! ! 11 16,135 13,177 33,630 Provision/(reversal) of impairment losses on financial assets ! ! ! ! ! ! ! ! ! 9 15,329 (2,303) 36,415 Write back of provisions ! ! ! ! ! ! ! ! ! ! ! 7 – (55,115) – Investment income from debt restructuring! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! – – (23,729) Provision for warranty ! ! ! ! ! ! ! ! ! ! ! ! ! – 7,306 – Provision for safety fund ! ! ! ! ! ! ! ! ! ! ! 5,804 1,762 1,421 Operating cash flows before movements in working capital ! ! ! ! 1,525,958 2,209,674 6,169,982 Decrease/(increase) in inventories ! ! ! ! 47,406 (623,831) (1,153,700) Decrease/(increase) in trade and notes receivables ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 50,633 (578,962) (2,080,043) (Increase)/decrease in other receivables ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! (1,218) 86,676 (255,153) Decrease/(increase) in other non-current assets ! ! ! ! ! ! ! ! ! ! ! ! ! ! 22,959 (52,525) (41,166) (Increase)/decrease in other current assets ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! (31,551) (30,442) (288,856) (Decrease)/increase in trade and notes payables ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! (199,965) 1,260,474 2,514,217 APPENDIX I ACCOUNTANTS’ REPORT – I-10 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 269 of 431 -- Year ended December 31, Note 2023 2024 2025 RMB’000 RMB’000 RMB’000 (Decrease)/increase in deferred income ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! (5,279) (7,409) 38,493 (Decrease)/increase in other payables ! (33,633) 87,817 129,415 Increase/(decrease) in other current liabilities ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 129,898 (159,073) (4,495) (Decrease)/increase in contract liabilities ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! (5,759) (1,465) 7,584 Cash generated from operations ! ! ! ! 1,499,449 2,190,934 5,036,278 Interest received ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 23,126 14,328 24,510 Income taxes paid ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! (54,753) (134,146) (440,714) Net cash generated from operating activities ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 1,467,822 2,071,116 4,620,074 Investing activities Purchases of financial assets at fair value through profit or loss ! ! ! ! ! ! ! (3,549) – (135,264) Proceeds from disposal of financial assets at fair value through profit or loss ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 504,749 – – Purchase of derivative financial instruments ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! (31,318) (15,796) – Proceeds from disposal of derivative financial instruments ! ! ! ! ! ! ! ! ! ! ! ! – 31,318 15,796 Proceeds from disposal of financial assets at amortised cost ! ! ! ! ! ! ! ! ! ! 766,966 8,638 1,489 Net cash outflow arising from acquisitions of subsidiaries ! ! ! ! ! ! ! (2,773,463) (223,512) – Purchase of property, plant and equipment ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! (261,683) (1,116,063) (6,363,688) Proceeds from disposal of property, plant and equipment! ! ! ! ! ! ! ! ! ! ! ! ! 2,568 17,242 145,651 Proceeds from disposal of intangible assets ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! – 150 1,593 Proceeds from disposal of land use rights ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 116,179 – – Purchase of intangible assets ! ! ! ! ! ! ! ! (7,975) (5,469) (25,297) Placement of restricted bank deposits ! (1,694,253) (830,591) (814,836) Redemption of restricted bank deposits ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 671,572 1,487,211 1,477,031 Net cash used in investing activities ! (2,710,207) (646,872) (5,697,525) APPENDIX I ACCOUNTANTS’ REPORT – I-11 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 270 of 431 -- Year ended December 31, Note 2023 2024 2025 RMB’000 RMB’000 RMB’000 Financing activities Repayment of principal of lease liabilities ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! (8,819) (17,140) (268,310) Repayment of interest of lease liabilities ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! (1,624) (3,197) (4,794) Dividend paid to owners of the Company ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! (163,264) (163,264) (257,576) Proceeds from bank borrowings! ! ! ! ! ! 4,071,492 2,273,524 4,914,512 Proceeds from exercise of share options ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 67,101 – 54,415 Repayment from bank borrowings ! ! ! ! (2,617,270) (3,208,069) (2,795,386) Proceeds from issue of new shares ! ! ! – – 1,876,387 Payment for repurchase of shares ! ! ! ! – (28,329) (41,682) Interest paid ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! (83,619) (107,444) (132,984) Net cash generated from/(used in) financing activities ! ! ! ! ! ! ! ! ! ! ! ! ! 1,263,997 (1,253,919) 3,344,582 Net increase in cash and cash equivalents ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 21,612 170,325 2,267,131 Cash and cash equivalents at beginning of year ! ! ! ! ! ! ! ! ! ! ! ! ! ! 726,013 749,376 926,746 Effect of exchange rate changes ! ! ! ! 1,751 7,045 12,695 Cash and cash equivalents at the end of year, represented by cash and cash equivalents ! ! ! ! ! ! ! ! ! ! ! 749,376 926,746 3,206,572 APPENDIX I ACCOUNTANTS’ REPORT – I-12 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 271 of 431 -- STATEMENTS OF FINANCIAL POSITION OF THE COMPANY As at December 31, Note 2023 2024 2025 RMB’000 RMB’000 RMB’000 ASSETS AND LIABILITIES Non-current assets Property, plant and equipment ! ! ! ! ! ! ! 18 5,941,718 6,054,227 10,335,155 Right-of-use assets ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 19 13,618 13,210 91,726 Intangible assets ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 20 21,277 17,269 19,043 Financial assets at fair value through other comprehensive income ! ! ! ! ! ! 22 661,663 1,005,087 2,683,283 Investment in subsidiaries ! ! ! ! ! ! ! ! ! ! 17 3,324,465 3,753,654 4,858,031 Deferred tax assets ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 23 25,636 23,222 280,508 Other non-current assets ! ! ! ! ! ! ! ! ! ! ! 24 84,088 258,207 1,689,312 Total non-current assets ! ! ! ! ! ! ! ! ! ! 10,072,465 11,124,876 19,957,058 Current assets Inventories ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 25 1,008,318 1,608,195 2,464,125 Financial assets at fair value through profit or loss ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 22 3,549 – 137,000 Derivative financial assets ! ! ! ! ! ! ! ! ! ! 22 31,318 15,796 – Trade and other receivables ! ! ! ! ! ! ! ! ! 26 3,359,266 3,620,786 6,889,367 Other current assets ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 27 46,435 80,268 271,010 Restricted bank deposits ! ! ! ! ! ! ! ! ! ! ! 28 1,390,553 735,277 72,975 Cash and cash equivalents ! ! ! ! ! ! ! ! ! ! 28 507,087 410,797 1,323,443 Total current assets ! ! ! ! ! ! ! ! ! ! ! ! ! ! 6,346,526 6,471,119 11,157,920 Current liabilities Borrowings ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 29 2,933,920 1,907,771 2,048,821 Lease liabilities ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 30 – – 3,469 Trade and other payables ! ! ! ! ! ! ! ! ! ! ! 31 4,510,524 5,049,772 9,206,511 Other current liabilities ! ! ! ! ! ! ! ! ! ! ! ! 1,453 16,693 8,265 Contract liabilities ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 32 4,431 1,368 1,686 Deferred income ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 33 6,024 5,005 6,715 Income tax payables ! ! ! ! ! ! ! ! ! ! ! ! ! ! 59,932 95,528 320,119 Derivative financial liabilities ! ! ! ! ! ! ! – – 1,736 Total current liabilities ! ! ! ! ! ! ! ! ! ! ! 7,516,284 7,076,137 11,597,322 Net current assets/(liabilities) ! ! ! ! ! ! (1,169,758) (605,018) (439,402) Total assets less current liabilities! ! ! 8,902,707 10,519,858 19,517,656 Non-current liabilities Borrowings ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 29 1,777,135 2,310,038 3,859,808 Deferred income ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 33 38,253 33,248 57,700 Deferred tax liabilities ! ! ! ! ! ! ! ! ! ! ! ! ! 23 47,650 95,844 347,574 Lease liabilities ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 30 – – 2,732 Total non-current liabilities! ! ! ! ! ! ! ! 1,863,038 2,439,130 4,267,814 Net assets ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 7,039,669 8,080,728 15,249,842 EQUITY Equity attributable to owners of the Company Share capital ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 34 862,689 862,689 870,349 Other reserves ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 35, 36 3,839,894 4,207,188 7,832,992 Retained earnings ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 36 2,337,086 3,010,851 6,546,501 Total equity ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 7,039,669 8,080,728 15,249,842 APPENDIX I ACCOUNTANTS’ REPORT – I-13 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 272 of 431 -- II NOTES TO HISTORICAL FINANCIAL INFORMATION 1. GENERAL INFORMATION The Company was established in the People’s Republic of China (the “PRC”) in July 2006. On June 11, 2015, the Company’s shares were listed on the ChiNext Market of the Shenzhen Stock Exchange (stock code: 300476). Its registered office and the principal place of business activities is located at Hangcheng Technology Park, Xinqiao Village, Danshui Town, Huiyang District, Huizhou City, Guangdong Province, PRC. The Group and the Company is principally engaged in research and development, manufacturing and sales of high-precision multilayer printed circuit boards, HDI, FRX and Rigid-Flex PCBs. during the Track Record Period. is the controlling shareholder of the Company. 2. BASIS OF PREPARATION OF HISTORICAL FINANCIAL INFORMATION The Historical Financial Information has been prepared based on the accounting policies set out in Note 4 which conform with all applicable IFRS Accounting Standards which collective term includes all applicable individual International Financial Reporting Standards, International Accounting Standards and Interpretations issued by International Accounting Standards Board (“IASB”). In addition, the Historical Financial Information also complies with the applicable disclosures requirements of the Hong Kong Companies Ordinance and the Rules Governing the Listing of Securities on the Stock Exchange of Hong Kong Limited (the “Stock Exchange”). The IASB has issued a number of new and revised IFRSs. For the purpose of preparing the Historical Financial Information, the Group has adopted the accounting policies which conform with all applicable new and revised IFRS Accounting Standards that are effective during the Track Record Period, consistently throughout the Track Record Period. In preparing this Historical Financial Information, the directors of the Company have taken into account the expected cash flows from operations and available credit facilities, and concluded that the Group will have sufficient working capital to finance its operations and to meet its financial obligations for not less than twelve months from December 31, 2025. Consequently, the Historical Financial Information has been prepared on a going concern basis, which contemplates the realisation of assets and settlement of liabilities in the normal course of business. 3. APPLICATION OF NEW AND REVISED IFRS ACCOUNTING STANDARDS At the date of this report, new standard and amendments to IFRS Accounting Standards that have been issued but are not effective and have not been early adopted by the Group: New and amendments to IFRS Accounting Standards issued but not yet effective Amendments to IFRS 9 and IFRS 7 ! ! ! ! ! ! ! Amendments to the Classification and Measurement of Financial Instruments1 Amendments to IFRS 9 and IFRS 7 ! ! ! ! ! ! ! Contracts Referencing Nature-dependent Electricity1 Amendments to IFRS Accounting Standards ! ! Annual Improvement to IFRS Accounting Standards – Volume 111 IFRS 18 ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! Presentation and Disclosure in Financial Statements2 IFRS 19 ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! Subsidiaries without Public Accountability: Disclosures2 Amendments to IFRS 10 and IAS 28 ! ! ! ! ! ! Sale or Contribution of Assets between an Investor and its Associate or Joint Venture3 1 Effective for annual periods beginning on or after January 1, 2026. 2 Effective for annual periods beginning on or after January 1, 2027. 3 Effective for annual periods beginning on or after a date to be determined. The Group is in the process of making an assessment of the impact of these new and amended IFRS Accounting Standards upon initial application. IFRS 18 introduces new requirements on presentation within the statement of profit or loss, including specified totals and subtotals. It also requires disclosure of management-defined performance measures in a note and includes new requirements for aggregation and disaggregation of financial information. The new requirements are expected to impact the Group’s presentation in the statement of profit or loss and disclosures of the Group’s financial performance. The Group does not anticipate the initial adoption of IFRS 18 would significantly affect the financial position and performance of the Group. The Group considers that other new and amended standards are unlikely to have a significant impact on the Group’s results of operations and financial position. APPENDIX I ACCOUNTANTS’ REPORT – I-14 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 273 of 431 -- 4. MATERIAL ACCOUNTING POLICIES The Historical Financial Information has been prepared on the historical cost basis except for certain financial instruments that are measured at fair values at the end of each reporting year, as explained in the accounting policies set out below. Historical cost is generally based on the fair value of the consideration given in exchange for goods and services. 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, regardless of whether that price is directly observable or estimated using another valuation technique. In estimating the fair value of an asset or a liability, the Group takes into account the characteristics of the asset or liability if market participants would take those characteristics into account when pricing the asset or liability at the measurement date. In addition, for financial reporting purposes, fair value measurements are categorised into Level 1, 2 or 3 based on the degree to which the inputs to the fair value measurements are observable and the significance of the inputs to the fair value measurement in its entirety, which are described as follows: • Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date; • Level 2 inputs are inputs, other than quoted prices included within Level 1, that are observable for the asset or liability, either directly or indirectly; and • Level 3 inputs are unobservable inputs for the asset or liability. The principal accounting policies are set out below. (a) Basis of consolidation The Historical Financial Information incorporates the financial statements of the Company and its subsidiaries. Control is achieved when the Company: • has power over the investee; • is exposed, or has rights, to variable returns from its involvement with the investee; and • has the ability to use its power to affect its returns. The Group reassesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control listed above. Consolidation of a subsidiary begins when the Group obtains control over the subsidiary and ceases when the Group loses control of the subsidiary. Specifically, income and expenses of a subsidiary acquired or disposed of during the year are included in the consolidated statements of profit or loss and other comprehensive income from the date the Group gains control until the date when the Group ceases to control the subsidiary. Profit or loss and each item of other comprehensive income are attributed to the owners of the Company and to the non-controlling interests. Total comprehensive income of subsidiaries is attributed to the owners of the Company and to the non-controlling interests even if this results in the non-controlling interests having a deficit balance. When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with the Group’s accounting policies. All intragroup assets and liabilities, equity, income, expenses and cash flows relating to transactions between members of the Group are eliminated in full on consolidation. Non-controlling interests in subsidiaries are presented separately from the Group’s equity therein, which represent present ownership interests entitling their holders to a proportionate share of net assets of the relevant subsidiaries upon liquidation. APPENDIX I ACCOUNTANTS’ REPORT – I-15 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 274 of 431 -- (b) Business combinations Acquisitions of businesses, other than business combination under common control, are accounted for using the acquisition method. The consideration transferred in a business combination is measured at fair value, which is calculated as the sum of the acquisition-date fair values of the assets transferred by the Group, liabilities incurred 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. Acquisition-related costs are generally recognised in profit or loss as incurred. At the acquisition date, the identifiable assets acquired and the liabilities assumed are recognised at their fair value, except that: • deferred tax assets or liabilities, and assets or liabilities related to employee benefit arrangements are recognised and measured in accordance with IAS 12 “Income Taxes” and IAS 19 “Employee Benefits”, respectively; • liabilities or equity instruments related to share-based payment arrangements of the acquiree or share-based payment arrangements of the Group entered into to replace share-based payment arrangements of the acquiree are measured in accordance with IFRS 2 “Share-based Payment” at the acquisition date (see the accounting policy below); and • assets (or disposal groups) that are classified as held for sale in accordance with IFRS 5 “Non-current Assets Held for Sale and Discontinued Operations” are measured in accordance with that standard. Goodwill is measured as the excess of the sum of the consideration transferred, the amount of any non-controlling interests in the acquiree, and the fair value of the acquirer’s previously held equity interest in the acquiree (if any) over the net amount of the identifiable assets acquired and the liabilities assumed as at acquisition date. If, after re-assessment, the net of the acquisition date amount of the identifiable assets acquired and liabilities assumed exceeds the sum of the consideration transferred, the amount of any non-controlling interests in the acquiree and the fair value of the acquirer’s previously held interest in the acquiree (if any), the excess is recognised immediately in profit or loss as a bargain purchase gain. Non-controlling interests that are present ownership interests and entitle their holders to a proportionate share of the relevant subsidiary’s net assets in the event of liquidation are initially measured at the non-controlling interests’ proportionate share of the recognised amounts of the acquiree’s identifiable net assets or at fair value. When the consideration transferred by the Group in a business combination includes a contingent consideration arrangement, the contingent consideration is measured at its acquisition date fair value and included as part of the consideration transferred in a business combination. Changes in the fair value of the contingent consideration that qualify as measurement period adjustments are adjusted retrospectively. Measurement period adjustments are adjustments that arise from additional information obtained during the “measurement period” (which cannot exceed one year from the acquisition date) about facts and circumstances that existed at the acquisition date. The subsequent accounting for the contingent consideration that do not qualify as measurement period adjustments depends on how the contingent consideration is classified. Contingent consideration that is classified as equity is not remeasured at subsequent reporting dates and its subsequent settlement is accounted for within equity. Contingent consideration that is classified as an asset or a liability is remeasured to fair value at subsequent reporting dates, with the corresponding gain or loss being recognised in profit or loss. When a business combination is achieved in stages, the Group’s previously held equity interest in the acquiree is remeasured to its acquisition date fair value (i.e. the date when the Group obtains control) and the resulting gain or loss, if any, is recognised in profit or loss or other comprehensive income, as appropriate. Amounts arising from interests in the acquiree prior to the acquisition date that have previously been recognised in other comprehensive income and measured under IFRS 9 would be accounted for on the same basis as would be required if the Group had disposed directly of the previously held equity interest. If the initial accounting for a business combination is incomplete by the end of the reporting year in which the combination occurs, the Group reports provisional amounts for the items for which the accounting is incomplete. Those provisional amounts are adjusted during the measurement year (see above), and additional assets or liabilities are recognised to reflect new information obtained about facts and circumstances that existed at the acquisition date that, if known, would have affected the amounts recognised at that date. APPENDIX I ACCOUNTANTS’ REPORT – I-16 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 275 of 431 -- (c) Acquisition of a subsidiary not constituting a business When the Group acquires a group of assets and liabilities that do not constitute a business, the Group identifies and recognises the individual identifiable assets acquired and liabilities assumed by allocating the purchase price first to financial assets and financial liabilities at the respective fair values, the remaining balance of the purchase price is then allocated to the other individual identifiable assets and liabilities on the basis of their relative fair values at the date of purchase. Such a transaction does not give rise to goodwill or bargain purchase gain. (d) Investments in subsidiaries Investments in subsidiaries are stated at cost less any identified impairment loss on the statements of financial position of the Company. (e) Revenue recognition and contract costs Revenue is recognised to depict the transfer of goods to customers in an amount that reflects the consideration to which the Group expects to be entitled in exchange for those goods. Specifically, the Group uses a 5-step approach to revenue recognition: • Step 1: Identify the contract(s) with a customer • Step 2: Identify the performance obligations in the contract • Step 3: Determine the transaction price • Step 4: Allocate the transaction price to the performance obligations in the contract • Step 5: Recognise revenue when (or as) the entity satisfies a performance obligation Revenue is recognised when, or as, obligations under the terms of a contract are satisfied, which occurs when control of the promised products or services is transferred to customers. Revenue is measured as the amount of consideration the Group expects to receive in exchange for transferring products or services to a customer (“transaction price”). 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. When the contract contains a financing component which provides the customer with a significant benefit of financing the transfer of goods or services to the customer for more than one year, revenue is measured at the present value of the amount receivable, discounted using the discount rate that would be reflected in a separate financing transaction between the Group and the customer at contract inception. When the contract contains a financing component which provides the Group with a significant financial benefit for more than one year, revenue recognised under the contract includes the interest expense accredited on the contract liability under the effective interest method. For a contract where the period between the payment by the customer and the transfer of the promised goods or services is one year or less, the transaction price is not adjusted for the effects of a significant financing component, using the practical expedient in IFRS 15. When volume rebates are provided to certain customers once the quantity of products purchased during the period exceeds a threshold specified in the contract, rebates are offset against amounts payable by the customer. To estimate the variable consideration for the expected future rebates, the most likely amount method is used. Revenue is recognised either at a point in time or over time, when the Group satisfies performance obligations by transferring the promised goods or services to its customers. A contract asset represents the Group’s right to consideration in exchange for goods or services that the Group has transferred to a customer that is not yet unconditional. In contrast, a receivable represents the Group’s unconditional right to consideration, i.e. only the passage of time is required before payment of that consideration is due. APPENDIX I ACCOUNTANTS’ REPORT – I-17 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 276 of 431 -- A contract liability represents the Group’s obligation to transfer goods or services to a customer for which Group has received consideration (or an amount of consideration is due) from the customer. Further details of the Group’s revenue and other income recognition policies are as follows: (i) Revenue from sale of goods Revenue from contracts with customers is recognised at the point in time when control of goods is transferred to the customers, generally when the Group has delivered goods to the location specified in the sales contract and the buyer has confirmed the acceptance of the goods. The credit period granted to customers by the Group is determined based on their credit risk characteristics. The Group does not expect to any contracts where the period between the transfer of the promised goods to the customer and payment by the customer exceed one year. As a consequence, there is no significant financing component. Interest 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. (ii) Contract costs Contract costs are either the costs to fulfil a contract or the incremental costs of obtaining a contract. Costs to fulfil a contract If the costs incurred in fulfilling a contract with a customer which are not capitalised as inventories, property, plant and equipment and intangible assets, the Group capitalises the costs incurred to fulfil a contract with a customer as an asset (included in “other non-current assets” in the consolidated statements of financial position) if all of the following criteria are met: i. the costs relate directly to a contract or to an anticipated contract that the entity can specifically identify; ii. the costs generate or enhance resources of the entity that will be used in satisfying (or in continuing to satisfy) performance obligations in the future; and iii. the costs are expected to be recovered. An asset is amortised and charged to the profit or loss on a systematic basis (i.e. over the period of sales contracts that is consistent with the transfer to the customer of the goods or services to which the asset relates. The asset is subject to impairment review. Other costs of fulfilling a contract, which are not capitalised, are expensed as incurred. (f) Leasing Definition of 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. For contracts entered into or modified on or after the date of initial application or arising from business combinations, the Group assesses whether a contract is or contains a lease based on the definition under IFRS 16 at inception or modification date. Such contract will not be reassessed unless the terms and conditions of the contract are subsequently changed. APPENDIX I ACCOUNTANTS’ REPORT – I-18 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 277 of 431 -- The Group as lessee All leases (irrespective of they are operating leases or finance leases) are required to be capitalised in the consolidated statements of financial position as right-of-use assets and lease liabilities, but accounting policy choices exist for an entity to choose not to capitalise (i) leases which are short-term leases and/or (ii) leases for which the underlying asset is of low-value. The Group has elected not to recognise right-of-use assets and lease liabilities for leases for which at the commencement date have a lease term less than 12 months and leases of low-value assets. The lease payments associated with those leases have been expensed on straight-line basis over the lease term. Payments associated with short-term leases and leases of low-value assets are recognised on a straight-line basis as an expense in profit or loss. Short-term leases are leases with a lease term of 12 months or less. The Group also applies practical expedient not to separate non-lease components from lease component, and instead account for the lease component and any associated non-lease components as a single lease component. The Group presents right-of-use assets and lease liabilities separately in the consolidated statements of financial position. Right-of-use asset The right-of-use asset is recognised at cost and would comprise: (i) the amount of the initial measurement of the lease liability (see below for the accounting policy to account for lease liability); (ii) any lease payments made at or before the commencement date, less any lease incentives received; (iii) any initial direct costs incurred by the lessee; and (iv) an estimate of costs to be incurred by the lessee in dismantling and removing the underlying asset to the condition required by the terms and conditions of the lease, unless those costs are incurred to produce inventories. The Group measures the right-of-use assets applying a cost model. Under the cost model, the Group measures the right-to-use asset at cost, less any accumulated depreciation and any impairment losses, and adjusted for any remeasurement of lease liability. The right-of-use asset is subsequently depreciated using the straight-line method from the date of initial application over the shorter of the remaining lease term or the useful life of the underlying asset. The useful lives, residual value and depreciation method are reviewed, and adjusted if appropriate, at the end of each reporting period. In addition, the right-of-use asset is reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability. Lease liability The lease liability is recognised at the present value of the lease payments that are not paid at the date of commencement of the lease. The lease payments are discounted using the interest rate implicit in the lease, if that rate can be readily determined. If that rate cannot be readily determined, the Group uses the Group’s incremental borrowing rate. The following payments for the right-to-use the underlying asset during the lease term that are not paid at the commencement date of the lease are considered to be lease payments: (i) fixed payments less any lease incentives receivable; (ii) variable lease payments that depend on an index or a rate, initially measured using the index or rate as at commencement date; (iii) amounts expected to be payable by the lessee under residual value guarantees; (iv) the exercise price of a purchase option if the lessee is reasonably certain to exercise that option; and (v) payments of penalties for terminating the lease, if the lease term reflects the lessee exercising an option to terminate the lease. Subsequent to the commencement date, the Group measures the lease liability by: (i) increasing the carrying amount to reflect interest on the lease liability; (ii) reducing the carrying amount to reflect the lease payments made; and (iii) remeasuring the carrying amount to reflect any reassessment or lease modifications, e.g., a change in future lease payments arising from change in an index or rate, a change in the lease term, a change in the in substance fixed lease payments or a change in assessment to purchase the underlying asset. APPENDIX I ACCOUNTANTS’ REPORT – I-19 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 278 of 431 -- (g) Foreign currencies In preparing the financial statements of each individual group entity, transactions in currencies other than the functional currency of that entity (foreign currencies) are recorded in the respective functional currency (i.e. the currency of the primary economic environment in which the entity operates) at the rates of exchange prevailing on the dates of the transactions. At the end of the reporting period, monetary items denominated in foreign currencies are retranslated at the rates prevailing at that date. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated. 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 Historical Financial Information of each entity are measured using that functional currency. Exchange differences arising on the settlement of monetary items, and on the retranslation of monetary items, are recognised in profit or loss in the period in which they arise. For the purposes of presenting the Historical Financial Information, the assets and liabilities of the Group’s foreign operations are translated into the presentation currency of the Group (i.e. RMB) using exchange rates prevailing at the end of each reporting period. Income and expenses items are translated at the average exchange rates for the period, unless exchange rates fluctuate significantly during the period, in which case, the exchange rates prevailing at the dates of transactions are used. Exchange differences arising, if any, are recognised in other comprehensive income and accumulated in equity under the heading of exchange reserve. On the disposal of a foreign operation (that is, a disposal of the Group’s entire interest in a foreign operation, or a disposal involving loss of control over a subsidiary that includes a foreign operation, or a partial disposal of an interest in an associate that includes a foreign operation of which the retained interest becomes a financial asset), all of the exchange differences accumulated in equity in respect of that operation attributable to the owners of the Company are reclassified to profit or loss. In addition, in relation to a partial disposal of a subsidiary that does not result in the Group losing control over the subsidiary, the proportionate share of accumulated exchange differences are re-attributed to non-controlling interests and are not recognised in profit or loss. For all other partial disposals (i.e. partial disposals of associates that do not result in the Group losing significant influence), the proportionate share of the accumulated exchange differences is reclassified to profit or loss. Goodwill and fair value adjustments on identifiable assets acquired arising on an acquisition of a foreign operation are treated as assets and liabilities of that foreign operation and translated at the rate of exchange prevailing at the end of each reporting period. Exchange differences arising are recognised in other comprehensive income. (h) Borrowing costs Borrowing costs attributable directly to the acquisition, construction or production of qualifying assets which require a substantial period of time to be ready for their intended use or sale, are capitalised as part of the cost of those assets. Income earned on temporary investments of specific borrowings pending their expenditure on those assets is deducted from borrowing costs capitalised. All other borrowing costs are recognised in profit or loss in the period in which they are incurred. (i) Government grants Government grants are not recognised until there is reasonable assurance that the Group will comply with the conditions attaching to them and that the grants will be received. Government grants are recognised in profit or loss on a systematic basis over the periods in which the Group recognises as expense the related costs for which the grants are intended to compensate. Specifically, government grants whose primary condition is that the Group should purchase, construct or otherwise acquire property, plant and equipment are recognised as deferred revenue in the consolidated statements of financial position and transferred to profit or loss on a systematic and rational basis over the useful lives of the related assets. Government grants that are receivable as compensation for expenses or losses already incurred or for the purpose of giving immediate financial support to the Group with no future related costs are recognised in profit or loss in the period in which they become receivable. APPENDIX I ACCOUNTANTS’ REPORT – I-20 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 279 of 431 -- (j) Retirement benefit costs In accordance with the rules and regulations in the PRC, the PRC based employees of the Group participate in various defined contribution retirement plans organised by the relevant municipal and provincial governments in the PRC under which the Group and the PRC based employees are required to make monthly contributions to these plans calculated as a percentage of the employees’ salaries. The municipal and provincial governments undertake to assume the retirement benefit obligations of all existing and future retired PRC based employees payable under the plans described above. Other than the monthly contributions, the Group has no further obligation for the payment of retirement and other post retirement benefits of its employees. The assets of these plans are held separately from those of the Group in independently administrated funds managed by the PRC government. The Group’s contributions to the defined contribution plans are expensed as incurred and not reduced by contributions forfeited by those employees who leave the plans prior to vesting fully in the contributions. (k) Short-term employee benefits Short-term employee benefits are recognised at the undiscounted amount of the benefits expected to be paid as and when employees rendered the services. All short-term employee benefits are recognised as an expense unless another IFRS Accounting standards requires or permits the inclusion of the benefit in the cost of an asset. A liability is recognised for benefits accruing to employees (such as wages and salaries, annual leave and sick leave) after deducting any amount already paid. (l) Share-based payment transactions Equity-settled share-based payments to employees (including directors of the Company) are measured at the fair value of the equity instruments at the grant date. The cost of equity-settled transactions with employees for grants is measured by reference to the fair value at the date at which they are granted. Further details of which are given in note 40 to the Historical Financial Information. The cost of equity-settled transactions is recognised in 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 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. Where an equity-settled award is canceled, it is treated as if it had vested on the date of cancelation, 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 canceled award, and is designated as a replacement award on the date that it is granted, the canceled and new awards are treated as if they were a modification of the original award, as described in the previous paragraph. APPENDIX I ACCOUNTANTS’ REPORT – I-21 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 280 of 431 -- The dilutive effect of outstanding restricted shares is reflected as additional share dilution in the computation of earnings per share. (m) Taxation Income tax expense represents the sum of the current tax and deferred tax. Current tax Current tax is based on the profit or loss from ordinary activities adjusted for items that are non-assessable or disallowable for income tax purposes and is calculated using tax rates that have been enacted or substantively enacted at the end of reporting period. Deferred tax Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the Historical Financial Information and the corresponding tax bases used in the computation of taxable profits. Deferred tax liabilities are generally recognised for all taxable temporary differences. Deferred tax assets are generally recognised for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilised. Such deferred tax assets and liabilities are not recognised if the temporary difference arises from the initial recognition (other than in a business combination) of assets and liabilities in a transaction that affects neither the taxable profits nor the accounting profit. In addition, deferred tax liabilities are not recognised if the temporary difference arises from the initial recognition of goodwill. Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries or associates except where the Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax assets arising from deductible temporary differences associated with such investments and interests are only recognised to the extent that it is probable that there will be sufficient taxable profits against which to utilise the benefits of the temporary differences and they are expected to reverse in the foreseeable future. The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realised, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of each reporting period. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Group expects, at the end of each reporting period, to recover or settle the carrying amount of its assets and liabilities. Current and deferred tax is recognised in profit or loss, except when they relate to items that are recognised in other comprehensive income or directly in equity, in which case, the current and deferred tax are also recognised in other comprehensive income or directly in equity respectively. Where current tax or deferred tax arises from the initial accounting for a business combination, the tax effect is included in the accounting for the business combination. (n) Property, plant and equipment Property, plant and equipment (except for freehold land) are stated in the consolidated statements of financial position at cost less subsequent accumulated depreciation and accumulated impairment losses, if any. Freehold land is stated at cost less accumulated impairment losses. The cost of property, plant and equipment includes its purchase price and the costs directly attributable to the acquisition of the items. APPENDIX I ACCOUNTANTS’ REPORT – I-22 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 281 of 431 -- Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognised. All other repairs and maintenance are recognised as an expense in profit or loss during the period in which they are incurred. Property, plant and equipment are depreciated so as to write off their cost or valuation net of expected residual value over their estimated useful lives on a straight-line basis. The useful lives, residual value and depreciation method are reviewed, and adjusted if appropriate, at the end of each reporting period. The useful lives are as follows: Property and Buildings ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 20-50 years Machinery ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 3-20 years Transportation vehicle ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 4-5 years Electronic equipment ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 3-30 years Leasehold improvement ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 3-5 years, or terms of lease contract Freehold land with indefinite useful life is not depreciated. An asset is written down immediately to its recoverable amount if its carrying amount is higher than the asset’s estimated recoverable amount. An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the item) is included in profit or loss in the period in which the item is derecognised. (o) Intangible assets Intangible assets acquired separately are initially recognised at cost. The cost of intangible assets acquired in a business combination is fair value at the date of acquisition. Subsequently, intangible assets with finite useful lives are carried at cost less accumulated amortisation and accumulated impairment losses. Amortisation is provided on a straight-line basis over their useful lives as follows. Intangible assets with indefinite useful lives are carried at cost less any accumulated impairment losses. The amortisation expense is recognised in profit or loss. Computer software ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 3-10 years Customers relationship ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 10-12 years Club memberships! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 11-28 years Patents ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 5-10 years An intangible asset is derecognised on disposal, or when no future economic benefits are expected from use or disposal. Gains and losses arising from derecognition of an intangible asset, measured as the difference between the net disposal proceeds and the carrying amount of the asset, are recognised in profit or loss when the asset is derecognised. Customer relationships acquired in a business combination are recognised initially at fair value at the acquisition date. The fair value is determined using the multi-period excess earnings method, whereby the asset is valued after deducting a fair return on all other assets that are part of creating the related cash flows. Subsequently, the customer relationships are carried at cost (i.e., the initial fair value) less accumulated amortisation and impairment losses, if any. Amortisation is calculated using the straightline method over the expected lives of the customer relationships, which are determined to be 10-12 years. Goodwill Goodwill is measured as described in note 4(b) above. Goodwill is not amortised but it is tested for impairment annually, or more frequently if events or changes in circumstances indicate that it might be impaired, and is carried at cost less accumulated impairment losses. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold. Goodwill is allocated to cash-generating units (“CGU”) for the purpose of impairment testing. The allocation is made to those CGU that are expected to benefit from the business combination in which the goodwill arose. The units or groups of units are identified at the lowest level at which goodwill is monitored for internal management purposes. APPENDIX I ACCOUNTANTS’ REPORT – I-23 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 282 of 431 -- (p) Research and development costs Expenditure on internally developed products is capitalised if it can be demonstrated that: • it is technically feasible to develop the product for it to be sold; • adequate resources are available to complete the development; • there is an intention to complete and sell the product; • the Group is able to sell the product; and • sale of the product will generate future economic benefits; and expenditure on the project can be measured reliably. Development expenditure not satisfying the above criteria and expenditure on the research phase of internal projects are recognised in profit or loss as incurred. (q) Impairment losses on tangible and intangible assets At the end of each reporting period, the Group reviews the carrying amounts of its tangible and intangible assets with finite useful lives to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss, if any. Goodwill and intangible assets that have an indefinite useful life are not subject to amortisation and are tested annually for impairment, or more frequently if events or changes in circumstances indicate that they might be impaired. When it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs. Where a reasonable and consistent basis of allocation can be identified, corporate assets are also allocated to individual cash-generating units, or otherwise they are allocated to the smallest group of cash-generating units for which a reasonable and consistent allocation basis can be identified. Recoverable amount is the higher of value in use and fair value less costs of disposal. In assessing value in use, the estimated future cash flows of the asset (or the cash-generating unit) 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 (or the cash-generating unit) for which the estimates of future cash flows have not been adjusted. If the recoverable amount of an asset (or the CGU) is estimated to be less than its carrying amount, the carrying amount of the asset (or the CGU) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss. When an impairment loss subsequently reverses, the carrying amount of the asset (or the CGU) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or the CGU) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss. (r) Financial instruments Financial assets and financial liabilities are recognised when a group entity becomes a party to the contractual provisions of the instrument. (i) Financial assets A financial asset (unless it is a trade receivable without a significant financing component) is initially measured at fair value plus, for an item not at fair value through profit or loss (“FVTPL”), transaction costs that are directly attributable to its acquisition or issue. A trade receivable without a significant financing component is initially measured at the transaction price. APPENDIX I ACCOUNTANTS’ REPORT – I-24 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 283 of 431 -- Purchases or sales of financial assets that require delivery of assets within a time frame established by regulation or convention in the market place (regular way trades) are recognised on the trade date, i.e., the date that the Group commits to purchase or sell the asset. Financial assets with embedded derivatives are considered in their entirety when determining whether their cash flows are solely payment of principal and interest. Effective interest method The effective interest method is a method of calculating the amortised cost of a financial asset or financial liability and of allocating interest income or interest expense over the Track Record Period. The effective interest rate is the rate that exactly discounts estimated future cash receipts or payments through the expected life of the financial asset or liability, or where appropriate, a shorter period. Debt instruments Subsequent measurement of debt instruments depends on the Group’s business model for managing the asset and the cash flow characteristics of the asset. There are two measurement categories into which the Group classifies its debt instruments: Amortised cost: Assets that are held for collection of contractual cash flows where those cash flows represent solely payments of principal and interest are measured at amortised cost. Financial assets at amortised cost are subsequently measured using the effective interest rate method. Interest income, foreign exchange gains and losses and impairment are recognised in profit or loss. Any gain on derecognition is recognised in profit or loss. Fair value through other comprehensive income (“FVOCI”): Assets that are held for collection of contractual cash flows and for selling the financial assets, where the assets’ cash flows represent solely payments of principal and interest, are measured at FVOCI. Debt investments at FVOCI are subsequently measured at fair value. Interest income calculated using the effective interest method, foreign exchange gains and losses and impairment are recognized in profit or loss. Other net gains and losses are recognised in other comprehensive income. On derecognition, gains and losses accumulated in other comprehensive income are reclassified to profit or loss. FVTPL: Financial assets at FVTPL include financial assets held for trading, financial assets designated upon initial recognition at FVTPL or financial assets mandatorily required to be measured at fair value. Financial assets are classified as held for trading if they are acquired for the purpose of selling or repurchasing in the near term. Derivatives, including separated embedded derivatives, are also classified as held for trading unless they are designated as effective hedging instruments. Financial assets with cash flows that are not solely payments of principal and interest are classified and measured at FVTPL, irrespective of the business model, whereby changes in fair value, interest income calculated using the effective interest rate method and foreign exchange gains and losses are recognised in profit or loss. Notwithstanding the criteria for debt instruments to be classified at amortised cost or at FVOCI, as described above, debt instruments may be designated at FVTPL on initial recognition if doing so eliminates, or significantly reduces, an accounting mismatch. Equity instruments On initial recognition of an equity investment that is not held for trading, the Group could irrevocably elect to present subsequent changes in the investment’s fair value in other comprehensive income. This election is made on an investment-by-investment basis. Equity investments at FVOCI are measured at fair value. Dividend income are recognised in profit or loss unless the dividend income clearly represents a recovery of part of the cost of the investments. Other net gains and losses are recognised in other comprehensive income and are not reclassified to profit or loss. All other equity instruments are classified as FVTPL, whereby changes in fair value, dividends and interest income are recognised in profit or loss. Impairment loss on financial assets The Group recognises a loss allowance for expected credit loss (“ECL”) on financial assets which are subject to impairment under IFRS 9 “Financial Instruments”. The amount of ECL is updated at the end of each reporting period to reflect changes in credit risk since initial recognition. APPENDIX I ACCOUNTANTS’ REPORT – I-25 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 284 of 431 -- Lifetime ECL represents the ECL that will result from all possible default events over the expected life of the relevant instrument. In contrast, 12-month ECL (“12m ECL”) represents the portion of lifetime ECL that is expected to result from default events that are possible within 12 months after the reporting date. Assessment are done based on the Group’s historical credit loss experience, adjusted for factors that are specific to the debtors, general economic conditions and an assessment of both the current conditions at the reporting date as well as the forecast of future conditions. The Group has elected to measure loss allowances for trade receivables using IFRS 9 simplified approach and always recognises lifetime ECL for trade receivables. The ECL on these financial assets are assessed collectively using a provision matrix based on the Group’s historical credit loss experience, adjusted for factors that are specific to the debtors, general economic conditions and an assessment of both the current as well as the forecast direction of conditions at the reporting date, including time value of money where appropriate. For other financial instruments, the Group measures the loss allowance equal to 12m ECL, unless there has been a significant increase in the credit risk since initial recognition or evidence that a financial asset is credit-impaired, then the Group recognises lifetime ECL. The assessment of whether lifetime ECL should be recognised is based on significant increases in the likelihood or risk of a default occurring since initial recognition. Significant increase in credit risk In assessing whether the credit risk on a financial instrument has increased significantly since initial recognition, the Group compares the risk of a default occurring on the financial instrument as at the reporting date with the risk of a default occurring on the financial instrument as at the date of initial recognition. In making this assessment, the Group considers both quantitative and qualitative information that is reasonable and supportable, including historical experience and forward-looking information that is available without undue cost or effort. Forward-looking information considered includes the future prospects of the industries in which the Group’s debtors operate obtained from economic expert reports, financial analysts and governmental bodies, as well as consideration of various external sources of actual and forecast economic information that relate to the Group’s core operations. In particular, the following information is taken into account when assessing whether credit risk has increased significantly: • an actual or expected significant deterioration in the financial instrument’s external (if available) or internal credit rating; • significant deterioration in external market indicators of credit risk for a particular financial instrument, e.g. a significant increase in the credit spread, or the credit default swap prices for the debtor; • existing or forecast adverse changes in business, financial or economic conditions that are expected to cause a significant decrease in the debtor’s ability to meet its debt obligations; • an actual or expected significant deterioration in the operating results of the debtor; • an actual or expected significant adverse change in the regulatory, economic, or technological environment of the debtor that results in a significant decrease in the debtor’s ability to meet its debt obligations. Irrespective of the outcome of the above assessment, the Group presumes that the credit risk has increased significantly since initial recognition when contractual payments are more than 30 days past due, unless the Group has reasonable and supportable information that demonstrates otherwise. Despite the aforegoing, the Group assumes that the credit risk on a debt instrument has not increased significantly since initial recognition if the debt instrument is determined to have low credit risk at the reporting date. A debt instrument is determined to have low credit risk if (i) it has a low risk of default, (ii) the borrower has a strong capacity to meet its contractual cash flow obligations in the near term and (iii) adverse changes in economic and business conditions in the longer term may, but will not necessarily, reduce the ability of the borrower to fulfil its contractual cash flow obligations. The Group considers a debt instrument to have low credit risk when it has an internal or external credit rating of “investment grade” as per globally understood definition. APPENDIX I ACCOUNTANTS’ REPORT – I-26 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 285 of 431 -- The Group regularly monitors the effectiveness of the criteria used to identify whether there has been a significant increase in credit risk and revises them as appropriate to ensure that the criteria are capable of identifying significant increase in credit risk before the amount becomes past due. Definition of default For internal credit risk management, the Group considers an event of default to have occurred when information developed internally or obtained from external sources indicates that the debtor is unlikely to pay its creditors, including the Group, in full (without taking into account any collaterals held by the Group). Irrespective of the above analysis, the Group considers that default has occurred when a financial asset is more than 90 days past due unless the Group has reasonable and supportable information to demonstrate that a more lagging default criterion is more appropriate. Credit-impaired financial assets A financial asset is credit-impaired when one or more events of default that have a detrimental impact on the estimated future cash flows of that financial asset have occurred. Evidence that a financial asset is credit-impaired includes observable data about the following events: (a) significant financial difficulty of the issuer or the borrower; (b) a breach of contract, such as a default or past due event; (c) the lender(s) of the borrower, for economic or contractual reasons relating to the borrower’s financial difficulty, having granted to the borrower a concession(s) that the lender(s) would not otherwise consider; or (d) it is becoming probable that the borrower will enter bankruptcy or other financial reorganisation. Write-off policy The Group writes off a financial asset when there is information indicating that the counterparty is in severe financial difficulty and there is no realistic prospect of recovery, e.g. when the counterparty has been placed under liquidation or has entered into bankruptcy proceedings. Financial assets written off may still be subject to enforcement activities under the Group’s recovery procedures, taking into account legal advice where appropriate. A write-off constitutes a derecognition event. Any subsequent recoveries made are recognised in profit or loss. Measurement and recognition of ECL The measurement of ECL is a function of the probability of default, loss given default (i.e. the magnitude of the loss if there is a default) and the exposure at default. The assessment of the probability of default and loss given default is based on historical data adjusted by forward-looking information. Estimation of ECL reflects an unbiased and probability-weighted amount that is determined with the respective risks of default occurring as the relevant weighting. Generally, the ECL is the difference between all contractual cash flows that are due to the Group in accordance with the contract and all the cash flows that the Group expects to receive, discounted at the effective interest rate determined at initial recognition. Where ECL is measured on a collective basis to cater for cases where evidence at the individual instrument level may not yet be available, the financial instruments are grouped on the following basis: • Nature of financial instruments (i.e. the Group’s trade receivables, other receivables are each assessed as a separate group. Note receivables are assessed for ECL on an individual basis); • Past-due status; • Nature, size and industry of debtors; and • External credit ratings where available. APPENDIX I ACCOUNTANTS’ REPORT – I-27 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 286 of 431 -- The grouping is regularly reviewed by management to ensure the constituents of each group continue to share similar credit risk characteristics. Interest income is calculated based on the gross carrying amount of the financial asset unless the financial asset is credit impaired, in which case interest income is calculated based on amortised cost of the financial asset. The Group recognises an impairment gain or loss in profit or loss for all financial instruments by adjusting their carrying amount through a loss allowance account. Derecognition of financial assets The Group derecognises a financial asset only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another party. On derecognition of a financial asset measured at amortised cost, the difference between the asset’s carrying amount and the sum of the consideration received and receivable is recognised in profit or loss. (ii) Financial liabilities and equity instruments Classification as debt or equity Debt and equity instruments are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument. Financial liabilities at amortised cost Financial liabilities at amortised cost are subsequently measured at amortised cost, using the effective interest method. The related interest expense is recognised in profit or loss. Gains or losses are recognised in profit or loss when the liabilities are derecognised as well as through the amortisation process. Equity instruments An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued by the Company are recognised at the proceeds received, net of direct issue costs. Derecognition of financial liabilities The Group derecognises financial liabilities when, and only when, the Group’s obligations are discharged, cancelled or have expired. The difference between the carrying amount of the financial liability derecognised and the consideration paid and payable is recognised in profit or loss. (s) Provisions and contingent liabilities Provisions are recognised for liabilities of uncertain timing or amount when the Group has a legal or constructive obligation arising as a result of a past event, which it is probable will result in an outflow of economic benefits that can be reliably estimated. Where it is not probable that an outflow of economic benefits will be required, or the amount cannot be estimated reliably, the obligation is disclosed as a contingent liability, unless the probability of outflow of economic benefits is remote. Possible obligations, the existence of which will only be confirmed by the occurrence or non-occurrence of one or more future events, are also disclosed as contingent liabilities unless the probability of outflow of economic benefits is remote. APPENDIX I ACCOUNTANTS’ REPORT – I-28 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 287 of 431 -- (t) Related parties (i) A person or a close member of that person’s family is related to the Group if that person: (a) has control or joint control over the Group; (b) has significant influence over the Group; or (c) is a member of key management personnel of the Group or the Company’s parent. (ii) An entity is related to the Group if any of the following conditions apply: (a) The entity and the Group are members of the same group (which means that each parent, subsidiary and fellow subsidiary is related to the others). (b) One entity is an associate or joint venture of the other entity (or an associate or joint venture of a member of a group of which the other entity is a member). (c) Both entities are joint ventures of the same third party. (d) One entity is a joint venture of a third entity and the other entity is an associate of the third entity. (e) The entity is a post-employment benefit plan for the benefit of the employees of the Group or an entity related to the Group. (f) The entity is controlled or jointly controlled by a person identified in (i). (g) A person identified in (i)(a) has significant influence over the entity or is a member of key management personnel of the entity (or of a parent of the entity). (h) 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 Group’s parent. (iii) Close members of the family of a person are those family members who may be expected to influence, or be influenced by, that person in their dealings with the entity and include: (a) that person’s children and spouse or domestic partner; (b) children of that person’s spouse or domestic partner; and (c) dependents of that person or that person’s spouse or domestic partner. (u) Treasury shares Own equity instruments which held by the Company or the Group (treasury shares) are recognised directly in equity at cost. No gain or loss is recognised in the consolidated statements of profit or loss and other comprehensive income on the purchase, sale, issue or cancelation of the Group’s own equity instruments. 5. KEY SOURCES OF ESTIMATION UNCERTAINTY In the application of the Group’s accounting policies, which are described in Note 4, the directors of the Company are required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates, judgements and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an on-going basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if revision affects both current and future periods. APPENDIX I ACCOUNTANTS’ REPORT – I-29 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 288 of 431 -- The following are key assumptions concerning the future, and other key sources of estimation uncertainty at the end of each reporting period that may have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year. Key sources of estimation uncertainty Useful lives and estimated impairment on property, plant and equipment The Group determines the estimated useful lives, residual values and related depreciation charges for its property, plant and equipment. This estimate is based on the historical experience of the actual useful lives of property, plant and equipment of similar nature and functions. The Group will increase the depreciation charges where useful lives are less than previously estimated lives, or will write-off or write-down technically obsolete or non-strategic assets that have been abandoned or sold. The Group regularly reviews whether there are any indications of impairment and recognises an impairment loss if the carrying amount of an asset is lower than its recoverable amount. The Group tests for impairment for property, plant and equipment whenever there is an indication that the asset may be impaired. The recoverable amounts have been determined based on the higher of value in use and fair value less costs of disposal. These calculations require the use of estimates, such as discount rates, future profitability and growth rates. Useful lives and estimated impairment on intangible assets The Group’s management determines the useful lives and related amortisation charges for its intangible assets. This estimate is based on the historical experience of the actual useful lives of intangible assets of similar nature and functions and may vary significantly as a result of technical innovations and keen competitions from competitors, resulting in higher amortisation charge and/or write-off or write-down of technically obsolete assets when useful lives are less than previously estimated. The Group will increase the amortisation charges where useful lives are less than previously estimated lives, or will write-off or write-down technically obsolete or non-strategic assets that have been abandoned or sold. The Group regularly reviews whether there are any indications of impairment and recognises an impairment loss if the carrying amount of an asset is lower than its recoverable amount. The Group tests for impairment for intangible assets whenever there is an indication that the asset may be impaired. The recoverable amounts have been determined based on the higher of value in use and fair value less costs of disposal. These calculations require the use of estimates, such as discount rates, future profitability and growth rates. Provision of ECL for financial assets at amortised cost The Group calculates ECL for trade and other receivables and cash and cash equivalent under IFRS 9. The provision rates are based on the Group’s historical default rates taking into consideration forward-looking information that is reasonable and supportable available without undue costs or effort. At every reporting date, the historical observed default rates are reassessed and changes in the forward-looking information are considered. The provision of ECL is sensitive to changes in estimates. Details of the key assumptions and inputs used are set out in Note 37. Changes in these assumptions and estimation could materially affect the assessment and it may be necessary to make additional loss allowance in future periods. Fair value measurements for financial assets at FVOCI The Group has made various investments during the Track Record Period as set out in note 22. The Group accounts for these financial instruments as financial assets at FVOCI. For those investments with no quoted market prices in an active market, their fair values are estimated by using valuation techniques. These techniques include those further described in Note 39 under the heading “Fair value measurement”. Valuation techniques are certified by independent and recognised business valuer before being implemented for valuation and are calibrated to ensure that outputs reflect market conditions. Valuation models established by the valuer make the maximum use of market inputs and rely as little as possible on the Group’s specific data. However, some inputs require management estimates and assumptions, which are reviewed periodically and adjusted if necessary. Should any of the estimates and assumptions be changed, it may lead to a change in the fair value of the financial assets. APPENDIX I ACCOUNTANTS’ REPORT – I-30 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 289 of 431 -- Net realisable value of inventories Net realisable value of inventories is the estimated selling price in the ordinary course of business, less estimated costs of completion and selling expenses. These estimates are based on the current market condition and the historical experience of manufacturing and selling products of similar nature. In addition, these estimates could change significantly as a result of change in customer preference, environmental goals and competitor actions in response to industry cycles. Management measures these estimates at the end of each reporting year. Assessment of goodwill impairment The Group tests annually whether goodwill have suffered any impairment and when there is indication that they may be impaired, in accordance with the accounting policy stated in note 4(q). The recoverable amounts of cash-generating units have been determined based on value-in-use calculations which require the use of assumptions. These calculations require the use of estimates. The key assumptions and sensitivity test was disclosed in note 21. 6. SEGMENT INFORMATION AND REVENUE For the purposes of assessing performance and allocating resources, the Group’s operation is regarded as one reportable operating segment which is the sale of high-precision printed circuit boards segment. The segment engages in the research and development, production and sales of high-precision multilayer printed circuit boards, HDI, FPC and Rigid-Flex PCBs. The executive directors of the Company review the financial performance and position for the year of the Group as a whole. Accordingly, no segment information is presented. The Group’s revenue streams are categorised as follows: – Sales of products; and – Others An analysis of the Group’s revenue is as follows: Year ended December 31, 2023 2024 2025 RMB’000 RMB’000 RMB’000 Sales of products ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 7,458,581 10,050,762 18,083,689 Others (note) ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 472,667 680,707 1,208,624 Contracts with customers ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 7,931,248 10,731,469 19,292,313 Note: During the Track Record Period, the amounts mainly represented sales of scrap materials. Year ended December 31, 2023 2024 2025 RMB’000 RMB’000 RMB’000 Revenue from contracts with customers by timing of recognition within IFRS 15 Point in time ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 7,931,248 10,731,469 19,292,313 APPENDIX I ACCOUNTANTS’ REPORT – I-31 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 290 of 431 -- The following table provides information about contract costs, trade receivables and contract liabilities from contracts with customers. As at December 31, 2023 2024 2025 RMB’000 RMB’000 RMB’000 Contract costs (Note 24) ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! – 12,069 12,133 Trade receivables (Note 26) ! ! ! ! ! ! ! ! ! ! ! ! ! ! 3,250,758 3,927,102 5,933,087 Contract liabilities (Note 32) ! ! ! ! ! ! ! ! ! ! ! ! ! 5,222 3,798 11,423 The contract liabilities mainly relate to the advance consideration received from customers. Transaction Price Allocated to Future Performance Obligations IFRS 15 requires that the Group to disclose the aggregate amount of transaction price that is allocated to each performance obligation that has not yet been satisfied as at year-end. The Group applied practical expedient in paragraph 121(a) of IFRS 15 to its sales of products and others such that the Group has not disclosed the information in relation to the aggregated amount of transaction price allocated in the remaining performance obligations for contracts with an original expected length of one year or less. Geographical information An analysis of the Group’s revenue from external customers, based on location of customers and analysed by region, is presented below: Year ended December 31, 2023 2024 2025 RMB’000 RMB’000 RMB’000 Revenue from external customers – Chinese Mainland (excluding special supervision territory) ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 3,054,914 4,198,643 4,470,884 – Outside Chinese Mainland – other regions and overseas countries ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 4,876,334 6,532,826 14,821,429 7,931,248 10,731,469 19,292,313 Information about the Group’s non-current assets excluding financial assets and deferred tax assets by geographical location of the assets are presented below: As at December 31, 2023 2024 2025 RMB’000 RMB’000 RMB’000 Non-current assets excluding financial assets and deferred tax assets – Chinese Mainland (excluding special supervision territory) ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 6,474,893 6,752,820 13,564,557 – Outside Chinese Mainland – other regions and overseas countries ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 2,803,636 3,173,760 4,968,579 9,278,529 9,926,580 18,533,136 APPENDIX I ACCOUNTANTS’ REPORT – I-32 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 291 of 431 -- Information about major customers Revenue from customers contributing over 10% of the total revenue of the Group are as follows: Years ended December 31, 2023 2024 2025 RMB’000 RMB’000 RMB’000 Customer A ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! N/A* N/A* 5,737,877 Customer B ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! N/A* N/A* 2,030,342 * The corresponding revenue did not contribute over 10% of the total revenue of the Group. 7. OTHER GAINS/(LOSSES), NET Year ended December 31, 2023 2024 2025 RMB’000 RMB’000 RMB’000 Donation ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! (6,750) (4,382) (10,387) Fair value change on financial assets at FVTPL ! 2,346 (3,491) – Interest income from wealth management product ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 40,561 8,638 1,489 Net foreign exchange gains ! ! ! ! ! ! ! ! ! ! ! ! ! ! 11,731 78,156 (1,886) Loss on disposal/written off of property, plant and equipment! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! (7,778) (47,615) (21,589) Impairment loss on property, plant and equipment ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! – (10,741) (253) Loss on disposal of intangible assets ! ! ! ! ! ! ! ! (2) (103) – Loss on disposal of land use rights ! ! ! ! ! ! ! ! ! (32,418) – – Write-back of provision (note) ! ! ! ! ! ! ! ! ! ! ! ! – 55,115 – Written down of inventories! ! ! ! ! ! ! ! ! ! ! ! ! ! (16,135) (13,177) (33,630) Gain on early termination of leases ! ! ! ! ! ! ! ! ! – 114 (716) Others ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! (2,968) (20,668) (868) Total ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! (11,413) 41,846 (67,840) Note: The Group has write back provisions for litigation claims amounted to RMB55,115,000 due to the finalisation of the legal proceedings. 8. OTHER INCOME Year ended December 31, 2023 2024 2025 RMB’000 RMB’000 RMB’000 Interest income! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 23,126 14,328 24,510 Government subsidies ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 20,703 23,891 42,195 VAT input tax deduction ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! – 7,482 4,959 Others ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! – 4,280 925 Total ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 43,829 49,981 72,589 APPENDIX I ACCOUNTANTS’ REPORT – I-33 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 292 of 431 -- 9. REVERSAL/(PROVISION) OF IMPAIRMENT LOSSES ON FINANCIAL ASSETS, NET Year ended December 31, 2023 2024 2025 RMB’000 RMB’000 RMB’000 Impairment losses under ECL model, net of reversal Trade and notes receivables ! ! ! ! ! ! ! ! ! ! ! ! ! ! (10,999) (974) (20,062) Other receivables ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! (4,330) 3,277 (16,353) (15,329) 2,303 (36,415) 10. FINANCE COSTS Year ended December 31, 2023 2024 2025 RMB’000 RMB’000 RMB’000 Interest expenses on borrowings ! ! ! ! ! ! ! ! ! ! ! 83,676 107,234 132,984 Interest expenses on lease liabilities ! ! ! ! ! ! ! ! ! 1,624 3,197 4,794 Others ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 2,872 3,192 4,715 88,172 113,623 142,493 11. PROFIT BEFORE INCOME TAX Profit before income tax has been arrived at after charging/(crediting): Year ended December 31, 2023 2024 2025 RMB’000 RMB’000 RMB’000 Cost of inventories ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 6,287,951 8,292,806 12,496,889 Depreciation and amortisation ! ! ! ! ! ! ! ! ! ! ! ! 649,422 773,014 954,290 Written down of inventories! ! ! ! ! ! ! ! ! ! ! ! ! ! 16,135 13,177 33,630 Impairment loss on property, plant and equipment ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 5,554 10,741 253 Staff costs (including directors’ emoluments): – Salaries and other benefits ! ! ! ! ! ! ! ! ! ! ! ! ! 1,225,826 1,688,481 2,262,379 – Retirement benefits scheme contributions ! ! ! ! 62,820 95,345 135,068 – Share-based payment expenses ! ! ! ! ! ! ! ! ! ! ! 25,035 10,709 11,201 Auditor’s remuneration ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 1,780 2,410 4,318 APPENDIX I ACCOUNTANTS’ REPORT – I-34 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 293 of 431 -- 12. INCOME TAX EXPENSES Year ended December 31, 2023 2024 2025 RMB’000 RMB’000 RMB’000 Current tax – PRC Enterprise Income Tax (“EIT”) ! ! ! ! ! ! ! 90,253 170,321 703,538 – Others ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! – – 26,655 – (Over)/under provision in respect of prior year ! (8,586) (819) 26,458 81,667 169,502 756,651 Deferred tax (Note 23) ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! (3,799) (12,110) (46,923) Total income tax expense ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 77,868 157,392 709,728 Under the Law of the PRC on Enterprise Income Tax (the “EIT Law”) and Implementation Regulation of the EIT Law, the standard EIT rate of the PRC subsidiaries is 25%. For the PRC subsidiaries approved as “High and New Technology Enterprise” by the relevant government authorities, they are subject to a preferential rate of 15%. For the PRC subsidiaries approved as “Micro and Small Enterprise” by the relevant government authorities, which the annual taxable income that is not more than RMB1,000,000 shall be included in its taxable income at the reduced rate of 12.5% for year ended December 31, 2022 and at the reduced rate of 25% for year ended December 31, 2023 to 2027, with the applicable enterprise income tax rate of 20%. The group entities incorporated in Hong Kong are subject to Hong Kong profits tax at a rate of 16.5% on the estimated assessable profits for the years ended December 31, 2023, 2024 and 2025. On March 21, 2018, the Hong Kong Legislative Council passed the Inland Revenue (Amendment) (No. 7) Bill 2017 (the “Bill”) which introduces the two-tiered profits tax rates regime. The Bill was signed into law on March 28, 2018 and was gazette on the following day. Under the two-tiered profits tax rates regime, the first Hong Kong dollar (“HK$”) 2,000,000 of profits of qualifying corporations will be taxed at 8.25%, and profits above HK$2,000,000 will be taxed at 16.5%. Taxation arising from other jurisdictions is calculated at the rate prevailing in the relevant jurisdictions. The income tax expenses for the Track Record Period can be reconciled to the profit before income tax per the consolidated statements of profit or loss and other comprehensive income as follows: Year ended December 31, 2023 2024 2025 RMB’000 RMB’000 RMB’000 Profit before income tax ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 749,214 1,311,823 5,021,716 Tax at the applicable tax rate of 15% (note) ! ! ! ! 112,382 196,773 753,257 Effect of different tax rates of subsidiaries operating in other jurisdictions ! ! ! ! ! ! ! ! ! ! (1,603) (19,521) 3,245 (Over)/under provision of current tax in prior year ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! (8,586) (819) 26,458 Tax effect of income not taxable for tax purpose ! (1,593) – – Tax effect of expenses not deductible for tax purpose ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 8,750 25,883 14,986 Tax effect of deductible temporary differences and tax losses not recognised as deferred tax asset ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! – 9,472 5,579 Utilisation of tax losses previously not recognised ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! – – (33,974) Effect of superdeduction ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! (38,619) (54,396) (59,823) Others ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 7,137 – – Income tax expense ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 77,868 157,392 709,728 Note: The applicable tax rate is with reference to the preferential PRC tax rate of 15% as the income deriving entities which are the PRC subsidiaries approved as “High and New Technology Enterprise” by the relevant government authorities under the EIT Law and Implementation Regulation of the EIT Law for the year. APPENDIX I ACCOUNTANTS’ REPORT – I-35 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 294 of 431 -- 13. DIRECTORS’ AND SUPERVISORS’ EMOLUMENTS Details of the emoluments paid or payable to the directors and supervisors of the Company for the services provided to the Group during the Track Record Period are as follows: Year ended December 31, 2023 Directors’ fee Salaries and other benefits Performance- based bonus Retirement benefit scheme contributions Share-based payment expenses Total RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 Chairman: Mr. Chen Tao! ! ! ! ! ! ! ! ! ! ! – 1,221 1 – – 1,222 Executive directors: Ms. Liu Chunlan ! ! ! ! ! ! ! ! ! – 538 4 – 2,106 2,648 Mr. Chen Yong ! ! ! ! ! ! ! ! ! ! – 797 –* – 1,053 1,850 Mr. He Lianqi (note (b)) ! ! ! ! ! – 840 – – – 840 Mr. Zhao Qixiang ! ! ! ! ! ! ! ! – 771 1 – 1,053 1,825 Independent non-executive directors: Ms. Chu Dazhi (note (c)) ! ! ! ! – 100 – – – 100 Ms. Liu Hui (note (d)) ! ! ! ! ! ! – 100 – – – 100 Mr. Hou Fuqiang (note (e)) ! ! ! – 100 – – – 100 Supervisors: Ms. Wang Haiyan (note (a)) ! ! ! – 564 27 – – 591 Mr. Wei Junyi ! ! ! ! ! ! ! ! ! ! – 213 2 – – 215 Mr. Wang Yum ! ! ! ! ! ! ! ! ! ! – 383 10 – – 393 Mr. Zhu Guoqiang ! ! ! ! ! ! ! ! – 743 5 – 1,053 1,801 Mr. Wang Hui ! ! ! ! ! ! ! ! ! ! – 886 5 – 1,053 1,944 – 7,256 55 – 6,318 13,629 * Amount less than RMB1,000 Year ended December 31, 2024 Directors’ fee Salaries and other benefits Performance- based bonus Retirement benefit scheme contributions Share-based payment expenses Total RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 Chairman: Mr. Chen Tao! ! ! ! ! ! ! ! ! ! ! – 2,692 1 – – 2,693 Executive directors: Ms. Liu Chunlan ! ! ! ! ! ! ! ! ! – 1,658 1 – 713 2,372 Mr. Chen Yong ! ! ! ! ! ! ! ! ! ! – 1,118 70 – 356 1,544 Mr. He Lianqi (note (b)) ! ! ! ! ! – 840 – – – 840 Mr. Zhao Qixiang ! ! ! ! ! ! ! ! – 1,744 1 – 356 2,101 Independent non-executive directors: Ms. Chu Dazhi (note (c)) ! ! ! ! – 100 – – – 100 Ms. Liu Hui (note (d)) ! ! ! ! ! ! – 100 – – – 100 Mr. Hou Fuqiang (note (e)) ! ! ! – 100 – – – 100 Supervisors: Ms. Wang Haiyan (note (a)) ! ! ! – 580 40 – – 620 Mr. Wei Junyi ! ! ! ! ! ! ! ! ! ! – 36 1 – – 37 Mr. Wang Yum ! ! ! ! ! ! ! ! ! ! – 465 20 – – 485 Mr. Zhu Guoqiang ! ! ! ! ! ! ! ! – 913 79 – 356 1,348 Mr. Wang Hui ! ! ! ! ! ! ! ! ! ! – 1,076 86 – 356 1,518 Ms. Zhu Xiyao ! ! ! ! ! ! ! ! ! ! – 547 3 – 36 586 Mr. Zhou Dingzhong ! ! ! ! ! ! ! – 888 70 – 285 1,243 – 12,857 372 – 2,458 15,687 APPENDIX I ACCOUNTANTS’ REPORT – I-36 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 295 of 431 -- Year ended December 31, 2025 Directors’ fee Salaries and other benefits Performance- based bonus Retirement benefit scheme contributions Share-based payment expenses Total RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 Chairman: Mr. Chen Tao! ! ! ! ! ! ! ! ! ! ! – 6,394 1 – – 6,395 Executive directors: Ms. Liu Chunlan ! ! ! ! ! ! ! ! ! – 2,554 1 – 792 3,347 Mr. Chen Yong ! ! ! ! ! ! ! ! ! ! – 1,915 114 – 396 2,425 Mr. Zhao Qixiang ! ! ! ! ! ! ! ! – 3,154 5 – 396 3,555 Independent non-executive directors: Ms. Chu Dazhi (note (c)) ! ! ! ! – – – – – – Ms. Liu Hui (note (d)) ! ! ! ! ! ! – – – – – – Mr. Hou Fuqiang (note (e)) ! ! ! – – – – – – Mr. Xie LanJun (note f) ! ! ! ! ! – 100 – – – 100 Ms. Xie LingMin (note g) ! ! ! – 100 – – – 100 Mr. Zhang JiHai (note h) ! ! ! ! – 100 – – – 100 Supervisors: Ms. Wang Haiyan (note (a)) ! ! ! – 584 130 – – 714 Mr. Wei Junyi ! ! ! ! ! ! ! ! ! ! – – – – – – Mr. Wang Yum ! ! ! ! ! ! ! ! ! ! – 594 7 – – 601 Mr. Zhu Guoqiang ! ! ! ! ! ! ! ! – 1,012 121 – 396 1,529 Mr. Wang Hui ! ! ! ! ! ! ! ! ! ! – 1,178 223 – 396 1,797 Ms. Zhu XiYao ! ! ! ! ! ! ! ! ! ! – 762 2 – 40 804 Mr. Zhou Dingzhong ! ! ! ! ! ! ! – 1,270 128 – 317 1,715 – 19,717 732 – 2,733 23,182 Notes: (a) Ms. Wang Haiyan appointed as a supervisor of the Company on April 7, 2022. She resigned as a supervisor and appointed as an executive director on August 15, 2025. (b) Mr. He Lianqi resigned as an executive director of the Company on November 25, 2024. (c) Ms. Chu Dazhi resigned as an independent non-executive director of the Company on March 17, 2025. (d) Ms. Liu Hui resigned as an independent non-executive director of the Company on March 17, 2025. (e) Mr. Hou Fuqiang resigned as an independent non-executive director of the Company on March 17, 2025. (f) Mr. Xie LanJun appointed as an independent non-executive director of the Company on March 17, 2025. (g) Ms. Xie LingMin appointed as an independent non-executive director of the Company on March 17, 2025. (h) Mr. Zhang JiHai appointed as an independent non-executive director of the Company on March 17, 2025. APPENDIX I ACCOUNTANTS’ REPORT – I-37 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 296 of 431 -- 14. FIVE HIGHEST PAID INDIVIDUALS During the years ended December 31, 2023, 2024 and 2025, the five individuals with the highest emoluments in the Group include 3, 4, and 4 directors of the Company, details of whose remuneration are set out in Note 13 above. The emoluments paid to the remaining 2, 1 and 1 individual during the years ended December 31, 2023, 2024 and 2025 are as follows: Year ended December 31, 2023 2024 2025 RMB’000 RMB’000 RMB’000 Salaries and other benefits! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 1,629 1,076 1,178 Performance-based bonus ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 10 86 223 Retirement benefits scheme contributions ! ! ! ! ! – – – Share-based payment expenses ! ! ! ! ! ! ! ! ! ! ! ! 2,106 356 396 3,745 1,518 1,797 The emoluments of the above individuals with the highest emoluments are within the following bands: Number of individuals Year ended December 31, 2023 2024 2025 Nil to HK$1,000,000 ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! – – – HK$1,000,001 to HK$1,500,000 ! ! ! ! ! ! ! ! ! ! ! – – – HK$1,500,001 to HK$2,000,000 ! ! ! ! ! ! ! ! ! ! ! – 1 1 HK$2,000,001 to HK$2,500,000 ! ! ! ! ! ! ! ! ! ! ! 2 – – 2 1 1 During the Track Record Period, no emoluments were paid by the Group to the directors of the Company or the five highest paid individuals (including directors and employees) as an inducement to join or upon joining the Group or as compensation for loss of office. None of the directors of the Company have waived any emoluments during the Track Record Period. 15. EARNINGS PER SHARE Basic earnings per share The calculation of the basic earnings per share attribute to owners of the Company is based on the following data: Year ended December 31, 2023 2024 2025 RMB’000 RMB’000 RMB’000 Earnings for the purpose of calculating basic earnings per share ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 671,346 1,154,431 4,311,988 Number of shares: Year ended December 31, 2023 2024 2025 Weighted average number of ordinary shares in issue, excluding treasury shares held for restricted share scheme as these shares are not considered outstanding for the purpose of calculating basic earnings per share ! ! ! ! ! ! ! ! 855,049,558 859,232,614 860,605,275 APPENDIX I ACCOUNTANTS’ REPORT – I-38 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 297 of 431 -- Diluted earnings per share During the year ended December 31, 2023, the restricted shares outstanding do not meet the vesting conditions. As a result, the Company did not have any potential dilutive shares. The diluted earnings per share of the Company for the year ended December 31, 2023, 2024 and 2025 is calculated as follows: The calculation of the diluted earnings per share attribute to owners of the Company is based on the following data: Year ended December 31, 2023 2024 2025 RMB’000 RMB’000 RMB’000 Earnings for the purpose of calculating diluted earnings per share ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 671,346 1,154,431 4,311,988 Number of shares: Year ended December 31, 2023 2024 2025 Weighted average number of ordinary shares for the purpose of calculating basic earnings per share ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 855,049,558 859,232,614 860,605,275 Effect of restricted shares ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! – 4,868,802 2,059,302 Weighted average number of ordinary shares for the purpose of calculating diluted earnings per share ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 855,049,558 864,101,416 862,664,577 16. DIVIDENDS Year ended December 31, 2023 2024 2025 RMB’000 RMB’000 RMB’000 Final dividend for the prior year ! ! ! ! ! ! ! ! ! ! ! 163,264 163,264 257,576 The final dividends of RMB1.90 per 10 shares (tax inclusive) in respect of the year ended December 31, 2022 were approved in 2022 Annual General Meeting of the Group. The final dividends have not been recognised as a liability at December 31, 2022. The final dividends were settled during 2023. The final dividends of RMB1.90 per 10 shares (tax inclusive) in respect of the year ended December 31, 2023 were approved in 2023 Annual General Meeting of the Group. The final dividends have not been recognised as a liability at December 31, 2023. The final dividends were settled during 2024. The final dividends of RMB3.00 per 10 shares (tax inclusive) in respect of the year ended December 31, 2024 were approved in 2024 Annual General Meeting of the Group. The final dividends have not been recognised as a liability at December 31, 2024. The final dividends were settled during 2025. Subsequent to the end of the Track Record Period, the final dividends of RMB20.00 per 10 shares (tax inclusive), amounting to approximately RMB1,740,264,000, in respect of the year ended December 31, 2025 had been proposed by the Board and were subject to approval by the shareholders in the forthcoming annual general meeting of the Group. The final dividends have not been recognised as a liability at December 31, 2025. APPENDIX I ACCOUNTANTS’ REPORT – I-39 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 298 of 431 -- 17. INVESTMENTS IN SUBSIDIARIES As at December 31, 2023 2024 2025 RMB’000 RMB’000 RMB’000 Company Investments in subsidiaries – Unlisted shares, at cost ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 3,324,465 3,753,654 4,858,031 The Company had direct and indirect equity interests in the following principal subsidiaries during the Track Record Period: Name of subsidiaries Place and date of incorporation establishment Currency Authorised shares capital/ registered capital Equity interests attributable to the Company as at December 31, 2023 December 31, 2024 December 31, 2025 Principal activities Direct Indirect Direct Indirect Direct Indirect % % % % % % Shenghua Electronics (Huiyang) Co., ltd* ( ) ! ! The PRC, January 24, 2003 RMB 60,000,000 100 – 100 – 100 – Manufacturing Hongxing International Technology Limited** ! ! ! Hong Kong, June 15, 2011 United State dollar (“USD”) 50,000 100 – 100 – 100 – Trading of electronic products Shenzhen Shenghong Electronics Co., Ltd.** ! ! The PRC, October 23, 2015 RMB 100,000,000 100 – 100 – 100 – Development consultation Huizhou Victory Giant Technology Research Institute Co., Ltd** ! ! The PRC, December 26, 2017 RMB 50,000,000 100 – 100 – 100 – Product development VGTPCB Inc ! ! ! ! ! ! ! United States, March 9, 2017 USD 500,000 – 100 – 100 – 100 Trading of electronic products Hongxing International Co., Ltd ! ! ! ! ! ! ! ! Japan, July 3, 2018 Japanese Yen (“JPY”) 5,000,000 – 100 – 100 – 100 Trading of electronic products Huizhou Victory Giant Precision Technology Co., Ltd** ! ! ! ! ! ! ! ! The PRC, September 9, 2020 RMB 100,000,000 100 – 100 – 100 – Product development Ningbo Kefa Fuding Venture Capital Partnership Enterprise ( ) ! The PRC, November 2, 2017 RMB 2,750,000 98.97 – 98.97 – 98.97 – Capital market services Pole Star Limited ! ! ! ! ! ! Cayman Island, October 24, 2017 USD 167,740,529 100 – 100 – 100 – Capital market services MFS Technology (S) Pte Ltd. (“MFS(S)”)*** ! ! Singapore, October 11, 1988 Singapore dollar (“SGD”) 87,922,356 – 100 – 100 – 100 Sales MFS Technology (M) Sdn. Bhd.*** ! ! ! ! ! ! Malaysia, January 31, 1958 Malaysia Ringgit (“RM”) 5,000,000 – 100 – 100 – 100 Manufacturing and sales APPENDIX I ACCOUNTANTS’ REPORT – I-40 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 299 of 431 -- Name of subsidiaries Place and date of incorporation establishment Currency Authorised shares capital/ registered capital Equity interests attributable to the Company as at December 31, 2023 December 31, 2024 December 31, 2025 Principal activities Direct Indirect Direct Indirect Direct Indirect % % % % % % Hunan Weisheng Technology Co., Ltd** ! ! ! ! ! ! ! ! ! The PRC, September 12, 2003 RMB 5,000,000 – 100 – 100 – 100 Manufacturing and sales Hunan Weisheng Technology Circuit Board Co., Ltd** ! ! ! ! ! ! ! ! ! ! ! The PRC, July 24, 1989 RMB 17,000,000 – 100 – 100 – 100 Manufacturing and sales MFS Technology Europe UG ! Germany, January 28, 2011 Euro (“EUR”) 1,500 – 100 – 100 – 100 Sales Yiyang Weisheng Technology Co., Ltd.** ! ! ! The PRC, September 14, 2018 USD 14,000,000 – 100 – 100 – 100 Manufacturing and sales Victory Giant Technology (S) Pte Ltd*** ! ! ! ! ! ! ! Singapore, April 17, 2024 USD 80,750,121 – – 100 – 100 – Capital market services Victory Giant Technology (Vietnam) Co., Ltd*** ! ! ! Vietnam, July 4, 2024 USD 30,000,000 – – – 100 – 100 Manufacturing and sales Victory Giant Technology (Thailand) Co., Ltd.*** ! ! Thailand, July 25, 1990 Thai Baht (“THB”) 4,564,836,100 – – – 100 – 100 Manufacturing and sales Notes: i. The English names of the subsidiaries registered in the Chinese Mainland of the PRC represent the best efforts made by management of the Company to translate their Chinese names as they do not have official English names. All of the subsidiaries adopted December 31 as their financial year end date. * The statutory financial statements of certain subsidiaries in the PRC were prepared in accordance with relevant accounting principles and financial regulations applicable in the PRC, for the years ended December 31, 2023, 2024 and 2025 were audited by BDO China Shu Lun Pan Certified Public Accountants LLP. ** No statutory audited financial statements were prepared for certain entities established in the PRC since their date of incorporation as they are incorporated in a jurisdiction where there are no local statutory audit requirements or exempted from statutory audit requirements. *** Statutory audited financial statements were prepared by member firm of BDO Limited. APPENDIX I ACCOUNTANTS’ REPORT – I-41 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 300 of 431 -- 18. PROPERTY, PLANT AND EQUIPMENT Property and buildings Land Machinery Transportation vehicle Electronic equipment Construction in progress Leasehold improvement Total RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 Group Cost As at January 1, 2023 ! ! 2,417,333 – 5,704,107 43,406 160,860 125,424 70,148 8,521,278 Additions ! ! ! ! ! ! ! ! 8,320 – 287,865 1,293 16,975 20,800 30,336 365,589 Acquisition of a subsidiary ! ! ! ! ! ! 247,418 – 507,502 73 33,257 114,135 – 902,385 Transferred from construction in progress ! ! ! ! ! ! ! 39,927 – 7,197 – 394 (47,518) – – Disposals/written off ! ! (123) – (38,102) (465) (1,817) – – (40,507) Exchange difference! ! ! (136) – (332) – 48 – – (420) As at December 31, 2023 and January 1, 2024 ! ! ! ! ! ! ! ! ! 2,712,739 – 6,468,237 44,307 209,717 212,841 100,484 9,748,325 Additions ! ! ! ! ! ! ! ! 44,896 – 435,920 6,933 24,903 351,756 10,561 874,969 Acquisition of a subsidiary ! ! ! ! ! ! 103,829 62,718 40,384 443 845 – – 208,219 Transferred from construction in progress ! ! ! ! ! ! ! 185,397 – 120,449 – 2,216 (308,062) – – Disposals/written off ! ! (1,787) – (557,205) (3,569) (13,055) – – (575,616) Exchange difference! ! ! (2,085) (1,123) (5,185) (34) (18) – – (8,445) As at December 31, 2024 and January 1, 2025 ! ! ! ! ! ! ! ! ! 3,042,989 61,595 6,502,600 48,080 224,608 256,535 111,045 10,247,452 Additions ! ! ! ! ! ! ! ! 54,856 97,996 1,749,535 22,579 57,791 4,381,671 85,769 6,450,197 Transferred from construction in progress ! ! ! ! ! ! ! 447,883 – 512,674 2,683 24,627 (987,867) – – Disposals/written off ! ! (108,630) – (252,082) (2,067) (4,882) (40,464) – (408,125) Exchange difference ! ! 4,779 5,148 (13,367) 167 (4,446) – – (7,719) As at December 31, 2025 ! ! ! ! ! ! ! ! ! 3,441,877 164,739 8,499,360 71,442 297,698 3,609,875 196,814 16,281,805 APPENDIX I ACCOUNTANTS’ REPORT – I-42 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 301 of 431 -- Property and buildings Land Machinery Transportation vehicle Electronic equipment Construction in progress Leasehold improvement Total RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 Accumulated depreciation and impairment As at January 1, 2023 ! ! 220,293 – 1,619,812 28,923 63,640 – 33,412 1,966,080 Depreciation for the year ! ! ! ! ! ! ! ! ! 70,674 – 518,576 4,590 17,761 – 11,409 623,010 Impairment loss ! ! ! ! ! – – 5,554 – – – – 5,554 Eliminated on disposals/written off ! (96) – (23,642) (224) (6,199) – – (30,161) Exchange difference! ! ! (30) – (480) (71) 46 – – (535) As at December 31, 2023 and January 1, 2024 ! ! ! ! ! ! ! ! ! 290,841 – 2,119,820 33,218 75,248 – 44,821 2,563,948 Depreciation for the year ! ! ! ! ! ! ! ! ! 85,879 – 571,623 4,139 36,381 – 18,483 716,505 Impairment loss ! ! ! ! ! 13 – 10,719 – 9 – – 10,741 Eliminated on disposals/written off ! (857) – (496,415) (2,306) (11,181) – – (510,759) Exchange difference! ! ! (1,624) – (8,007) (35) 131 – – (9,535) As at December 31, 2024 and January 1, 2025 ! ! ! ! ! ! ! ! ! 374,252 – 2,197,740 35,016 100,588 – 63,304 2,770,900 Depreciation for the year ! ! ! ! ! ! ! ! ! 97,500 – 704,819 5,399 43,718 – 31,356 882,792 Impairment loss ! ! ! ! ! – – 57 – 196 – – 253 Eliminated on disposals/written off ! (80,042) – (155,957) (1,717) (3,169) – – (240,885) Exchange difference! ! ! 2,994 – (7,051) 121 (3,735) – – (7,671) As at December 31, 2025 ! ! ! ! ! ! ! ! ! 394,704 – 2,739,608 38,819 137,598 – 94,660 3,405,389 Net book value As at December 31, 2023 ! ! ! ! ! ! ! ! ! 2,421,898 – 4,348,417 11,089 134,469 212,841 55,663 7,184,377 As at December 31, 2024 ! ! ! ! ! ! ! ! ! 2,668,737 61,595 4,304,860 13,064 124,020 256,535 47,741 7,476,552 As at December 31, 2025 ! ! ! ! ! ! ! ! ! 3,047,173 164,739 5,759,752 32,623 160,100 3,609,875 102,154 12,876,416 APPENDIX I ACCOUNTANTS’ REPORT – I-43 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 302 of 431 -- Property and buildings Machinery Transportation vehicle Electronic equipment Construction in progress Leasehold improvement Total RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 Company Cost As at January 1, 2023 ! ! ! ! ! ! 2,417,210 5,339,064 33,590 134,802 124,378 22,368 8,071,412 Additions ! ! ! ! ! ! ! ! ! ! ! ! 7,746 256,346 1,223 26,883 7,045 6,080 305,323 Transferred from construction in progress ! ! ! ! ! ! ! ! ! ! ! ! 435 – – – (435) – – Disposals/written off ! ! ! ! ! ! ! – (35,997) (94) – – – (36,091) As at December 31, 2023 and January 1, 2024 ! ! ! ! ! ! ! ! 2,425,391 5,559,413 34,719 161,685 130,988 28,448 8,340,644 Additions ! ! ! ! ! ! ! ! ! ! ! ! 41,371 425,444 1,890 19,507 236,616 1,270 726,098 Transferred from construction in progress ! ! ! ! ! ! ! ! ! ! ! ! 168,814 – – – (168,814) – – Disposals/written off ! ! ! ! ! ! ! – (109,105) (623) – – – (109,728) As at December 31, 2024 and January 1, 2025 ! ! ! ! ! ! ! ! 2,635,576 5,875,752 35,986 181,192 198,790 29,718 8,957,014 Additions ! ! ! ! ! ! ! ! ! ! ! ! 51,903 1,723,167 10,616 34,686 3,261,623 23,054 5,105,049 Transferred from construction in progress ! ! ! ! ! ! ! ! ! ! ! ! 494,474 225,599 – – (720,073) – – Disposals/written off ! ! ! ! ! ! ! – (193,190) (1,895) (8) – – (195,093) As at December 31, 2025 ! ! ! ! 3,183,953 7,631,328 44,707 215,870 2,740,340 52,772 13,866,970 Accumulated depreciation and impairment As at January 1, 2023 ! ! ! ! ! ! 220,203 1,549,778 24,238 45,789 – 9,934 1,849,942 Depreciation for the year ! ! ! ! 70,987 474,538 3,302 18,784 – 4,013 571,624 Eliminated on disposals/written off ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! – (22,551) (89) – – – (22,640) As at December 31, 2023 and January 1, 2024 ! ! ! ! ! ! ! ! 291,190 2,001,765 27,451 64,573 – 13,947 2,398,926 Depreciation for the year ! ! ! ! 75,482 467,487 2,801 24,545 – 5,026 575,341 Eliminated on disposal/written off ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! – (70,887) (593) – – – (71,480) As at December 31, 2024 and January 1, 2025 ! ! ! ! ! ! ! ! 366,672 2,398,365 29,659 89,118 – 18,973 2,902,787 Depreciation for the year ! ! ! ! 84,482 592,895 2,752 27,693 – 13,756 721,578 Eliminated on disposal/written off ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! – (90,976) (1,574) – – – (92,550) As at December 31, 2025 ! ! ! ! 451,154 2,900,284 30,837 116,811 – 32,729 3,531,815 Net book value As at December 31, 2023 ! ! ! ! 2,134,201 3,557,648 7,268 97,112 130,988 14,501 5,941,718 As at December 31, 2024 ! ! ! ! 2,268,904 3,477,387 6,327 92,074 198,790 10,745 6,054,227 As at December 31, 2025 ! ! ! ! 2,730,799 4,731,044 13,870 99,059 2,740,340 20,043 10,335,155 At December 31, 2023, 2024 and 2025, property, plant and equipment approximately amounted to RMB754,936,000, RMB731,565,000 and RMB839,815,000 were pledged for the borrowings of the Group (note 29). At December 31, 2023, 2024 and 2025, property, plant and equipment approximately amounted to RMB754,936,000, RMB731,565,000 and RMB839,815,000 were pledged for the borrowings of the Company (note 29). APPENDIX I ACCOUNTANTS’ REPORT – I-44 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 303 of 431 -- During the years ended December 31, 2023, 2024 and 2025, the Group has identified obsolete machineries which were idle and not expected to be used in the future. The directors of the Company assessed the recoverable amounts of the obsolete machineries based on the fair value less costs of disposal and provided impairment provision of approximately RMB5,554,000, RMB10,719,000 and RMB253,000 at the December 31, 2023, 2024 and 2025 respectively. When determining the fair value less costs of disposal, the fair value is determined based on market price of scrap iron which is Level 2 input that are indirectly observable based on current market expectations. 19. RIGHT-OF-USE ASSETS Details of the right-of-use assets recognised and movements during the years: Group Land use rights Property and buildings Equipment Total RMB’000 RMB’000 RMB’000 RMB’000 Costs As at January 1, 2023 ! ! ! ! ! ! ! ! ! 174,684 50,981 – 225,665 Additions ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! – 31,377 – 31,377 Acquisition of a subsidiary ! ! ! ! ! ! 130,082 3,411 4,967 138,460 Disposals ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! (155,208) (5,311) – (160,519) Exchange difference ! ! ! ! ! ! ! ! ! ! – 8 2 10 As at December 31, 2023 and January 1, 2024 ! ! ! ! ! ! ! ! ! ! ! ! 149,558 80,466 4,969 234,993 Additions ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! – 21,974 6,452 28,426 Disposals ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! – – (8,414) (8,414) Exchange difference ! ! ! ! ! ! ! ! ! ! 1,492 118 6 1,616 As at December 31, 2024 and January 1, 2025 ! ! ! ! ! ! ! ! ! ! ! ! 151,050 102,558 3,013 256,621 Additions ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 246,160 51,577 – 297,737 Disposals ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! – (15,060) (2,477) (17,537) Exchange difference ! ! ! ! ! ! ! ! ! ! (6,648) (166) (9) (6,823) As at December 31, 2025 ! ! ! ! ! ! ! 390,562 138,909 527 529,998 Depreciation As at January 1, 2023 ! ! ! ! ! ! ! ! ! 11,026 11,617 – 22,643 Provided for the year ! ! ! ! ! ! ! ! ! ! 1,391 12,821 226 14,438 Disposals ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! (6,611) (4,910) – (11,521) Exchange difference ! ! ! ! ! ! ! ! ! ! – 74 1 75 As at December 31, 2023 and January 1, 2024 ! ! ! ! ! ! ! ! ! ! ! ! 5,806 19,602 227 25,635 Provided for the year ! ! ! ! ! ! ! ! ! ! 4,433 13,535 3,714 21,682 Disposals ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! – – (2,060) (2,060) Exchange difference ! ! ! ! ! ! ! ! ! ! 57 277 4 338 As at December 31, 2024 and January 1, 2025 ! ! ! ! ! ! ! ! ! ! ! ! 10,296 33,414 1,885 45,595 Provided for the year ! ! ! ! ! ! ! ! ! ! 8,701 22,075 164 30,940 Disposals ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! – (14,302) (1,818) (16,120) Exchange difference ! ! ! ! ! ! ! ! ! ! (271) (88) (1) (360) As at December 31, 2025 ! ! ! ! ! ! ! 18,726 41,099 230 60,055 Carrying amounts As at December 31, 2023 ! ! ! ! ! ! ! 143,752 60,864 4,742 209,358 As at December 31, 2024 ! ! ! ! ! ! ! 140,754 69,144 1,128 211,026 As at December 31, 2025 ! ! ! ! ! ! ! 371,836 97,810 297 469,943 APPENDIX I ACCOUNTANTS’ REPORT – I-45 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 304 of 431 -- Company Land use rights Property and buildings Total RMB’000 RMB’000 RMB’000 Costs As at January 1, 2023, December 31, 2023, January 1, 2024, December 31, 2024 and January 1, 2025 ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 19,476 – 19,476 Additions ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 71,523 9,085 80,608 As at December 31, 2025 ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 90,999 9,085 100,084 Accumulated depreciation As at January 1, 2023 ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 5,450 – 5,450 Provided for the year ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 408 – 408 As at December 31, 2023 and January 1, 2024 ! ! 5,858 – 5,858 Provided for the year ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 408 – 408 As at December 31, 2024 and January 1, 2025 ! ! 6,266 – 6,266 Provided for the year ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 595 1,497 2,092 As at December 31, 2025 ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 6,861 1,497 8,358 Carrying amounts As at December 31, 2023 ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 13,618 – 13,618 As at December 31, 2024 ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 13,210 – 13,210 As at December 31, 2025 ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 84,138 7,588 91,726 For the years ended December 31, 2023, 2024 and 2025, the Group leases various office premises for its operations. Lease contracts are entered into for fixed term of 1.3 years to 3 years. Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions. In determining the lease term and assessing the length of the non-cancellable year, the Group applies the definition of a contract and determines the year for which the contract is enforceable. The land use rights of the Group and the Company are located in the PRC on the lease of 50 years. Leases committed As at December 31, 2023, 2024 and 2025, the Group did not enter into any new leases for leased buildings and machinery and equipment that have not yet commenced. 20. INTANGIBLE ASSETS Patent Software Customer relationship Trademark Club Memberships Total RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 Group Cost As at January 1, 2023 ! ! ! ! ! ! – 44,387 – – 7,453 51,840 Additions ! ! ! ! ! ! ! ! ! ! ! ! ! – 4,630 – – 3,345 7,975 Acquisition of a subsidiary ! ! ! 98,717 18,295 126,995 353,120 – 597,127 Disposals ! ! ! ! ! ! ! ! ! ! ! ! ! (2) – – – – (2) Exchange difference ! ! ! ! ! ! ! 30 (18) (1,495) – – (1,483) As at December 31, 2023 and January 1, 2024 ! ! ! ! ! ! ! ! 98,745 67,294 125,500 353,120 10,798 655,457 Additions ! ! ! ! ! ! ! ! ! ! ! ! ! – 3,978 – – 1,491 5,469 Acquisition of a subsidiary ! ! ! 7,462 34 16,949 – – 24,445 Disposals ! ! ! ! ! ! ! ! ! ! ! ! ! – (2,726) – – – (2,726) Exchange difference ! ! ! ! ! ! ! (630) (427) 1,229 4,306 – 4,478 APPENDIX I ACCOUNTANTS’ REPORT – I-46 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 305 of 431 -- Patent Software Customer relationship Trademark Club Memberships Total RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 As at December 31, 2024 and January 1, 2025 ! ! ! ! ! ! ! ! 105,577 68,153 143,678 357,426 12,289 687,123 Additions ! ! ! ! ! ! ! ! ! ! ! ! ! – 25,297 – – – 25,297 Disposals ! ! ! ! ! ! ! ! ! ! ! ! ! – (6,746) – – – (6,746) Exchange difference ! ! ! ! ! ! ! (1,857) 466 (2,047) (7,936) – (11,374) As at December 31, 2025 ! ! ! ! 103,720 87,170 141,631 349,490 12,289 694,300 Accumulated amortisation As at January 1, 2023 ! ! ! ! ! ! – 26,581 – – 660 27,241 Provided for the year ! ! ! ! ! ! 1,429 9,417 866 – 262 11,974 Exchange difference ! ! ! ! ! ! ! (29) 90 – – – 61 As at December 31, 2023 and January 1, 2024 ! ! ! ! ! ! ! ! 1,400 36,088 866 – 922 39,276 Provided for the year ! ! ! ! ! ! 14,939 8,461 10,828 – 599 34,827 Disposals ! ! ! ! ! ! ! ! ! ! ! ! ! – (2,473) – – – (2,473) Exchange difference ! ! ! ! ! ! ! 171 88 111 – – 370 As at December 31, 2024 and January 1, 2025 ! ! ! ! ! ! ! ! 16,510 42,164 11,805 – 1,521 72,000 Provided for the year ! ! ! ! ! ! 17,305 10,474 12,155 – 624 40,558 Disposals ! ! ! ! ! ! ! ! ! ! ! ! ! – (5,153) – – – (5,153) Exchange difference ! ! ! ! ! ! ! (636) 274 (367) – – (729) As at December 31, 2025 ! ! ! ! 33,179 47,759 23,593 – 2,145 106,676 Net book value As at December 31, 2023 ! ! ! ! 97,345 31,206 124,634 353,120 9,876 616,181 As at December 31, 2024 ! ! ! ! 89,067 25,989 131,873 357,426 10,768 615,123 As at December 31, 2025 ! ! ! ! 70,541 39,411 118,038 349,490 10,144 587,624 Customer relationship arose from the acquisition of MFS CGU and VGT Thailand CGU (as defined in note 41) based on the valuation prepared by an independent external valuer adopting the multi-period excess earnings method under the income approach. The intangible assets were evaluated based on the respective CGU’s core customers of the five years preceding the acquisition. As at the date of the valuation, the relationships between the respective CGU and their core customers have been well-established, strong and achieved through track records of quality product deliveries. These intangible assets enable the respective CGU to have stable source of revenue and also provide a solid foundation for business growth and development. Methods and key assumptions in determining the fair value of the customer relationship as at respective acquisition dates are disclosed as follows: CGU Valuation date Valuation technique Discount rate Expected useful lives MFS CGU ! ! ! ! ! ! ! ! November 30, 2023 Income approach 22.16% 12 years VGT Thailand CGU ! ! September 30, 2024 Income approach 16.31% 10 years The Group estimated the useful lives of the respective assets based on the Group’s historical experience with similar customer bases and the customers retention ratio of the acquirees. Trademark arose from the acquisition of MFS CGU (note 41) based on the valuation prepared by an independent external valuer adopting the multi-period excess earnings method under the income approach. APPENDIX I ACCOUNTANTS’ REPORT – I-47 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 306 of 431 -- Methods and key assumptions in determining the fair value of the trademark at acquisition date is disclosed as follows: CGU Valuation date Valuation technique Discount rate MFS CGU ! ! ! ! ! ! ! ! November 30, 2023 Income approach 22.16% Trademark of the Group is determined to have indefinite useful lives as the trademarks can be renewed indefinitely with insignificant cost. Methods and key assumptions on impairment loss assessment is discussed in the impairment assessment of goodwill of MFS CGU in note 21. Software Club memberships Total RMB’000 RMB’000 RMB’000 Company Cost As at January 1, 2023 ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 42,496 7,453 49,949 Additions ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 1,173 3,345 4,518 As at December 31, 2023 and January 1, 2024 ! ! 43,669 10,798 54,467 Additions ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 3 1,491 1,494 As at December 31, 2024 and January 1, 2025 ! ! 43,672 12,289 55,961 Additions ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 8,495 – 8,495 As at December 31, 2025 ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 52,167 12,289 64,456 Accumulated amortisation As at January 1, 2023 ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 26,097 659 26,756 Provided for the year ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 5,903 531 6,434 As at December 31, 2023 and January 1, 2024 ! ! 32,000 1,190 33,190 Provided for the year ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 4,898 604 5,502 As at December 31, 2024 and January 1, 2025 ! ! 36,898 1,794 38,692 Provided for the year ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 6,368 353 6,721 As at December 31, 2025 ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 43,266 2,147 45,413 Net book value As at December 31, 2023 ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 11,669 9,608 21,277 As at December 31, 2024 ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 6,774 10,495 17,269 As at December 31, 2025 ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 8,901 10,142 19,043 21. GOODWILL As at December 31, 2023 2024 2025 RMB’000 RMB’000 RMB’000 Group At beginning of the year ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! – 1,156,331 1,217,339 Acquisition of subsidiaries ! ! ! ! ! ! ! ! ! ! ! ! ! ! 1,156,331 47,757 – Exchange difference ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! – 13,251 (23,807) At the end of the year ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 1,156,331 1,217,339 1,193,532 Goodwill acquired through business combinations is allocated to the following cash-generating units (the “CGUs”): MFS CGU; and VGT Thailand CGU APPENDIX I ACCOUNTANTS’ REPORT – I-48 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 307 of 431 -- The carrying amount of goodwill allocated to each of the CGU is as follows: As at December 31, 2023 2024 2025 RMB’000 RMB’000 RMB’000 Group MFS CGU ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 1,156,331 1,170,431 1,144,445 VGT Thailand CGU! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! – 46,908 49,087 Total ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 1,156,331 1,217,339 1,193,532 The trademark with an indefinite useful life of the Group are used by MFS CGU for its design and production of high-density, multilayer flexible circuit boards business. The carrying amount of which are RMB353,120,000, RMB357,426,000 and RMB349,490,000 as at December 31, 2023, 2024 and 2025, respectively. Impairment test for goodwill and trademark with an indefinite useful life Goodwill is tested for impairment annually or more frequently if events or changes in circumstances indicate that the carrying value may be impaired. For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each of the Group’s CGUs, that are expected to benefit from the synergies of the combination, irrespective of whether other assets or liabilities of the Group are assigned to those units. Impairment is determined by assessing the recoverable amount of the CGU to which the goodwill relates. Where the recoverable amount of the CGU is less than the carrying amount, an impairment loss is recognised. An impairment loss recognised for goodwill is not reversed in a subsequent period. Management conducted an impairment review on the goodwill and trademark with an indefinite useful life of the Group according to IAS36 Impairment of Assets. For the purpose of impairment review, the recoverable amount of MFS CGU and VGT Thailand CGU is determined based on value-in-use calculations. The calculations use pre-tax cash flow projections based on financial budgets approved by management covering a five-year period. Cash flows beyond the five-year period are extrapolated using the estimated growth rates stated below. The growth rate does not exceed the long-term average growth rate for the respective industry in which the CGU operates. The following table sets out the key assumptions used for value in use calculations of MFS CGU and VGT Thailand CGU: MFS CGU: Year ended December 31, 2023 2024 2025 Revenue growth rate over the forecast period ! ! ! 0%-24% 9%-12% 0%-42% Terminal revenue growth rate ! ! ! ! ! ! ! ! ! ! ! ! ! 0% 0% 0% Net profit margin before tax and interests ! ! ! ! ! 9%-11% 13% 13%-14% Pre-tax discount rate ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 12% 13% 13% VGT Thailand CGU: Year ended December 31, 2023 2024 2025 Revenue growth rate over the forecast period ! ! ! N/A 13%-49% 16%-59% Terminal revenue growth rate ! ! ! ! ! ! ! ! ! ! ! ! ! N/A 0% 0% Net profit margin before tax and interests ! ! ! ! ! N/A 5%-11% 3%-17% Pre-tax discount rate ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! N/A 15% 16% APPENDIX I ACCOUNTANTS’ REPORT – I-49 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 308 of 431 -- As at December 31, 2023, 2024 and 2025, the recoverable amount of MFS CGU and VGT Thailand CGU was determined based on discount cash flow method. Various factors were taken into consideration when determine the appropriate terminal revenue growth rate beyond the five-year forecasting period. This growth rate does not exceed the long-term average growth rate for the market in which the relative business operates. Management determined budgeted profit margins and revenue growth rates based on historical performance and its expectations of the market development. The pre-tax discount rates reflected the current market assessment of the time value of money and the risks specific to the business. As at December 31, 2023, 2024 and 2025, the recoverable amount of MFS CGU were approximately RMB3,402.2 million, RMB3,203.2 million and RMB3,451.8 million respectively. The headroom measured by the excess of the recoverable amount over the carrying amount of MFS CGU were RMB568.6 million, RMB531.6 million and RMB549.5 million as of December 31, 2023, 2024 and 2025 respectively. Based on the results of the impairment assessments, no impairment loss on the goodwill and trademark with an indefinite useful life relating to MFS CGU was recognised as of December 31, 2023, 2024 and 2025. As at December 31, 2024 and 2025, the recoverable amount of VGT Thailand CGU were approximately RMB383.4 million and RMB1,059.4 million. The headroom measured by the excess of the recoverable amount over the carrying amount of VGT Thailand CGU were RMB114.0 million and RMB210.8 million as of December 31, 2024 and 2025 respectively. Based on the results of the impairment assessments, no impairment loss on the goodwill relating to MFS CGU was recognised as of December 31, 2024 and 2025. The Group performed sensitivity analysis based on the assumption that the pre-tax discount rate and the annual growth rate of revenue have been changed. Has the estimated key assumptions during the forecast period been changed as below, headroom would have decreased to the following: MFS CGU December 31, 2023 December 31, 2024 December 31, 2025 RMB’000 RMB’000 RMB’000 Annual growth rate of revenue decreased by 1% ! 482,372 381,599 445,364 Pre-tax discount rate increased by 1% ! ! ! ! ! ! ! 278,829 206,269 449,498 VGT Thailand CGU December 31, 2023 December 31, 2024 December 31, 2025 RMB’000 RMB’000 RMB’000 Annual growth rate of revenue decreased by 1% ! N/A 74,591 131,064 Pre-tax discount rate increased by 1% ! ! ! ! ! ! ! N/A 68,145 3,338 Considering there was sufficient headroom based on the assessment, the directors of the Company believe that any reasonable possible change in any of the key assumptions would not cause the carrying amount of the MFS CGU or VGT Thailand CGU to exceed its recoverable amount as of December 31, 2023, 2024 and 2025, respectively. 22. FINANCIAL INVESTMENTS (a) Financial investments measured at FVOCI As at December 31, 2023 2024 2025 RMB’000 RMB’000 RMB’000 Group Non-current assets Financial assets at FVOCI – Listed equity investments ! ! ! ! ! ! ! ! ! ! ! ! ! ! 661,663 1,005,087 2,683,283 – Unlisted equity investments! ! ! ! ! ! ! ! ! ! ! ! ! 103,565 111,182 171,012 765,228 1,116,269 2,854,295 APPENDIX I ACCOUNTANTS’ REPORT – I-50 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 309 of 431 -- As at December 31, 2023 2024 2025 RMB’000 RMB’000 RMB’000 Company Non-current assets Financial assets at FVOCI – Listed equity investments ! ! ! ! ! ! ! ! ! ! ! ! ! ! 661,663 1,005,087 2,683,283 At December 31, 2023, 2024 and 2025, listed equity investments of approximately amounted to RMB661,663,000, RMB1,005,087,000 and RMB2,683,283,000 were pledged for the borrowings of the Group (note 29). At December 31, 2023, 2024 and 2025, the Group’s listed equity investment represented Founder Technology Group Co., Ltd., a company listed in Shanghai Stock Exchange with stock code 600601. The Group designated its investment in Founder Technology Group Co., Ltd. at FVOCI (non-recycling), as the investment is held for long term strategic purposes. No dividends were received on this investment during the years ended December 31, 2023, 2024 and 2025. At December 31, 2023, 2024 and 2025, the Group’s unlisted equity investment represented Zhuhai ACCESS Semiconductor Co., Ltd., a company incorporated in the PRC and engaged in semiconductor accessory manufacturing. The Group designated its investment in Zhuhai ACCESS Semiconductor Co., Ltd.. at FVOCI (non-recycling), as the investment is held for long term strategic purposes. No dividends were received on this investment during the years ended December 31, 2023, 2024 and 2025. At December 31, 2023, 2024 and 2025, the Company’s listed equity investment represented Founder Technology Group Co., Ltd., a company listed in Shanghai Stock Exchange with stock code 600601. The Company designated its investment in Founder Technology Group Co., Ltd. at FVOCI (non-recycling), as the investment is held for long term strategic purposes. No dividends were received on this investment during the years ended December 31, 2023, 2024 and 2025. (b) Financial investments measured at FVTPL As at December 31, 2023 2024 2025 RMB’000 RMB’000 RMB’000 Group Current assets Financial assets at FVTPL – Wealth management product ! ! ! ! ! ! ! ! ! ! ! ! 3,549 – 137,000 Company Current assets Financial assets at FVTPL – Wealth management product ! ! ! ! ! ! ! ! ! ! ! ! 3,549 – 137,000 APPENDIX I ACCOUNTANTS’ REPORT – I-51 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 310 of 431 -- (c) Derivative financial assets As at December 31, 2023 2024 2025 RMB’000 RMB’000 RMB’000 Group Current assets Financial assets at FVTPL – Foreign exchange forward contracts! ! ! ! ! ! ! ! 31,318 15,796 – Company Current assets Financial assets at FVTPL – Foreign exchange forward contracts! ! ! ! ! ! ! ! 31,318 15,796 – 23. DEFERRED TAXATION Group The following is a summary of the deferred tax balances of the Group for financial reporting purposes: As at December 31, 2023 2024 2025 RMB’000 RMB’000 RMB’000 Deferred tax assets ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 76,739 52,466 343,263 Deferred tax liabilities ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! (242,563) (284,181) (540,709) (165,824) (231,715) (197,446) The followings are the major deferred tax assets and liabilities recognised and movements during the Track Record Period: Impairment allowance Fair value adjustments of financial assets Deferred income Accrued expenses Assets recorded at fair value through acquisition Withholding tax Temporary differences on leases Accelerated tax depreciation Intragroup unrealised profits Tax losses Share- based payments Total RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 As at January 1, 2023 ! ! 13,688 (35,383) 7,913 – – – – (3,118) 714 9,569 3,221 (3,396) Acquisition of a subsidiary ! ! ! ! ! 6,015 – 255 3,724 (162,123) (12,448) (51) (20,505) 1,387 31,853 – (151,893) Charged to other comprehensive income ! – (14,954) – – – – – – – – – (14,954) Credited/(charged) to profit or loss ! ! ! ! 3,942 6,352 (813) 1,269 2,582 (932) 1,243 (992) (803) (7,749) (300) 3,799 Exchange difference ! ! 170 – – 115 (44) (3) – (5) 2 385 – 620 As at December 31, 2023 and January 1, 2024! ! 23,815 (43,985) 7,355 5,108 (159,585) (13,383) 1,192 (24,620) 1,300 34,058 2,921 (165,824) Acquisition of a subsidiary ! ! ! ! ! – – – – (24,234) – – – – – – (24,234) Charged to other comprehensive income ! – (52,656) – – – – – – – – – (52,656) (Charged)/credited to profit or loss ! ! ! ! (2,064) 532 (1,108) 5,141 17,943 (6,307) 242 (2,450) 1,357 (2,782) 1,606 12,110 Exchange difference ! ! 26 – 1 65 (985) (114) (28) (165) 3 86 – (1,111) APPENDIX I ACCOUNTANTS’ REPORT – I-52 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 311 of 431 -- Impairment allowance Fair value adjustments of financial assets Deferred income Accrued expenses Assets recorded at fair value through acquisition Withholding tax Temporary differences on leases Accelerated tax depreciation Intragroup unrealised profits Tax losses Share- based payments Total RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 As at December 31, 2024 and January 1, 2025! ! 21,777 (96,109) 6,248 10,314 (166,861) (19,804) 1,406 (27,235) 2,660 31,362 4,527 (231,715) Recognised in other reserves! ! ! ! ! ! – – – – – – – – – – 306,677 306,677 Charged to other comprehensive income ! – (260,704) – – – – – – – – – (260,704) Credited/(charged) to profit or loss ! ! ! ! 4,775 – 5,793 (4,894) 13,116 (10,218) 1,422 1,337 (717) 36,036 273 46,923 Others ! ! ! ! ! ! ! – – – – – – – – – – (57,492) (57,492) Exchange difference ! ! – – – (223) 493 (623) – (375) (5) (402) – (1,135) As at December 31, 2025! 26,552 (356,813) 12,041 5,197 (153,252) (30,645) 2,828 (26,273) 1,938 66,996 253,985 (197,446) Note: As at December 31, 2023, 2024 and 2025, the Group had unused tax losses of RMB70,307,000, RMB254,726,000 and RMB39,063,000, respectively, available to offset against future profits, and had not been recognised as at December 31, 2023, 2024 and 2025, respectively, due to the unpredictability of future profit streams. Company The following is a summary of the deferred tax balances of the Company for financial reporting purposes: As at December 31, 2023 2024 2025 RMB’000 RMB’000 RMB’000 Deferred tax assets ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 25,636 23,222 280,508 Deferred tax liabilities ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! (47,650) (95,844) (347,574) (22,014) (72,622) (67,066) The followings are the major deferred tax assets and liabilities recognised and movements during the Track Record Period: Impairment allowance Fair value adjustments of financial assets Deferred income Temporary differences on leases Accelerated tax depreciation Share-based payments Total RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 As at January 1, 2023 ! ! ! ! ! 11,306 (24,069) 7,251 – (2,820) 3,221 (5,111) Charged to other comprehensive income ! ! ! – (20,262) – – – – (20,262) Credited/(charged) to profit or loss ! ! ! ! ! ! ! ! ! ! ! ! ! 4,767 (532) (610) – 34 (300) 3,359 As at December 31, 2023 and January 1, 2024! ! ! ! ! 16,073 (44,863) 6,641 – (2,786) 2,921 (22,014) Charged to other comprehensive income ! ! ! – (50,982) – – – – (50,982) (Charged)/credited to profit or loss ! ! ! ! ! ! ! ! ! ! ! ! ! (597) – (903) – 268 1,606 374 APPENDIX I ACCOUNTANTS’ REPORT – I-53 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 312 of 431 -- Impairment allowance Fair value adjustments of financial assets Deferred income Temporary differences on leases Accelerated tax depreciation Share-based payments Total RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 As at December 31, 2024 and January 1, 2025! ! ! ! ! 15,476 (95,845) 5,738 – (2,518) 4,527 (72,622) Recognised in other reserves – – – – – 306,677 306,677 Charged to other comprehensive income ! ! ! – (251,729) – – – – (251,729) Credited/(charged) to profit or loss ! ! ! ! ! ! ! ! ! ! ! ! ! 3,610 – 3,924 (208) 501 273 8,100 Others! ! ! ! ! ! ! ! ! ! ! ! ! ! ! – – – – – (57,492) (57,492) As at December 31, 2025 ! ! ! 19,086 (347,574) 9,662 (208) (2,017) 253,985 (67,066) 24. OTHER NON-CURRENT ASSETS As at December 31, 2023 2024 2025 RMB’000 RMB’000 RMB’000 Group Contract costs ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! – 12,069 12,133 Prepayment for property, plant and equipment ! ! 93,275 334,369 3,279,531 Prepayment for expenses! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 16,221 57,457 108,744 Deposits ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 2,786 2,645 5,213 Total ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 112,282 406,540 3,405,621 Company Prepayment for property, plant and equipment ! ! 84,088 217,603 1,613,949 Prepayment for expenses! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! – 40,604 75,363 Total ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 84,088 258,207 1,689,312 25. INVENTORIES As at December 31, 2023 2024 2025 RMB’000 RMB’000 RMB’000 Group Raw materials ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 321,118 520,413 935,219 Work in progress ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 435,020 879,227 1,275,517 Finished goods ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 713,781 739,159 1,051,302 Less: write-downs of inventories ! ! ! ! ! ! ! ! ! ! ! (93,085) (93,396) (99,678) Total ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 1,376,834 2,045,403 3,162,360 Company Raw materials ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 224,182 368,782 671,848 Work in progress ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 287,267 734,757 1,019,980 Finished goods ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 541,422 554,554 819,187 Less: write-downs of inventories ! ! ! ! ! ! ! ! ! ! ! (44,553) (49,898) (46,890) Total ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 1,008,318 1,608,195 2,464,125 APPENDIX I ACCOUNTANTS’ REPORT – I-54 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 313 of 431 -- 26. TRADE AND OTHER RECEIVABLES AND PREPAYMENTS As at December 31, 2023 2024 2025 RMB’000 RMB’000 RMB’000 Group Trade receivables – Third parties ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 3,250,758 3,927,102 5,933,087 Less: loss allowance for trade receivables ! ! ! ! ! (44,967) (40,498) (61,908) 3,205,791 3,886,604 5,871,179 Notes receivables – Commercial ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 49,148 60,516 96,526 – Bank ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 168,072 133,960 95,166 217,220 194,476 191,692 Less: loss allowance for notes receivables ! ! ! ! ! (2,009) (1,945) (1,917) 215,211 192,531 189,775 Bills receivables measured at fair value through other comprehensive income (note (a)) ! ! ! ! ! 122,797 37,371 69,600 Other receivables – Third parties ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 90,108 133,350 380,887 Less: loss allowance for other receivables ! ! ! ! ! (15,779) (12,502) (28,789) 74,329 120,848 352,098 Prepayment ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 37,497 34,395 78,259 Trade and other receivables ! ! ! ! ! ! ! ! ! ! ! ! ! ! 3,655,625 4,271,749 6,560,911 (a) As at December 31, 2023, 2024 and 2025, the Group discounted certain bills receivable from certain banks in the PRC or endorsed them to the Group’s suppliers (“Derecognised Bills”) and derecognised them on December 31, 2023, 2024 and 2025 respectively. The carrying amounts of undue bills receivable that have been discounted and derecognised on December 31, 2023, 2024 and 2025 are approximately RMB159,145,000, RMB108,886,000 and RMB225,233,000, respectively. As at December 31, 2023, 2024 and 2025, the carrying amounts of undue bills receivable that have been endorsed and derecognised are approximately RMB1,102,000, RMB16,444,000 and RMB55,770,000, respectively. As at December 31, 2023, 2024 and 2025, the remaining period of the derecognised bills was within one year, within one year and within one year respectively. According to the Bill Law of the People’s Republic of China, if the acceptance bank of bills receivable that is discounted or endorsed by the Group refuses to pay, the holder has recourse to the Group. The Board believed that for the endorsed bills that were derecognised, the Group had substantially transferred almost all the risks and rewards of the bills. Therefore, the Group had derecognised these bills in full. Due to the recourse rights of the bearer, the Group continued to be involved in the derecognition of the bills and the continued exposure to the maximum risk exposure resulting in the loss of the Group amounted to its full amount. There is no change in fair value of bills receivables of the Group during the Track Record Period. No impairment losses was recognised in other comprehensive income during each of the Track Record Period. APPENDIX I ACCOUNTANTS’ REPORT – I-55 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 314 of 431 -- As at December 31, 2023 2024 2025 RMB’000 RMB’000 RMB’000 Company Trade receivables – Third parties ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 2,518,076 2,926,117 4,412,096 – Subsidiaries (note (a)) ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 305,838 278,513 1,466,066 2,823,914 3,204,630 5,878,162 Less: loss allowance for trade receivables ! ! ! ! ! (35,826) (30,485) (46,498) 2,788,088 3,174,145 5,831,664 Notes receivables – Commercial ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 49,148 46,632 53,945 – Bank ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 151,747 133,960 93,380 200,895 180,592 147,325 Less: loss allowance for notes receivables ! ! ! ! ! (2,009) (1,806) (1,473) 198,886 178,786 145,852 Bills receivables measured at fair value through other comprehensive income (note (b)) ! ! ! ! ! 122,797 37,371 69,600 Other receivables – Third parties ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 57,561 104,794 335,844 – Subsidiaries (note (a)) ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 183,887 115,686 492,001 241,448 220,480 827,845 Less: loss allowance for other receivables ! ! ! ! ! (14,209) (10,424) (21,821) 227,239 210,056 806,024 Prepayment ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 22,256 20,428 36,227 3,359,266 3,620,786 6,889,367 Notes: (a) During the Track Record Period, the amounts due from subsidiaries were unsecured, interest free and repayable on demand. (b) As at December 31, 2023, 2024 and 2025, the Company discounted certain bills receivable from certain banks in the PRC or endorsed them to the Company’s suppliers (“Derecognised Bills”) and derecognised them on December 31, 2023, 2024 and 2025 respectively. The carrying amounts of undue bills receivable that have been discounted and derecognised on December 31, 2023, 2024 and 2025 are approximately RMB135,190,000, RMB108,886,000 and RMB225,233,000, respectively. As at December 31, 2023, 2024 and 2025, the carrying amounts of undue bills receivable that have been endorsed and derecognised are approximately RMB1,102,000, RMB16,444,000 and RMB2,019,000, respectively. As at December 31, 2023, 2024 and 2025, the remaining period of the derecognised bills was within one year, within one year and within one year respectively. According to the Bill Law of the People’s Republic of China, if the acceptance bank of bills receivable that is discounted or endorsed by the Company refuses to pay, the holder has recourse to the Company. The Board believed that for the endorsed bills that were derecognised, the Company had substantially transferred almost all the risks and rewards of the bills. Therefore, the Company had derecognised these bills in full. Due to the recourse rights of the bearer, the Company continued to be involved in the derecognition of the bills and the continued exposure to the maximum risk exposure resulting in the loss of the Company amounted to its full amount. There is no change in fair value of bills receivables of the Company during the Track Record Period. No impairment losses was recognised in other comprehensive income during each of the Track Record Period. APPENDIX I ACCOUNTANTS’ REPORT – I-56 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 315 of 431 -- The Group generally allows a credit period ranging from 30 to 150 days to its customers. The following is aging analysis of trade receivables (before allowance for impairment losses), presented based on the invoice dates, at the end of each financial year during the Track Record Period: As at December 31, 2023 2024 2025 RMB’000 RMB’000 RMB’000 Within 90 days ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 2,436,195 3,047,146 4,682,181 91 to 180 days ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 755,003 851,855 1,211,208 181 days to 1 year ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 16,630 25,193 35,973 Over 1 year to 2 years ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 36,632 988 1,817 Over 2 years to 3 years ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 6,298 1,920 78 Over 3 years to 4 years ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! – – 1,830 3,250,758 3,927,102 5,933,087 At the end of each reporting period, the Group’s notes receivables and bills receivables are mainly aged one year or less since the issuance date. Movements in lifetime ECL that have been recognised for trade receivables and notes receivables in accordance with the simplified approach set out in IFRS 9 for the years ended December 31, 2023, 2024 and 2025: Trade receivables As at December 31, 2023 2024 2025 RMB’000 RMB’000 RMB’000 At the beginning of year ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 27,358 44,967 40,498 Provided! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 10,604 1,038 20,090 Write-off ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! – (6,556) – Acquisition of subsidiaries ! ! ! ! ! ! ! ! ! ! ! ! ! ! 7,048 935 – Exchange difference ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! (43) 114 1,320 At the end of year! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 44,967 40,498 61,908 Notes receivables As at December 31, 2023 2024 2025 RMB’000 RMB’000 RMB’000 At the beginning of year ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 1,614 2,009 1,945 Provided/(reversed) ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 395 (64) (28) At the end of year! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 2,009 1,945 1,917 APPENDIX I ACCOUNTANTS’ REPORT – I-57 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 316 of 431 -- The following table shows the movement in ECL allowance that has been recognised for other receivables. 12-month ECL (not credit-impaired) RMB’000 As at January 1, 2023 ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 10,272 Impairment losses recognised ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 4,330 Acquisition of a subsidiary ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 1,144 Exchange difference ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 33 As at December 31, 2023 and January 1, 2024 ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 15,779 Impairment losses reversed ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! (3,277) As at December 31, 2024 and January 1, 2025 ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 12,502 Impairment losses recognised ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 16,363 Exchange difference ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! (66) As at December 31, 2025 ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 28,789 At December 31, 2023, 2024 and 2025, trade receivables with carrying amount of approximately RMB1,556,704,000, RMB726,413,000 and Nil were pledged as security for the Group’s borrowings and banking facilities granted to the Group. As at the end of each reporting period, no notes receivables were pledged as security for the Group’s borrowings and banking facilities granted to the Group. The Company generally allows a credit period ranging from 30 to 150 days to its customers. The following is aging analysis of trade receivables (before allowance for impairment losses), presented based on the invoice dates, at the end of each financial year during the Track Record Period: As at December 31, 2023 2024 2025 RMB’000 RMB’000 RMB’000 Company Within 90 days ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 2,164,236 2,470,930 3,904,633 91 to 180 days ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 612,856 716,590 1,622,195 181 days to 1 year ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 10,138 14,202 347,588 Over 1 year to 2 years ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 36,635 988 1,823 Over 2 years to 3 years ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 49 1,920 85 Over 3 years to 4 years ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! – – 1,838 2,823,914 3,204,630 5,878,162 At the end of each reporting period, the Company’s notes receivables and bills receivables are mainly aged one year or less since the issuance date. APPENDIX I ACCOUNTANTS’ REPORT – I-58 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 317 of 431 -- Movement in lifetime ECL that has been recognised for trade receivables and notes receivables of the Company in accordance with the simplified approach set out in IFRS 9 for the years ended December 31, 2023, 2024 and 2025: Trade receivables As at December 31, 2023 2024 2025 RMB’000 RMB’000 RMB’000 At the beginning of year ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 24,590 35,826 30,485 Provided/(reversed) ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 11,236 (5,341) 16,013 At the end of year! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 35,826 30,485 46,498 Notes receivables As at December 31, 2023 2024 2025 RMB’000 RMB’000 RMB’000 At the beginning of year ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 1,614 2,009 1,806 Provided/(reversed) ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 395 (203) (333) At the end of year! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 2,009 1,806 1,473 The following table shows the movement in ECL allowance that has been recognised for other receivables 12-month ECL (not credit-impaired) RMB’000 As at January 1, 2023 ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 9,774 Impairment losses recognised ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 4,435 As at December 31, 2023 and January 1, 2024 ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 14,209 Impairment losses reversed ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! (3,785) As at December 31, 2024 and January 1, 2025 ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 10,424 Impairment losses recognised ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 11,397 As at December 31, 2025 ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 21,821 APPENDIX I ACCOUNTANTS’ REPORT – I-59 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 318 of 431 -- 27. OTHER CURRENT ASSETS As at December 31, 2023 2024 2025 RMB’000 RMB’000 RMB’000 Group Prepaid VAT ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 54,493 85,019 365,390 Prepaid insurance fee ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! – – 8,482 Others ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 5 5 5 Total ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 54,498 85,024 373,877 As at December 31, 2023 2024 2025 RMB’000 RMB’000 RMB’000 Company Prepaid VAT ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 46,435 80,268 262,528 Prepaid insurance fees ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! – – 8,482 Total ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 46,435 80,268 271,010 28. CASH AND CASH EQUIVALENTS/RESTRICTED BANK DEPOSITS As at December 31, 2023 2024 2025 RMB’000 RMB’000 RMB’000 Group Cash and cash equivalents (note (a)) ! ! ! ! ! ! ! ! 749,376 926,746 3,206,572 Restricted bank deposits (note (b)) ! ! ! ! ! ! ! ! ! 1,391,920 735,280 73,075 2,141,296 1,662,026 3,279,647 As at December 31, 2023 2024 2025 RMB’000 RMB’000 RMB’000 Company Cash and cash equivalents (note (a)) ! ! ! ! ! ! ! ! 507,087 410,797 1,323,443 Restricted bank deposits (note (b)) ! ! ! ! ! ! ! ! ! 1,390,553 735,277 72,975 1,897,640 1,146,074 1,396,418 Notes: (a) At the end of each reporting year, cash and cash equivalents of the Group comprised of bank balances and cash held. Bank balances carried interest at prevailing market rates which are 0.47%, 0.24% and 0.29% per annum as at December 31, 2023, 2024 and 2025, respectively. (b) As at December 31, 2023, 2024 and 2025, certain bank deposits with balances of approximately RMB1,387,834,000, RMB735,280,000 and RMB72,269,000 were pledged to secure borrowings of RMB1,050,955,000, RMB251,594,000 and Nil, respectively. As at December 31, 2023, 2024 and 2025, approximately RMB4,086,000, Nil and RMB651,000, respectively, was restricted and held at a bank in the PRC as a reserve under litigation. APPENDIX I ACCOUNTANTS’ REPORT – I-60 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 319 of 431 -- 29. BORROWINGS Group As at December 31, 2023 2024 2025 RMB’000 RMB’000 RMB’000 Current portion Pledged bank and other borrowings (note (a))! ! ! 1,554,834 838,412 527,516 Unpledged bank and other borrowings (note (a)) ! 1,736,472 1,066,474 1,941,827 Interest payables ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 3,095 2,885 4,483 3,294,401 1,907,771 2,473,826 Non-current portion Pledged bank borrowings ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 1,002,840 835,680 820,490 Unpledged bank borrowings ! ! ! ! ! ! ! ! ! ! ! ! ! ! 774,295 1,474,358 3,046,946 1,777,135 2,310,038 3,867,436 Total borrowings! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 5,071,536 4,217,809 6,341,262 Loan interest at rate per annum in the range of ! ! 1.07%- 5.56% 0.63%- 5.82% 0.80%- 2.90% Total current and non-current borrowings were scheduled to repay as follows: As at December 31, 2023 2024 2025 RMB’000 RMB’000 RMB’000 Bank borrowings On demand or within one year ! ! ! ! ! ! ! ! ! ! ! ! 2,797,364 1,797,785 1,946,310 More than one year, but not exceeding two years! 498,116 774,947 1,108,980 More than two years, but not exceeding five years ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 876,410 1,341,423 2,502,974 More than five years ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 402,609 193,668 255,482 4,574,499 4,107,823 5,813,746 Other borrowings On demand or within one year ! ! ! ! ! ! ! ! ! ! ! ! 497,037 109,986 527,516 Company As at December 31, 2023 2024 2025 RMB’000 RMB’000 RMB’000 Current portion Pledged bank and other borrowings (note (a))! ! ! 1,721,994 838,412 102,516 Unpledged bank and other borrowings (note (a)) ! 1,208,831 1,066,474 1,941,827 Interest payables ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 3,095 2,885 4,478 2,933,920 1,907,771 2,048,821 Non-current portion Pledged bank borrowings ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 1,002,840 835,680 820,491 Unpledged bank borrowings ! ! ! ! ! ! ! ! ! ! ! ! ! ! 774,295 1,474,358 3,039,317 1,777,135 2,310,038 3,859,808 Total borrowings! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 4,711,055 4,217,809 5,908,629 Loan interest at rate per annum in the range of ! ! 1.07%- 5.56% 0.63%- 5.82% 0.80%- 2.90% APPENDIX I ACCOUNTANTS’ REPORT – I-61 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 320 of 431 -- Total current and non-current borrowings were scheduled to repay as follows: As at December 31, 2023 2024 2025 RMB’000 RMB’000 RMB’000 Bank borrowings On demand or within one year ! ! ! ! ! ! ! ! ! ! ! ! 2,797,364 1,797,785 1,946,305 More than one year, but not exceeding two years! 498,116 774,947 1,108,146 More than two years, but not exceeding five years ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 876,410 1,341,423 2,497,133 More than five years ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 402,609 193,668 254,529 4,574,499 4,107,823 5,806,113 Other borrowings On demand or within one year ! ! ! ! ! ! ! ! ! ! ! ! 136,556 109,986 102,516 The carrying amounts of the Group’s and the Company’s current interest-bearing bank borrowing approximate to their fair values. Notes: (a) At December 31, 2023, 2024 and 2025, other borrowings represented loans arising from discounted bills. The borrowing is guaranteed by the Company, interest bearing at floating interest rate in the range of 1.07%-1.42%, 0.63%-1.65% and 0.40%~1.26% per annum, respectively, and repayable within one year. (b) At December 31, 2023, 2024 and 2025, the Group had banking facilities to the extent of approximately RMB5,071,536,000, RMB4,217,808,000 and RMB21,740,168,000, respectively. The aforesaid bank loans outstanding as at December 31, 2023, 2024 and 2025 were approximately RMB4,571,404,000, RMB4,104,938,000 and RMB5,809,263,000, respectively. (c) At December 31, 2023, 2024 and 2025, the Company had banking facilities to the extent of approximately RMB5,059,569,000, RMB4,217,808,000 and RMB21,240,168,000 respectively. The aforesaid bank loans outstanding as at December 31, 2023, 2024 and 2025 were approximately RMB4,571,404,000, RMB4,104,938,000 and RMB5,801,635,000 respectively. 30. LEASE LIABILITIES The following table shows the remaining contractual maturities of the Group’s lease liabilities at the end of each reporting years: As at December 31, 2023 2024 2025 RMB’000 RMB’000 RMB’000 Group Within one year ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 16,536 14,832 22,114 Within a period of more than one year but within two years ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 14,970 13,510 16,867 Within a period of more than two years but within five years ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 24,667 20,384 29,354 More than 5 years ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 14,036 26,337 36,099 70,209 75,063 104,434 Less: Amounts due for settlement with 12 months shown under current liabilities ! ! ! ! ! ! ! ! ! ! ! (16,536) (14,832) (22,114) Amount due for settlement after 12 months shown under non-current liabilities ! ! ! ! ! ! ! ! 53,673 60,231 82,320 APPENDIX I ACCOUNTANTS’ REPORT – I-62 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 321 of 431 -- The following table shows the remaining contractual maturities of the Company’s lease liabilities at the end of each reporting years: As at December 31, 2023 2024 2025 RMB’000 RMB’000 RMB’000 Company Within one year ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! – – 3,469 Within a period of more than one year but within two years ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! – – 2,732 – – 6,201 Less: Amounts due for settlement with 12 months shown under current liabilities ! ! ! ! ! ! ! ! ! ! ! – – (3,469) Amount due for settlement after 12 months shown under non-current liabilities ! ! ! ! ! ! ! ! – – 2,732 31. TRADE AND OTHER PAYABLES As at December 31, 2023 2024 2025 RMB’000 RMB’000 RMB’000 Group Trade payables – Third parties ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 1,860,242 2,760,653 7,141,945 Notes payable ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 1,745,068 2,202,380 3,383,996 Other payables – Third parties ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 20,017 73,651 108,436 – Salary and bonus payables ! ! ! ! ! ! ! ! ! ! ! ! ! 166,355 201,581 284,087 – Water and electricity payables ! ! ! ! ! ! ! ! ! ! ! 27,559 47,301 32,360 – Dividend payables ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 42 – – – Engineering and equipment payables ! ! ! ! ! ! ! 89,387 84,139 – – Commission payables ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 29,691 17,649 12,887 – Deposits ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 35,346 58,030 84,609 – Other taxes payables ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 31,306 33,680 100,781 399,703 516,031 623,160 Total trade and other payables ! ! ! ! ! ! ! ! ! ! ! ! 4,005,013 5,479,064 11,149,101 Less: non-current portion ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! – (5,585) (5,171) Total trade and other payables ! ! ! ! ! ! ! ! ! ! ! ! 4,005,013 5,473,479 11,143,930 As at December 31, 2023 2024 2025 RMB’000 RMB’000 RMB’000 Company Trade payables – Third parties ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 1,287,327 1,959,257 4,725,972 – Subsidiaries (note (a)) ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 276,190 350,515 330,133 1,563,517 2,309,772 5,056,105 Notes payable – Third parties ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 2,250,801 2,087,778 3,603,602 APPENDIX I ACCOUNTANTS’ REPORT – I-63 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 322 of 431 -- As at December 31, 2023 2024 2025 RMB’000 RMB’000 RMB’000 Other payables – Third parties ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 19,009 21,623 26,126 – Subsidiaries (note (a)) ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 530,796 439,541 201,981 – Salary and bonus payables ! ! ! ! ! ! ! ! ! ! ! ! ! 81,315 95,727 161,742 – Water and electricity payables ! ! ! ! ! ! ! ! ! ! ! 23,687 42,948 12,838 – Deposits ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 32,960 40,990 59,160 – Other taxes payables ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 8,439 11,393 84,957 696,206 652,222 546,804 Total trade and other payables ! ! ! ! ! ! ! ! ! ! ! ! 4,510,524 5,049,772 9,206,511 Notes: (a) During the Track Record Period, the amounts due to subsidiaries were unsecured, repayable on demand and interest free. (b) As at the end of each reporting period, notes payable were unsecured. The Group’s and the Company’s notes payables are aged one year or less at the end of each reporting period. Payment terms with suppliers are mainly on credit ranging from 30 to 180 days from invoice date. The following is an aging analysis of trade payables presented based on transaction date at the end of each of the reporting period: As at December 31, 2023 2024 2025 RMB’000 RMB’000 RMB’000 Group Within 90 days ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 1,204,904 2,047,020 5,510,401 91 days to 180 days! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 560,071 580,570 1,195,150 181 days to 1 year ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 57,366 112,028 419,775 Over 1 year to 2 years ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 31,992 11,499 7,343 Over 2 years to 3 years ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 3,167 5,012 2,532 Over 3 years to 4 years ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 2,742 4,524 2,751 Over 4 years to 5 years ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! – – 3,993 1,860,242 2,760,653 7,141,945 As at December 31, 2023 2024 2025 RMB’000 RMB’000 RMB’000 Company Within 90 days ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 1,104,160 1,732,629 4,391,482 91 days to 180 days! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 379,690 448,737 578,851 181 days to 1 year ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 43,033 109,590 71,004 Over 1 year to 2 years ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 30,950 10,152 6,151 Over 2 years to 3 years ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 3,065 4,333 2,075 Over 3 years to 4 years ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 2,619 4,331 2,742 Over 4 years to 5 years ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! – – 3,800 1,563,517 2,309,772 5,056,105 APPENDIX I ACCOUNTANTS’ REPORT – I-64 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 323 of 431 -- 32. CONTRACT LIABILITIES As at December 31, 2023 2024 2025 RMB’000 RMB’000 RMB’000 Group Contract liabilities! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 5,222 3,798 11,423 As at December 31, 2023 2024 2025 RMB’000 RMB’000 RMB’000 Company Contract liabilities! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 4,431 1,368 1,686 When the Group receives deposits from customers for the sales of goods, this will give rise to contract liabilities at the start of a contract, until the revenue recognised on the relevant contract exceeds the amount of the deposits. Changes in contract liabilities primarily relate to the Group’s performance of services under the contracts. Revenue of approximately RMB8,762,000, RMB5,180,000 and RMB3,798,000 of the Group were recognised for the years ended December 31, 2023, 2024 and 2025 that were included in the contract liabilities at the beginning of the respective years. When the Company receives deposits from customers for the sales of goods, this will give rise to contract liabilities at the start of a contract, until the revenue recognised on the relevant contract exceeds the amount of the deposits. Changes in contract liabilities primarily relate to the Company’s performance of services under the contracts. Revenue of approximately RMB8,762,000, RMB4,431,000 and RMB1,368,000 of the Company were recognised for the years ended December 31, 2023, 2024 and 2025 that were included in the contract liabilities at the beginning of the respective years. 33. DEFERRED INCOME Group Deferred income related to assets Deferred income related to income Total RMB’000 RMB’000 RMB’000 As at January 1, 2023 ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 51,752 700 52,452 Addition through acquisition of a subsidiary (note 41(a)) ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 1,925 – 1,925 Additions ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 2,016 13,401 15,417 Release to profit and loss ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! (7,302) (13,401) (20,703) As at December 31, 2023 ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 48,391 700 49,091 Additions ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! – 16,530 16,530 Release to profit and loss ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! (7,469) (16,422) (23,891) As at December 31, 2024 ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 40,922 808 41,730 Additions ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 45,683 800 46,483 Release to profit and loss ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! (7,334) (608) (7,942) As at December 31, 2025 ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 79,271 1,000 80,271 APPENDIX I ACCOUNTANTS’ REPORT – I-65 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 324 of 431 -- Company Deferred income related to assets Deferred income related to income Total RMB’000 RMB’000 RMB’000 As at January 1, 2023 ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 47,642 700 48,342 Additions ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 2,016 5,115 7,131 Release to profit and loss ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! (6,081) (5,115) (11,196) As at December 31, 2023 ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 43,577 700 44,277 Additions ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! – 5,753 5,753 Release to profit and loss ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! (6,024) (5,753) (11,777) As at December 31, 2024 ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 37,553 700 38,253 Additions ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 31,710 – 31,710 Release to profit and loss ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! (5,548) – (5,548) As at December 31, 2025 ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 63,715 700 64,415 Note: It mainly comprise incentives provided by local authorities. The amounts received are treated as deferred income and will be released to profit or loss over the estimated useful lives of the underlying property, plant and equipment or over the year. There is no unfulfilled obligations for the recognised income at the end of reporting date for each of the Track Record Period. 34. SHARE CAPITAL Number of ordinary shares Authorised shares Issued and paid shares RMB’000 RMB’000 Group and Company As at January 1, 2023, December 31, 2023, January 1, 2024, December 31, 2024 and January 1, 2025 ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 862,688,641 862,689 862,689 Issuance of shares (Note) ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 7,660,672 7,660 7,660 As at December 31, 2025 ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 870,349,313 870,349 870,349 Note: For the year ended December 31, 2025, a total of 7,660,672 A shares has been issued, and capital reserve of approximately amounted to RMB1,868,727,000 were recognised. The shares were issued with an average price of RMB248.02 per share. 35. TREASURY SHARES Group and Company 2023 2024 2025 Number of shares RMB’000 Number of shares RMB’000 Number of shares RMB’000 At January 1 ! ! ! ! ! ! ! ! ! ! ! ! ! ! 9,108,543 150,106 3,402,663 56,075 4,101,163 84,404 Repurchase of shares (note a) ! ! ! ! ! – – 698,500 28,329 944,600 41,682 Vested under 2022 restricted share scheme during the year (note 40) ! ! (5,705,880) (94,031) – – (4,828,320) (120,652) At December 31 ! ! ! ! ! ! ! ! ! ! ! ! 3,402,663 56,075 4,101,163 84,404 217,443 5,434 APPENDIX I ACCOUNTANTS’ REPORT – I-66 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 325 of 431 -- Notes: (a) For the year ended December 31, 2023, a total of 9,108,543 A shares has been repurchased, and treasury shares amounted to RMB150,106,000 were recognised. The shares were repurchased with an average price of RMB16.48 per share. For the year ended December 31, 2024, a total of 698,500 A shares has been repurchased, and treasury shares of approximately amounted to RMB28,329,000 were recognised. The shares were repurchased with an average price of RMB40.56 per share. For the year ended December 31, 2025, a total of 944,600 A shares has been repurchased, and treasury shares of approximately amounted to RMB41,682,000 were recognised. The shares were repurchased with an average price of RMB44.12 per share. 36. RESERVES Reserve movement of the Company: Capital reserve Treasury shares Surplus reserve Other reserve Retained earnings Total RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 As at January 1, 2023 ! ! ! ! ! ! 3,263,479 (150,106) 316,728 136,391 1,902,316 5,468,808 Profit for the year ! ! ! ! ! ! ! ! – – – – 664,482 664,482 Fair value change on financial assets at fair value through other comprehensive income, net of tax! ! ! ! ! ! ! ! ! ! ! ! – – – 114,818 – 114,818 Dividend paid ! ! ! ! ! ! ! ! ! ! – – – – (163,264) (163,264) Share-based payment expenses ! 25,035 – – – – 25,035 Exercise of share options under 2022 Restricted Share Scheme ! ! ! ! ! ! ! ! ! ! ! ! ! (26,930) 94,031 – – – 67,101 Transferred to surplus reserve ! ! – – 66,448 – (66,448) – As at December 31, 2023 and January 1, 2024 ! ! ! ! ! ! ! ! 3,261,584 (56,075) 383,176 251,209 2,337,086 6,176,980 Profit for the year ! ! ! ! ! ! ! ! – – – – 930,032 930,032 Fair value change on financial assets at fair value through other comprehensive income, net of tax! ! ! ! ! ! ! ! ! ! ! ! – – – 291,911 – 291,911 Dividend paid ! ! ! ! ! ! ! ! ! ! – – – – (163,264) (163,264) Share-based payment expenses ! 10,709 – – – – 10,709 Transferred to surplus reserve ! ! – – 93,003 – (93,003) – Repurchase of share ! ! ! ! ! ! ! – (28,329) – – – (28,329) As at December 31, 2024 and January 1, 2025 ! ! ! ! ! ! ! ! 3,272,293 (84,404) 476,179 543,120 3,010,851 7,218,039 Profit for the year ! ! ! ! ! ! ! ! – – – – 3,793,226 3,793,226 Dividend paid ! ! ! ! ! ! ! ! ! ! – – – – (257,576) (257,576) Share-based payment expenses ! 11,201 – – – – 11,201 Deferred tax asset recognised on share-based payment! ! ! ! ! ! 306,677 – – – – 306,677 Issue of shares ! ! ! ! ! ! ! ! ! ! 1,868,727 – – – – 1,868,727 Repurchase of share ! ! ! ! ! ! ! – (41,682) – – – (41,682) Exercise of share options under 2022 Restricted Share Scheme ! ! ! ! ! ! ! ! ! ! ! ! ! (66,237) 120,652 – – – 54,415 Fair value change on financial assets at fair value through other comprehensive income, net of tax! ! ! ! ! ! ! ! ! ! ! ! – – – 1,426,466 – 1,426,466 As at December 31, 2025 ! ! ! ! 5,392,661 (5,434) 476,179 1,969,586 6,546,501 14,379,493 APPENDIX I ACCOUNTANTS’ REPORT – I-67 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 326 of 431 -- Description of the Group’s reserves as below: (a) Capital Reserve: The amount mainly represents capital contribution in excess of nominal value of share capital. (b) Surplus reserve: In accordance with the articles of association of subsidiaries established in the PRC, these subsidiaries are required to transfer 10% of the profit after taxation in accordance to China Accounting Standards for Business Enterprises to the statutory reserve until the reserve reaches 50% of the registered capital. Transfer to this reserve shall be made before distributing dividends to equity holders. The statutory reserve can be used to make up for previous years’ losses, expand the existing operations or convert into additional capital of the subsidiaries. (c) Exchange reserve: The amount represents gains/losses arising on retranslating the net assets of foreign operations into presentation currency of the Group. (d) Other reserve: Other reserves mainly comprise of investment revaluation reserves and safety fund reserves. Investment revaluation reserve represents the change in fair value of equity investments classified as financial assets at fair value through other comprehensive income. Pursuant to certain regulations issued by the Ministry of Finance (“ ”) and the State Administration of Work Safety (“ ”) of the PRC, the Group entities which are engaged in communication and manufacturing of electronic equipment are required to set aside an amount to a safety fund at 2.35% per revenue on revenue amount below RMB10,000,000, 1.25% per revenue on revenue amount between RMB10,000,000 to RMB100,000,000, 0.25% per revenue on revenue amount between RMB100,000,000 to RMB1,000,000,000, 0.1% per revenue on revenue amount between RMB1,000,000,000 to RMB5,000,000,000 and 0.05% per revenue on revenue amount over RMB5,000,000,000. The Group entities which are engaged in communication and manufacturing of electronic equipment and other relevant business are required to set aside an amount of certain percentage of revenue to a safety fund. The safety fund can be used for safety facilities and environment improvement, and is not available for distribution to shareholders. Upon incurring qualifying safety expenditure, an equivalent amount should be transferred from safety fund to retained earnings. (e) Retained earnings: Cumulative net gains and losses recognised in profit or loss. 37. OVERVIEW OF THE GROUP’S EXPOSURE TO CREDIT RISK Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Group. At the end of each reporting period, the Group’s maximum exposure to credit risk which cause a financial loss to the Group due to failure to discharge an obligation by the counterparties is arising from the carrying amount of the respective recognised financial assets as stated in the consolidated statements of the financial position. In order to minimise credit risk, the Group has tasked its finance team to develop and maintain the Group’s credit risk grading to categorise exposures according to their degree of risk of default. Management uses publicly available financial information and the Group’s own historical repayment records to rate its major customers and other debtors. The Group’s exposure and the credit ratings of its counterparties are continuously monitored and the aggregate exposure is spread amongst approved counterparties. The Group’s credit risk is primarily attributable to trade receivables and other receivables. Management has a credit policy in place and the exposures to these credit risks are monitored on an ongoing basis. APPENDIX I ACCOUNTANTS’ REPORT – I-68 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 327 of 431 -- Trade receivables For trade receivables, the Group has applied the simplified approach in IFRS 9 to measure the loss allowance at lifetime ECL. Except for trade receivables that are credit-impaired, the Group determines the ECL on these items collectively based on loss patterns as reflected in the debtors’ historical payment pattern. The Group determines the ECL on these items by using a provision matrix as at December 31, 2023, 2024 and 2025 within lifetime ECL (not credit impaired) estimated based on the financial quality of debtors and historical credit loss experience, adjusted as appropriate to reflect current conditions and estimates of future economic conditions with reference to general macroeconomic conditions that may affect the ability of debtors to settle receivables. To measure the ECL, the trade receivables have been grouped into the categories based on share credit risk characteristics and the aging as disclosed in note 26. Notes and Other receivables For notes and other receivables, management of the Group makes periodic assessment on the recoverability based on historical settlement records, past experience, and also quantitative and qualitative information that is reasonable and supportive forward-looking information. The Group measures the loss allowance equal to 12m ECL, unless when there are indicators that the financial asset is credit-impaired, the Group recognises lifetime ECL. The Group recognises lifetime ECL for notes and other receivables when there is evidence indicating (i) there has been significant increase in credit risk since initial recognition; (ii) the asset is credit-impaired but the Group has realistic prospect of recovery; or (iii) the debtor is in severe financial difficulty. Categories Description Other receivables, other than credit impaired ! ! ! ! ! ! ! ! ! Management of the Group makes periodic assessment on the recoverability based on historical settlement records, past experience, and also quantitative and qualitative information that is reasonable and supportive forward-looking information. Notes receivables, other than credit impaired ! ! ! ! ! ! ! ! ! Management of the Group makes periodic assessment on the recoverability based on historical settlement records, past experience, and also quantitative and qualitative information that is reasonable and supportive forward-looking information. Credit impaired ! ! ! ! ! ! ! ! ! ! There is evidence indicating that the debtor is in severe financial difficulty and the Group has no realistic prospect of recovery. Cash and bank balances, restricted bank deposits and bills receivables from bank Credit risk for bank balances, deposits and cash is considered to be immaterial, as the counterparts are banks/financial institutions with high credit ratings by international credit rating agencies. The following table details the credit risk exposures of the Group’s trade receivables, presented by due date, which are subject to ECL assessment: Average expected credit loss rate Gross amounts Loss allowance RMB’000 RMB’000 As at December 31, 2023 Current (not past due) ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 1% 3,138,256 31,383 0-90 days past due ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 1% 69,139 691 91-180 days past due ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 1% 135 1 181-365 days past due ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 1% 510 5 Over 1 year past due ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 30% 42,718 12,887 3,250,758 44,967 As at December 31, 2024 Current (not past due) ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 1% 3,833,110 38,331 0-90 days past due ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 1% 86,381 864 91-180 days past due ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 1% 2,881 29 181-365 days past due ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 1% 2,733 27 Over 1 year past due ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 62% 1,997 1,247 3,927,102 40,498 APPENDIX I ACCOUNTANTS’ REPORT – I-69 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 328 of 431 -- Average expected credit loss rate Gross amounts Loss allowance RMB’000 RMB’000 As at December 31, 2025 Current (not past due) ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 1% 5,803,924 58,039 0-90 days past due ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 1% 114,394 1,144 91-180 days past due ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 1% 8,665 87 181-365 days past due ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 17% 3,574 598 Over 1 year past due ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 81% 2,530 2,040 5,933,087 61,908 In view of the credit risk of the debtors, historical payment pattern and forward looking information, the Group considers the expected credit risk for receivables aged within 1 year is 1%. There is no significant change in credit risk rating of the debtors, historical payment pattern and forward looking information during the Track Record Period. The table below details the credit risk exposures of the Group’s notes receivables which are subject to ECL assessment: Average expected credit loss rate Gross amounts Loss allowance RMB’000 RMB’000 As at December 31, 2023 Not credit-impaired ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 0.92% 217,220 2,009 As at December 31, 2024 Not credit-impaired ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 1.00% 194,476 1,945 As at December 31, 2025 Not credit-impaired ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 1.00% 191,692 1,917 The table below details the credit risk exposures of the Group’s other receivables which are subject to ECL assessment: Average expected credit loss rate Gross amounts Loss allowance RMB’000 RMB’000 As at December 31, 2023 Not credit-impaired ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 17.51% 90,108 15,779 As at December 31, 2024 Not credit-impaired ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 9.38% 133,350 12,502 As at December 31, 2025 ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! Not credit-impaired ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 7.56% 380,887 28,789 The Group makes full provision for a trade receivable when there is information indicating that the receivable is in severe financial difficulty and there is no realistic prospect of recovery. APPENDIX I ACCOUNTANTS’ REPORT – I-70 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 329 of 431 -- 38. CAPITAL MANAGEMENT The Group manages its capital to ensure that entities comprising the Group will be able to continue as going concern while maximising the return to shareholders through the optimisation of the debt and equity balance. The Group’s overall strategy remains unchanged throughout the Track Record Period. The capital structure of the Group consists of lease liabilities, borrowings (net of cash and bank balances) and equity attributable to owners of the Company (comprising capital and reserves). Management of the Group regularly reviews the capital structure on a continuous basis taking into account the cost of capital and the risks associated with each class of capital. The Group will balance its overall capital structure through the payment of dividends, new share issues as well as the issue of new debts. 39. FINANCIAL INSTRUMENTS Categories of financial instruments As at December 31, 2023 2024 2025 RMB’000 RMB’000 RMB’000 Group Financial assets Financial assets measured at amortised cost Restricted bank deposits ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 1,391,920 735,280 73,075 Cash and cash equivalents ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 749,376 926,746 3,206,572 Trade receivables ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 3,205,791 3,886,604 5,871,179 Notes receivables ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 215,211 192,531 189,775 Other receivables ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 74,329 120,848 352,098 Subtotal ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 5,636,627 5,862,009 9,692,699 Financial assets measured at FVOCI Financial investments measured at FVOCI ! ! ! ! ! 765,228 1,116,269 2,854,295 Bills receivables measured at FVOCI ! ! ! ! ! ! ! ! 122,797 37,371 69,600 Subtotal ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 888,025 1,153,640 2,923,895 Financial assets measured at FVTPL Financial assets at FVTPL ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 3,549 – 137,000 Derivative financial assets ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 31,318 15,796 – Subtotal ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 34,867 15,796 137,000 6,559,519 7,031,445 12,753,594 Financial liabilities Financial liabilities measured at amortised cost Borrowings ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 5,071,536 4,217,809 6,341,262 Lease liabilities ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 70,209 75,063 104,434 Trade and other payables ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 3,938,361 5,387,354 10,963,711 Other current liabilities! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 177,146 18,846 15,108 Other non-current liabilities ! ! ! ! ! ! ! ! ! ! ! ! ! ! 1,227 1,192 1,172 Subtotal ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 9,258,479 9,700,264 17,425,687 Financial liabilities at fair value through profit or loss Derivative financial liabilities! ! ! ! ! ! ! ! ! ! ! ! ! 58 – 1,736 9,258,537 9,700,264 17,427,423 APPENDIX I ACCOUNTANTS’ REPORT – I-71 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 330 of 431 -- As at December 31, 2023 2024 2025 RMB’000 RMB’000 RMB’000 Company Financial assets Financial assets measured at amortised cost Restricted bank deposits ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 1,390,553 735,277 72,975 Cash and cash equivalents ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 507,087 410,797 1,323,443 Trade receivables ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 2,788,088 3,174,145 5,831,664 Notes receivables ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 198,886 178,786 145,852 Other receivables ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 227,239 210,056 806,024 Subtotal ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 5,111,853 4,709,061 8,179,958 Financial assets measured at FVOCI Financial investments measured at FVOCI ! ! ! ! ! 661,663 1,005,087 2,683,283 Bills receivables measured at FVOCI ! ! ! ! ! ! ! ! 122,797 37,371 69,600 Subtotal ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 784,460 1,042,458 2,752,883 Financial assets measured at FVTPL Financial assets at FVTPL ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 3,549 – 137,000 Derivative financial assets ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 31,318 15,796 – Subtotal ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 34,867 15,796 137,000 5,931,180 5,767,315 11,069,841 Financial liabilities Financial liabilities at amortised cost Borrowings ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 4,711,055 4,217,809 5,908,629 Trade and other payables ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 4,502,085 5,038,379 9,121,554 Other current liabilities! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 1,453 16,693 8,265 9,214,593 9,272,881 15,038,448 Financial risk management objectives and policies The Group’s major financial assets and liabilities include restricted bank deposits, trade and other receivables, cash and bank balances, financial assets at fair value through profit or loss, derivative financial assets, other current asset, trade and other payables, borrowings, other current liabilities, derivative financial liabilities and lease liabilities. Details of these financial instruments are disclosed in the respective notes. The risks associated with these financial instruments and the policies on how to mitigate these risks are set out below. Management of the Group manages and monitors these exposures to ensure appropriate measures are implemented on a timely and effective manner. Market risk The Group’s activities expose it primarily to currency risk, interest rate risk and price risk. There has been no change in the Group’s exposure to these risks or the manner in which it managed and measured the risks during each of the reporting year. Currency risk Several subsidiaries of the Company have foreign currency sales, trade and other receivables, bank deposits and cash and bank balances, trade and other payables, and borrowings which expose the Group to foreign currency risk. The subsidiaries are mainly exposed to foreign currency of US$, Euro dollar (“EUR”), Hong Kong dollar (“HKD”), Thailand baht (“THB”), and New Zealand dollar (“NZD”). APPENDIX I ACCOUNTANTS’ REPORT – I-72 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 331 of 431 -- The Group currently does not have a foreign currency hedging policy. However, the management monitors foreign exchange exposure and will consider hedging significant foreign currency exposure should the need arise. The carrying amounts of the Group’s foreign currency denominated monetary assets (trade and other receivables and cash and bank balances) and liabilities (trade and other payables and borrowings) at the end of each reporting period are summarised as follows: As at December 31, 2023 2024 2025 RMB’000 RMB’000 RMB’000 Group Assets US$ ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 622,448 2,608,100 1,069,774 EUR ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 5,230 274,393 3,074 HKD ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! – 149,956 6,139 THB ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! – 55,516 820,099 Liabilities US$ ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 483,859 882,550 25,328 EUR ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 446,787 2,083 289 HKD ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 438,176 134 83 THB ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! – 105,301 2,307,879 NZD ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 205,955 – – Sensitivity analysis The following table details the Group’s sensitivity to a 5% increase and decrease in RMB against foreign currencies, the foreign currencies with which the Group may have a material exposure. 5% represents management’s assessment of the reasonably possible change in foreign exchange rate. The sensitivity analysis uses outstanding foreign currency denominated monetary items as a base and adjusts their translation at the end of each reporting period for a 5% change in foreign currency rate. A positive number below indicates an increase in profit before tax where foreign currencies strengthens 5% against RMB. For a 5% weakening of foreign currencies against RMB, there would be an equal and opposite impact on profit before tax. As at December 31, 2023 2024 2025 RMB’000 RMB’000 RMB’000 Group Impact on profit before income tax US$ ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 6,929 86,277 52,222 EUR ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! (22,078) 13,615 139 HKD ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! (21,909) 7,491 303 THB ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! – (2,489) (74,389) NZD ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! (10,298) – – In the opinion of the directors of the Company, the sensitivity analysis is unrepresentative of the inherent foreign exchange risk as the year end exposure does not reflect the exposure during the year. Interest rate risk The Group’s interest rate risk mainly originates from its interest-bearing borrowings. Variable-rate borrowings expose the Group to cash flow interest rate risk, while fixed-rate borrowings and lease liabilities with fixed rates subject the Group to fair value interest rate risk. APPENDIX I ACCOUNTANTS’ REPORT – I-73 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 332 of 431 -- The Group has been monitoring the level of interest rates. The increase in interest rates will increase the interest costs of borrowings at variable rates, which will further impact the performance of the Group. To hedge against the variability in the cash flows arising from a change in market interest rates, the Group may enter into certain interest rate swap contracts to swap variable rates into fixed rates. The following tables list out the interest rate profiles of the Group’s variable interest-bearing financial instruments as at December 31, 2023, 2024 and 2025: As at December 31, 2023 2024 2025 RMB’000 RMB’000 RMB’000 Group Floating rate instruments Borrowings ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 2,540,322 2,671,898 5,988,824 Fixed rate instruments Borrowings ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! – – 347,955 If interest rates of floating rate instruments had been 50 basis points higher/lower with all other variables held constant, the profit before income tax would be lower/higher RMB10,796,000, RMB11,356,000 and RMB18,854,000 as at December 31, 2023, 2024 and 2025, respectively. Price risk The Group is exposed to equity price risk through its financial investments at FVOCI (see Note 22). A 10% increase/decrease in the price of the financial assets at FVOCI would increase/decrease the other comprehensive income by RMB76,523,000, RMB111,630,000 and RMB285,430,000 for the year ended December 31, 2023, 2024 and 2025, respectively. The Group monitors the pricing change of these equity securities during each reporting period to manage the price risk. Credit risk As at the end of each reporting period, the Group’s maximum exposure to credit risk which will cause a financial loss to the Group due to failure to discharge an obligation by the counterparties is the carrying amount of the respective recognised financial assets as stated in the consolidated statements of financial position. Credit terms are granted to customers who are in good credit reputation. In order to minimise the credit risk, management has designated a team responsible for determination of credit limits, credit approvals and other monitoring procedures to ensure that follow-up actions are taken to recover overdue debts. In addition, the directors of the Company review the recoverability of each significant trade debt at the end of each reporting period to ensure that adequate impairment losses are made for irrecoverable amounts. In this regard, the directors of the Company consider that the Group’s credit risk is significantly reduced. As at December 31, 2023, 2024 and 2025, the Group has concentration of credit risk as 5.92%, 12.80% and 33.04%, respectively, of the total trade receivables was due from the Group’s largest customer. The Group’s concentration of credit risk on the top five largest customers accounted for 23.21%, 29.30% and 52.67% of the total trade receivables as at December 31, 2023, 2024 and 2025, respectively. The Group expects that there is no significant credit risk associated with cash deposits since they are substantially deposited at state-owned banks and other medium or large-sized listed banks. Management does not expect that there will be any significant losses from non-performance by these counterparties. The Group also expects that there is no significant credit risk associated with amounts due from related parties since counterparties are mainly related parties with good reputation. APPENDIX I ACCOUNTANTS’ REPORT – I-74 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 333 of 431 -- Liquidity risk In the management of the liquidity risk, the Group and the Company monitor and maintain a level of cash and bank balances and unused banking facilities deemed adequate by management to finance the Group’s operations and mitigate the effects of fluctuations in cash flows. The following table details the Group’s and the Company’s remaining contractual maturity for its non-derivative financial liabilities based on the agreed repayment terms. The table has been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Group and the Company can be required to pay. The table includes both interest and principal cash flows. To the extent that interest flows are floating rate, the undiscounted amount is derived from interest rate at the end of the reporting period. Liquidity and interest risk table Effective interest rate On demand or less than one year One to two years Two to five years Over five years Total undiscounted cash flows Carrying amount RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 Group As at December 31, 2023 Trade and other payables ! ! N/A 4,005,013 – – – 4,005,013 4,005,013 Borrowings ! ! ! ! ! ! ! ! ! 1.07%-5.56% 3,370,954 550,552 957,575 416,864 5,295,945 5,071,536 Lease liabilities ! ! ! ! ! ! ! 3.65% 19,672 18,651 28,732 22,347 89,402 70,209 Total ! ! ! ! ! ! ! ! ! ! ! ! ! 7,395,639 569,203 986,307 439,211 9,390,360 9,146,758 As at December 31, 2024 Trade and other payables ! ! N/A 5,473,479 5,585 – – 5,479,064 5,479,064 Borrowings ! ! ! ! ! ! ! ! ! 0.63%-5.82% 1,985,874 831,168 1,400,018 196,795 4,413,855 4,217,809 Lease liabilities ! ! ! ! ! ! ! 3.45% 19,481 16,123 25,547 29,115 90,266 75,063 Total ! ! ! ! ! ! ! ! ! ! ! ! ! 7,478,834 852,876 1,425,565 225,910 9,983,185 9,771,936 As at December 31, 2025 Trade and other payables ! ! N/A 11,143,930 5,171 – – 11,149,101 11,149,101 Borrowings ! ! ! ! ! ! ! ! ! 0.80%-2.90% 2,587,169 1,191,836 2,578,726 258,940 6,616,671 6,341,262 Lease liabilities ! ! ! ! ! ! ! 3%-5.28% 26,302 20,141 36,296 39,089 121,828 104,434 Total ! ! ! ! ! ! ! ! ! ! ! ! ! 13,757,401 1,217,148 2,615,022 298,029 17,877,600 17,594,797 Effective interest rate On demand or less than one year One to two years Two to five years Over five years Total undiscounted cash flows Carrying amount RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 Company As at December 31, 2023 Trade and other payables ! ! N/A 4,510,524 – – – 4,510,524 4,510,524 Borrowings ! ! ! ! ! ! ! ! ! 0.01%-5.56% 3,010,473 550,552 957,575 416,864 4,935,464 4,711,055 Total ! ! ! ! ! ! ! ! ! ! ! ! ! 7,520,997 550,552 957,575 416,864 9,445,988 9,221,579 As at December 31, 2024 Trade and other payables ! ! N/A 5,049,772 – – – 5,049,772 5,049,772 Borrowings ! ! ! ! ! ! ! ! ! 0.63%-5.82% 1,985,874 831,168 1,400,018 196,795 4,413,855 4,217,809 Total ! ! ! ! ! ! ! ! ! ! ! ! ! 7,035,646 831,168 1,400,018 196,795 9,463,627 9,267,581 As at December 31, 2025 Trade and other payables ! ! N/A 9,206,511 – – – 9,206,511 9,206,511 Borrowings ! ! ! ! ! ! ! ! ! 0.80%-2.90% 2,161,971 1,190,814 2,572,583 257,974 6,183,342 5,908,629 Lease liabilities ! ! ! ! ! ! 3% 3,600 2,761 – – 6,361 6,201 Total ! ! ! ! ! ! ! ! ! ! ! ! ! 11,372,082 1,193,575 2,572,583 257,974 15,396,214 15,121,341 APPENDIX I ACCOUNTANTS’ REPORT – I-75 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 334 of 431 -- This note provides information about how the Group determines fair value of the following financial assets or liabilities that are measured at fair value on a recurring basis. The Group’s assets that are measured at fair value is disclosed by levels of the following fair value measurement hierarchy: • Quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1). • Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices) (level 2). • Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs) (level 3). The following table presents the Group’s assets and liabilities that are measured at fair value: Level 1 Level 2 Level 3 RMB’000 RMB’000 RMB’000 For the year ended December 31, 2023 Financial assets at FVOCI – Listed equity investments ! ! ! ! ! ! ! ! ! ! ! ! ! ! 661,663 – – – Unlisted equity investments! ! ! ! ! ! ! ! ! ! ! ! ! – – 103,565 Financial assets at FVTPL – Wealth management product ! ! ! ! ! ! ! ! ! ! ! ! – 3,549 – – Foreign exchange forward contract ! ! ! ! ! ! ! ! – 31,318 – 661,663 34,867 103,565 Level 1 Level 2 Level 3 RMB’000 RMB’000 RMB’000 For the year ended December 31, 2024 Financial assets at FVOCI – Listed equity investments ! ! ! ! ! ! ! ! ! ! ! ! ! ! 1,005,087 – – – Unlisted equity investments! ! ! ! ! ! ! ! ! ! ! ! ! – – 111,182 Financial assets at FVTPL – Foreign exchange forward contract ! ! ! ! ! ! ! ! – 15,796 – 1,005,087 15,796 111,182 Level 1 Level 2 Level 3 RMB’000 RMB’000 RMB’000 For the year ended December 31, 2025 Financial assets at FVOCI – Listed equity investments ! ! ! ! ! ! ! ! ! ! ! ! ! ! 2,683,283 – – – Unlisted equity investments! ! ! ! ! ! ! ! ! ! ! ! ! – – 171,012 Financial assets at FVTPL – Wealth management product ! ! ! ! ! ! ! ! ! ! ! ! – 137,000 – 2,683,283 137,000 171,012 The fair value of financial instruments traded in active markets is based on quoted market prices at the balance sheet date. A market is regarded as active if quoted prices are readily and regularly available from an exchange, dealer, broker, industry group, pricing service, or regulatory agency, and those prices represent actual and regular occurring market transactions on an arm’s length basis. The quoted market price used for financial assets held by the Group is the current bid price. APPENDIX I ACCOUNTANTS’ REPORT – I-76 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 335 of 431 -- These instruments are included in level 1. Instruments included in level 1 comprise primarily listed equity investments classified as financial assets at FVOCI. The fair value of financial instruments that are not traded in an active market is determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2. If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3. There were no changes made to the valuation techniques applied throughout the Track Record Period. The Group’s policy is to recognise transfers into and transfers out of fair value hierarchy levels as of the date of the event or change in circumstances that caused the transfer. There were no transfers between levels 1, 2 and 3 for recurring fair value measurements during the years ended December 31, 2023, 2024 and 2025. For the years ended December 31, 2023, 2024 and 2025, there were no significant changes in the business or economic circumstances that affect the fair value of the Group’s financial assets. The movements in assets included in level 3 are as follows: RMB’000 At January 1, 2023 ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 138,949 Fair value changes during the year ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! (35,384) At December 31, 2023 and January 1, 2024 ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 103,565 Fair value changes during the year ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 7,617 At December 31, 2024 and January 1, 2025 ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 111,182 Fair value changes during the year ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 59,830 At December 31, 2025 ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 171,012 The valuation technique and inputs used in the fair value measurements within Level 3 for unlisted financial assets at FVOCI are summarised as follows: Description Fair value at Valuation technique Unobservable input December 31, 2023 December 31, 2024 December 31, 2025 RMB’000 RMB’000 RMB’000 Unlisted equity investment ! ! ! ! ! 103,565 111,182 171,012 Market multiples Enterprise value/sales ratio (“EV/S”) and discount for lack of marketability (“DLOM”) EV/S is used when the entity has determined that market participants would use such multiples when pricing the investment. An increase of 5% of EV/S will increase the carrying amount of the investment of RMB5,178,000, RMB5,559,000 and RMB8,551,000 at December 31, 2023, 2024 and 2025, respectively. DLOM is used when the entity has determined that market participants would take into account the discount when pricing the investment. An increased of 5% of DLOM will decrease the carrying amount of the investment of RMB5,178,000, RMB5,559,000 and RMB8,551,000 at December 31, 2023, 2024 and 2025, respectively. Fair value of financial assets and financial liabilities that are not measured at fair value The directors of the Company consider that the carrying amount of the Group’s and the Company’s financial assets and financial liabilities recorded at amortised cost in the Historical Financial Information approximate to their fair values. Such fair values have been determined in accordance with generally accepted pricing models based on discounted cash flow analysis. APPENDIX I ACCOUNTANTS’ REPORT – I-77 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 336 of 431 -- 40. SHARE-BASED PAYMENT Year ended December 31, 2023 2024 2025 RMB’000 RMB’000 RMB’000 Share-based compensation ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 25,035 10,709 11,201 (a) During the Track Record Period, the Company launched and adopted a restricted share scheme in 2022 (the “2022 Restricted Share Scheme”) for the primary purpose of attracting, retaining and motivating the employees of the Group. Under the 2022 Restricted Share Scheme, the directors of the Company may grant up to 25,588,500 restricted shares under the scheme to eligible employees, including the employees of the Group, to obtain ordinary shares of the Company upon vesting. The 2022 Restricted Share Scheme will be valid and effective for a period of 4 years. On September 5, 2022, the Group granted 25,588,500 restricted shares to its employees at exercise price of RMB11.95 per share. On May 22, 2023, the Group had distributed final dividend in relation to the results in 2022. The exercise price of the restricted shares has been changed to RMB11.76 accordingly. On September 13, 2025, the exercise price of the restricted shares has been changed to RMB11.27, after taken account into the final dividend in relation to the results in 2023 and 2024. Set out below are details of the movements of the outstanding restricted shares granted under the 2022 Restricted Share Scheme during the Track Record Period: Weighted average exercise price 2023 Weighted average exercise price 2024 Weighted average exercise price 2025 At the beginning of the year ! ! ! 11.95 25,588,500 11.76 17,878,350 11.76 9,821,640 Vested and exercised during the year ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 11.76 (5,705,880) – – 11.27 (4,828,320) Cancelled or lapsed during the year ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 11.76 (2,004,270) 11.76 (8,056,710) 11.27 (2,785,320) At the end of the year ! ! ! ! ! ! ! 11.76 17,878,350 11.76 9,821,640 11.27 2,208,000 The weighted average remaining contractual lives of the restricted shares outstanding at December 31, 2023, 2024 and 2025 were 2.25 years, 1.68 years and 0.68 years respectively. There are no restricted shares exercisable at December 31, 2023 and 2024. The number of restricted shares exercisable at December 31, 2025 was 2,208,000. APPENDIX I ACCOUNTANTS’ REPORT – I-78 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 337 of 431 -- Subject to the Company’s performance appraisal and individual performance appraisal, 30%, 30% and 40% of restricted shares granted in September 5, 2022 will be exercisable respectively. The lock-up periods and the details of the Company’s performance appraisal are summarised in the table below: Performance target Unlocking period Basic Growth (A) Target Growth (B) First unlocking period: Commencing from the first trading day after the expiry of the 12-month period from date of grant and ending on the last trading day of the 24-month from the date of grant ! ! ! ! ! ! ! ! ! ! ! Revenue growth in 2022 compared to 2021 is not less than 20% or Net profit growth in 2022 compared to 2021 is not less than 20% Revenue growth in 2022 compared to 2023 is not less than 30% or Net profit growth in 2022 compared to 2021 is not less than 30% Second unlocking period: Commencing from the first trading day after the expiry of the 24-month period from date of grant and ending on the last trading day of the 36-month from the date of grant ! ! ! ! ! ! ! ! ! ! ! Revenue growth in 2023 compared to 2021 is not less than 44% or Net profit growth in 2023 compared to 2021 is not less than 44% Revenue growth in 2023 compared to 2021 is not less than 69% or Net profit growth in 2023 compared to 2021 is not less than 69% Third unlocking period: Commencing from the first trading day after the expiry of the 36-month period from date of grant and ending on the last trading day of the 48-month from the date of grant ! ! ! ! ! ! ! ! ! ! ! Revenue growth in 2024 compared to 2021 is not less than 72.8% or Net profit growth in 2024 compared to 2021 is not less than 72.8% Revenue growth in 2024 compared to 2021 is not less than 119.7% or Net profit growth in 2024 compared to 2021 is not less than 119.7% Indicator Performance Completion Ratio Company-Level Vesting Restricted Shares Ratio Subject year net profit or revenue growth rate compared with that of in 2021 (X) ! ! ! ! ! ! ! ! ! ! ! ! X"B 100% B>X"A 80% + (X-A)/(B-A) × 20% A<X 0 Apart from above-mentioned Company’s performance appraisal, eligible employees have to fulfill requirement of individual performance appraisal. The number of shares granted will be calculated based on the results of the appraisal. The total fair value of the restricted shares granted under the 2022 Restricted Share Scheme during the year ended December 31, 2022 was approximately RMB127,584,000. The fair value was calculated using the Black-Scholes model. The major inputs in the model are as follows: A Share price at grant date (RMB) ! ! ! ! ! ! ! ! ! ! ! RMB15.87 per share Expected volatility in the black-out period ! ! ! ! ! ! 25.76%, 25.47% and 26.32% for 12 months, 24 months and 36 months, respectively Dividend yield ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 0% Risk-free rate ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 1.50%, 2.10% and 2.75% for 12 months, 24 months and 36 months, respectively Expected volatility was determined by using the historical volatility of ChiNext Composite Index. The risk-free interest rate was based on the 1-year, 2-year, and 3-year deposit benchmark interest rates determined by the People’s Bank of China. The variables and assumptions used in computing the fair value of the restricted shares are based on management’s best estimate. The value of restricted shares varies with different variables of certain subjective assumptions. Change in variables and assumptions may result in change in fair values of the restricted shares. APPENDIX I ACCOUNTANTS’ REPORT – I-79 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 338 of 431 -- 41. BUSINESS COMBINATIONS (a) Acquisition of Pole Star Limited On November 30, 2023, the Group acquired 100% of the issued capital in Pole Star Limited. The main business of Pole Star Limited and its subsidiaries (“MFS CGU”) included design and production of high-density, multi-layer flexible circuit boards and focuses on terminal industries such as medical, data storage, automotive and industrial control. The fair value of identifiable assets and liabilities of the acquiree as at the date of acquisition were: November 30, 2023 RMB’000 Intangible assets ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 597,127 Property, plant and equipment ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 902,385 Right-of-use assets ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 138,460 Other non-current assets ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 30,798 Deferred tax assets ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 25,582 Cash and cash equivalents ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 103,241 Trade receivables ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 531,829 Other receivables ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 50,503 Inventory ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 316,807 Trade payables ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! (396,929) Other payables ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! (223,956) Contract liabilities! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! (2,234) Borrowings ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! (109,567) Lease liabilities ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! (7,035) Provisions ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! (57,238) Government grant ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! (1,925) Deferred tax liabilities ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! (177,475) Total identifiable net assets at fair value ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 1,720,373 Goodwill ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 1,156,331 Fair value of consideration paid: Cash and cash equivalents ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! (2,876,704) Net cash outflow arising from acquisition ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! (2,773,463) Since the acquisition date, Pole Star Limited has contributed approximately RMB142,708,000 and RMB17,601,000 to the Group’s revenue and profit for the year respectively. If the acquisition had occurred on January 1, 2023, Group revenue and profit for the year ended December 31, 2023 would have been increased by approximately RMB1,712,496,000 and RMB211,212,000 respectively. This [REDACTED] information is for illustrative purposes only and is not necessarily an indication of revenue and results of operations of the Group that actually would have been achieved had the acquisition been completed on January 1, 2023, nor is it intended to be a projection of future performance. APPENDIX I ACCOUNTANTS’ REPORT – I-80 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 339 of 431 -- (b) Acquisition of Victory Giant Technology (Thailand) Co., Ltd On September 30, 2024, the Group acquired 100% of the issued capital in Victory Giant Technology (Thailand) Co., Ltd. The main business of Victory Giant Technology (Thailand) Co., Ltd (“VGT Thailand CGU”) included manufacturing and sales of high-precision multilayer printed circuit boards. The fair value of identifiable assets and liabilities of the acquiree as at the date of acquisition were: September 30, 2024 RMB’000 Intangible assets ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 24,445 Property, plant and equipment ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 208,219 Other non-current assets ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 348 Cash ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 51,352 Trade receivables ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 99,818 Other receivables ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 3,063 Inventory ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 49,469 Trade payables ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! (86,226) Other payables ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! (16,588) Borrowings ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! (82,559) Deferred tax liabilities ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! (24,234) Total identifiable net assets at fair value ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 227,107 Goodwill ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 47,757 Fair value of consideration paid: Cash and cash equivalents ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! (274,864) Net cash outflow arising from acquisition ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! (223,512) Since the acquisition date, Victory Giant Technology (Thailand) Co., Ltd has contributed approximately RMB56,435,000 and RMB12,563,000 to the Group’s revenue and profit for the year respectively. If the acquisition had occurred on January 1, 2024, Group revenue and profit for the year ended December 31, 2024 would have been increased by approximately RMB225,740,000 and RMB50,252,000 respectively. This [REDACTED] information is for illustrative purposes only and is not necessarily an indication of revenue and results of operations of the Group that actually would have been achieved had the acquisition been completed on January 1, 2024, nor is it intended to be a projection of future performance. 42. RECONCILIATION OF LIABILITIES ARISING FROM FINANCING ACTIVITIES The table below details changes in the Group’s liabilities arising from financing activities, including both cash and non-cash changes. Liabilities arising from financing activities are those for which cash flows were, or future cash flows will be, classified in the Group’s consolidated statements of cash flows as cash flows from financing activities. Borrowings Lease liabilities Total RMB’000 RMB’000 RMB’000 At January 1, 2023 ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 3,507,730 41,029 3,548,759 Financing cash flows – Proceeds from borrowings! ! ! ! ! ! ! ! ! ! ! ! ! ! 4,071,492 – 4,071,492 – Repayment of borrowings ! ! ! ! ! ! ! ! ! ! ! ! ! ! (2,617,270) – (2,617,270) – Interest paid on borrowings ! ! ! ! ! ! ! ! ! ! ! ! ! (83,619) – (83,619) – Repayment of lease liabilities ! ! ! ! ! ! ! ! ! ! ! – (8,819) (8,819) – Interest paid on lease liabilities ! ! ! ! ! ! ! ! ! ! – (1,624) (1,624) Non-cash changes ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! – New leases ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! – 31,377 31,377 – Termination of leases! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! – (401) (401) – Exchange difference ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! (40) (12) (52) – Acquired through business combination (note 41(a)) ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 109,567 7,035 116,602 – Interest expense recognised ! ! ! ! ! ! ! ! ! ! ! ! ! 83,676 1,624 85,300 At December 31, 2023 and January 1, 2024 ! ! ! ! 5,071,536 70,209 5,141,745 APPENDIX I ACCOUNTANTS’ REPORT – I-81 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 340 of 431 -- Borrowings Lease liabilities Total RMB’000 RMB’000 RMB’000 At December 31, 2023 and January 1, 2024 ! ! ! ! 5,071,536 70,209 5,141,745 Financing cash flows – Proceeds from borrowings! ! ! ! ! ! ! ! ! ! ! ! ! ! 2,273,524 – 2,273,524 – Repayment of borrowings ! ! ! ! ! ! ! ! ! ! ! ! ! ! (3,208,069) – (3,208,069) – Interest paid on borrowings ! ! ! ! ! ! ! ! ! ! ! ! ! (107,444) – (107,444) – Repayment of lease liabilities ! ! ! ! ! ! ! ! ! ! ! – (17,140) (17,140) – Interest paid on lease liabilities ! ! ! ! ! ! ! ! ! ! – (3,197) (3,197) Non-cash changes – New leases ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! – 28,426 28,426 – Termination of leases! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! – (6,468) (6,468) – Exchange difference ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! (1,531) 36 (1,495) – Acquired through business combination (note 41(b)) ! ! ! ! ! ! ! ! ! ! ! ! ! ! 82,559 – 82,559 – Interest expense recognised ! ! ! ! ! ! ! ! ! ! ! ! ! 107,234 3,197 110,431 At December 31, 2024 ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 4,217,809 75,063 4,292,872 Borrowings Lease liabilities Total RMB’000 RMB’000 RMB’000 At December 31, 2024 and January 1, 2025 ! ! ! ! 4,217,809 75,063 4,292,872 Financing cash flows – Proceeds from borrowings! ! ! ! ! ! ! ! ! ! ! ! ! ! 4,914,512 – 4,914,512 – Repayment of borrowings ! ! ! ! ! ! ! ! ! ! ! ! ! ! (2,795,386) – (2,795,386) – Interest paid on borrowings ! ! ! ! ! ! ! ! ! ! ! ! ! (128,501) – (128,501) – Repayment of lease liabilities ! ! ! ! ! ! ! ! ! ! ! – (268,310) (268,310) – Interest paid on lease liabilities ! ! ! ! ! ! ! ! ! ! – (4,794) (4,794) Non-cash changes – New leases ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! – 297,737 297,737 – Exchange difference ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! (156) (56) (212) – Interest expense recognised ! ! ! ! ! ! ! ! ! ! ! ! ! 132,984 4,794 137,778 At December 31, 2025 ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 6,341,262 104,434 6,445,696 43. CAPITAL COMMITMENTS The Group has capital commitments under non-cancellable contracts as follows: As at December 31, 2023 2024 2025 RMB’000 RMB’000 RMB’000 Acquisition of property, plant and equipment ! ! ! 67,776 386,457 8,788,609 The Company has capital commitments under non-cancellable contracts as follows: As at December 31, 2023 2024 2025 RMB’000 RMB’000 RMB’000 Acquisition of property, plant and equipment ! ! ! 41,144 292,100 8,496,070 APPENDIX I ACCOUNTANTS’ REPORT – I-82 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 341 of 431 -- 44. RELATED PARTY TRANSACTION AND BALANCES The related parties of the Group during the Track Record Period are as follows: Names of related parties Relationship (Note)! ! ! ! ! ! ! ! ! ! ! ! ! Controlled by close family member of the controlling shareholder of the Company Note: The English names of the related parties registered in the PRC mentioned above represent the best efforts made by management of the Company to translate their Chinese names as they do not have official English names. In addition to the transactions and balances disclosed in respective notes, the Group had the following significant transactions and balances with related parties during the Track Record Period: (a) Related party transactions: (i) Fee paid to related parties for services/goods Year ended December 31, 2023 2024 2025 RMB’000 RMB’000 RMB’000 ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 2,680 2,796 3,491 (b) Related party balances: Saved as disclosed in note 31, there is no balances with related parties at the end of each of the Track Record Period. (c) Compensation of key management personnel: Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the Group. The remuneration of the directors of the Company and other members of key management of the Group during the Track Record Period were as follows: Year ended December 31, 2023 2024 2025 RMB’000 RMB’000 RMB’000 Directors’ fee, salaries and other benefits ! ! ! ! ! 7,256 12,857 19,717 Performance-based bonus ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 55 372 732 Retirement benefit scheme contributions ! ! ! ! ! ! – – – Share-based payment expenses ! ! ! ! ! ! ! ! ! ! ! ! 6,318 2,458 2,733 13,629 15,687 23,182 The remuneration of key management is determined with reference to the performance of the individuals and market trends. 45. SUBSEQUENT EVENTS On January 23, 2026, the Company’s wholly owned subsidiary, MFS(S) entered into an equity purchase agreement with SunPower Technology Ltd., which MFS(S) would acquire 100% equity interest of SunPower Malaysia Manufacturing Sdn. Bhd. for a total consideration of US$51 million. The acquisition is not considered as a business combination under IFRS 3. The acquisition was completed on February 13, 2026. APPENDIX I ACCOUNTANTS’ REPORT – I-83 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 342 of 431 -- III. SUBSEQUENT FINANCIAL STATEMENTS No audited financial statements of the Group, the Company or any of its subsidiaries have been prepared in respect of any period subsequent to December 31, 2025. APPENDIX I ACCOUNTANTS’ REPORT – I-84 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 343 of 431 -- The information set out in this appendix does not form part of the Accountants’ Report prepared by BDO Limited, Certified Public Accountants, Hong Kong, the reporting accountant of the Company, as set out in Appendix I to this document, and is included herein for illustrative purposes only. The unaudited [REDACTED] financial information should be read in conjunction with section headed “Financial Information” in this document and the “Accountants’ Report” set forth in Appendix I to this document. (A) UNAUDITED [REDACTED] STATEMENT OF ADJUSTED CONSOLIDATED NET TANGIBLE ASSETS The following unaudited [REDACTED] statement of adjusted consolidated net tangible assets of the Group attributable to owners of the Company prepared in accordance with paragraph 4.29 of the Listing Rules is for illustrative purpose only, and is set forth here to illustrate the effect of the [REDACTED] on the audited consolidated net tangible assets of the Group attributable to owners of the Company as of December 31, 2025 as if the [REDACTED] had taken place on December 31, 2025. This unaudited [REDACTED] statement of adjusted consolidated net tangible assets of the Group attributable to owners of the Company has been prepared for illustrative purposes only and, because of its hypothetical nature, it may not give a true picture of the consolidated net tangible assets of the Group attributable to owners of the Company as of December 31, 2025 or at any future dates following the [REDACTED]. It is prepared based on the audited consolidated net tangible assets of the Group attributable to owners of the Company as of December 31, 2025 as set out in the Accountants’ Report of the Group, the text of which is set out in Appendix I to this Document, and adjusted as described below. Audited consolidated net tangible assets attributable to the owners of the Company as of December 31, 2025 Estimated [REDACTED] from the [REDACTED] Unaudited [REDACTED] adjusted consolidated net tangible assets attributable to the owners of the Company as of December 31, 2025 Unaudited [REDACTED] adjusted consolidated net tangible assets per Share attributable to owners of the Company as of December 31, 2025 RMB’000 RMB’000 RMB’000 RMB HK$ (note 1) (note 2) (note 3) (note 4) Based on the [REDACTED] of HK$[REDACTED] per Share ! ! [REDACTED] [REDACTED] [REDACTED] [REDACTED] [REDACTED] APPENDIX II UNAUDITED [REDACTED] FINANCIAL INFORMATION – II-1 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 344 of 431 -- (1) The audited consolidated net tangible assets of the Group attributable to owners of the Company as of December 31, 2025 is extracted from the Accountants’ Report set out in Appendix I to this Document, which is based on the audited consolidated net assets of our Group attributable to owners of the Company as of December 31, 2025 of approximately RMB16,617,608,000 with an adjustment for intangible assets and goodwill as of December 31, 2025 of approximately RMB587,624,000 and RMB1,193,532,000. (2) The estimated [REDACTED] from the [REDACTED] are based on the [REDACTED] of HK$[REDACTED] after deduction of the estimated [REDACTED] fees and other related [REDACTED] expenditure payable by the Company (excluding the [REDACTED] expense that have been charged to profit or loss during the Track Record Period), taking into no account of [REDACTED] which may be [REDACTED] upon the exercise of the [REDACTED] and the [REDACTED] and upon the vesting of restricted shares that have been or may be granted from time to time under the restricted share scheme. (3) The unaudited [REDACTED] adjusted consolidated net tangible assets of the Group attributable to owners of the Company as of December 31, 2025 per share is calculated based on a total of [REDACTED] shares (representing 870,349,313 shares in issue as of December 31, 2025, excluding 217,443 treasury shares as of December 31, 2025, adding [REDACTED] under the [REDACTED]), assuming that the [REDACTED] had been completed on December 31, 2025 but does not take into account of any [REDACTED] which may be [REDACTED] upon the exercise of the [REDACTED] and the [REDACTED] and upon the vesting of restricted shares that have been or may be granted from time to time under the restricted share scheme. (4) For the purpose of this unaudited [REDACTED] statement of adjusted consolidated net tangible assets of the Group attributable to owners of the Company as of December 31, 2025 per Share, the amounts stated in Renminbi are converted from or into Hong Kong dollars at an exchange rate of HK$1.0 to RMB0.88787. No representation is made that RMB has been, could have been or may be converted into HK$, or vice versa, at that rate. (5) No adjustment has been made to the unaudited [REDACTED] adjusted consolidated net tangible assets of the Group attributable to owners of the Company as of December 31, 2025 to reflect any trading results or other transactions of the Group entered into subsequent to December 31, 2025. (6) The unaudited [REDACTED] adjusted consolidated net tangible assets of the Group attributable to owners of the Company as shown on page II-1 have not been adjusted to illustrate the effect of the following: In March 2026, the Company declared a dividend of approximately RMB1,740,264,000 to the existing shareholders prior to the [REDACTED] on the Company’s retained profits as of December 31, 2025. Had the payment of the declared dividend been made on December 31, 2025, the unaudited [REDACTED] adjusted consolidated net tangible assets of the Group would decrease from RMB30,157,005,000 to RMB[REDACTED] based on [REDACTED] of HK$[REDACTED] per Share, and the unaudited [REDACTED] adjusted consolidated net tangible assets of the Group attributable to owners of the Company as at December 31, 2025 per Share would be RMB[REDACTED] (equivalent to HK$[REDACTED]) based on [REDACTED] of HK$[REDACTED] per Share. Except for the information as disclosed above, no other adjustments have been made to the unaudited [REDACTED] adjusted consolidated net tangible assets. These amounts are converted from Renminbi to Hong Kong dollars or Hong Kong dollars to Renminbi at an exchange rate of HK$1.0 to RMB0.88787. No representation is made that Renminbi/Hong Kong dollars amount have been, could have been or may be converted to Hong Kong dollars/Renminbi at that rate or at all. APPENDIX II UNAUDITED [REDACTED] FINANCIAL INFORMATION – II-2 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 345 of 431 -- [REDACTED] APPENDIX II UNAUDITED [REDACTED] FINANCIAL INFORMATION – II-3 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 346 of 431 -- [REDACTED] APPENDIX II UNAUDITED [REDACTED] FINANCIAL INFORMATION – II-4 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 347 of 431 -- [REDACTED] APPENDIX II UNAUDITED [REDACTED] FINANCIAL INFORMATION – II-5 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 348 of 431 -- TAXATION OF SECURITY HOLDERS Income tax and capital gains tax of [REDACTED] of the H shares is subject to the laws and practices of Chinese mainland and of jurisdictions in which [REDACTED] of the H shares are resident or otherwise subject to tax. The following summary of certain relevant taxation provisions is based on current laws and practices, and has not taken into account the expected change or amendment to the relevant laws and policies and does not constitute any opinion or advice. The discussion does not deal with all possible tax consequences relating to an [REDACTED] in the H shares, nor does it take into account the specific circumstances of any particular [REDACTED], some of which may be subject to special regulations. Accordingly, you should consult your own tax advisors regarding the tax consequences of an [REDACTED] in the H shares. The discussion is based upon laws and relevant interpretations in effect as of the Latest Practicable Date, all of which are subject to change or adjustment and may have retrospective effect. This discussion does not address any aspects of Chinese mainland taxation other than income tax, capital gains tax and profits tax, sales tax, VAT, stamp duty and estate duty. [REDACTED] are urged to consult their financial advisors regarding Chinese mainland and elsewhere tax consequences of [REDACTED] and [REDACTED] of the H shares. Taxation in Chinese Mainland Tax on Dividends Individual Investors Pursuant to the Individual Income Tax Law of the PRC ( ), or the Individual Income Tax Law, lastly amended by the SCNPC on August 31, 2018 and effective on January 1, 2019, and the Implementation Rules of the Individual Income Tax Law of the PRC ( ) lastly amended by the State Council on December 18, 2018 and effective on January 1, 2019, dividends paid by Chinese mainland companies to individual investors are ordinarily subject to a withholding income tax levied at a flat rate of 20%. Meanwhile, according to the Notice on Issues Concerning Differentiated Individual Income Tax Policies on Dividends and Bonus of Listed Companies ( ) jointly issued by the MOF, the SAT and the CSRC on September 7, 2015 and effective on September 8, 2015, where an individual holds the shares of a listed company obtained from the public offering and market transfer, if the holding period is more than one year, the dividends and bonus income shall be temporarily exempted from individual income tax. Where an individual holds shares of a listed company from the public offering and market transfer, if the holding period is within one month (inclusive), the dividend income shall be included in the taxable income in full; if the holding period is more than one month but less than one year (inclusive), the dividend income shall be included in the taxable income at the rate of 50%; the aforesaid income shall be subject to individual income tax at a uniform rate of 20%. APPENDIX III TAXATION AND FOREIGN EXCHANGE – III-1 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 349 of 431 -- Pursuant to the Arrangement between the Chinese Mainland and the Hong Kong Special Administrative Region for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income ( ), or the Arrangement for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income, executed on August 21, 2006, the government may impose tax on dividends paid by a company in Chinese mainland to a Hong Kong resident (including natural person and legal entity), but such tax shall not exceed 10% of the total amount of dividends payable. If a Hong Kong resident directly holds 25% or more of the equity interests in a company in Chinese mainland and the Hong Kong resident is the beneficial owner of the dividends and meets other conditions, such tax shall not exceed 5% of the total amount of dividends payable by the company in Chinese mainland. The Fifth Protocol to the Arrangement between the Chinese Mainland and the Hong Kong Special Administrative Region for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income ( < > ), or the Fifth Protocol, issued by the SAT and effective on December 6, 2019 provides that such provisions shall not apply to arrangements or transactions made for one of the primary purposes of obtaining such tax benefits. Enterprise Investors Pursuant to the EIT Law, lastly amended by the SCNPC and effective on December 29, 2018, and the Implementation Rules of the EIT Law of the PRC ( ), or the Implementation Rules of the EIT Law, lastly amended by the State Council on December 6, 2024 and effective on January 20, 2025, a non-resident enterprise is subject to a 10% EIT on Chinese mainland-sourced income, including dividends paid by a PRC resident enterprise that issues and lists shares in Hong Kong, if such non-resident enterprise does not have an establishment or place of business in the Chinese mainland or has an establishment or place of business in the Chinese mainland but the Chinese mainland-sourced income is not actually connected with such establishment or place of business in the Chinese mainland. The aforesaid income tax payable by non-resident enterprises shall be withheld at source, and the payer shall be the withholding agent, and the tax shall be withheld by the withholding agent from the payment or due payment every time it is paid or due. Such tax may be reduced or exempted pursuant to an applicable treaty for the avoidance of double taxation. Pursuant to the Notice on the Issues Concerning Withholding the EIT on the Dividends Paid by Chinese Resident Enterprises to H Share Holders Which Are Overseas Non-resident Enterprises by State Administration of Taxation ( H ) issued by the SAT and effective on November 6, 2008, a PRC resident enterprise is required to withhold EIT at a unified rate of 10% on dividends paid to non-PRC resident enterprise holders of H shares which are derived out of profit generated since 2008. The Reply on the Collection of EIT on Dividends Received by Non-resident Enterprises from Holding B Shares and Other Shares by State Administration of Taxation ( B ), promulgated by the SAT on July 24, 2009 and effective on the same day, further provides that PRC-resident enterprises listed on Chinese mainland and overseas APPENDIX III TAXATION AND FOREIGN EXCHANGE – III-2 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 350 of 431 -- stock exchanges by issuing stocks must withhold EIT at a flat rate of 10% on dividends of 2008 and onwards that it distributes to non-resident enterprise shareholders. Such tax rates may be further modified pursuant to the tax treaty or agreement that the PRC government has concluded with a relevant country or region, where applicable. According to the Arrangement for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income, the PRC government may impose tax on dividends paid by a Chinese mainland company to a Hong Kong resident (including natural person and legal entity), but such tax shall not exceed 10% of the total dividends payable by the Chinese mainland company. If a Hong Kong resident directly holds 25% or more of equity interest in a Chinese mainland company and the Hong Kong resident is the beneficial owner of the dividends and meets other conditions, such tax shall not exceed 5% of the total dividends payable by the Chinese mainland company. The Fifth Protocol provides that such provisions shall not apply to arrangements or transactions made for one of the primary purposes of obtaining such tax benefits. Pursuant to applicable regulations, we intend to withhold tax at a rate of 10% from dividends paid to non-PRC resident enterprise [REDACTED] of our H Shares (including [REDACTED]). Non-PRC resident enterprises that are entitled to be taxed at a reduced rate under an applicable income tax treaty will be required to apply to the tax authorities in Chinese mainland for a refund of any amount withheld in excess of the applicable treaty rate, and payment of such refund will be subject to the Chinese mainland tax authorities’ verification. Tax Related to Share Transfer Income Individual Investors Under the Individual Income Tax Law and its implementation rules, individuals are subject to individual income tax at a rate of 20% on gains realized on the sale of equity interests in PRC resident enterprises. Pursuant to the Circular on Continuing the Temporary Exemption of Individual Income Tax on Gains from Share Transfers by Individuals by Ministry of Finance and State Administration of Taxation ( ), which was promulgated by the MOF and the SAT on March 30, 1998 and effective on the same day, from January 1, 1997, income of individuals from the transfer of shares in listed companies continues to be temporarily exempted from individual income tax. The SAT does not specify whether to continue to exempt individuals from individual income tax on the income from the transfer of shares in listed company in the newly revised EIT Law and Implementation Rules of the EIT Law. Enterprise Investors Under the EIT Law and its implementation rules, a non-PRC resident enterprise is subject to EIT at the rate of 10% with respect to Chinese mainland-sourced income, including gains derived from the disposal of shares in a Chinese mainland resident enterprise, if it does not have an establishment or place of business in the Chinese mainland or has an establishment or place of business in the Chinese mainland but the Chinese mainland-sourced income is not APPENDIX III TAXATION AND FOREIGN EXCHANGE – III-3 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 351 of 431 -- actually connected with such establishment or place of business in the Chinese mainland. The aforementioned income tax payable by non-PRC resident enterprises is subject to source withholding, and the payer is the withholding agent. The tax shall be withheld by the withholding agent from the payment or due payment every time it is paid or due. Such tax may be reduced or exempted under the applicable tax treaties or arrangements on the avoidance of double taxation. Shenzhen-Hong Kong Stock Connect Taxation Policy Pursuant to the Notice on the Tax Policies Related to the Pilot Program of the Shenzhen-Hong Kong Stock Connect ( ) promulgated by the MOF, the SAT and the CSRC on November 5, 2016 and effective on December 5, 2016, transfer spread income derived by enterprise investors in Chinese mainland from stock investment listed on the Hong Kong Stock Exchange through Shenzhen-Hong Kong Stock Connect shall be included in their total income and subject to EIT according to law. For dividends and bonuses received by individual investors in Chinese mainland from investing in H shares listed on the Hong Kong Stock Exchange through Shenzhen-Hong Kong Stock Connect, the H-share companies shall apply to China Securities Depository and Clearing Company Limited for providing the register of individual investors in Chinese mainland to the H-share companies and the H-share companies shall withhold individual income tax at the rate of 20% on behalf of the investors. Pursuant to the Announcement on the Continued Implementation of the Individual Income Tax Policies on the Inter-connected Mechanisms for Trading on the Shanghai and Hong Kong Stock Markets and for Trading on the Shenzhen and Hong Kong Stock Markets and on the Mutual Recognition of Funds between the Mainland and Hong Kong ( ) promulgated by the MOF, the SAT and the CSRC on December 4, 2019 and effective on December 5, 2019, and the Announcement on Extending the Implementation of the Individual Income Tax Policies Concerning the Shanghai-Hong Kong Stock Connect and the Shenzhen- Hong Kong Stock Connect and the Mainland-Hong Kong Mutual Recognition of Funds ( ) which promulgated on August 21, 2023 and implemented on the same day, the transfer spread income derived by individual investors in Chinese mainland from investing in shares listed on the Hong Kong Stock Exchange through Shenzhen-Hong Kong Stock Connect shall be exempted from individual income tax from December 5, 2019 to December 31, 2027. Pursuant to the Notice on the Tax Policies Related to the Pilot Program of the Shenzhen-Hong Kong Stock Connect ( ), dividends derived by enterprise investors in Chinese mainland from investing in shares listed on the Hong Kong Stock Exchange through Shenzhen-Hong Kong Stock Connect are included in their total income and subject to EIT according to law. In particular, dividends and bonus income obtained by resident enterprises in Chinese mainland from holding H shares for 12 consecutive months shall be exempted from EIT according to law. H-share companies shall not withhold income tax on dividends and bonus income for enterprise investors in Chinese mainland. The tax payable shall be declared and paid by the enterprise itself. APPENDIX III TAXATION AND FOREIGN EXCHANGE – III-4 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 352 of 431 -- Stamp Duty Pursuant to the Stamp Duty Law of the PRC ( ), which was promulgated by the SCNPC on June 10, 2021 and came into effect on July 1, 2022, the purchase and disposal of H shares by non-Chinese mainland investors outside of Chinese mainland are not subject to the requirements of the Stamp Duty Law of the PRC. Estate Duty Pursuant to the laws of Chinese mainland, no estate duty is currently levied in Chinese mainland. MAJOR TAXATION OF OUR COMPANY IN CHINESE MAINLAND EIT According to the EIT Law, enterprises and other income-generating organizations (hereinafter collectively referred to as “enterprises”) within the territory of the Chinese mainland are the taxpayers of EIT and shall pay EIT in accordance with the provisions of the EIT Law. The EIT rate is 25%. According to the Administrative Measures for Determination of High and New Tech Enterprises ( ), which was promulgated by the Ministry of Science and Technology, the MOF and the SAT on April 14, 2008, amended on January 29, 2016 and became effective on January 1, 2016, an enterprise recognized as a high and new technology enterprise may apply for a preferential enterprise income tax rate of 15% pursuant to the relevant requirements of the Enterprise Income Tax Law. Enterprises are classified into resident enterprises and non-resident enterprises. A non-resident enterprise that does not have an establishment or place of business in the Chinese mainland, or has an establishment or place of business in the Chinese mainland but the income has no actual connection to such establishment or place of business, shall pay EIT on its income within the Chinese mainland and withhold at source, where the payer is the withholding agent. The tax shall be withheld by the withholding agent from the payment or due payment every time it is paid or due. Meanwhile, any gains realized on the transfer of shares by such investors are subject to EIT and shall be withheld at source if such gains are regarded as income derived from the transfer of property within the Chinese mainland. VAT Pursuant to the Provisional Regulations on Value-added Tax of the PRC ( ) lastly amended by the State Council on November 19, 2017 and effective on the same day and the Detailed Rules for the Implementation of the Provisional Regulations on Value-added Tax of the PRC ( ) lastly amended by the MOF on October 28, 2011 and effective on November 1, 2011, all APPENDIX III TAXATION AND FOREIGN EXCHANGE – III-5 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 353 of 431 -- entities and individuals in Chinese mainland engaging in the sale of goods, the provision of processing, repairs and replacement services, and the importation of goods are required to pay VAT. For taxpayers selling or importing goods, the general tax rate shall be 17% unless otherwise specified in the aforesaid regulations. Pursuant to the Notice of the Ministry of Finance and the State Administration of Taxation on the Adjustment to VAT Rates ( ) (Cai Shui [2018] No. 32), promulgated by the MOF and the SAT on April 4, 2018, and became effective as of May 1, 2018, the VAT rates of 17% and 11% applicable to the taxpayers who have VAT taxable sales activities or imported goods are adjusted to 16% and 10%, respectively. Pursuant to the Announcement on Relevant Policies for Deepening VAT Reform ( ) (2019 No. 39 of MOF, SAT and GACC), promulgated by the MOF, the SAT and the GACC on March 20, 2019 and became effective on April 1, 2019, the VAT rates of 16% and 10% applicable to the taxpayers who have VAT taxable sales activities or imported goods are adjusted to 13% and 9%, respectively. On December 25, 2024, the SCNPC promulgated the VAT Law of the PRC ( ), which will come into effective on January 1, 2026, and replace the Provisional Regulations on Value-added Tax of the PRC. FOREIGN EXCHANGE ADMINISTRATION The lawful currency of Chinese mainland is the Renminbi. The SAFE, authorized by the People’s Bank of China, is empowered with the functions of administering all matters relating to foreign exchange, including the enforcement of foreign exchange regulations. Pursuant to the Regulations of the PRC on Foreign Exchange Control ( ) announced by the State Council on August 5, 2008 and effective on the same day, all international payments and transfers are classified into current account items and capital account items. Chinese Mainland does not impose restrictions on international payments and transfers under current account items. Foreign exchange income from the current account of enterprises in Chinese Mainland may be retained or sold to financial institutions engaged in the settlement and sale of foreign exchange in accordance with relevant provisions of the State. The retention or sale of foreign exchange receipts under capital accounts to financial institutions engaging in settlement and sale of foreign exchange shall be subject to the approval of foreign exchange administrative authorities, unless otherwise stipulated by the State. Pursuant to the Regulations for the Administration of Settlement, Sale and Payment of Foreign Exchange ( ) promulgated by the People’s Bank of China on June 20, 1996 and became effective on July 1, 1996, the remaining restrictions on convertibility of foreign exchange in respect of current account items are abolished while the existing restrictions on foreign exchange transactions in respect of capital account items are retained. APPENDIX III TAXATION AND FOREIGN EXCHANGE – III-6 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 354 of 431 -- Pursuant to relevant laws and regulations of the Chinese mainland, Chinese mainland enterprises (including foreign-invested enterprises) which require foreign exchange for transactions relating to current account items, may, without the approval of SAFE, effect payment from their foreign exchange accounts at the designated foreign exchange banks, on the strength of valid receipts and proof of transactions. Foreign-invested enterprise that need to distribute profits to their shareholders in foreign exchange and Chinese enterprise that need to pay fixed dividends in foreign exchange in accordance with the requirements shall pay from its foreign exchange account or pay at the designated foreign exchange bank by a resolution of the board of directors on the distribution of profits. Pursuant to the Decision of the State Council on Canceling and Adjusting a Group of Administrative Approval Items and Other Matters ( ) promulgated by the State Council and effective on October 23, 2014, the administrative approval of the SAFE and its branches on matters concerning the repatriation and settlement of foreign exchange of overseas-raised funds through overseas listing has been canceled. Pursuant to the Circular of the State Administration of Foreign Exchange of the PRC on Relevant Issues Concerning the Foreign Exchange Administration of Overseas Listing ( ) promulgated by the SAFE on December 26, 2014 and effective on the same day, the relevant provisions on foreign exchange administration of domestic joint stock companies (hereinafter referred to as “domestic companies”) listed overseas are as follows: (i) The SAFE and its branches and the Foreign Exchange Management Department, or the Foreign Exchange Bureau, supervise, manage and inspect the business registration, account opening and use, cross-border income and expenditure, and capital exchange involved in the overseas listing of domestic companies. (ii) A domestic company shall, within 15 working days after the completion of the overseas listing and issuance, register the overseas listing with the Foreign Exchange Bureau at the place where it is registered with relevant material. (iii) A domestic company (other than banking financial institutions) shall, by virtue of its registration certificate for overseas listing business, open a “special foreign exchange account for overseas listing of domestic companies” with a domestic bank for its initial offering (or additional offering) and repurchase business to handle the remittance and transfer of funds for the relevant business. According to the Notice of the State Administration of Foreign Exchange of the PRC on Further Simplifying and Improving Policies for the Foreign Exchange Administration of Direct Investment ( ) issued on February 13, 2015 and effective on June 1, 2015, the SAFE has cancelled the confirmation of foreign exchange registration under domestic direct investment and the confirmation of foreign exchange registration under overseas direct investment, instead, banks APPENDIX III TAXATION AND FOREIGN EXCHANGE – III-7 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 355 of 431 -- shall directly examine and handle foreign exchange registration under domestic direct investment and foreign exchange registration under overseas direct investment, and the SAFE and its branch offices shall indirectly regulate the foreign exchange registration of direct investment through banks. According to the Notice of the State Administration of Foreign Exchange of the PRC on Revolutionize and Regulate Capital Account Settlement Management Policies ( ) issued by the SAFE on June 9, 2016 and effective on the same day, foreign currency earnings in capital account that relevant policies of willingness exchange settlement have been clearly implemented on (including the recalling of raised capital by overseas listing) may undertake foreign exchange settlement in the banks according to actual business needs of the domestic institutions. The tentative percentage of foreign exchange settlement for foreign currency earnings in capital account of domestic institutions is 100%, subject to adjustment by the SAFE in due time in accordance with international revenue and expenditure situations. Pursuant to the Notice of the State Administration of Foreign Exchange of the PRC on Promulgation of the Guidelines on Foreign Exchange Businesses under Capital Accounts (Edition 2024) ( < (2024 )> ) promulgated by the SAFE on April 3, 2024, for domestic companies listed overseas, the funds raised shall in principle be repatriated to China in a timely manner, either in RMB or foreign currency. The use of these funds must comply with the relevant content disclosed in public documents, such as the document, bond issuance documents, shareholder circulars, board or shareholder meeting resolutions. If a domestic company uses overseas-raised funds for outbound direct investment, overseas securities investment, or cross-border lending, it must comply with the relevant foreign exchange regulations. APPENDIX III TAXATION AND FOREIGN EXCHANGE – III-8 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 356 of 431 -- This Appendix summarizes certain aspects of the laws and regulations of Chinese Mainland which are relevant to our Company’s operations and business. Laws and regulations relating to taxation in Chinese mainland are discussed separately in “Appendix III — Taxation and Foreign Exchange” to this document. This Appendix also contains a summary of laws and regulatory provisions of the PRC Company Law. The principal objective of this summary is to provide potential [REDACTED] with an overview of the principal laws and regulatory provisions applicable to our Company. This summary is not intended to include all the information which is important to the potential [REDACTED]. For a discussion of laws and regulations which are relevant to our Company’s business, see “Regulatory Overview” in this document. THE LEGAL SYSTEM OF CHINESE MAINLAND The legal system of Chinese mainland is based on the Constitution of the PRC ( ), or the “Constitution”, and is made up of written laws, administrative regulations, local regulations, separate regulations, rules and regulations of departments of the State Council, rules and regulations of local governments, autonomous regulations, separate regulations of autonomous regions, special administrative region laws and international treaties and other regulatory documents signed by the PRC government. Court decisions do not constitute binding precedents, although they are used for the purposes of judicial reference and guidance. According to the Constitution and the Legislation Law of the PRC ( ), or the “Legislation Law”, lastly amended by National People’s Congress (the “NPC”) on March 13, 2023 and effective on March 15, 2023, the NPC and the SCNPC are empowered to exercise the legislative power of the State. The NPC has the power to formulate and amend basic laws governing criminal and civil matters, state organs and other matters. The SCNPC is empowered to formulate and amend laws other than those required to be enacted by the NPC and to supplement and amend any parts of laws enacted by the NPC during the adjournment of the NPC, provided such supplements and amendments are not in conflict with the basic principles of such laws. The State Council is the highest organ of state administration and has the power to formulate administrative regulations based on the Constitution and laws. The people’s congresses of provinces, autonomous regions and municipalities and their respective standing committees may formulate local regulations based on the specific circumstances and actual needs of their respective administrative areas, provided that such local regulations do not contravene any provisions of the Constitution, laws or administrative regulations. The people’s congresses of cities divided into districts and their standing committees may formulate local regulations on matters such as urban and rural construction and management, environmental protection and historical and cultural protection based on the specific circumstances and actual needs of such cities, provided that such local regulations do not contravene any provision of the Constitution, laws, administrative regulations and local regulations of such provinces or APPENDIX IV SUMMARY OF PRINCIPAL LAWS AND REGULATIONS – IV-1 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 357 of 431 -- autonomous regions. Where laws have other stipulations on matters of local regulations formulated by cities divided into districts, such stipulations shall prevail. The local regulations of cities divided into autonomous regions shall be submitted for approval before implementation. The standing committees of the people’s congresses of provinces or autonomous regions shall examine the legality of local regulations submitted for approval, and such approval should be granted within four months if they are not in conflict with the Constitution, laws, administrative regulations and local regulations of their respective provinces or autonomous regions. People’s congresses of national autonomous areas have the power to enact autonomous regulations and separate regulations in the light of the political, economic and cultural characteristics of the nationality (nationalities) in the areas concerned. The ministries, commissions, the People’s Bank of China, National Audit Office of the State Council and institutions with administrative functions directly under the State Council may formulate rules and regulations within the jurisdiction of their respective departments based on the laws and the administrative regulations, decisions and rulings of the State Council. The Constitution has supreme legal authority and no laws, administrative regulations, local regulations, autonomous regulations or separate regulations or rules may contravene the Constitution. The authority of laws is greater than that of administrative regulations, local regulations and rules. The authority of administrative regulations is greater than that of local regulations and rules. The authority of the rules enacted by the people’s governments of the provinces and autonomous regions is greater than that of the rules enacted by the people’s governments of the cities divided into districts within their respective administrative regions. The NPC has the power to amend or annul any inappropriate laws formulated by the SCNPC, and to annul any autonomous regulations and separate regulations which have been approved by the SCNPC but which contravene the Constitution and the Legislation Law. The SCNPC has the power to annul administrative regulations that contravene the Constitution and laws, to annul local regulations that contravene the Constitution, laws and administrative regulations, and to annul autonomous regulations and separate regulations which have been approved by the standing committees of the people’s congresses of the relevant provinces, autonomous regions or municipalities directly under the Central Government, but which contravene the Constitution and the Legislation Law. The State Council has the power to amend or annul any inappropriate ministerial rules and rules of local governments. The people’s congresses of provinces, autonomous regions and municipalities directly under the Central Government have the power to alter or annul any inappropriate local regulations enacted or approved by their respective standing committees. The standing committees of the local people’s congresses have the power to annul inappropriate rules enacted by the people’s governments at the corresponding level. The people’s governments of provinces and autonomous regions have the power to amend or annul any inappropriate rules enacted by the people’s governments at a lower level. APPENDIX IV SUMMARY OF PRINCIPAL LAWS AND REGULATIONS – IV-2 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 358 of 431 -- According to the Decision of the SCNPC Regarding the Strengthening of Interpretation of Laws ( ) passed by the SCNPC and effective on June 10, 1981, the SCNPC shall give interpretation and make provisions by means of decrees on issues related to the further clarification or supplement of laws or decrees. The Supreme People’s Court shall give interpretations on questions involving the specific application of laws and decrees in court trials. The Supreme People’s Procuratorate shall interpret all issues involving the specific application of laws and decrees in the procuratorial work. If there are principled differences in the interpretation of the Supreme People’s Court and the Supreme People’s Procuratorate, they shall be submitted to the SCNPC for interpretation or decision. Interpretation of questions involving the specific application of laws and decrees in areas unrelated to judicial and procuratorial work shall be provided by the State Council and competent authorities. Where the scope of local regulations needs to be further defined or additional stipulations need to be made, the standing committees of the people’s congresses of provinces, autonomous regions and municipalities which have enacted these regulations shall provide interpretations or make the stipulations. Interpretation of questions involving the specific application of local regulations shall be provided by the competent departments of the people’s governments of provinces, autonomous regions and municipalities. JUDICIAL SYSTEM OF CHINESE MAINLAND According to the Constitution and the Law of the PRC of Organization of the People’s Courts ( ) lastly amended by the SCNPC on October 26, 2018 and effective on January 1, 2019, the People’s Court is made up of the Supreme People’s Court, the local people’s courts, and other special people’s courts. The local people’s courts are divided into three levels, namely the basic people’s courts, the intermediate people’s courts and the higher people’s courts. The basic people’s courts may set up certain people’s tribunals based on the status of the region, population and cases. The Supreme People’s Court shall be the highest judicial organ of the state. The Supreme People’s Court shall supervise the administration of justice by the local people’s courts at all levels and by the special people’s courts. The people’s courts at higher levels shall supervise the judicial work of the people’s courts at lower levels. According to the Constitution and the Law of Organization of the People’s Procuratorate of the PRC ( ) lastly amended by SCNPC on October 26, 2018 and effective on January 1, 2019, the People’s Procuratorate is the law supervision organ of the state. The Supreme People’s Procuratorate shall be the highest procuratorial organ. The Supreme People’s Procuratorate shall direct the work of the local people’s procuratorates at all levels and of the special people’s procuratorates; the people’s procuratorates at higher levels shall direct the work of those at lower levels. The people’s courts employ a two-instance trial system, and judgments or rulings of the second instance at the people’s courts are final. A party may appeal against the judgment or ruling of the first instance of a local people’s courts. The people’s procuratorate may present APPENDIX IV SUMMARY OF PRINCIPAL LAWS AND REGULATIONS – IV-3 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 359 of 431 -- a protest to the people’s courts at the next higher level in accordance with the procedures stipulated by the laws. In the absence of any appeal by the parties and any protest by the people’s procuratorate within the stipulated period, the judgments or rulings of the people’s courts become final. Judgments or rulings of the second instance of the intermediate people’s courts, the higher people’s courts and the Supreme People’s Court and those of the first instance of the Supreme People’s Court are final. However, if the Supreme People’s Court or the people’s courts at the next higher level finds any definite errors in a legally effective final judgment or ruling of the people’s court at a lower level, or if the president of a people’s court at any level finds any definite errors in a legally effective final judgment or ruling of such court, the case can be retried according to judicial supervision procedures. The PRC Civil Procedure Law ( ), or the “Civil Procedure Law” lastly amended by the SCNPC on September 1, 2023 and effective on January 1, 2024 sets forth the requirements for instituting a civil action, the jurisdiction of the people’s courts, the procedures to be followed for conducting a civil action and the procedures for enforcement of a civil judgment or order. All parties to a civil action conducted within the Chinese mainland must comply with the Civil Procedure Law. Civil cases are generally heard by the courts where the defendants are located. The court of jurisdiction in a civil action may be chosen by express agreement between the parties, provided that the court is located at a place that has direct connection with the dispute, such as the plaintiff’s or the defendant’s place of domicile, the place where the contract is performed or signed, or the object of the action is located. However, the choice of the court cannot conflict with the regulations of different jurisdictions and exclusive jurisdictions in any case. A foreign individual, a person without nationality, a foreign enterprise or a foreign organization must have the same litigation rights and obligations as a PRC citizen, legal person or other organizations when initiating or defending any proceedings at a people’s court. If a foreign court limits the litigation rights of PRC citizens, legal person or other organizations, the PRC court may apply the same limitations to the citizens, legal person or other organizations of such foreign country. A foreign individual, a person without nationality, a foreign-invested enterprise or a foreign organization must engage a lawyer from Chinese Mainland if such person needs to engage a lawyer in initiating or defending any proceedings at a people’s court. Under an international treaty or the principle of reciprocity signed or acceded to by the Chinese mainland, the people’s court and foreign courts may require each other to act on their behalf to serve documents, conduct investigations, collect evidence and take other actions on behalf of each other. If the request by a foreign court would result in the violation of the PRC’s sovereignty, security or public interest, the people’s court shall decline the request. All parties involved must comply with legally effective civil judgments and rulings. If any party to a civil action refuse to comply with a judgment or order made by a people’s court or an award made by an arbitration tribunal, the other party may apply to the people’s court for enforcement within two years. Suspension or disruption of the time limit for applying for such enforcement shall comply with the provisions of the applicable law concerning the suspension or disruption of the time-barring of actions. APPENDIX IV SUMMARY OF PRINCIPAL LAWS AND REGULATIONS – IV-4 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 360 of 431 -- When a party applies to a people’s court for enforcing an effective judgment or ruling by a people’s court against a party who is not located within the territory of the Chinese mainland or whose property is not within the Chinese mainland, the party may apply to a foreign court with proper jurisdiction 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 the Chinese mainland enforcement procedures if the Chinese mainland 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, unless among other exceptions, 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 Chinese mainland, its sovereignty or security, or for reasons of social and public interests. THE PRC COMPANY LAW, OVERSEAS LISTING TRIAL MEASURES AND GUIDELINES FOR ARTICLES OF ASSOCIATION A joint stock limited company established in Chinese mainland seeking a listing on Hong Kong Stock Exchange is mainly subject to the following laws and regulations of Chinese Mainland. The Company Law of the PRC, or the “Company Law”, was lastly revised on December 29, 2023 and came into effect on July 1, 2024. The Trial Administrative Measures of the Overseas Securities Offering and Listing by Domestic Enterprises ( ), or the “Overseas Listing Trial Measures” and its five interpretative guidelines, were promulgated by the CSRC on February 17, 2023 and came into effect on March 31, 2023 and were applicable to the direct and indirect overseas offering and listing of PRC domestic companies’ securities. According to the Overseas Listing Trial Measures and its interpretative guidelines, where a domestic company directly conducts offering and listing overseas, it shall formulate its articles of association in line with the Guidelines for Articles of Association of Listed Companies ( ), or the “Guidelines for Articles of Association,” which was issued by the CSRC as amended and effective from time to time, in place of the Mandatory Provisions for Articles of Association of Companies to be Listed Overseas ( ) which ceased to apply from March 31, 2023. The latest revision of the Guidelines for Articles of Association of Listed Companies became effective on March 28, 2025. Set out below is a summary of the major provisions of the Company Law, the Overseas Listing Trial Measures and the Guidelines for Articles of Association which are applicable to our Company. APPENDIX IV SUMMARY OF PRINCIPAL LAWS AND REGULATIONS – IV-5 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 361 of 431 -- General Provisions A joint stock limited company means a corporate legal person incorporated under the Company Law, whose registered capital is divided into shares of equal par value. The liability of its shareholders is limited to the extent of the shares held by them and the liability of a company is limited to the full value of all the property owned by it. A company must conduct its business in accordance with laws and regulations as well as public and commercial ethics, be honest and trustworthy and accept the supervision of the government and the public. A company may invest in other companies. If it is prescribed by any law that a company shall not become a capital contributor that shall bear the joint and several liability for the debts of the enterprises it invests in, such provisions shall prevail. Incorporation A joint stock limited company may be incorporated by promotion or subscription. A joint stock limited company may be incorporated by a minimum of one but not more than 200 promoters, and at least half of the promoters must have residence within the Chinese Mainland. The promoters of subscription of a joint stock company shall convene an inaugural meeting of the company within 30 days after the share capital has been paid up and shall notify all subscribers of the date of the meeting or make an announcement in this regard 15 days before the meeting. The inaugural meeting may be held only with the presence of subscribers holding more than 50% of the voting rights. The convening and voting procedures for the inaugural meeting of a joint stock limited company incorporated by promotion shall be stipulated in the agreement of the promoters. Powers to be exercised at the inaugural meeting include but are not limited to the adoption of articles of association and the election of members of the board of directors and the supervisory committee of a company. The aforesaid matters shall be resolved by more than 50% of the votes to be cast by subscribers presented at the meeting. Within 30 days after the conclusion of the inaugural meeting, the board of directors shall apply to the registration authority for registration of the incorporation of the joint stock limited company. A company is formally established and has the status of a legal person after the business license has been issued by the relevant registration authority. Registered Shares Under the Company Law, shareholders may make capital contributions in cash, or with non-monetary property that may be valued in money and legally transferred, such as contribution in kind or with an intellectual property right, land use right, shareholding or claim. The Overseas Listing Trial Measures provides that domestic enterprises that are listed overseas may raise funds and distribute dividends in foreign currencies or Renminbi. APPENDIX IV SUMMARY OF PRINCIPAL LAWS AND REGULATIONS – IV-6 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 362 of 431 -- Under the Company Law, a joint stock limited company is required to maintain a register of shareholders, detailing the following information: (i) the name and domicile of each shareholder; (ii) the class and number of shares subscribed for by each shareholder; (iii) the serial number of shares if issued in paper form; and (iv) the date on which each shareholder acquired the shares. Allotment and Issue of Shares All issues of shares of a joint stock limited company shall be based on the principles of equality and fairness. The same class of shares must 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. A joint stock limited company may issue shares at a par value or at a premium, but it may not issue shares below the par value. Domestic enterprises issued and listed overseas shall file with the CSRC in accordance with the Overseas Listing Trial Measures, submit filing reports, legal opinions and other relevant materials, and truthfully, accurately and completely explain shareholders information and other information. Where a domestic enterprise directly issues and is listed overseas, the issuer itself shall file with the CSRC. If a domestic enterprise is indirectly listed overseas, the issuer shall designate a major domestic operating entity as the domestic person responsible and file with the CSRC. Increase in Share Capital Under the Company Law, in the case of a joint stock limited company issuing new shares, resolutions shall be passed at the shareholders’ meeting in respect of the class and number of new shares, the issue price of the new shares, the commencement and end dates for the issuance of new shares and the class and number of the new shares proposed to be issued to original shareholders, if any. If no par value stock is issued, more than one-half of the proceeds from the issuance of the new stocks shall be included in the registered capital. Additionally, if a company intends to make public offering of shares, it is required to complete the registration with the securities regulatory authority of the State Council and announce the prospectus. Reduction of Share Capital A company may reduce its registered capital in accordance with the following procedures prescribed by the Company Law: (i) to prepare a balance sheet and a property list; (ii) a company makes a resolution at shareholders’ meeting to reduce its registered capital; (iii) a company shall inform its creditors within 10 days and publish an announcement in newspapers or the National Enterprise Credit Information Publicity System within 30 days after the approval of resolution of reducing registered capital; (iv) the creditors shall have the right to require a company to repay its debts or provide corresponding guarantees within 30 days after receiving the notice or within 45 days after the announcement if the creditors have not received the notice; (v) when a company reduces its registered capital, it shall register the change with a company registration authority in accordance with the law. APPENDIX IV SUMMARY OF PRINCIPAL LAWS AND REGULATIONS – IV-7 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 363 of 431 -- When a company reduces its registered capital, it must reduce the amount of capital contribution or shares in proportion to the capital contribution or shares held by the shareholders, unless otherwise prescribed by any law, or agreed upon by all the shareholders of a limited liability company, or as specified in the articles of association of a joint stock limited company. Share Buy-Back Under the Company Law, a company shall not purchase its own shares. Except for any following circumstances: (i) reducing the registered capital; (ii) merging with other company that holds the shares of the company; (iii) using the shares for employee stocks plan or equity incentives; (iv) with respect to shareholders voting against any resolution adopted at the shareholders’ meeting on the merger or division of our Company, the right to demand our Company to acquire the shares held by them; (v) using the shares for the conversion of convertible corporate bonds issued by the listed company; (vi) as required for maintenance of the corporate value and shareholders’ rights and interests of a listed company. The purchase of shares of a company for reasons specified in the case of (i) to (ii) above shall be subject to the resolution of the shareholders’ meeting; the purchase of shares of a company for reasons specified in the case of (iii), (v) and (vi) above shall be subject to the resolution of the board meetings attended by more than two-thirds of the directors in accordance with the provisions of the articles of association or the authorization from the meeting. Following the purchase of a company’s shares by a company in accordance with the above provisions, such shares shall be canceled within 10 days from the date of buy-back in the case of item (i) above; such shares shall be transferred or canceled within six months in the case of items (ii) and (iv) above; the total numbers of share of our Company held by a company shall not exceed 10% of the total issued shares of our Company, and shall be transferred or canceled within three years in the case of items (iii), (v) and (vi) above. A listed company purchasing its own shares shall perform information disclosure obligations in accordance with the Securities Law of the PRC. A listed company purchasing its own shares for reasons specified in the case of (iii), (v) and (vi) above shall purchase the shares in a public and centralized trading manner. Transfer of Shares Shares held by a shareholder may be transferred according to the law. Under the Company Law, a shareholder of a joint stock limited company should affect a transfer of his shares on securities exchange established according to the law or by any other means as required by the State Council. Registered shares may be transferred by endorsement of shareholders or by other means stipulated by laws or administrative regulations. After the transfer, a company shall APPENDIX IV SUMMARY OF PRINCIPAL LAWS AND REGULATIONS – IV-8 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 364 of 431 -- record the name and address of the transferee in the register of shareholders. No changes of registration in the share register provided in the foregoing requirement shall be affected during a period of 20 days prior to the convening of shareholder’s meeting or 5 days prior to the record date for a company’s distribution of dividends. If any law, administrative regulation, or any provision by the securities regulatory authority of the State Council specifies otherwise for the modification of the register of shareholders of a listed company, such provisions should prevail. Under the Company Law, shares issued by a company prior to the public offering of shares shall not be transferred within one year from the date on which the shares of the company are listed and traded on a securities exchange. The directors, supervisors and senior management of the company should declare to the company the shares they hold and the changes thereof. During the term of office as determined when they assume the posts, the shares transferred each year should not exceed 25% of the total shares they hold of the company. Shares of a company held by them shall not be transferred within one year from the date of a company’s listing on a securities exchange, nor within six months after their resignation from their positions with a company. If the shares are pledged within the time limit for restricted transfer as provided for by laws and administrative regulations, the pledgee cannot exercise the pledge right within such restricted transfer period. Shareholders Under the Company Law and Guidelines for Articles of Association the rights of a shareholder of a company include: (i) to receive dividends and other forms of interest distribution according to the number of shares held; (ii) to legally require, convene, preside over, participate in or authorize proxies of Shareholders to attend the shareholders’ meeting and exercise corresponding voting rights; (iii) to supervise business operations of the company, provide suggestions or submit queries; (iv) to transfer, grant or pledge the company’s shares held according to the provisions of the laws, administrative regulations and the articles of association; (v) to read and copy the articles of association, the register of Shareholders, counterfoil of company debentures, General Meeting minutes, resolutions of meetings of the board of directors, resolutions of meetings of the board of supervisors and financial and accounting reports; (vi) shareholders who hold more than 3% of the company’s shares individually or collectively for more than 180 consecutive days may inspect the company’s accounting books and accounting vouchers in accordance with laws; (vii) to participate in the distribution of the remaining assets of the company according to the proportion of shares held upon our termination or liquidation; (viii) to require our company to acquire the shares from Shareholders voting against any resolutions adopted at the General Meeting concerning the merger and division of the company; (ix) other rights conferred by laws, administrative regulations, regulations of the authorities or the articles of association. APPENDIX IV SUMMARY OF PRINCIPAL LAWS AND REGULATIONS – IV-9 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 365 of 431 -- The obligations of a shareholder of a company include: (i) to abide by laws, administrative regulations and the articles of association; (ii) to provide share capital according to the shares subscribed for and share participation methods; (iii) not to abuse shareholders’ rights to infringe upon the interests of the company or other shareholders; not to abuse the company’s status as an independent legal entity or the limited liability of shareholders to damage the interests of the company’s creditors; (iv) to perform other duties prescribed in laws, administrative regulations, departmental rules and articles of association. Shareholder’s Meetings Under the Company Law, the shareholders’ meeting of a joint stock limited company is made up of all shareholders. The shareholders’ meeting is the organ of authority of a company, which exercises the following functions and powers: (i) to elect and replace directors and supervisors and to decide on matters relating to the remuneration of directors and supervisors; (ii) to examine and approve reports of the board of directors; (iii) to examine and approve reports of the supervisory committee; (iv) to examine and approve a company’s profit distribution plans and loss recovery plans; (v) to resolve on the increase or reduction of a company’s registered capital; (vi) to resolve on the issuance of corporate bonds; (vii) to resolve on the merger, division, dissolution, liquidation or change of corporate form of a company; (viii) to amend the company’s articles of association; (ix) other functions and powers specified in provision of the articles of association. Under the Company Law, annual shareholders’ meetings are required to be held once every year. An interim shareholders’ meeting is required to be held within two months after the occurrence of any of the following circumstances: (i) the number of directors is less than the number stipulated in the Company Law or less than two-thirds of the number specified in the articles of association; (ii) when the unrecovered losses of a company amount to one-third of the total share capital; (iii) shareholders individually or jointly holding 10% or more of the company’s shares request; (iv) when deemed necessary by the board of directors; (v) the supervisory committee proposes to convene the meeting; (vi) other circumstances as stipulated in the articles of association. Shareholders’ meeting shall be convened by the board of directors, and presided over by the chairperson of the board of directors. In the event that the chairperson is incapable of performing or not performing his duties, the meeting shall be presided over by the vice chairperson. In the event that the vice chairperson is incapable of performing or not performing his duties, a director nominated by more than half of directors shall preside over the meeting. If the board of directors is incapable of performing or is not performing its duties to convene the general meeting, the supervisory board should convene and preside over shareholders’ meeting in a timely manner. If the supervisory board fails to convene and preside over shareholders’ meeting, shareholders individually or in aggregate holding 10% or more of the company’s shares for 90 days or more consecutively may unilaterally convene and preside over shareholders’ meeting. APPENDIX IV SUMMARY OF PRINCIPAL LAWS AND REGULATIONS – IV-10 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 366 of 431 -- If the shareholders who separately or aggregately hold more than 10% of the shares of the company request to convene an interim shareholders’ meeting, the board of directors and the board of supervisors should, within 10 days after the receipt of such request, decide whether to hold an interim shareholders’ meeting and reply to the shareholders in writing. Notice of meeting shall state the time and venue of and matters to be considered at the meeting and shall be given to all shareholders 20 days before the meeting. A notice of interim meeting shall be given to all shareholders 15 days prior to the meeting. Shareholders who individually or jointly hold more than 1% of the company’s shares may put forward interim proposals and submit them to the board of directors in writing 10 days before the shareholders’ meeting. The board of directors shall notify other shareholders within two days after receiving the proposal and submit the interim proposal to the shareholders’ meeting for consideration. Under the Company Law, a shareholder may entrust a proxy to attend a shareholders’ meeting, and it should clarify the matters, power and time limit of the proxy. The proxy shall present a written power of attorney issued by the shareholder to a company and shall exercise his voting rights within the scope of authorization. There is no specific provision in the Company Law regarding the number of shareholders constituting a quorum in a shareholders’ meeting. Under the Company Law, shareholders present at a shareholders’ meeting have one vote for each share they hold, except the shareholders of classified shares. However, shares held by the company itself are not entitled to any voting rights. The cumulative voting system may be adopted for the election of directors and supervisors at the shareholders’ meeting in accordance with the provisions of the articles of association or the resolutions of the shareholders’ meeting. Under the accumulative voting system, each share shall have the same number of voting rights as the number of directors or supervisors to be elected at the shareholders’ meeting, and shareholders may consolidate their voting rights when casting a vote. Under the Company Law and the Guidelines for Articles of Association, the passing of any resolution requires affirmative votes of shareholders representing more than half of the voting rights represented by the shareholders who attend the shareholders’ meeting. Matters relating to merger, division or dissolution of a company, increase or reduction of registered capital, change of corporate form or amendments to the articles of association must be approved by more than two-thirds of the voting rights held by the shareholders present at the meeting. APPENDIX IV SUMMARY OF PRINCIPAL LAWS AND REGULATIONS – IV-11 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 367 of 431 -- Directors Under the Company Law, a joint stock limited company should have a board of directors, which consists of more than three members. The term of office of a director shall be stipulated in the articles of association, but each term of offices hall not exceed three years. Directors may serve consecutive terms if re-elected. Meetings of the board of directors shall be convened at least twice a year. All directors and supervisors shall be notified 10 days before the meeting for every meeting. The board of directors exercises the following functions and powers: (i) to convene shareholder’s general meetings and report its work to the shareholder’s general meetings; (ii) to implement the resolutions of the shareholder’s general meeting; (iii) to decide on a company’s business plans and investment plans; (iv) to formulate a company’s profit distribution plan and loss recovery plan; (v) to formulate proposals for the increase or reduction of a company’s registered capital and the issue of corporate bonds; (vi) to formulate plans for cake, division, dissolution or change of corporate form of a company; (vii) to decide on the internal management structure of a company; (viii) to decide on the appointment or dismissal of the manager of a company and their remuneration; to decide on the appointment or dismissal of the deputy manager and financial officer of a company based on the nomination of the manager and as well as remuneration; (ix) to formulate a company’s basic management system; (x) other functions and powers specified in the articles of association or granted by the shareholders’ meeting. The board meetings shall be held only if more than half of the directors are present. If a director is unable to attend a board meeting, he/she may appoint another director by a power of attorney specifying the scope of the authorization for another director to attend the meeting on his behalf. 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 suffers serious losses, the directors participating in the resolution shall be liable to compensate the company. However, if it can be proved that a director expressly objected to the resolution when the resolution was voted on, and that such objection was recorded in the minutes of the meeting, such director may be exempt from such liability. Under the Company Law, a person may not serve as a director of a company if he/she is: (i) a person without capacity or with restricted capacity; (ii) a person who has been sentenced to any criminal penalty due to an offense of corruption, bribery, encroachment of property, misappropriation of property, or disrupting the order of the socialist market economy, or has been deprived of political rights due to a crime, where a five-year period has not elapsed since the date of completion of the sentence; if he/she is pronounced for suspension of sentence, a two-year period has not elapsed since the expiration of the suspension period; (iii) a person who was a director, factory manager or manager of a company or enterprise which has entered into insolvent liquidation and who was personally liable for the insolvency of such company or enterprise, where less than three years have elapsed since the date of the completion of the insolvency and liquidation of such company or enterprise; (iv) a person who was legal representative of a company or enterprise which had its business license revoked due to violation of the law and had been closed down by order, and who were personally liable, where APPENDIX IV SUMMARY OF PRINCIPAL LAWS AND REGULATIONS – IV-12 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 368 of 431 -- less than three years have elapsed since the date of the revocation of the business license of the company or enterprise or the order for closure; and (v) being listed as one of “dishonest persons subject to enforcement” by the people’s court due to his/her failure to pay off a relatively large amount of due debts. The board of directors shall have one chairperson, who shall be elected by more than half of all the directors. The chairperson shall exercise the following functions and powers (including but not limited to): (i) to preside over shareholders’ meetings and convene and preside overboard meetings; and (ii) to examine the implementation of resolutions of the board of directors; (iii) to exercise other powers conferred by the board of directors. Supervisors Under the Company Law, a joint stock limited company may have a board of supervisors which shall comprise 3 members or more. The members of the board of supervisors shall include shareholders’ representatives and an appropriate proportion of employees’ representatives of the company, among which the proportion of the employees’ representatives shall not be lower than one third, and the concrete proportion shall be specified in the articles of association. The employees’ representatives who serve as members of the board of supervisors shall be democratically elected by employees through the employees’ representative congress, employees’ congress or by other means. No director or senior executive may concurrently hold the post of supervisor. The board of supervisors shall have one chairman and may have deputy chairmen. The chairman and deputy chairmen of the board of supervisors shall be elected by 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. If the chairman of the board of supervisors is unable or fails to perform his/her duties, the deputy chairman of the board of supervisors shall convene and preside over the meeting. If the deputy chairman is unable or fails to perform his/her duties, a supervisor jointly elected by more than half of the supervisors shall convene and preside over such meeting. The board of supervisors shall exercise the following functions and powers: (i) examining the financial affairs of the company; (ii) supervising the acts of the directors and senior executives in the performance of their duties, and proposing the removal of the directors and senior executives who have violated laws, administrative regulations, the articles of association or the resolutions of the Shareholders’ Meeting; (iii) requiring the directors and senior executives to correct their acts if such acts damage the interests of the company; (iv) proposing to convene an interim Shareholders’ Meeting, and convening and presiding over the Shareholders’ Meeting when the board of directors fails to implement the duties to convene and preside over the Shareholders’ Meeting as prescribed in the Company Law; (v) presenting proposals to the Shareholders’ Meeting; (vi) initiating lawsuits against the directors and senior executives according to Article 189 of the Company Law; and (vii) other functions and powers provided for in the articles of association. APPENDIX IV SUMMARY OF PRINCIPAL LAWS AND REGULATIONS – IV-13 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 369 of 431 -- A joint-stock company may, instead of setting up board of supervisors, in accordance with the provisions of its articles of association, set up an audit committee consisting of directors on its board of directors to exercise the powers and functions of the board of supervisors. On December 27, 2024, the CSRC promulgated the Transitional arrangements relating to the implementation of the rules under the new Company Law ( < > ), Listed companies shall, before January 1, 2026, in accordance with the provisions of the Company Law, the Provisions of the State Council on Implementation of the Registered Capital Management System under the Company Law of the PRC and the supporting rules of the CSRC, provide in the articles of association for the establishment of an audit committee in the board of directors, exercising the powers and functions of the supervisory board as stipulated in the Company Law, the listed companies will then have no supervisory board or supervisors. Before a listed company adjusts the establishment of the company’s internal supervisory body, the supervisory board or supervisors shall continue to comply with the provisions in the original rules of the CSRC. Managers and Senior Management According to the Company Law, a company should have a manager who is appointed or removed by the board of directors. The manager is responsible to the board of directors and exercise his/her functions and powers according to the articles of association or the authorization of the board of directors. The manager attends the meetings of the board of directors as a non-voting member. According to the Company Law, senior management shall refer to the manager, deputy manager(s), financial controller, secretary of the board of directors and other personnel as stipulated in the articles of association of the company. Duties of Directors, Supervisors and Senior Management Directors, supervisors and senior management of the company are required under the Company Law to comply with the relevant laws, regulations and the articles of association, and have fiduciary and diligent duties to the company. Directors, supervisors and senior management are prohibited from abusing their powers to accept bribes or other unlawful income and from misappropriating the company’s properties. Directors, supervisors and senior management are prohibited from: (i) embezzling the company’s property or misappropriating of the company’s capital; (ii) depositing the company’s capital into accounts under his/her own name or the name of other individuals; (iii) giving bribes or accepting any other illegal proceeds by taking advantage of their power; (iv) accept and possess commissions paid by a third party for transactions conducted with the company; (v) unauthorized divulgence of confidential business information of the company; or (vi) other acts in violation of their fiduciary duty to the company. APPENDIX IV SUMMARY OF PRINCIPAL LAWS AND REGULATIONS – IV-14 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 370 of 431 -- If any director, supervisor or senior management directly or indirectly concludes a contract or conducts a transaction with the company, he/she should report the matters relating to the conclusion of the contract or transaction to the board of directors or the shareholders’ meeting, subject to the approval of the board of directors or the shareholders’ meeting according to the articles of association. The provisions of the preceding paragraph shall apply if any near relatives of the directors, supervisors or senior management, or any of the enterprises directly or indirectly controlled by the directors, supervisors or senior management or any of their near relatives, or any related parties with any other related-party relationship with the directors, supervisors or senior management, concludes a contract or conducts a transaction with the company. Neither director, supervisor or senior management may take advantage of his/her position to seek any business opportunity that belongs to the company for himself/herself or any other person except under any of the following circumstances: (i) where he/she has reported to the board of directors or the shareholders’ meeting and has been approved by a resolution of the board of directors or the shareholders’ meeting according to the articles of association; or (ii) where the company cannot make use of the business opportunity as stipulated by laws, administrative regulations or the articles of association. Where any director, supervisor or senior management fails to report to the board of directors or the shareholders’ meeting and obtain an approval by resolution of the board of directors or the shareholders’ meeting according to the articles of association, he/she may not engage in any business that is similar to that of the company where he/she holds office for himself/herself or for any other person. A director, supervisor or senior management who contravenes any law, regulation or the company’s articles of association in the performance of his/her duties resulting in any loss to the company shall be personally liable for the damages to the company. Finance and Accounting Under the Company Law, a company shall establish its financial and accounting systems according to laws, administrative regulations and the regulations of the financial department of the State Council. At the end of each fiscal year, the company shall prepare financial and accounting reports which shall be audited by an accounting firm in accordance with the law. The financial and accounting reports shall be prepared in accordance with the laws, administrative regulations and the regulations of the financial department of the State Council. A joint stock limited company shall make its financial and accounting reports available at the company for inspection by the shareholders 20 days before the convening of an annual meeting of shareholders. A joint stock limited company issuing its shares in public must publish its financial and accounting reports. APPENDIX IV SUMMARY OF PRINCIPAL LAWS AND REGULATIONS – IV-15 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 371 of 431 -- A joint stock limited company may distribute profits in proportion to the number of shares held by its shareholders, except for profit distributions that are not in proportion to the number of shares held in accordance with the provisions of the articles of association of the joint stock limited company. The premium over the nominal value of the shares of a joint stock limited company from the issue of shares, the amount of share proceeds from the issuance of no-par shares that have not been credited to the registered capital and other incomes required by the financial department of the State Council to be treated as the capital reserve fund shall be accounted for as the capital reserve fund of the company. The reserve fund of the company shall be used to make up losses of the company, expand the production and operation of the company or increase the capital of the company. Where the reserve fund of a company is used for making up losses, the discretionary reserve and statutory reserve shall be firstly used. If losses still cannot be made up, the capital reserve can be used according to the relevant provisions. When the statutory reserve fund is converted to increase registered capital, the balance of the statutory reserve shall not be less than 25% of the registered capital before such conversion. The company shall not keep accounts other than those provided by law. Appointment and Dismissal of Accounting Firms Pursuant to the Company Law, the engagement or dismissal of an accounting firm responsible for the company’s auditing shall be determined by a shareholders’ meeting, the board of directors or the board of supervisors in accordance with the articles of association. The accounting firm should be allowed to make representations when the shareholders’ meeting, the board of directors or the board of supervisors conduct a vote on the dismissal of the accounting firm. The company should provide true and complete accounting evidence, accounting books, financial and accounting reports and other accounting information to the engaged accounting firm without any refusal or withholding or falsification of information. The Guidelines for Articles of Association provides that the company guarantees to provide true and complete accounting vouchers, accounting books, financial accounting reports and other accounting materials to the employed accounting firm, and shall not refuse, conceal or falsely report. And the audit fee of the accounting firm shall be decided by the shareholders’ meeting. Profit Distribution When distributing each year’s after-tax profits, the company shall set aside 10% of its profits into its statutory reserve fund. The company can no longer withdraw statutory reserve fund if it has accumulated to more than 50% of the registered capital. If the statutory reserve fund of the company is insufficient to make up for the losses of the previous years, the current year profits shall be used to make up for the losses before making allocations to the statutory APPENDIX IV SUMMARY OF PRINCIPAL LAWS AND REGULATIONS – IV-16 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 372 of 431 -- reserve in accordance with the preceding paragraph. After the company has made an allocation to the statutory reserve fund from its after-tax profit, it may also make an allocation to the discretionary reserve fund from its after-tax profit upon a resolution of the shareholders’ meeting. The residual after-tax profits after a company has made up its losses and accrued reserve shall be distributed by the company (in the case of a joint stock limited company) in proportion to the shares held by its shareholders, except as otherwise provided for in the company’s articles of association. Profit shall not be distributed for a company’s shares held by this company. Where a company distributes profits to shareholders in violation of the provisions of the Company Law, the shareholders shall refund the profits distributed to the company, and the shareholders and directors, supervisors, and senior management who are responsible for causing losses to the company shall bear compensation liability. Dissolution and Liquidation According to the Company Law, a company shall be dissolved for the following reasons: (i) the term of business stipulated in the articles of association has expired or other events of dissolution specified in the articles of association have occurred; (ii) the shareholders’ meeting resolves to dissolve the company; (iii) dissolution is necessary due to a merger or division of the company; (iv) the business license is revoked, or the company is ordered to close down or is revoked in accordance with laws; (v) where the company encounters serious difficulties in its operation and management and its continuance shall cause a significant loss in the interest of shareholders, and where this cannot be resolved through other means, shareholders who hold more than 10% of the total shareholders’ voting rights of the company may present a petition to a people’s court for the dissolution of the company. If any of the situations as mentioned in the preceding paragraph arises, a company shall publicize the situations through the National Enterprise Credit Information Publicity System within ten days. Where the company is dissolved in accordance with item (i) above, it may carry on its existence by amending its articles of association or upon a resolution of the shareholders’ meeting, which must be approved by more than two-thirds of the voting rights held by the shareholders present at the shareholders’ meeting. Where the company is dissolved pursuant to items (i), (ii), (iv) or (v) above, it shall be liquidated. The directors, who are the liquidation obligors of the company, shall form a liquidation group to carry out liquidation within 15 days from the date of occurrence of the cause of dissolution. The liquidation group shall be composed of the directors, unless it is otherwise provided for in the company’s articles of association or it is otherwise elected by the shareholders’ meeting. The liquidation obligors shall be liable for compensation if they fail to fulfill their obligations of liquidation in a timely manner, and thus any loss is caused to the company or the creditors. APPENDIX IV SUMMARY OF PRINCIPAL LAWS AND REGULATIONS – IV-17 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 373 of 431 -- The liquidation group fails to be formed within the time limit or fails to carry out the liquidation after its formation, any interested party may request the people’s court to designate relevant persons to form a liquidation group to conduct liquidation. The people’s court shall accept such request and organize a liquidation group to carry out the liquidation in a timely manner. The liquidation group shall exercise the following functions and powers during the liquidation period: (i) to liquidate the company’s property and respectively prepare balance sheet and list of property; (ii) to notify creditors by notice or public announcement; (iii) to deal with the outstanding business of the company involved in the liquidation; (iv) to pay all outstanding taxes and taxes arising in the course of liquidation; (v) to liquidate claims and debts; (vi) to distribute the remaining property of the company after paying off debts; (vii) to participate in civil litigations on behalf of the company. The liquidation group shall notify the company’s creditors within ten days as of its formation and shall make a public announcement in the newspaper or on the National Enterprise Credit Information Publicity System within 60 days. The creditors shall file their proofs of claim with the liquidation group within 30 days as of the receipt of the notice or within 45 days as of the issuance of the public announcement in the case of failing to receive such notice. The remaining property of the company after the payment of liquidation expenses, employees’ wages, social insurance expenses and statutory compensation, outstanding taxes and the company’s debts, shall be distributed to shareholders in proportion to their shareholdings. During the liquidation period, the company shall continue to exist but shall not carry out any business activities unrelated to the liquidation. The company’s assets shall not be distributed to the shareholders before the liquidation in accordance with the preceding paragraph. If the liquidation group, having thoroughly examined the company’s assets and having prepared a balance sheet and an inventory of assets, discovers that the company’s assets are insufficient to pay its debts in full, it shall file an application to a people’s court for bankruptcy liquidation. After the people’s court accepts the application for bankruptcy, the liquidation group shall hand over the liquidation matters to the bankruptcy administrator designated by the people’s court. Upon completion of the liquidation, the liquidation group shall prepare a liquidation report to be submitted to the shareholders’ meeting or the people’s court for confirmation, and submit to the company registration authority to apply for cancellation of the company’s registration. APPENDIX IV SUMMARY OF PRINCIPAL LAWS AND REGULATIONS – IV-18 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 374 of 431 -- The members of the liquidation group performing their duties of liquidation are obliged to loyalty and diligence. Any member of the liquidation group who neglects to fulfill his/her liquidation duties, thus causing any loss to the company shall be liable for compensation, and any member of the liquidation group who cause any loss to any creditor due to his/her intentional or gross negligence shall be liable for compensation. Where, after three years since the business license of a company is revoked, or the company is ordered to close down or is revoked, the company fails to apply for its deregistration with the company registration authority, the said authority may announce the company’s deregistration through the National Enterprise Credit Information Publicity System for a period of no less than 60 days. If there is no objection after the announcement period expires, the company registration authority may deregister the company. Overseas Listing According to the Overseas Listing Trial Measures, where an issuer makes an overseas initial public offering or listing, it shall file with the CSRC within 3 working days after submitting the application documents for overseas issuance and listing. If an issuer issues securities in the same overseas market after overseas issuance and listing, it shall file with the CSRC within 3 working days after the completion of the issuance. If an issuer issues and lists in other overseas markets after overseas issuance and listing, it shall be filed in accordance with the provisions of the first paragraph of Article 16 of the Overseas Listing Trial Measures. Suspension and Termination of Listing The Company Law has deleted provisions governing suspension and termination of listing. The Securities Law has also deleted provisions regarding suspension of listing. Where listed securities fall under the delisting circumstances stipulated by the stock exchange, the stock exchange shall terminate its listing and trading in accordance with the business rules. According to the Overseas Listing Trial Measures, in case of active or compulsory termination of listing, the issuer shall report the specific situation to the CSRC within 3 working days from the date of occurrence and announcement of the relevant matters. SECURITIES LAW AND REGULATIONS In October 1992, the State Council established the Securities Committee and the CSRC. The Securities Committee is responsible for coordinating the drafting of securities regulations, formulating securities-related policies, planning the development of securities markets, directing, coordinating and supervising all securities-related institutions in the Chinese mainland and administering the CSRC. The CSRC is the regulatory arm of the Securities Committee and is responsible for the drafting of regulatory provisions of securities markets, supervising securities companies, regulating public offers of securities by companies in APPENDIX IV SUMMARY OF PRINCIPAL LAWS AND REGULATIONS – IV-19 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 375 of 431 -- Chinese mainland or overseas, regulating the trading of securities, compiling securities-related statistics and undertaking research and analysis. On March 29, 1998, the State Council consolidated the above two departments and reformed the CSRC. The Provisional Regulations Concerning the Issue and Trading of Shares ( ), promulgated by the State Council on April 22, 1993 and came into effect on the same day, provide the application and approval procedures for public offerings of shares, trading in shares, the acquisition of listed companies, the deposit, settlement and transfer of listed shares, the disclosure of information with respect to a listed company, investigation and penalties and dispute arbitration. The Regulations of the State Council Concerning the Domestic Listed Foreign Shares of Joint Stock Limited Companies ( ), promulgated by the State Council on December 25, 1995 and came into effect on the same day, mainly provide for the issue, subscription, trading and payment of dividends of domestic listed foreign shares and disclosure of information of joint stock limited companies with domestic listed foreign shares. The Securities Law, which was lastly amended by the SCNPC on December 28, 2019 and came into effect on March 1, 2020, provides a series of provisions regulating, among other things, the issue and trading of securities, takeovers by listed companies, securities exchanges, securities companies and the duties and responsibilities of the State Council’s securities regulatory authorities in the Chinese mainland, and comprehensively regulates activities in the securities market of Chinese mainland. The Securities Law provides that a domestic enterprise must comply with the relevant provisions of the State Council in issuing securities directly or indirectly outside the Chinese mainland or listing and trading its securities outside the Chinese Mainland. Currently, the issue and trading of foreign issued shares are mainly governed by the rules and regulations promulgated by the State Council and the CSRC. ARBITRATION AND ENFORCEMENT OF ARBITRAL AWARDS Under the Arbitration Law of the PRC ( ), or the “Arbitration Law”, last amended by the SCNPC on September 1, 2017 and effective on January 1, 2018, the Arbitration Law is applicable to economic disputes involving foreign parties, and all parties have entered into a written agreement to refer the matter to an arbitration committee constituted in accordance with the Arbitration Law. An arbitration committee may, before the promulgation by the PRC Arbitration Association of arbitration regulations, formulate interim arbitration rules in accordance with relevant regulations under the Arbitration Law and the Civil Procedure Law. Where both parties have agreed to settle disputes by means of arbitration, the people’s court will refuse to take legal action brought by a party in the people’s court. Under the Arbitration Law, an arbitral award is final and binding on the parties. If a party fails to comply with an award, the other party to the award may apply to the people’s court for enforcement according to the Civil Procedure Law. If there is evidence to prove that any of the following circumstances exists: the parties have not stipulated an arbitration clause in the APPENDIX IV SUMMARY OF PRINCIPAL LAWS AND REGULATIONS – IV-20 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 376 of 431 -- contract or have not reached a written arbitration agreement afterwards; the respondent has not been notified of the appointment of the Court of Arbitration or the arbitration proceedings or failed to present views for other reasons for which the respondent is not responsible; the composition of the arbitral tribunal or the arbitration procedures are not in accordance with the arbitration rules; the matters awarded are outside the scope of the arbitration agreement, or the arbitration committee has no jurisdiction to arbitrate, the people’s court may rule not to enforce such award. A party seeking to enforce an arbitral award of foreign arbitration commission against a party who or whose property is not within the Chinese mainland shall apply to a foreign court with jurisdiction over the case for recognition and enforcement. Similarly, an arbitral award made by a foreign arbitration body may be recognized and enforced by the people’s court in accordance with the principles of reciprocity or any international treaty concluded or acceded to by the PRC. According to the Arrangement of the Supreme People’s Court on Mutual Enforcement of Arbitral Awards between the Mainland and the Hong Kong Special Administrative Region ( ) promulgated by the Supreme People’s Court on January 24, 2000 and effective on February 1, 2000, and the Supplementary Arrangement of the Supreme People’s Court on Mutual Enforcement of Arbitral Awards between the Mainland and the Hong Kong Special Administrative Region ( ) promulgated by the Supreme People’s Court on November 26, 2020 and effective on November 27, 2020, awards made by arbitral authorities in Chinese mainland can be applied for enforcement in Hong Kong, and Hong Kong arbitration awards can also be applied for enforcement in the Chinese mainland. JUDICIAL JUDGMENT AND ITS ENFORCEMENT According to the Arrangement on Mutual Recognition and Enforcement of Judgments in Civil and Commercial Matters by Courts of Chinese Mainland and of the Hong Kong Special Administrative Region ( ) promulgated by the Supreme People’s Court on January 25, 2024 and implemented on January 29, 2024, except for judgments in civil and commercial cases that are not applicable under Article 3 of this Arrangement, judgments that can be recognized and enforced in both places are those made by mainland and Hong Kong Special Administrative Region courts on or after January 29, 2024. The mutually recognized and enforced judgments include monetary judgments and non-monetary judgments. Upon implementation of this Arrangement, the Arrangement on Mutual Recognition and Enforcement of Judgments in Civil and Commercial Matters by Courts of Chinese Mainland and of the Hong Kong Special Administrative Region Pursuant to Agreed Jurisdiction by Parties Concerned ( ) which was adopted by the Judicial Committee of the Supreme People’s Court on June 12, 2006 and took effect on August 1, 2008 has been repealed. APPENDIX IV SUMMARY OF PRINCIPAL LAWS AND REGULATIONS – IV-21 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 377 of 431 -- This Appendix is primarily intended to provide potential [REDACTED] with an overview of the Articles of Association, the following information is a summary and therefore may not contain all the information that is material to potential [REDACTED]. ISSUANCE OF SHARES The shares of the Company shall be issued in a fair and equal manner. Each share of the same class shall rank pari passu with each other. Shares of a class in each issuance shall be issued under the same terms and at the same price. [REDACTED] shall pay the same price for each share [REDACTED] for. INCREASE, DECREASE AND REPURCHASE OF SHARES According to the operation and development needs of the Company, subject to the laws and regulations, the Company may increase the share capital in the following ways upon approval of resolutions at the shareholders’ meeting: (i) Issuance of shares to unspecified parties; (ii) Issuance of shares to specified parties; (iii) Distribution of bonus shares to existing shareholders; (iv) Converting the reserve funds into share capital; (v) Other methods as provided for by laws and administrative regulations and approved by the CSRC and other securities regulatory authorities and the stock exchanges in the places where the shares of the Company are listed. The Company may decrease the registered share capital. When the Company reduces its registered capital, it shall comply with the procedures stipulated in the Company Law of the PRC ( ) and other regulations, the Articles of Association. The Company may repurchase its own shares in accordance with laws, administrative regulations, departmental rules, and the provisions of this Articles of Association under the circumstances: (i) Reducing the Company’s registered share capital; (ii) Merging with other companies which hold our shares; (iii) Using the shares for an employee stock ownership plan or equity incentive plan; (iv) Purchasing its shares from shareholders who have voted against the resolutions on the merger or division of the Company at a shareholders’ meeting upon their request; APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION – V-1 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 378 of 431 -- (v) Use of shares for conversion of convertible corporate bonds issued by the Company; (vi) Necessary for the Company to maintain its value and protect the interests of the Shareholders. The repurchase of the Company’s shares by the Company may be carried out through public centralized trading on stock exchanges, or other methods recognized under laws, regulations, the CSRC and the stock exchanges at the places where the Company’s shares are listed. A resolution shall be passed at the shareholders’ meeting when the Company is to repurchase its own shares under the circumstances (i) and (ii) set out above. In case of the circumstances stipulated in (iii), (v) and (vi) above, subject to compliance with the applicable securities regulatory rules of the places where the Company’s shares are listed, a resolution of the Company’s Board shall be passed by two-thirds or more of the Directors attending the Board meeting in accordance with the provisions of the Articles of Association or the authorization of the shareholders’ meeting. After the Company has repurchased its own shares in accordance with the circumstances above, the shares repurchased shall be canceled within ten days from the date of purchase (under the circumstance set out in (i) above), or shall be transferred or canceled within six months (under the circumstances set out in (ii) and (iv) above). If the Company repurchases its shares under the circumstances set out in (iii), (v) and (vi) above, the total number of shares held by the Company shall not exceed 10% of the total issued shares of the Company, and such shares shall be transferred or canceled within three years. When the Company repurchases its own shares, it shall perform the obligation of information disclosure in accordance with the Securities Law and the regulatory rules of securities of the places where the Company’s shares are listed. TRANSFER OF SHARES Shares issued prior to the [REDACTED] of shares of the Company shall not be transferred within one year from the date on which the shares of the Company are [REDACTED] and [REDACTED] on the stock exchange. Where laws, administrative regulations, or the securities regulatory authority of the State Council provide otherwise for the transfer of shares of the company held by the company’s shareholders or actual controllers, such provisions shall prevail. Any gains from sale of Company’s shares by the Directors, senior management members or shareholders holding 5% or more of the Company’s shares (excluding shareholders who are the recognized clearing houses and their agents) within six months after their purchase of the same, and any gains from the purchase of the shares by any of the aforesaid parties within six months after sale of the same shall be disgorged and paid to the Company, and the Board of Directors of the Company shall recover such gains from the abovementioned parties. However, APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION – V-2 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 379 of 431 -- there is an exception for securities companies that hold more than 5% of the shares due to the purchase of surplus shares after the package sale, and other circumstances stipulated by the CSRC. If the securities regulatory rules of the places where the Company’s shares are listed impose additional restrictions on the transfer restrictions of the Company’s shares, such provisions shall prevail. Shares or other securities with the nature of equity held by Directors, senior management and individual shareholders as mentioned in the preceding paragraph include shares or other securities with the nature of equity held by their spouses, parents or children, or held by them by using other people’s accounts. If the Board of Directors fails to implement the provisions set forth above, the responsible Directors shall bear joint and several liability in accordance with law. FINANCIAL ASSISTANCE FOR THE ACQUISITION OF SHARES IN OUR COMPANY The Company or its subsidiaries (including affiliates of enterprises) shall not offer gift, advance, guarantee, loan etc. for others to acquire the shares of the Company or its parent company except for those implemented by employee stock ownership plans by the Company. For the benefit of the Company, upon the resolution of the shareholders’ meeting or the resolution adopted by the Board of Directors as authorized by the Articles of Association of the Company or by the shareholders’ meeting, the Company may provide financial assistance for other persons to acquire shares in the Company or its parent company, provided that the aggregate amount of such financial assistance shall not exceed ten percent of the total issued share capital of the Company. The resolution of the Board of Directors shall be passed by two-thirds or more of all the Directors. SHAREHOLDERS AND SHAREHOLDERS’ MEETING Shareholders The Company shall establish a register of shareholders in accordance with evidentiary documents provided by the securities registration authorities. The register of shareholders is sufficient evidence to prove that the shareholders hold the Company’s Shares. The original register of shareholders of H shares is kept in Hong Kong and is available for inspection by shareholders, but the Company may suspend the registration of shareholders in accordance with applicable laws and regulations and the securities regulatory rules of the places where the Company’s shares are listed. Shareholders shall enjoy rights and assume obligations according to the class of shares they hold. Shareholders holding shares of the same class shall enjoy the same rights and assume the same obligations. APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION – V-3 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 380 of 431 -- The rights of our shareholders are as follows: (i) To receive dividends and other forms of interest distribution according to the number of shares held; (ii) To legally require, convene, preside over, participate in or authorize proxies of shareholders to attend the shareholders’ meeting and exercise corresponding speeching rights and voting rights; (iii) To supervise operations of the Company, provide suggestions or submit queries; (iv) To transfer, grant or pledge the Company’s shares held according to the provisions of the laws, administrative regulations and the Articles of Association; (v) To read and copy the Articles of Association, the register of shareholders, shareholders’ meeting minutes, resolutions of meeting of the Board of Directors and accounting reports. The shareholders who comply with the regulations may also consult the Company’s accounting books and accounting vouchers; (vi) To participate in the distribution of the remaining assets of our Company according to the proportion of shares held upon our termination or liquidation; (vii) To require our Company to acquire the shares from shareholders voting against any resolutions adopted at the shareholders’ meeting concerning the merger and division of the Company; (viii) Other rights conferred by laws, administrative regulations, regulations of the authorities, regulatory rules where the Company’s shares are listed, or the Articles of Association. Shareholders of the Company who inspect or replicate the relevant materials shall also comply with the provisions of the Company Law of the PRC ( ), the Securities Law and other laws and administrative regulations, and rules of the places where the Company’s shares are listed. If a shareholder who individually or jointly holds 3% or more of the Company’s shares for more than 180 consecutive days requests to inspect and replicate the Company’s accounting books or accounting vouchers, the provisions of the second, third and fourth paragraphs of Article 57 of Company Law of the PRC ( ) shall apply. The provisions of the above articles shall apply to shareholders who request to inspect or replicate the relevant materials of a wholly-owned subsidiary of the Company. APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION – V-4 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 381 of 431 -- If the content of the resolution of the Company’s shareholders’ meeting or Board of Directors violates laws, administrative regulations, or regulatory rules of securities of the places where the Company’s shares are listed, the shareholders have the right to request the court to declare it invalid. If the convening procedures or voting methods of the shareholders’ meeting or the Board of Directors violate laws, administrative regulations, regulatory rules of securities of the places where the Company’s shares are listed or the Articles of Association, or the content of the resolution violates the Articles of Association, the shareholders have the right to request the court to revoke the resolution within 60 days from the date on which the resolution is made, except where there are only some minor defects in the convening procedures or the voting method of the shareholders’ meeting or the Board of Directors, which do not materially affect the resolution. In the event of any loss caused to the Company as a result of violation of any laws, administrative regulations, regulatory rules of securities of the places where the Company’s shares are listed or Articles of Association by the Directors or senior management who are not members of the Audit Committee when performing their duties in the Company, the shareholders holding more than 1% shares separately or jointly for over 180 consecutive days may submit a written request to the Audit Committee to file an action with the court. Where members of the Audit Committee violate laws, administrative regulations, regulatory rules of securities of the places where the Company’s shares are listed or the Articles of Association in their duty performance and cause loss to the Company, the shareholders holding 1% or more shares separately or jointly for 180 or more consecutive days may submit a written request to the Board of Directors to file an action with the court. In the event that the Audit Committee or the Board of Directors refuse to file an action upon receipt of the shareholders’ written request specified in the preceding paragraph, or fail to file an action within 30 days upon receipt thereof, or in the event that the failure to immediately file an action in an emergency case will cause irreparable damage to the interests of the Company, the shareholder(s) specified in the preceding paragraph may, in their own name, directly file an action to the court for the interest of the Company. In the event of any other person infringes upon the legitimate rights and interests of the Company and causes losses thereto, the shareholder(s) specified in this Articles of Association may file an action with the court pursuant to the provisions of the preceding paragraphs. The obligations of shareholders are as follows: (i) To abide by laws, administrative regulations and the Articles of Association; (ii) To provide Share capital according to the Shares subscribed and the subscription methods; (iii) Not to withdraw Shares unless prescribed otherwise in laws and administrative regulations; APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION – V-5 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 382 of 431 -- (iv) Not to abuse shareholders’ rights to infringe upon the interests of the Company or other Shareholders; not to abuse the Company’s status as an independent legal entity or the limited liability of Shareholders to damage the interests of the Company’s creditors; Shareholders of a company who abuse their shareholders’ rights and cause the company or other shareholders to suffer damages shall bear compensation liability in accordance with the law. Shareholders of a company who abuse the independent legal person status of the company and limited liability of shareholders to evade debts and cause damage to the interests of the creditors of the company shall bear joint liability for the company’s debt. (v) To perform other duties prescribed in laws, administrative regulations, the listing rules of the places where the Company’s shares are listed and the Articles of Association. Where 5% or more of the shares in the Company held by the Company’s controlling shareholders or actual controllers are pledged, frozen, judicially marked, judicially auctioned, entrusted, placed in trust, or subject to lawful restrictions on voting rights, or where there is a risk of compulsory transfer of ownership, such controlling shareholders or actual controllers shall promptly inform the Company and cooperate with the Company in fulfilling its information disclosure obligations. The controlling shareholders and actual controllers of the Company shall comply with the following provisions: (i) Exercise their shareholder rights in accordance with the law, and shall not abuse their controlling power or utilize connected relationships to damage the legitimate rights and interests of the Company or other shareholders; (ii) Strictly perform their public statements and various commitments, and shall not arbitrarily modify or grant exemptions therefrom; (iii) Strictly fulfill their information disclosure obligations in accordance with relevant provisions, actively cooperate with the Company in information disclosure work, and promptly inform the Company of major events that have occurred or are proposed to occur; (iv) Shall not occupy the Company’s funds in any manner; (v) Shall not coerce, instigate, or require the Company and relevant personnel to provide guarantees in violation of laws or regulations; APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION – V-6 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 383 of 431 -- (vi) Shall not use the Company’s undisclosed major information to seek benefits, shall not disclose undisclosed major information related to the Company in any manner, and shall not engage in illegal or irregular acts such as insider trading, short-term trading, or market manipulation; (vii) Shall not damage the legitimate rights and interests of the Company and other shareholders through any means such as unfair connected transactions, profit distribution, asset restructuring, or external investments; (viii) Ensure the Company’s asset integrity, personnel independence, financial independence, organizational independence, and business independence, and shall not affect the Company’s independence in any manner; (ix) Comply with other provisions of laws, administrative regulations, regulatory rules of securities of the places where the Company’s shares are listed, and the Articles of Association. The controlling shareholders and actual controllers of the Company shall exercise their rights and perform their obligations in accordance with laws, administrative regulations, the provisions of the CSRC and the securities regulatory rules of the places where the Company’s shares are listed, and safeguard the interests of the Company. Where the controlling shareholders or actual controllers of the Company does not serve as a Director of the Company but actually executes the Company’s affairs, the provisions of the Articles of Association regarding the duty of loyalty and diligence of Directors shall apply. Where the controlling shareholders or actual controllers of the Company instructs Directors or senior management personnel to engage in acts that harm the interests of the Company or shareholders, they shall bear joint and several liability with such Directors or senior management personnel. General Provisions for Shareholders’ Meeting The shareholders’ meeting is the organ of authority of the Company, which exercises its powers in accordance with the law: (i) To elect and replace the Directors, and to decide on matters relating to the remuneration of Directors; (ii) To review and approve reports of the Board of Directors; (iii) To review and approve the Company’s proposals for profit distribution plans and loss recovery plans; (iv) To decide on any increase or decrease of the Company’s registered capital; APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION – V-7 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 384 of 431 -- (v) To decide on the issue of corporate bonds by the Company; (vi) To decide on matters such as merger, division, dissolution and liquidation or change of corporate form of the Company; (vii) To amend the Articles of Association; (viii) To appoint or remove the accounting firm undertaking the Company’s auditing business by the Company; (ix) To review and approve the guarantees stipulated in the Articles of Association; (x) To review matters relating to the purchases and sales of the Company’s material assets within one year, which exceed 30% of the Company’s latest audited total assets; (xi) To review and approve matters relating to changes in the use of proceeds; (xii) To review and approve the equity incentive plans and employee stock ownership plans; (xiii) Review and approve the major transactions (excluding guarantees and financial assistance) which meet the following standards: 1. The total assets involved in the transaction account with the amount more than 50% of the Company’s most recent audited total assets. Where the total assets involved in the transaction have both book value and valuation value, it shall be calculated on the basis of whichever is higher; 2. The related operating income of the subject matter of transaction (such as equity) in the most recent fiscal year accounts with the amount more than 50% of the Company’s audited operating income in the most recent fiscal year and the absolute amount is more than RMB50 million; 3. The related net profit of the subject matter of transaction (such as equity) in the most recent fiscal year accounts with the amount more than 50% of the Company’s audited net profit in the most recent fiscal year and the absolute amount is more than RMB5 million; 4. The transaction amount (including commitment debts and expenses) accounts for more than 50% of audited net assets of the Company of the latest period with the absolute amount of more than RMB50 million; APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION – V-8 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 385 of 431 -- 5. The profit generated by the transaction accounts for more than 50% of the audited net profit of the Company in the most recent fiscal year with the absolute amount of more than RMB5 million. If the data involved in the above index calculation is negative, the absolute value of the data shall be taken. (xxiii) To review all transactions where the Company’s percentage ratios calculated in accordance with Rule 14.07 of the Hong Kong Listing Rules relating to percentage ratios are not less than 25% (including one-off transactions and a series of transactions which require combined percentage ratio calculation) and connected transactions where the percentage ratios are not less than 5% (including one-off transactions and a series of transactions which require combined percentage ratio calculation); (xxiv) To review other matters as required by the laws, administrative regulations, departmental rules, the securities regulatory rules of the places where the Company’s shares are listed or the Articles of Association of the Company, which shall be decided by the shareholders’ meeting. The shareholders’ meeting may authorize the board of Directors to make resolutions on issuance of bonds by the Company. Except as otherwise provided by laws, administrative regulations, departmental rules or the securities regulatory rules of the places where the Company’s shares are listed, the aforesaid powers of the shareholders’ meeting shall not be exercised by the board of Directors or any other institution or individual on its behalf upon authorization. The following connected transaction of the Company shall be submitted to the shareholders’ meeting for review and approval: (i) The transactions (except the Company providing guarantee) that are entered into between the Company and a connected person with a transaction amount of more than RMB30,000,000, representing more than 5% of the absolute value of the latest audited net assets of the Company; In addition to timely disclosure, the company shall engage an intermediary institution qualified to engage in securities and futures-related businesses to evaluate or audit the subject matter of the transaction, and submit the transaction to the shareholders’ meeting for consideration; (ii) The guarantee to be provided to a connected person thereof, after approval by the Board of Directors, shall be submitted to the shareholders’ meeting for review and approval, regardless of the amount. APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION – V-9 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 386 of 431 -- Where any connected transaction referred to in the preceding paragraph of this Article falls under any of the following circumstances, no audit or valuation is required: (i) Routine connected transactions as provided in Article 7.2.15 of the Shenzhen Stock Exchange ChiNext Stock Listing Rules; (ii) The Company and the connected persons, together with the other participants, all make cash capital contributions, and the ownership interests in the investee entity are allocated strictly pro rata to their respective capital contributions; (iii) Other circumstances as prescribed by the securities regulatory authority and the stock exchange of the place where the Company’s shares are listed. The following acts of guarantee of the Company shall be submitted to the shareholders’ meeting for review and approval: (i) The single guarantee for an amount more than 10% of the Company’s net assets audited in the latest period; (ii) Any guarantee to be provided after the total amount of external guarantees provided by the Company and the subsidiaries it controls has exceeded 50% of the Company’s net assets as audited in the latest period; (iii) Any guarantee to be provided for a party whose ratio of liabilities to assets exceeds 70%; (iv) The cumulative and total amount of guarantees within twelve consecutive months provided by the Company has exceeded 50% of the Company’s net assets audited in the latest period and the absolute amount is more than RMB50 million; (v) The cumulative and total amount of guarantees within twelve consecutive months provided by the Company has exceeded 30% of the Company’s total assets audited in the latest period; (vi) Any guarantee to be provided after the total amount of external guarantees provided by the Company and the subsidiaries it controls has exceeded 30% of the Company’s total assets audited in the latest period; (vii) The guarantee to be provided to a connected person thereof, after approval by the Board of Directors, shall be submitted to the shareholders’ meeting for review and approval, regardless of the amount; (viii) Other guarantees required by the laws, administrative regulations, departmental rules, the securities regulatory rules of the places where the Company’s shares are listed or the guarantees to be decided by the shareholders’ meeting in accordance with the Articles of Association. APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION – V-10 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 387 of 431 -- For guarantee matters within the authority of the Board of Directors, they shall also be agreed upon by two-thirds or more of the Directors attending the board meeting. When the shareholders’ meeting of the Company deliberates on the guarantee as stipulated in item (vi) of the preceding paragraph, it shall be approved by two-thirds or more of the voting rights held by the shareholders present at the meeting. Where any of the following matters of the Company — external investments (including entrusted wealth management and investments in subsidiaries), purchase or sale of assets, lease-in or lease-out of assets, execution of management-related contracts (including entrusting operation or entrusted operation), gifting or receipt of assets, restructuring of debt or credit, transfer of research-and-development projects, execution of license agreements, and other similar matters (excluding the guarantee and the financial assistance) — reaches any standard set out below, the matter shall first be reviewed and approved by the Board of Directors and then submitted to the shareholders’ Meeting for consideration: (i) The total assets involved in the transaction account with the amount more than 50% of the Company’s most recent audited total assets. Where the total assets involved in the transaction have both book value and valuation value, it shall be calculated on the basis of whichever is higher; (ii) The related operating income of the subject matter of transaction (such as equity) in the most recent fiscal year accounts with the amount more than 50% of the Company’s audited operating income in the most recent fiscal year and the absolute amount is more than RMB50 million; (iii) The related net profit of the subject matter of transaction (such as equity) in the most recent fiscal year accounts with the amount more than 50% of the Company’s audited net profit in the most recent fiscal year and the absolute amount is more than RMB5 million; (iv) The transaction amount (including commitment debts and expenses) accounts for more than 50% of audited net assets of the Company of the latest period with the absolute amount of more than RMB50 million; (v) The profit generated by the transaction accounts for more than 50% of the audited net profit of the Company in the most recent fiscal year with the absolute amount of more than RMB5 million. If the data involved in the above index calculation is negative, the absolute value of the data shall be taken. The shareholders’ meeting is divided into annual shareholders’ meeting and extraordinary shareholders’ meeting. The annual shareholders’ meeting shall be convened once a year and be held within six months after the end of the previous fiscal year. APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION – V-11 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 388 of 431 -- The Company shall convene an extraordinary shareholders’ meeting within two months from the date of the occurrence of any of the following circumstances: (i) The number of Directors is less than the number provided for in the Company Law of the PRC ( ) or less than two-thirds of the number prescribed in the Articles of Association; (ii) The uncovered losses of our Company reach one-third of its total share capital; (iii) A written request from shareholders who separately or jointly hold 10% or more shares in the Company; (iv) The Board of Directors considers it necessary; (v) The Audit Committee proposes that such a meeting shall be held; (vi) Other circumstances conferred by the laws, administrative regulations, departmental rules, securities regulatory rules of the places where the Company’s shares are listed and the Articles of Association. Assembling of Shareholders’ Meeting The Board of Directors shall convene the shareholders’ meeting within the time limit specified in the Company’s Articles of Association. After obtaining the consent of a majority of all independent Directors, an independent Director has the right to propose to the Board of Directors to convene a special shareholders’ meeting. Upon receiving such a proposal, the Board of Directors shall, in accordance with the provisions of laws, administrative regulations, securities regulatory rules of the places where the Company’s shares are listed and the Articles of Association, provide a written response within 10 days of receipt, indicating whether it agrees or disagrees to convene a special shareholders’ meeting. If the Board of Directors agrees to convene a special shareholders’ meeting, it shall issue a notice of the shareholders’ meeting within 5 days after making the board resolution. If the Board of Directors disagrees to convene a special shareholders’ meeting, it shall state the reasons and make an announcement. Where the Board of Directors does not give consent to convening of an extraordinary shareholders’ meeting or does not issue feedback within 10 days from receipt of the proposal, the Board of Directors shall be deemed as unable to perform or failed to perform the duties of convening of shareholders’ meeting, and the audit committee may convene and chair a shareholders’ meeting on its own. Where the audit committee does not issue a notice of shareholders’ meeting within the stipulated period, the audit committee shall be deemed not to convene and chair a shareholders’ meeting, and a shareholder who individually or jointly holds 10% or more of the Company’s shares (including preferred shares with resumed voting rights etc.) for 90 or more consecutive days may convene and chair a shareholders’ meeting on his/her own. APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION – V-12 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 389 of 431 -- If Audit Committee proposes to the Board of Directors to convene a special shareholders’ meeting, it shall submit such proposal in writing to the Board of Directors. The Board of Directors shall, in accordance with the provisions of laws, administrative regulations, securities regulatory rules of the places where the Company’s shares are listed and the Articles of Association, provide a written response within 10 days of receipt, indicating whether it agrees or disagrees to convene a special shareholders’ meeting. If the Board of Directors agrees to convene a special shareholders’ meeting, it shall issue a notice of the shareholders’ meeting within 5 days after making the board resolution. Any changes to the original proposal in the notice shall be subject to the consent of the Audit Committee. If the Board of Directors disagrees to convene a special shareholders’ meeting, or fails to provide feedback within 10 days of receipt, it shall be deemed that the Board of Directors is unable or fails to perform its duty to convene the shareholders’ meeting. In such cases, the Audit Committee may convene and preside over the meeting on its own. Shareholders who individually or collectively hold 10% or more of the Company’s shares have the right to request the Board of Directors to convene a special shareholders’ meeting and shall submit such request in writing to the Board of Directors. The Board of Directors shall, in accordance with the provisions of laws, administrative regulations, securities regulatory rules of the places where the Company’s shares are listed and the Articles of Association, provide a written response within 10 days of receipt, indicating whether it agrees or disagrees to convene a special shareholders’ meeting. If the Board of Directors agrees to convene a special shareholders’ meeting, it shall issue a notice of the shareholders’ meeting within 5 days after making the board resolution. Any changes to the original request in the notice shall be subject to the consent of the relevant shareholders. If the Board of Directors disagrees to convene a special shareholders’ meeting, or fails to provide feedback within 10 days of receipt, shareholders who individually or collectively hold 10% or more of the Company’s shares have the right to propose to the Audit Committee to convene a special shareholders’ meeting and shall submit such request in writing to the Audit Committee. If the Audit Committee agrees to convene a special shareholders’ meeting, it shall issue a notice of the shareholders’ meeting within 5 days after receiving the request. Any changes to the original proposal in the notice shall be subject to the consent of the relevant shareholders. If the Audit Committee fails to issue a notice of the shareholders’ meeting within the prescribed period, it shall be deemed that the Audit Committee does not convene and preside over the shareholders’ meeting. In such cases, shareholders who individually or collectively hold 10% or more of the Company’s shares for a continuous period of 90 days or more may convene and preside over the meeting on their own. APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION – V-13 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 390 of 431 -- Where the Audit Committee or the shareholders proceed to convene a general meeting, the Board of Directors shall be notified in writing, and the required filings or public announcements shall be made in accordance with the securities regulatory rules and the stock exchange regulations of the place where the Company’s shares are listed. Prior to announcement of resolutions passed by the shareholders’ general meeting, the shareholding percentage of the convening shareholders (holders of ordinary shares and preferential shareholders with restored voting rights) shall not be less than 10%. The Audit Committee or the convening shareholders shall submit the relevant proof materials and complete the required filings or public announcements in accordance with the securities regulatory rules and the stock exchange regulations at the place where the Company’s shares are listed prior to the time of issuance of notice of the general meeting and announcement of resolutions passed by the shareholders’ meeting. Proposals and Notices of Shareholders’ Meeting The Company may convene a shareholders’ meeting, and the Board of Directors, the Audit Committee, as well as shareholders who individually or collectively hold more than 1% of the Company’s shares, have the right to submit proposals to the Company. Shareholders who individually or collectively hold more than 1% of the Company’s shares may submit a temporary proposal in writing to the convener 10 days prior to the shareholders’ meeting. The contents of proposals shall contain clear topics and detailed resolutions. The convener shall issue a supplementary notice of the shareholders’ meeting within 2 days after receiving the proposal, announcing the content of the temporary proposal and submit the temporary proposal to the shareholders’ meeting for deliberation, but the proposal which violates applicable laws, administrative regulations, the securities regulatory rules of the place where the Company’s shares are listed, or the Articles of Association, or falls outside the scope of the shareholders’ meeting shall be excluded. If, according to the securities regulatory rules of the places where the Company’s shares are listed, the shareholders’ meeting must be postponed due to the issuance of a supplementary notice, the meeting shall be postponed in accordance with the provisions of the securities regulatory rules of the places where the Company’s shares are listed. Except for the circumstances specified in the preceding paragraph, after the convener has issued the notice of the shareholders’ meeting, it shall not modify the proposals already listed in the notice or add new proposals. The shareholders’ meeting shall not vote on or make resolutions regarding proposals that are not listed in the notice of the shareholders’ meeting or that do not comply with the provisions of the Articles of Association. A notice of a shareholders’ meeting shall include the following: (i) the time, venue and duration of the meeting; (ii) matters and proposals submitted to the meeting for consideration; APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION – V-14 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 391 of 431 -- (iii) a prominent written statement that all Shareholders are entitled to attend shareholders’ meeting and are entitled to appoint in writing a proxy to attend and vote at the meeting and that such proxy need not be a shareholder of the Company; (iv) the record date of registration of Shareholders entitled to attend the shareholders’ meeting; (v) the name and telephone number of the regular contact person for the meeting; (vi) the time and procedure for voting online or through other means. After the shareholders’ meeting notice has been issued, the meeting should not be postponed or canceled without a valid reason, and the proposals listed in the notice should not be canceled. In the event of a postponement or cancellation, the convener shall announce and explain the reasons at least two trading days before the originally scheduled date. If the securities regulatory rules of the places where the Company’s shares are listed have special provisions regarding the procedures for postponing or canceling a shareholders’ meeting, these provisions shall be followed, provided that they do not violate the regulatory requirements of the domestic jurisdiction. Convening of Shareholders’ Meeting All shareholders on the record date for equity registration are entitled to attend the shareholders’ meeting and, in accordance with applicable laws and regulations, the securities regulatory rules of the place where the Company’s shares are listed, and the Articles of Association, to speak at the meeting and exercise their voting rights. Shareholders may attend the shareholders’ meeting in person or appoint a proxy to attend, speak and vote on their behalf. The shareholders’ meeting shall be presided over by the chairman of the board. If the chairman is unable or fails to perform his duties, the meeting shall be presided over by the vice chairman (if the company has two or more vice chairman, the vice chairman nominated by more than half of the directors shall preside over the meeting); if the vice chairman is unable or fails to perform their duties, one Director shall be elected by more than half of the Directors to preside over the meeting. If the shareholders’ meeting is convened by the Audit Committee, it shall be presided over by the convener of the Audit Committee. If the convener of the Audit Committee is unable or fails to perform his duties, one member of the Audit Committee shall be elected by more than half of the members of the Audit Committee to preside over the meeting. If the shareholders’ meeting is convened by the shareholders themselves, the convener or a representative shall be elected by the convener to preside over the meeting. If the presiding officer of the meeting violates the rules of procedure and prevents the meeting from proceeding, upon the agreement of more than half of the shareholders present and entitled to vote, the shareholders’ meeting may elect one person to serve as the presiding officer to continue the meeting. APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION – V-15 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 392 of 431 -- The Company shall establish rules of procedure for the shareholders’ meeting, which shall detail the procedures for convening, holding and voting at the shareholders’ meeting, including notification, registration, review of proposals, voting, counting of votes, announcement of voting results, formation of resolutions, record-keeping and signing, and announcement. The rules shall also specify the principles and specific content of the authorization granted by the shareholders’ meeting to the Board of Directors. The rules of procedure for the shareholders’ meeting shall be an appendix to the Articles of Association, drafted by the Board of Directors, and approved by the shareholders’ meeting. Voting at the Shareholders’ Meeting The resolutions of the shareholders’ meeting are divided into ordinary resolutions and special resolutions. An ordinary resolution at a shareholders’ meeting shall be passed by more than half of the voting rights held by the shareholders present at the shareholders’ meeting (including proxies). A special resolution at a shareholders’ meeting shall be passed by at least two-thirds of the voting rights held by the shareholders present at the shareholders’ meeting (including proxies). The following matters shall be approved by the shareholders’ meeting through ordinary resolutions: (i) Work reports of the Board of Directors; (ii) Plans of earnings distribution and recovery of losses schemes drafted by the Board of Directors; (iii) Appointment or dismissal of the members of the Board of Directors, their remunerations and the payment method; (iv) Engage and dismiss the engagement of accounting firms; (v) Other matters other than those approved by special resolution stipulated in the laws, administrative regulations, securities regulatory rules of the places where the Company’s Shares are listed or the Articles of Association. The following matters shall be approved by special resolution at the shareholders’ meeting: (i) The increase or reduction of the registered capital of the Company; (ii) The division, spin-off, merger, dissolution and liquidation or any change in its corporate form (including a voluntary winding-up) of the Company; APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION – V-16 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 393 of 431 -- (iii) Any amendment to the Articles of Association and its appendices (including the Rules of Procedure for the shareholders’ meeting and the Rules of Procedure for the Board of Directors); (iv) the listing of any subsidiary through spin-off; (v) The purchase and sale of material assets or amount of guarantee provided by the Company within twelve consecutive months valued at more than 30% of the audited total assets of the Company as at the most recent period; (vi) The issuance of shares, convertible corporate bonds, preference shares, and other types of securities recognized by the CSRC; (vii) The repurchase of shares for the purpose of reducing the registered capital; (viii) Any material asset restructuring; (ix) Share incentive plan; (x) Any resolution of the shareholders’ meeting to voluntarily withdraw the listing of the Company’s shares on the Shenzhen Stock Exchange and/or The Stock Exchange of Hong Kong Limited and to cease trading thereon, or to apply for trading or transfer on another trading venue. (xi) other matters as required by the laws, administrative regulations, the securities regulatory rules of the places where the shares of the Company are listed or the Articles of Association, and considered by the shareholders’ meeting, by way of an ordinary resolution, to be of a nature which may have a material impact on the Company, shall be passed by a special resolution. Shareholders (including proxies) shall exercise voting rights based on the number of shares with voting rights held by them, and each share shall be entitled to one vote, except for class share shareholders. Where material issues affecting the interests of minority shareholders are considered at the shareholders’ meeting, the votes of minority shareholders shall be counted separately. The separate votes counting results shall be disclosed publicly in a timely manner. The Company’s own shares held by the Company do not carry voting rights and such shares shall not count towards the total number of shares with voting rights at shareholders’ meeting. If a shareholder purchases shares with voting rights of the Company in violation of the provisions of Article 63(1) and (2) of the “Securities Law,” the voting rights of such shares in excess of the prescribed proportion shall not be exercised and shall not be counted towards the total number of shares with voting rights present at the shareholders’ meeting for 36 months after the purchase. APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION – V-17 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 394 of 431 -- In accordance with the requirements of relevant laws and regulations and the Hong Kong Listing Rules, if any shareholder is required to abstain from voting on the relevant proposal, or restricts any shareholder from voting only for or against the designated proposal, any vote taken by such shareholder or his representative in violation of the aforesaid provisions or restrictions shall not be counted in the voting results. The Board of Directors of a company, independent Directors, shareholders holding more than 1% of the voting shares, or investor protection institutions established in accordance with the laws, administrative regulations, the provisions of the CSRC, may publicly exercise shareholders’ voting rights. Except for the statutory conditions, the Company shall not impose a minimum shareholding restriction on the solicitation of voting rights. BOARD OF DIRECTORS Directors Directors of the Company shall be individuals, and a person may not serve as a Director of the Company in case of any of the following circumstances: (i) the person without civil conduct capacity or with limited civil conduct capacity; (ii) the person who has committed an offense of corruption, bribery, conversion of property, misappropriation of property or sabotaging the market economic order of socialism and has been punished therefor; or who has been deprived of his/her political rights, in each case where less than 5 years have elapsed since the date of the completion of implementation of such punishment or deprivation; in the case of a suspended sentence, for a period not exceeding two years from the date of expiry of the probationary period; (iii) the person who is a former Director, factory Director or General Manager (President) of a company or enterprise which is insolvent and under liquidation and he/she is personally liable for the insolvency of such company or enterprise, where less than 3 years have elapsed since the date of the completion of such insolvency and liquidation of the company or enterprise; (iv) the person who is a former legal representative of a company or enterprise which had its business license revoked and was ordered to shut down due to a violation of the law and who incurred personal liability, where less than 3 years have elapsed since the date of such revocation of the business license; (v) the person listed as a judgment defaulter by the court of the PRC because the amount of debt he bears is relatively large and the debt is not paid off when it is due; (vi) the person has been banned by the CSRC or the Hong Kong Stock Exchange from access to the securities market, and the term of prohibition has not expired; APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION – V-18 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 395 of 431 -- (vii) the person has been publicly identified by the stock exchange as unsuitable to serve as Directors, senior management personnel, etc. of the listed companies, and the term of prohibition has not expired; (viii) other contents stipulated by laws, administrative regulations or departmental rules or the securities regulatory rules of the places where the shares of the Company are listed. Where a Director is elected or appointed in violation of the provisions above, the election, appointment or appointment shall be invalid. If a Director falls under the provisions above during his or her tenure, the Company shall dismiss him or her from office. Directors are elected or replaced by the shareholders’ meeting and may be removed from office by the shareholders’ meeting before the expiration of their term. The term of office for Directors is three years, and they may be re-elected for consecutive terms. The term of office for Directors begins on the date of their appointment and ends when the current Board of Directors’ term expires. If the term of office for Directors expires and a timely re-election has not taken place, the outgoing Directors shall continue to perform their duties in accordance with laws, administrative regulations, departmental rules, securities regulatory rules of the places where the Company’s shares are listed and the Articles of Association until the newly elected Directors take office. Directors may concurrently hold the position of senior management positions, but the total number of Directors who concurrently hold the position of senior management positions and Directors who is representative of the employees shall not exceed half of the total number of Directors of the Company. Directors shall comply with laws, administrative regulations, regulatory rules where the Company’s shares are listed, and the Articles of Association and owe the following duties of diligence to the Company: (i) They shall exercise the rights granted to them by the Company with prudence, diligence, and care to ensure that the Company’s business activities comply with national laws, administrative regulations, and all national economic policies, and that business operations do not exceed the scope of business specified in the business license; (ii) They shall treat all shareholders fairly; (iii) They shall promptly understand the status of the Company’s business operations and management; (iv) They shall sign a written confirmation on the Company’s regular reports to ensure that the information disclosed by the Company is true, accurate, and complete; APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION – V-19 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 396 of 431 -- (v) They shall provide relevant information and materials to the Audit Committee truthfully and shall not obstruct the Audit Committee from exercising their powers; (vi) Other duties of diligence as stipulated by laws, administrative regulations, departmental rules, the securities regulatory rules of the places where the Company’s shares are listed, and the Articles of Association. Directors may resign before the expiration of their term. Resignation of a Director shall be submitted to the Board of Directors in writing. The Company shall disclose the relevant circumstances within two days or within the period required by the securities regulatory rules of the places where the Company’s shares are listed. If the resignation of a Director causes the number of Directors on the board to fall below the statutory minimum or there are no independent directors who are usually resident in Hong Kong, or the number of independent directors is less than one-third of the board members due to the resignation of independent directors, or there are no accounting professionals or appropriate professional qualifications among independent directors, the outgoing Director shall continue to perform their duties in accordance with laws, administrative regulations, departmental rules, securities regulatory rules of the places where the Company’s shares are listed and the Articles of Association, until the newly elected Director takes office. Without the provisions of the Articles of Association or the lawful authorization of the Board of Directors, no Director shall act on behalf of the Company or the Board of Directors in their personal capacity. When a Director acts in their personal capacity, if a third party would reasonably believe that the Director is acting on behalf of the Company or the Board of Directors, the Director shall make a prior declaration of their position and identity. A person shall meet the following conditions to serve as an independent director of the Company: (i) Possess the qualifications to serve as a director of a listed company in accordance with laws, administrative regulations, regulatory rules of securities of the places where the Company’s shares are listed, and other relevant provisions; (ii) Meet the independence requirements specified in the Articles of Association; (iii) Have basic knowledge of the operation of listed companies and be familiar with relevant laws, regulations, and rules; (iv) Have at least five years of work experience in fields such as law, accounting, or economics, which is necessary for performing the duties of an independent director; (v) Have good personal ethics and no major dishonest or other adverse records; (vi) Meet other conditions stipulated by laws, administrative regulations, the CSRC, regulatory rules of securities of the places where the Company’s shares are listed, and the Articles of Association. APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION – V-20 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 397 of 431 -- As members of the board of directors, independent directors owe fiduciary duties and duties of diligence to the Company and all shareholders, and shall prudently perform the following responsibilities: (i) Participate in the decision-making of the board of directors and express clear opinions on the matters under discussion; (ii) Supervise potential major conflicts of interest between the Company and its controlling shareholders, actual controllers, directors, or senior management, and protect the legitimate rights and interests of minority shareholders; (iii) Provide professional and objective suggestions on the Company’s business development to help improve the decision-making level of the board of directors; (iv) Perform other responsibilities stipulated by laws, administrative regulations, CSRC, regulatory rules of securities of the places where the Company’s shares are listed, and the Articles of Association. Independent directors shall exercise the following special powers: (i) Independently engage intermediary institutions to audit, consult on, or verify specific matters of the Company; (ii) Propose to the board of directors to convene an extraordinary shareholders’ meeting; (iii) Propose to convene a meeting of the board of directors; (iv) Publicly solicit shareholder rights from shareholders in accordance with the law; (v) Express independent opinions on matters that may damage the interests of the Company or minority shareholders; (vi) Exercise other powers stipulated by laws, administrative regulations, CSRC, regulatory rules of securities of the places where the Company’s shares are listed, and the Articles of Association. The exercise of the powers listed in Items (i) to (iii) of the preceding paragraph by independent directors shall be subject to the approval of more than half of all independent directors. APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION – V-21 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 398 of 431 -- Board of Directors The Company has established a Board of Directors which shall be accountable to the shareholders’ meeting. The Board of Directors shall consist of 9 Directors, including one employee representative Director, 4 independent Directors. The Board shall exercise the following duties and powers: (i) to convene shareholders’ meeting and report its work to the shareholders’ meeting; (ii) to implement the resolutions of the shareholders’ meeting; (iii) to resolve business operation plans and investment plans of the Company; (iv) to formulate the profit distribution plans and plans for recovery of losses of the Company; (v) to formulate plans of the Company regarding increase or reduction of the registered capital, issuance of bonds or other securities and listing; (vi) to draft plans for significant acquisitions of the Company, the purchase of Shares of the Company, merger, division, dissolution or change of the form of the Company; (vii) to determine, to the extent authorized by the shareholders’ meeting, on such matters as the external investments, purchase or sale of assets, assets mortgage, external guarantee, entrusted wealth management, connected transactions, external donations of the Company; (viii) to determine the internal management structure of the Company; (ix) to determine the appointment or dismissal of the President of the Company and the Board secretary; and based on the nomination of the President, to determine the appointment or dismissal of the senior management including Deputy President and Financial Officer of the Company and determine their remuneration, rewards and penalties; (x) to formulate the basic management system of the Company; (xi) to formulate proposals for any amendment of the Articles of Association; (xii) to manage the information disclosure of the Company; APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION – V-22 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 399 of 431 -- (xiii) to propose to the shareholders’ meeting for appointment or replacement of the accounting firms which provide audit services to the Company; (xiv) to listen to work reports of the President of the Company and review his or her work; (xv) other duties as stipulated in laws, administrative regulations, departmental rules, securities regulatory rules of the places where the shares of the Company are listed, the Articles of Association or the shareholders’ meeting. The Board of Directors establishes special committees such as Strategy and Investment Committee, Nomination Committee, Remuneration and Appraisal Committee, etc. The special committees perform duties pursuant to the Articles of Association and the authorization of the Board of Directors. Meetings of the Board of Directors are divided into regular meetings and interim meetings. The Board of Directors shall hold at least two regular meetings each year, which shall be convened by the chairman. All directors shall be given written notice 10 days prior to the convening of the meeting. Shareholders representing more than one-tenth of the voting rights, more than one-third of the directors, or the Audit Committee may propose the convening of an interim meeting of the board of directors. The chairman shall convene and preside over the board meeting within 10 days from the date of receiving such proposal. A meeting of the Board of Directors shall be held only if more than half of the Directors are present. Resolutions of the Board of Directors must be passed by a majority of all Directors. When the Board of Directors reviews external guarantee matters, such matters shall also be approved by more than two-thirds of the directors present at the board meeting, unless otherwise stipulated more strictly by laws, regulations, regulatory rules of securities of the places where the Company’s shares are listed, or the Articles of Association. Voting on resolutions of the Board of Directors shall be conducted on a one person, one vote basis. Where a director is related to an enterprise or individual involved in a board resolution, the director shall promptly submit a written report to the Board of Directors. A related director shall not vote for the said resolution and shall not represent another director in exercise of voting rights. The board meeting may be held with more than half of unrelated directors present, and resolutions passed by the board meeting shall require more than half of votes of unrelated directors. Where the number of unrelated directors present at the board meeting is less than three, the said matter shall be tabled at a shareholders’ meeting for deliberation. APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION – V-23 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 400 of 431 -- Secretary to the Board The Company shall have a secretary to the Board, and shall be responsible for the preparation of the shareholders’ meeting and Board meeting, document keeping and management of information regarding the shareholders of the Company and other matters. The secretary to the Board shall comply with the relevant provisions of the laws, administrative regulations, departmental rules, securities regulatory rules of the place where the Company’s shares are listed and the Articles of Association. President and Other Senior Management Members The Company shall have one President and several Deputy Presidents, all of whom shall be appointed or dismissed by the Board of Directors. The President is responsible to the Board of Directors and exercises the following powers: (i) To be in charge of the production, operation and management of the Company, organize and implement the resolutions of the Board of Directors, and report the work to the Board of Directors; (ii) To implement the Company’s annual business plan and investment programs; (iii) To draft proposals for the establishment of internal management institutions of the Company; (iv) To draft the Company’s basic management systems; (v) To formulate specific regulations of the Company; (vi) To propose to the Board of Directors the appointment or dismissal of Deputy Presidents and other senior management personnel. (vii) To decide on the appointment or dismissal of management personnel other than those who should be appointed or dismissed by the Board of Directors; (viii) Other powers granted by the Articles of Association or the Board of Directors. Senior management personnel of the Company shall faithfully perform their duties and safeguard the maximum interests of the Company and all shareholders. If senior management personnel fail to faithfully perform their duties or violate their fiduciary duties, causing damage to the interests of the Company and the public shareholders, they shall be liable for compensation in accordance with the law. APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION – V-24 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 401 of 431 -- FINANCIAL ACCOUNTING SYSTEM, DISTRIBUTION OF PROFITS AND AUDIT Financial Accounting System The Company shall formulate its financial and accounting systems in accordance with laws, administrative regulations and regulations of relevant departments. The Company shall, within four months after the end of each fiscal year, file its annual financial accounting report with the local branch of the CSRC and the stock exchange of the place where its shares are listed; within two months after the end of the first six months of each fiscal year, file its semi-annual financial accounting report; and within one month after the end of the first three months and the first nine months of each fiscal year, file its quarterly financial accounting reports, in each case with the foregoing authorities. The Company shall not establish the statutory accounts books other than those provided by law. Any assets of the Company shall not be kept under any account opened in the name of any individual. Distribution of Profits When distributing after-tax profits of the year, the Company shall allocate 10% of its after-tax profits for the Company’s statutory reserve fund. When the aggregate balance in the statutory reserve fund has reached 50% or more of the Company’s registered capital, the Company needs not to make any further allocations to that fund. Where the Company’s statutory reserve fund is not enough to make up losses of the Company for the preceding year, the current year’s profits shall be applied firstly to make up the losses before being allocated to the statutory reserve in accordance with the preceding provision. After allocating the statutory reserve fund from the after-tax profits, the Company may also allocate a discretionary reserve fund from the after-tax profits upon a resolution of the shareholders’ meeting. The remaining after-tax profit after the Company has made up for losses and extracted surplus reserves shall be distributed in proportion to the shares held by the shareholders, unless the Articles of Association provide that the distribution is not made as per the proportion of shareholding. If the shareholders’ meeting violates the Company Law by distributing profits to the shareholders, the shareholders shall return the profits distributed in violation of the regulations to the company. If losses are caused to the Company, the shareholders and the responsible directors and senior executives shall be liable for compensation. Shares held by the Company itself do not participate in the profit distribution. The company’s surplus reserves are used to make up for the Company’s losses, to expand the Company’s production and operations, or to increase the Company’s registered capital. When the legal reserve fund is converted into share capital, the retained reserve fund shall not be less than 25% of the Company’s registered capital before the conversion. APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION – V-25 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 402 of 431 -- Internal Audit The Company implements an internal audit system which is equipped with dedicated audit personnel to conduct internal audits for supervision of financial income and expenditure and economic activities of the Company. The Company’s internal audit system shall supervise and examine the Company’s business activities, risk management, internal controls, financial information, and related matters, and shall be subject to the oversight and guidance of the Audit Committee. The internal audit department is accountable to the Board of Directors. Appointment of an Accounting Firm The Company shall appoint such accounting firm which has complied with the Securities Law, and the securities regulatory rules of the places where the shares of the Company are listed for carrying out the audit for the accounting statements, net asset verification, and other relevant consultancy services. The term of appointment shall be 1 year and can be re-appointed. The appointment, removal, or non-renewal of the accounting firm shall, after approval by a majority of all members of the Audit Committee, be submitted to the Board of Directors for consideration and shall be finally approved by the shareholders’ meeting. The Board shall not appoint accounting firm before the approval of the shareholders’ meeting. The Company guarantees that it shall provide the appointed accounting firm with true and complete accounting proofs, accounting books, financial and accounting reports and other accounting information, and that it engages without any refusal, withholding, and misrepresentation. The auditing fee of the accounting firm or the method of determining audit fee shall be approved by the shareholders’ meeting. In the event of termination of the appointment or non-renewal of appointment of an accounting firm, the Company shall notify the accounting firm 30 days in advance; and the accounting firm shall be allowed to make its representation. An accounting firm proposing to resign shall state its opinions in the shareholders’ meeting whether the Company has committed any improper act. APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION – V-26 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 403 of 431 -- MERGER, DIVISION, CAPITAL INCREASE, CAPITAL REDUCTION, DISSOLUTION AND LIQUIDATION Merger, Division, Capital Increase, and Capital Reduction Merger of the Company may take the form of absorption or establishment of a new company. In case of merger by absorption, a company absorbs any other company and the absorbed company is dissolved. In case of merger by new establishment, two or more companies merge into a new one and the parties to the merger are dissolved. If the Company is involved in a merger, the parties to the merger shall enter into a merger agreement and prepare a balance sheet and a property list. The Company shall notify its creditors within 10 days as of the date of the resolution for the merger and shall publish an announcement on the designated information disclosure media, or the National Enterprise Credit Information Publicity System ( ) or website (including the Hong Kong Stock Exchange Disclosures Website (www.hkexnews.hk)) within 30 days as of the date of such resolution. A creditor may within 30 days as of the receipt of the notice or, in case where he/she fails to receive such notice within 45 days of the date of the announcement, to demand the Company to repay its debts or provide guarantees for such debts. When the Company is merged, the claims and debts of each party to the merger shall be succeeded to by the company surviving the merger or the new company established subsequent to the merger. Where there is a division of the Company, a balance sheet and property list shall be prepared. The Company shall notify its creditors within 10 days as of the date of the resolution for the division and shall publish an announcement on the press or the National Enterprise Credit Information Publicity System within 30 days as of the date of such resolution. Unless a written agreement has been entered into, before the division, by the Company and its creditors in relation to the repayment of debts, debts of the Company prior to the division shall be jointly assumed by the surviving companies after the division. Where the Company needs to reduce its registered capital, it shall prepare a balance sheet and property list. The Company shall notify its creditors within 10 days as of the date of the resolution for the reduction of its registered capital and shall publish an announcement on the press, or the National Enterprise Credit Information Publicity System or website (including the Hong Kong Stock Exchange Disclosures Website (www.hkexnews.hk)) within 30 days as of the date of such resolution. A creditor may within 30 days as of the receipt of the notice or, in case where he/she fails to receive such notice within 45 days of the date of the announcement, to demand the Company to repay its debts or provide guarantees for such debts. APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION – V-27 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 404 of 431 -- In the event of a merger or division of a company, if there is a change in the registration items, the Company shall go through the change registration with the company registration authority in accordance with the law; If the Company is dissolved, it shall go through the deregistration of the procedures company in accordance with the law; If a new company is established, the company establishment registration shall be completed in accordance with the law. If the Company increases or decreases its registered capital, it shall go through the change registration with the company registration authority in accordance with the law. Dissolution and Liquidation The Company shall be dissolved upon the occurrence of the following events: (i) expiry of the term of business as specified by the Articles of Association or the occurrence of other matters for dissolution as specified by the Articles of Association; (ii) a resolution on dissolution is passed by a shareholders’ meeting; (iii) dissolution is required due to the merger or division of the Company; (iv) the business license of the Company is revoked or the Company is ordered to close down or dissolved in accordance with the laws; (v) the Company suffers significant hardships in operation and management, and its continued existence would cause significant losses to shareholders’ interests, and such issues cannot be resolved through other means, Shareholders representing 10% or above of the total voting rights of the Company may plead the court to dissolve the Company. If the Company is in the situation as described in item (i) and (ii) of the preceding paragraph, and has not yet distributed its properties to shareholders, it can continue to exist by amending the Articles of Association. The amendment of the Articles of Association or the resolution of the shareholders’ meeting as per the preceding paragraph must be passed by two-thirds or more of the voting rights held by the shareholders attending the shareholders’ meeting. If the company is dissolved due to the provisions mentioned in items (i), (ii), (iv), and (v) above, a liquidation shall be conducted and a liquidation group within 15 days from the date the cause for dissolution arises to carry out the liquidation. Directors are the liquidation obligors of the Company and shall form a liquidation group to conduct liquidation within 15 days from the date on which the cause of dissolution arises. The liquidation group shall be composed of directors, unless otherwise provided in the Articles of Association or another person is designated by a resolution of the shareholders’ meeting. APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION – V-28 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 405 of 431 -- The liquidation group shall notify the creditors within 10 days from the date of its establishment and announce it in the designated press, or the National Enterprise Credit Information Publicity System within 60 days or website (including the Hong Kong Stock Exchange Disclosures Website (www.hkexnews.hk)). Creditors shall declare their claims to the liquidation group within 30 days from the date of receiving the notice, or within 45 days from the date of the announcement if they have not received the notice. When declaring claims, creditors shall specify the relevant matters of the claims and provide supporting documents. The liquidation group shall register the claims. During the period for declaring claims, the liquidation group shall not make repayments to the creditors. After the liquidation group has sorted out the Company’s assets, prepared the balance sheet and inventory of assets, it shall formulate a liquidation plan and submit it to the shareholders’ meeting or the court for confirmation. The Company’s assets shall be used to pay the liquidation expenses, employees’ wages, social insurance fees, and statutory compensation, to pay the taxes owed, and to repay the Company’s debts. The remaining assets shall be distributed among the shareholders in proportion to their shareholdings. During the liquidation period, the Company shall continue to exist but shall not engage in any business activities unrelated to the liquidation. After sorting out the Company’s assets and preparing the balance sheet and inventory of assets, the liquidation group finds that the Company’s assets are insufficient to repay the debts, it shall apply to the court for bankruptcy liquidation in accordance with the law. After the court accepts the bankruptcy application, the liquidation group shall transfer the liquidation affairs to the court. After the completion of the Company’s liquidation, the liquidation group shall prepare a liquidation report, submit it to the shareholders’ meeting or the people’s court for confirmation, and submit it to the company registration authority to apply for cancellation of the Company’s registration. If the Company is declared bankrupt in accordance with the law, the bankruptcy liquidation shall be carried out in accordance with the relevant laws on enterprise bankruptcy. AMENDMENTS TO THE ARTICLES OF ASSOCIATION The Company shall amend the Articles of Association in any of the following circumstances: (i) after amendments are made to the Company Law of the PRC ( ) or other relevant laws, administrative regulations and regulatory rules of the places where the shares of the Company are listed, the matters stipulated in the Articles of Association are in conflict with the provisions of the revised laws, administrative regulations and regulatory rules of the places where the shares of the Company are listed; APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION – V-29 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 406 of 431 -- (ii) if certain changes of the Company occur resulting in the inconsistency with certain terms specified in the Articles of Association; (iii) the shareholders’ meeting has resolved to amend the Articles of Association. Where the amendments to the Articles of Association passed by resolutions of the shareholders’ meeting require approval of the competent authorities, the amendments shall be submitted to the relevant authorities for approval. Where the amendments involve registration matters of the Company, the involved changes shall be registered in accordance with the laws. The Board shall amend the Articles of Association in accordance with the resolution of the shareholders’ meeting on amendment to the Articles of Association and the examination and approval opinions from relevant authorities. Any amendment to the Articles of Association that is required to be disclosed in accordance with laws and regulations shall be announced in accordance with provisions thereof. APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION – V-30 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 407 of 431 -- A. FURTHER INFORMATION ABOUT THE COMPANY 1. Incorporation of Our Company Our Company was established as a limited liability company under the laws of the PRC on July 28, 2006 and was converted into a joint stock company with limited liability on February 27, 2012. Our Company completed the listing of our A Shares on the ChiNext Market of the Shenzhen Stock Exchange (stock code: 300476) on June 11, 2015. As at the Latest Practicable Date, the total issued share capital of our Company was RMB872,557,313. Our registered office is located at Hangcheng Technology Park, Xinqiao Village, Danshui Town, Huiyang District, Huizhou City, Guangdong Province, the PRC. Additionally, our principal place of business in Hong Kong is 40/F, Dah Sing Financial Centre, 248 Queen’s Road East, Wanchai, Hong Kong. We have been registered as a registered non-Hong Kong company in Hong Kong under Part 16 of the Companies Ordinance (Chapter 622 of the Laws of Hong Kong) on August 21, 2025, with Ms. Lin Sio Ngo ( ) of 40/F, Dah Sing Financial Centre, 248 Queen’s Road East, Wanchai, Hong Kong appointed as the Hong Kong authorised representative of the Company for acceptance of the service of process and any notices required to be served on our Company in Hong Kong. As our Company was incorporated in the PRC, its operations are subject to the relevant laws and regulations of the PRC. A summary of the relevant aspects of laws and regulations of the PRC and the Articles of Association is set out in Appendix IV and Appendix V, respectively. 2. Changes in the Share Capital of Our Company Save as disclosed in the section headed “History, Development and Corporate Structure” for changes in the share capital of the Company, there has been no alteration in the share capital of the Company within two years immediately preceding the date of this document. 3. Changes in the Share Capital of Our Subsidiaries A summary of the corporate information and the particulars of our subsidiaries are set out in the Accountants’ Report in Appendix I to this document. The following sets out the changes in the share capital of the Company’s subsidiaries during the two years immediately preceding the date of this document: • On April 17, 2024, Victory Giant Technology (S) Pte Ltd was established in Singapore as a private limited company with an issued capital of USD54,000,000 and RMB250,830,000. APPENDIX VI STATUTORY AND GENERAL INFORMATION – VI-1 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 408 of 431 -- • On July 4, 2024, Vietnam VGT was established in Vietnam as a single-member limited liability company with the charter capital of VND720,000,000,000 (approximately USD30,000,000). • On August 23, 2024, October 28, 2024, November 26, 2024, December 16, 2024 and April 8, 2025, the shareholders of Thailand VGT have approved its capital increase of THB592,736,100, THB339,300,000, THB172,500,000, THB57,000,000 and THB311,940,000 respectively. • On December 20, 2024, Yiyang Weisheng increased its registered capital by USD0.5 million from USD13.5 million to USD14.0 million. On July 15, 2025, Yiyang Weisheng further increased its registered capital by USD3.0 million from USD14.0 million to USD17.0 million. • On March 14, 2025, MFSM allotted 39,223,811 ordinary shares to MFSS. Save as disclosed above and the section headed “History, Development and Corporate Structure”, there have been no other alterations to the share capital of our subsidiaries within the two years preceding the date of this document. 4. Resolutions Passed by Our Shareholders’ General Meeting in Relation to the [REDACTED] At the 2025 fourth extraordinary general meeting of the Shareholders held on August 15, 2025, the following resolutions, among other things, were duly passed: (i) the [REDACTED] by the Company of H Shares with a nominal value of RMB1.00 each and such H Shares be [REDACTED] on the Stock Exchange; (ii) the number of H shares to be [REDACTED] shall be no more than [REDACTED] of the total [REDACTED] share capital upon the [REDACTED] (before the exercise of the [REDACTED]), and the grant of the [REDACTED] in respect of no more than 15% of the number of H Shares [REDACTED] pursuant to the [REDACTED]; (iii) authorisation of the Board or its authorised individual to handle all matters relating to, among other things, the [REDACTED], the [REDACTED] and [REDACTED] of H Shares on the Stock Exchange; and (iv) subject to the completion of the [REDACTED], the conditional adoption of the revised Articles of Association, which shall become effective on the [REDACTED]. 5. Restrictions on Repurchase Please refer to Appendices IV and V of this document for details. APPENDIX VI STATUTORY AND GENERAL INFORMATION – VI-2 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 409 of 431 -- B. FURTHER INFORMATION ABOUT THE BUSINESS 1. Summary of Material Contract We have entered into the following contract (not being contracts entered into in the ordinary course of business) within the two years immediately preceding the date of this document that is or may be material: (a) the [REDACTED]. 2. Intellectual Property As at the Latest Practicable Date, the following intellectual property rights are material to our Group’s business: (a) Trademarks As of the Latest Practicable Date, our Group had registered the following trademarks which are material to our business: No. Trademark Class Registered Owner Place of Registration Registration Number Expiry date (Year-Month-Date) 1. ! ! 9; 35 Our Company PRC 23777705 2028.4.13 2. ! ! 9 Our Company PRC 23735462 2028.4.13 3. ! ! 9 Our Company PRC 11303709 2034.3.20 4. ! ! 9 Our Company PRC 44729837 2030.11.13 5. ! ! 9 Our Company PRC 49168395 2031.4.6 6. ! ! 9 Our Company PRC 9419893 2032.05.20 7. ! ! 9 Our Company PRC 9419826 2034.03.06 8. ! ! 9 Our Company PRC 11910808 2034.6.27 9. ! ! 9 Our Company PRC 44727639 2030.11.13 10. ! ! 9 Our Company PRC 49183487 2031.4.6 11. ! ! 9 Weisheng Circuit Board PRC 15908888 2026.11.6 APPENDIX VI STATUTORY AND GENERAL INFORMATION – VI-3 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 410 of 431 -- No. Trademark Class Registered Owner Place of Registration Registration Number Expiry date (Year-Month-Date) 12. ! ! 9 Weisheng Technology, Weisheng Circuit Board and Yiyang Weisheng PRC 69150541 2033.7.13 13. ! ! 9 Weisheng Technology, Weisheng Circuit Board and Yiyang Weisheng PRC 69150996 2033.9.20 14. ! ! 9 Weisheng Technology; Weisheng Circuit Board; Yiyang Weisheng PRC 69155284 2033.10.20 15. ! ! 9 Our Company Hong Kong 304098330 2027.04.01 (b) Domain Names As of the Latest Practicable Date, our Group had registered the following domain names which are material to our business: No. Domain Name Registered owner Expiry date (Month-Date-Year) 1. ! ! ! ! shpcb.com Our Company 2029.11.10 (c) Patents As of the Latest Practicable Date, our Group had registered the following patents which are material to our business: No. Patent Type Patent holder Jurisdiction of registration Patent Number Application date (Month-Date-Year) Duration of patent right 1. ! ! A method to prevent the lead wire residue in the segmented position of the gold finger of the segmented high-frequency connector ( ) Invention Our Company PRC ZL201510549747.7 2015.09.01 20 years APPENDIX VI STATUTORY AND GENERAL INFORMATION – VI-4 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 411 of 431 -- No. Patent Type Patent holder Jurisdiction of registration Patent Number Application date (Month-Date-Year) Duration of patent right 2. ! ! A new method for making a mixed material printed circuit board ( ) Invention Our Company PRC ZL201510693313.4 2015.10.21 20 years 3. ! ! A method for making a high- frequency board with mixed pressing of different board materials ( ) Invention Our Company PRC ZL201710593847.9 2017.7.20 20 years 4. ! ! A method for making an optical module PCB ( PCB ) Invention Our Company PRC ZL201810609433.5 2018.6.13 20 years 5. ! ! A circuit board for a power battery of a new energy vehicle ( ) Utility Model Our Company PRC ZL201720091748.6 2017.1.24 10 years 6. ! ! A circuit board with local mixed pressure of high- frequency materials ( ) Utility Model Our Company PRC ZL201821176210.6 2018.7.24 10 years 7. ! ! An anti-corrosion agent for aluminum-based circuit boards and a method for making aluminum-based circuit boards using the same ( ) Invention Shenghua Electronics PRC ZL201510847354.4 2015.11.30 20 years 8. ! ! A method for making a selected PCB board ( PCB ) Invention Our Company PRC ZL201910477323.2 2019.6.3 20 years 9. ! ! A method for making a core board of a buried magnetic core circuit board ( ) Invention Our Company PRC ZL201810885315.7 2018.8.6 20 years APPENDIX VI STATUTORY AND GENERAL INFORMATION – VI-5 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 412 of 431 -- No. Patent Type Patent holder Jurisdiction of registration Patent Number Application date (Month-Date-Year) Duration of patent right 10. ! A method for making a circuit board with a BGA boss ( BGA ) Invention Our Company PRC ZL201911407951.X 2019.12.31 20 years 11. ! An optical point structure ( ) Utility Model Our Company PRC ZL202021570524.1 2020.7.31 10 years 12. ! A coil board single PCS glue removal jig ( PCS ) Utility Model Our Company PRC ZL202220710358.3 2022.3.30 10 years 13. ! A tool for easily removing PCB inspection tape ( PCB ) Utility Model Our Company PRC ZL202121071998.6 2021.5.19 10 years 14. ! A method for making a 5G high-frequency board with precise inter-layer alignment ( 5G ) Invention Our Company PRC ZL202010767304.6 2020.8.3 20 years 15. ! A compensation method for gold finger etching ( ) Invention Our Company PRC ZL202010326869.0 2020.4.23 20 years 16. ! A surface treatment method for a high-speed optical module board ( ) Invention Our Company PRC ZL201910915702.5 2019.9.26 20 years 17. ! A method for manufacturing a communication base station RRU board ( RRU ) Invention Our Company PRC ZL201910650909.4 2019.7.18 20 years 18. ! A method for manufacturing a radio frequency module transfer PCB board ( PCB ) Invention Our Company PRC ZL201910085529.0 2019.1.29 20 years 19. ! A 3D transfer PCB board and its manufacturing method ( 3D PCB ) Invention Our Company PRC ZL201811060435.X 2018.9.12 20 years APPENDIX VI STATUTORY AND GENERAL INFORMATION – VI-6 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 413 of 431 -- No. Patent Type Patent holder Jurisdiction of registration Patent Number Application date (Month-Date-Year) Duration of patent right 20. ! A method for detecting drilling deviation of a multi-layer circuit board ( ) Invention Our Company PRC ZL201811026979.4 2018.9.4 20 years 21. ! A mini LED backlight board dustproof cutting and grinding integrated mechanism ( mini LED ) Utility Model Shenghua Electronics PRC ZL202222510220.1 2022.9.22 10 years 22. ! A high-brightness mini LED circuit board ( mini LED ) Utility Model Shenghua Electronics PRC ZL202120854393.8 2021.4.25 10 years 23. ! A method for plugging holes with copper paste on a circuit board ( ) Invention Shenghua Electronics PRC ZL202110214475.0 2021.2.26 20 years 24. ! A PCB substrate structure and hybrid substrate for embedded processing ( PCB ) Utility Model Our Company PRC ZL202420056332.0 2024.1.10 10 years 25. ! A visual detection device and method for controlling the depth of deep holes ( ) Invention Our Company and Shenghua Electronics PRC ZL20221028232.58 2022.3.22 20 years (d) Software Copyrights As of the Latest Practicable Date, our Group had registered the following software copyrights which are material to our business: No. Software Name Registrant Registration number Registration date (Year-Month-Date) 1. ! ! CAM integrated circuit design system V1.0 (CAM V1.0) Weisheng Circuit Board 2009SR045035 2009.10.10 2. ! ! Integrated circuit modification system V1.0 ( V1.0) Weisheng Circuit Board 2009SR044927 2009.10.10 3. ! ! Milling machine CNC device control system V1.0 ( V1.0) Weisheng Circuit Board 2009SR044930 2009.10.10 APPENDIX VI STATUTORY AND GENERAL INFORMATION – VI-7 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 414 of 431 -- No. Software Name Registrant Registration number Registration date (Year-Month-Date) 4. ! ! Circuit board fully automatic lamination system V1.0 ( V1.0) Weisheng Circuit Board 2009SR044937 2009.10.10 5. ! ! Circuit board production monitoring system V1.0 ( V1.0) Weisheng Circuit Board 2009SR044929 2009.10.10 6. ! ! Circuit board circuit auxiliary design system V1.0 ( V1.0) Weisheng Circuit Board 2009SR044928 2009.10.10 7. ! ! MFSP self-produced panel automatic edge system V1.0 (MFSP V1.0) Weisheng Circuit Board 2012SR009101 2012.2.13 8. ! ! Weisheng PCB design control system V1.0 ( PCB V1.0) Weisheng Circuit Board 2012SR009106 2012.2.13 9. ! ! MFSPCAM single PCS automatic production system V1.0 (MFSPCAM PCS V1.0) Weisheng Circuit Board 2017SR511114 2017.9.13 10. ! Circuit board production quality control system V1.0 ( V1.0) Weisheng Technology 2019SR0405612 2019.4.28 11. ! ! Fully automatic exposure machine control software V1.0 ( V1.0) Weisheng Technology 2019SR0405836 2019.4.28 12. ! Printed circuit board direct drawing system V1.0 ( V1.0) Weisheng Technology 2019SR0403487 2019.4.28 13. ! Drilling machine control software V1.0 ( V1.0) Weisheng Technology 2019SR0402866 2019.4.28 14. ! Fully automatic plate placing machine software V1.0 ( V1.0) Weisheng Technology 2019SR0411508 2019.4.29 15. ! FPC CAM auxiliary design system 1.01 (FPC CAM 1.01) Weisheng Circuit Board 2020SR1888523 2020.12.24 16. ! Workshop model optimization training system based on deep reinforcement learning V1.0 ( V1.0) Weisheng Technology 2023SR0754071 2023.6.29 17. ! SMT intelligent distribution planning system V1.0 (SMT V1.0) Weisheng Technology 2023SR0754072 2023.6.29 18. ! SMT scheduling system based on deep reinforcement learning V1.0 ( SMT V1.0) Weisheng Technology 2023SR0754074 2023.6.29 APPENDIX VI STATUTORY AND GENERAL INFORMATION – VI-8 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 415 of 431 -- No. Software Name Registrant Registration number Registration date (Year-Month-Date) 19. ! Intelligent warehousing and precise distribution management system software ( ) Weisheng Technology 2023SR1115548 2023.9.20 20. ! PCB appearance inspection intelligent confirmation management system V1.0 (PCB V1.0) Weisheng Technology 2023SR1080996 2023.9.15 21. ! Weisheng label printing system V1.0 ( V1.0) Weisheng Technology 2025SR0297863 2025.2.20 C. FURTHER INFORMATION ABOUT OUR DIRECTORS AND SUBSTANTIAL SHAREHOLDERS 1. Disclosure of interest (a) Interests and short positions of the Directors and chief executive of the Company in the Shares, underlying Shares and debentures of our Company and our associated corporations The following table sets out the interests and short positions of our Directors and chief executive of our Company immediately following completion of the [REDACTED] (assuming the [REDACTED] and the [REDACTED] are not exercised) in our Shares, underlying Shares or debentures of our Company or any of our associated corporations (within the meaning of Part XV of the SFO) which will have to be notified to us and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests and short positions in which they are taken or deemed to have under such provisions of the SFO), or which will be required, pursuant to section 352 of the SFO, to be entered in the register referred to therein, or which will be required to be notified to us and the Stock Exchange pursuant to the Model Code for Securities Transactions by Directors of Listed Issuers contained in the Listing Rules, once our H Shares are [REDACTED]: Name Capacity/Nature of Interest Class of Shares held after the [REDACTED] Number of Shares Approximate % of shareholding in our A Shares as of the Latest Practicable Date Approximate percentage of shareholding in the relevant class of Shares upon completion of the [REDACTED](2) Approximate percentage of shareholding in the issued share capital of our Company after the [REDACTED](2) Mr. Chen Tao ! ! ! ! ! Interest in controlled corporation(3) A Shares 266,269,191 (L) 30.52% [REDACTED]% [REDACTED]% Interest of Spouse(4) A Shares 3,791,642 (L) 0.43% [REDACTED]% [REDACTED]% Ms. Liu Chunlan ! ! ! ! Beneficial Interest(3) A Shares 3,791,642 (L) 0.43% [REDACTED]% [REDACTED]% Interest of Spouse(4) A Shares 266,269,191 (L) 30.52% [REDACTED]% [REDACTED]% APPENDIX VI STATUTORY AND GENERAL INFORMATION – VI-9 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 416 of 431 -- Name Capacity/Nature of Interest Class of Shares held after the [REDACTED] Number of Shares Approximate % of shareholding in our A Shares as of the Latest Practicable Date Approximate percentage of shareholding in the relevant class of Shares upon completion of the [REDACTED](2) Approximate percentage of shareholding in the issued share capital of our Company after the [REDACTED](2) Mr. Chen Yong ! ! ! ! Beneficial owner(5) A Shares 2,311,361 (L) 0.26% [REDACTED]% [REDACTED]% Mr. Zhao Qixiang ! ! ! Beneficial Interest A Shares 1,605,744 (L) 0.18% [REDACTED]% [REDACTED]% Mr. Zhu Guoqiang ! ! ! Beneficial Interest A Shares 1,302,444 (L) 0.15% [REDACTED]% [REDACTED]% Mr. Wang Hui ! ! ! ! ! Beneficial Interest A Shares 500,000 (L) 0.06% [REDACTED]% [REDACTED]% Mr. Xie Lanjun ! ! ! ! Beneficial Interest A Shares 6,500 (L) 0.00% [REDACTED]% [REDACTED]% Notes: (1) “L” denotes long position. (2) The calculation is based on the total number of [REDACTED] Shares, consisting of 872,557,313 A Shares and [REDACTED] H Shares) in [REDACTED] immediately after completion of the [REDACTED] (assuming the [REDACTED] and the [REDACTED] are not exercised). The calculation of the percentage includes 217,443 A Shares being held as treasury Shares repurchased by our Company pursuant to the repurchase mandates approved by Shareholders, accounting for approximately 0.02% of the total number of A Shares in issue as of the Latest Practicable Date. (3) As of the Latest Practicable Date, (a) Mr. Chen Tao and Ms. Liu Chunlan (spouse of Mr. Chen Tao) holds 90% and 10% of Shenghua Xinye, which holds 134,837,190 A Shares; (b) Mr. Chen Tao holds 70% of Hongda Investment, which in turns is the sole shareholder of Hong Kong Victory Giant which holds 131,432,001 A Shares. As such, Mr. Chen Tao will be deemed to be interested in the A Shares held by Shenghua Xinye and Hong Kong Victory Giant. (4) As of the Latest Practicable Date, Ms. Liu Chunlan, the spouse of Mr. Chen Tao, is interested in 3,791,642 A Shares (consisting of 640,000 restricted Shares under the 2022 Restricted A Share Incentive Scheme), while Mr. Chen Tao will be deemed to be interested in 266,269,191 A Shares. According to SFO, Ms. Liu Chunlan will be deemed to be interested in the A Shares held by her spouse and vice versa. (5) On March 14, 2025, Mr. Chen Yong pledged his 1,240,000 A Shares to China Merchants Securities Co., Ltd. ( ), and such pledge was released on March 9, 2026. On March 6 and 10, 2026, Mr. Chen Yong pledged 500,000 and 710,000 of his A Shares respectively to China Merchants Securities Co., Ltd.. Such pledged Shares were used as collateral for his personal loan and accounted for approximately 0.14% of our total number of A Shares in issue as of the Latest Practicable Date. (b) Interests of the substantial shareholders Save as disclosed in the section headed “Substantial Shareholders” of this document, immediately following the completion of the [REDACTED] (assuming the [REDACTED] and the [REDACTED] are not exercised), our Directors are not aware of any other person (not being a Director or chief executive of our Company) who will have an interest or short position in the Shares or the underlying Shares which would fall to be disclosed to us and the Stock Exchange under the provisions of Divisions 2 and 3 of Part XV of the SFO, or who is, directly or indirectly, interested in 10% or more of the issued voting shares of our Company or any member of our Group. APPENDIX VI STATUTORY AND GENERAL INFORMATION – VI-10 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 417 of 431 -- 2. Particulars of the Directors’ Service Contracts Pursuant to Rules 19A.54 and 19A.55 of the Hong Kong Listing Rules, we will enter into a contract with each of our Directors in respect of, among other things (i) compliance with relevant laws and regulations, (ii) observance of the Articles of Association, and (iii) provisions on arbitration. Save as disclosed above, none of the Directors has entered into any service contracts as a director with any member of the Group (excluding contracts expiring or determinable by the employer within one year without payment of compensation (other than statutory compensation)). 3. Remuneration of Directors For details of the remuneration of Directors, see “Directors and Senior Management — Emolument of Directors and Senior Management” and notes 13 and 14 in “Appendix I — Accountants’ Report” to this document. 4. Agency fees or commissions received Save as disclosed in this section no commissions, discounts, agency fee, brokerages or other special terms in connection with the issue or sale of any capital of any member of our Group within the two years immediately preceding the date of this document. 5. Disclaimers (i) Save as disclosed in “Substantial Shareholders” and “C. Further information about our Directors, and Substantial Shareholders” of this section, none of our Directors or our chief executive has any interest or short position in the Shares, underlying Shares or debentures of us or any of our associated corporations (within the meaning of Part XV the SFO) which will have to be notified to us and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO, or which will be required, pursuant to section 352 of the SFO, to be entered in the register referred to therein, or which will be required to be notified to us and the Stock Exchange pursuant to Model Code for Securities Transactions by Directors of Listed Issuers once the H Shares are [REDACTED] on the Stock Exchange; (ii) Save as disclosed in “Substantial Shareholders” and “C. Further information about our Directors and Substantial Shareholders” of this section, none of our Directors is a director or employee of a company which is expected to have an interest in the Shares falling to be disclosed to our Company and the Hong Kong Stock Exchange under the provisions of Divisions 2 and 3 of Part XV of the SFO once the H Shares are [REDACTED] on the Stock Exchange; APPENDIX VI STATUTORY AND GENERAL INFORMATION – VI-11 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 418 of 431 -- (iii) Save as disclosed in the section headed “History, Development and Corporate Structure” of this document, none of the Directors nor any of the experts referred to in “E. Other Information — 8. Qualifications and Consents of Experts” below: (i) has any direct or indirect interest in the promotion of, or in any assets which have been, within the two years immediately preceding the date of this document, acquired or disposed of by, or leased to, any member of the Group, or are proposed to be acquired or disposed of by, or leased to, any member of the Group; or (ii) is materially interested in any contract or arrangement subsisting at the date of this document which is significant in relation to the business of the Group; (iv) Save in connection with the [REDACTED], none of the Directors nor any of the experts referred to in “E. Other Information — 8. Qualifications and Consents of Experts” below: (i) interested legally or beneficially in any shares in any member of our Group; or (ii) has any right (whether legally enforceable or not) to [REDACTED] for or to nominate persons to [REDACTED] for any securities in any member of our Group; (v) So far as is known to the Directors, none of the Directors or their associates or any Shareholders who are expected to be interested in 5% or more of the issued share capital of the Company has any interest in the top five customers or our top five suppliers of the Group. D. 2022 RESTRICTED A SHARE INCENTIVE SCHEME Our Company adopted the 2022 Restricted A Share Incentive Scheme approved by the Shareholders on August 15, 2022, which was outstanding as of the Latest Practicable Date. The terms of 2022 Restricted A Share Incentive Scheme not subject to the provisions of Chapter 17 of the Listing Rules other than Rule 17.12 as they do not involve any grant of restricted Shares by our Company after our [REDACTED] but is partially funded by our treasury Shares which are not [REDACTED] on the Stock Exchange. Our Company will comply with applicable requirements under Rule 19A.39E of the Listing Rules as and when appropriate and required. The terms of the 2022 Restricted A Share Incentive Scheme are summarized below: (i) Purpose The purpose of the 2022 Restricted A Share Incentive Scheme is to establish and enhance the long-term incentive mechanism of the Company, attract and retain talents and incentive the sense of mission of the Directors, senior and middle level managements and key technical employees to achieve a sustainable developing environment of our Group and thereby realize APPENDIX VI STATUTORY AND GENERAL INFORMATION – VI-12 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 419 of 431 -- our Group’s long-term objectives. The 2022 Restricted A Share Incentive Scheme is implemented under the premise of protecting shareholder’s interests and with a principle of evaluating the benefits according to contributions. (ii) Administration of the scheme The 2022 Restricted A Share Incentive Scheme is subject to the approval of the Shareholders’ meeting, the administration of the Board, and the supervision of the independent non-executive Directors of the Company. (iii) Participants The participants of the 2022 Restricted A Share Incentive Scheme include Directors, senior and middle management, and other key technical employees (excluding independent Directors and supervisors) of our Group who have made significant contributions to the business operations and development of our Group. (iv) Source and maximum number of Shares The Shares underlying the 2022 Restricted A Share Incentive Scheme shall be A Shares repurchased by our Company from the secondary market and/or the A Shares to be issued by our Company. Each restricted Share granted represents the right to purchase one A share within the agreed period at the grant price. The restricted Shares are subject to a vesting period and will only be vested upon fulfilling the unlocking conditions stipulated. The maximum number of restricted Shares that can be granted under the 2022 Restricted A Share Incentive Scheme is 28,178,000 A Shares, of which include 2,400,000 retained restricted Shares (the “Retained Restricted Shares”), the grantees of which shall be determined within 12 months after the approval of the 2022 Restricted A Share Incentive Scheme by the Shareholders’ meeting. (v) Date of grant and term of the scheme Within 60 days following the approval of the 2022 Restricted A Share Incentive Scheme by the shareholders’ meeting, the Board shall determine the grant date of the restricted shares and complete the necessary procedures for registration and announcement. The 2022 Restricted A Share Incentive Scheme shall be effective from the date of completion of the grant of restricted shares under the Scheme up to the date when all of the restricted shares granted to the participants have either fully vested or been repurchased and cancelled, provided that the term of the Scheme shall not exceed 48 months. (vi) Lock-up for Directors and the senior management team If the grantee is a Director or a senior management of our Company, during the period of employment, the A Shares to be transferred in each year shall not exceed 25% of the total Shares he or she holds. No A Share can be transferred within six months after termination of his or her employment. If the grantee is a Director or senior management of our Company, any APPENDIX VI STATUTORY AND GENERAL INFORMATION – VI-13 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 420 of 431 -- income derived from the sale of A Shares within six months after purchase, or from the purchase of shares within six months after a sale shall belong to our Company and will be forfeited by the Board. If there is any change in the applicable laws and regulations on the foregoing lock-up requirements, the grantee shall comply with the amended laws and regulations. (vii) Conditions to the grant of restricted Shares The restricted Shares under the 2022 Restricted A Share Incentive Scheme will only be granted to selected participants when the following conditions are fulfilled: (a) Regarding our Company, none of the following circumstances has occurred: (1) an audit report with a disclaimer of opinion or an adverse opinion has been issued by the reporting accountant with respect to our Company’s accountants’ report for the most recent fiscal year; (2) an audit report with a disclaimer of opinion or an adverse opinion has been issued by the reporting accountant with respect to the internal control contained in the accountants’ report for the most recent fiscal year; (3) our Company’s failure to distribute dividends in accordance with the relevant laws and regulations, the Articles of Association, or the public commitment within the last 36 months after its listing on the ChiNext Market of the Shenzhen Stock Exchange; (4) applicable laws and regulations prohibit the implementation of any share incentive scheme; or (5) any other circumstances determined by CSRC. (b) With respect to the grantee, none of the following circumstances has occurred: (1) the grantee has been regarded as an inappropriate person by the relevant stock exchange within the last 12 months; (2) the grantee has been regarded as an inappropriate person by CSRC or its regional office within the last 12 months; (3) the grantee has been punished or prohibited from entering into the securities market by the CSRC or its regional office within the last 12 months; (4) the grantee is not qualified to serve as a director or senior management according to the PRC Company Law; APPENDIX VI STATUTORY AND GENERAL INFORMATION – VI-14 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 421 of 431 -- (5) the grantee is prohibited from participating in any incentive plan of listed companies according to applicable laws and regulations; or (6) any other circumstances determined by the CSRC. (viii) Vesting of restricted Shares The vesting period for the restricted Shares commences from the date of the first grant of these Shares to the grantee. The vesting period of the restricted Shares is divided into three phases: 12 months, 24 months and 36 months. During the vesting period, the restricted Shares granted to the grantee shall not be transferred, for repayment of debt or pledged. In addition, the restricted Shares will only be unlocked when (i) the conditions set out under paragraph (vii) above are fulfilled; and (ii) the annual assessment of the performance of targets (including our Company and grantees) set out under the scheme is achieved. The restricted Shares will be unlocked after the vesting period in accordance with the vesting schedule as set out under the scheme during a period of 12 to 36 months as follows: (a) The 30% shall be unlocked during the period from the first trading day after the expiration of the 12-month period from the date of the initial grant to the last trading day within 24 months from the initial grant date; (b) The 30% shall be unlocked during the period from the first trading day after the expiration of the 24-month period from the date of the initial grant to the last trading day within 36 months from the initial grant date; (c) The remaining 40% shall be unlocked during the period from the first trading day after the expiration of the 36-month period of the date of the initial grant to the last trading day within 48 months from the initial grant date. The Retained Restricted Shares will be vested in tranches of 50% in each of the two vesting periods that occur between (i) the first trading date after 12 months from the date of grant and the last trading day up to 24 months from the date of grant; and (i) the first trading date after 24 months from the date of grant and the last trading day up to 36 months from the date of grant. The number of restricted Shares granted and/or the grant prices will be adjusted upon the occurrence of certain events, including but not limited to issue of bonus shares, right issue, subdivision of shares placing and share reduction. The Company may repurchase the restricted Shares upon the occurrence of certain events as set out in the Scheme, including but not limited to the change of the positions of the grantee or termination of employment. APPENDIX VI STATUTORY AND GENERAL INFORMATION – VI-15 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 422 of 431 -- (ix) Grant Price The grantees shall pay a grant price of RMB11.76 or RMB11.27 per Share to purchase the restricted Shares from the Company upon the fulfilment of all conditions for the restricted Shares. The grant price of each restricted Shares under the 2022 Restricted A Share Incentive Scheme was determined based on the average share prices of the relevant trading dates. (x) Dividend and voting rights Upon transfer of the restricted Shares by our Company, the grantees of restricted Shares will be entitled to exercise the right of Shareholders, including but not limited to the right to receive dividends and voting rights. Before the unlocking of the restricted Shares, the restricted Shares (including the rights to voting and receive dividends) shall be locked and such shares shall not be transferred or used to guarantee or repay debts. (xi) Vested restricted Shares As of the Latest Practicable date, the number of restricted Shares granted and vested under the 2022 Restricted A Share Incentive Scheme was 7,036,320, representing approximately [REDACTED]% of the total [REDACTED] Shares immediately following the completion of the [REDACTED] (assuming the [REDACTED] and the [REDACTED] are not exercised). The following table sets forth the number of restricted Shares granted and vested to Directors and senior management under the 2022 Restricted A Share Incentive Scheme as of the Latest Practicable Date: Name of grantee Position Date of grant Number of restricted shares Grant Price(2) Vesting period Approximate % of total issued Shares immediately after the completion of the [REDACTED](1) Ms. Liu Chunlan ! ! Non-executive Director September 5, 2022 640,000 11.27 30%, 30% and 40% of the share awards granted under the 2022 Restricted A Share Incentive Scheme will be vested in each of three periods that occur between the first trading date after the expiration of the 12-month period from the date of grant and the last trading day within the 48- month period of the date of grant, respectively. [REDACTED]% Mr. Zhao Qixiang ! ! Executive Director and president September 5, 2022 320,000 11.27 [REDACTED]% Mr. Chen Yong ! ! ! Executive Director and vice manager September 5, 2022 320,000 11.27 [REDACTED]% Mr. Zhu Guoqiang ! ! Chief financial officer September 5, 2022 320,000 11.27 [REDACTED]% Mr. Wang Hui ! ! ! ! Executive vice president September 5, 2022 320,000 11.27 [REDACTED]% Mr. Zhou Dingzhong Vice president September 5, 2022 256,000 11.27 [REDACTED]% Ms. Zhu Xiyao ! ! ! Vice president, secretary to our Board and one of the joint company secretaries September 5, 2022 32,000 11.27 [REDACTED]% APPENDIX VI STATUTORY AND GENERAL INFORMATION – VI-16 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 423 of 431 -- Notes: (1) The calculation is based on the assumption that the [REDACTED] and the [REDACTED] are not exercised. (2) The grant price under the 2022 Restricted A Share Incentive Scheme takes into account the adjustment due to our dividends distributions, including our Company’s distribution of cash dividends of RMB1.9 (tax inclusive) per 10 Shares to our then existing Shareholders on May 22, 2023 and June 7, 2024, respectively and our Company’s distribution of cash dividends of RMB3.0 (tax inclusive) per 10 Shares to our then existing Shareholders on April 30, 2025. The table below sets forth the details of restricted Shares granted and vested to connected persons and other grantees (excluding Directors and senior management of our Company) under the 2022 Restricted A Share Incentive Scheme as of the Latest Practicable Date. Position Number of grantees Date of grant Number of restricted Shares Grant price(2) Vesting period Approximate % of total issued Shares immediately after the completion of the [REDACTED](1) Connected person ! ! ! ! ! 1 September 5, 2022 48,000 11.27 30%, 30% and 40% of the share awards granted under the 2022 Restricted A Share Incentive Scheme will be vested in each of three periods that occur between the first trading date after the expiration of the 12-month period from the date of grant and the last trading day within the 48 month period of the date of grant, respectively. [REDACTED]% other grantees ! ! 615 September 5, 2022 4,780,320 11.27 [REDACTED]% Notes: (1) The calculation is based on the assumption that the [REDACTED] and the [REDACTED] are not exercised. (2) The grant price under the 2022 Restricted A Share Incentive Scheme takes into account the adjustment due to our dividends distributions, including our Company’s distribution of cash dividends of RMB1.9 (tax inclusive) per 10 Shares to our then existing Shareholders on May 22, 2023 and June 7, 2024, respectively and our Company’s distribution of cash dividends of RMB3.0 (tax inclusive) per 10 Shares to our then existing Shareholders on April 30, 2025. APPENDIX VI STATUTORY AND GENERAL INFORMATION – VI-17 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 424 of 431 -- E. OTHER INFORMATION 1. Estate Duty The Directors have been advised that no material liability for estate duty is likely to fall on the Group. 2. Litigation As of the Latest Practicable Date, the Company was not engaged in any litigation, arbitration or claim of material importance and no litigation, arbitration or claim of material importance was known to our Directors to be pending or threatened by or against us, that would have a material adverse effect on our results of operations or financial conditions. 3. The Joint Sponsors’ Independence The Joint Sponsors have made an application on our behalf to the Listing Committee for the [REDACTED] of, and permission to [REDACTED], our H Shares. All necessary arrangements have been made to enable the securities to be admitted into [REDACTED]. The Joint Sponsors satisfy the independence criteria applicable to sponsors set out in Rule 3A.07 of the Listing Rules. The Joint Sponsors will receive an aggregate of USD850,000 for acting as the sponsors for the [REDACTED]. 4. Compliance Adviser The Company has appointed China Securities (International) Corporate Finance Company Limited as the compliance adviser upon [REDACTED] in compliance with Rules 3A.19 and 19A.05 of the Listing Rules. 5. Preliminary Expenses The Company has not incurred any material preliminary expenses. 6. Taxation of [REDACTED] of H Shares The [REDACTED] of H Shares registered with our Hong Kong branch register of members will be subject to Hong Kong stamp duty. The current rate charged on each of the [REDACTED] is 0.1% of the consideration of or, if higher, of the fair value of our Shares being sold or transferred (in other words, a total of 0.20% is currently payable on a typical [REDACTED] involving H Shares). In addition, a fixed stamp duty of HK$5.00 is currently payable on any [REDACTED] of H Shares. Where one of the parties is a resident outside Hong Kong and does not pay the ad valorem duty due by it, the duty not paid will be assessed on the instrument of transfer (if any) and will be payable by the transferee. If no stamp duty is paid on or before the due date, a penalty of up to 10 times the duty payable may be imposed. APPENDIX VI STATUTORY AND GENERAL INFORMATION – VI-18 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 425 of 431 -- 7. Promoters Our promoters comprised 9 of our then Shareholders immediately before our conversion into a joint stock limited liability company on February 27, 2012: No. Name of promoters 1. ! ! ! Shenghua Xinye 2. ! ! ! Hong Kong Victory Giant 3. ! ! ! Oriental Fortune (Wuhu) Equity Investment Fund (Limited Partnership)* ( ( ) ( )) 4. ! ! ! Bodaxing 5. ! ! ! Guoke Ruihua Venture Capital Enterprise* ( ) 6. ! ! ! Oriental Fortune (Wuhu) No. 2 Equity Investment Fund (Limited Partnership)* ( ( ) ( )) 7. ! ! ! Huizhou Kaichuang Venture Capital Partnership (Limited Partnership)* ( ( )) 8. ! ! ! Jiaxing Shidai Jingxuan Venture Capital Partnership (Limited Partnership)* ( ( )) 9. ! ! ! Ningbo Fenghai Information Technology Development Co., Ltd.* ( ) Within the two years immediately preceding the date of this document, no cash, securities, amount or benefit has been paid, allotted or given, or has been proposed to be paid, allotted or given, to any of the promoters named above in connection with the [REDACTED] or the related transactions described in this document. 8. Qualifications and Consents of Experts The qualifications of the experts (as defined under the Listing Rules and the Companies (Winding Up and Miscellaneous Provisions) Ordinance) which have given opinions or advice in, or referred to in, this document are as follows: Name of Expert Qualifications J.P. Morgan Securities (Far East) Limited ! ! ! ! ! ! ! ! A licensed corporation under the SFO carrying on Type 1 (dealing in securities), Type 4 (advising on securities) and Type 6 (advising on corporate finance) regulated activities under the SFO APPENDIX VI STATUTORY AND GENERAL INFORMATION – VI-19 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 426 of 431 -- Name of Expert Qualifications China Securities (International) Corporate Finance Company Limited! ! A licensed corporation carrying on Type 1 (dealing in securities) and Type 6 (advising on corporate finance) regulated activities under the SFO GF Capital (Hong Kong) Limited ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! A licensed corporation under the SFO for type 6 (advising on corporate finance) of the regulated activity as defined under the SFO BDO Limited ! ! ! ! ! ! ! ! ! ! ! ! ! Certified Public Accountants under Professional Accountants Ordinance (Chapter 50 of the Laws of Hong Kong) Registered Public Interest Entity Auditor under Accounting and Financial Reporting Council Ordinance (Chapter 588 of the Laws of Hong Kong) JunHe LLP ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! Legal advisor as to PRC law and as to data privacy and cybersecurity law to our Company Frost & Sullivan (Beijing) Inc., Shanghai Branch Co. ! ! Industry consultant Robin Lynn & Lee in collaboration with DFDL! ! ! Legal advisor as to Malaysian law to our Company CHP LAW LLC ! ! ! ! ! ! ! ! ! ! ! Legal advisor as to Singaporean law to our Company DFDL (Thailand) Limited ! ! ! ! Legal advisor as to laws of Thailand to our Company Each of the experts listed above has given and has not withdrawn its written consent to the issue of this document with the inclusion of its report and/or letter and/or opinion and/or references to its name and qualifications included herein in the form and context in which they respectively appear. 9. Binding Effect This document shall have the effect, if an application is made in pursuance hereof, of rendering all persons concerned bound by all of the provisions (other than the penal provisions) of Sections 44A and 44B of the Companies (Winding Up and Miscellaneous Provisions) Ordinance so far as applicable. APPENDIX VI STATUTORY AND GENERAL INFORMATION – VI-20 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 427 of 431 -- 10. Bilingual Document The English language and Chinese language versions of this document are being published separately, in reliance upon the exemption provided in Section 4 of the Companies Ordinance (Exemption of Companies and Prospectuses from Compliance with Provisions) Notice (Chapter 32L of the Laws of Hong Kong). 11. No Material Adverse Change Save as disclosed in “Summary” and “Financial Information” of this document, our Directors confirm that there has been no material adverse change in the financial or trading position or prospects of our Group since December 31, 2025 (being the date to which the latest audited consolidated financial statements of our Group were prepared). 12. Miscellaneous Save as disclosed in “Financial Information,” “History, Development and Corporate Structure,” and “[REDACTED]” this document: (a) within the two years preceding the date of this document, no share or loan capital of the Company or any of its subsidiary has been issued or has been agreed to be issued fully or partly paid either for cash or for a consideration other than cash. (b) no share or loan capital of the Company or any of its subsidiary is under option or is agreed conditionally or unconditionally to be put under option. (c) no founder, management or deferred shares of the Company or any of its subsidiary have been issued or have been agreed to be issued. (d) our Company has no outstanding convertible debt securities or debentures. (e) none of the experts listed under “— 8. Qualifications and Consents of Experts”: (i) is interested beneficially or non-beneficially in any shares in any member of the Group; or (ii) has any right or option (whether legally enforceable or not) to subscribe for or to nominate persons to subscribe for securities in any member of the Group save in connection with the [REDACTED]. (f) there are no procedures for the exercise of any right of pre-emption or transferability of subscription rights. (g) there are no contracts for hire or hire purchase of plant to or by us for a period of over one year which are substantial in relation to our business. APPENDIX VI STATUTORY AND GENERAL INFORMATION – VI-21 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 428 of 431 -- (h) the English text of this document shall prevail over their respective Chinese text. (i) there are no arrangements under which future dividends are waived or agreed to be waived. (j) there has not been any interruption in the business of the Group which may have or has had a significant effect on the financial position of the Group in the 12 months preceding the date of this document. (k) save for the A Shares of our Company that are listed on the ChiNext Market of the Shenzhen Stock Exchange, and save for the H Shares to be [REDACTED] in connection with the [REDACTED], none of the equity and debt securities of our Company, if any, is listed or dealt with in any other stock exchange nor is any listing or permission to deal being or proposed to be sought. (l) there are no restriction affecting the remittance of profits or repatriation of capital by us into Hong Kong from overseas. APPENDIX VI STATUTORY AND GENERAL INFORMATION – VI-22 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 429 of 431 -- DOCUMENTS DELIVERED TO THE REGISTRAR OF COMPANIES The documents attached to the copy of this document delivered to the Registrar of Companies in Hong Kong for registration were: (a) a copy of the material contract referred to in “Appendix VI — Statutory and General Information — B. Further Information about the Business — 1. Summary of Material Contract”; and (b) the written consents referred to in “Appendix VI — Statutory and General Information — E. Other Information — 8. Qualifications and Consents of Experts.” DOCUMENTS AVAILABLE ON DISPLAY Electronic copies of the following documents will be available on display on the website of the Stock Exchange at www.hkexnews.hk and our website at www.shpcb.com during a period of 14 days from the date of this document: (a) the Articles of Association; (b) the Accountants’ Report, and the report on the unaudited [REDACTED] financial information prepared by BDO Limited, the texts of which are set out in “Appendix I — Accountants’ Report” and “Appendix II — Unaudited [REDACTED] Financial Information,” respectively; (c) the audited consolidated financial statements of the Group for the three years ended December 31, 2023, 2024 and 2025; (d) the legal opinion from JunHe LLP, the Company’s PRC Legal Advisor, in respect of, among other things, the general matters of the Company and the property interests of our Group in the PRC; (e) the legal opinion as to Malaysian law issued by Robin Lynn & Lee in collaboration with DFDL, our legal advisor as to Malaysian law; (f) the legal opinion as to Singaporean law issued by CHP LAW LLC, our legal advisor as to Singaporean law; (g) the legal opinion as to laws of Thailand issued by DFDL (Thailand) Limited, our legal advisor as to laws of Thailand; (h) the industry report prepared by Frost & Sullivan (Beijing) Inc., Shanghai Branch Co., a summary of which is set forth in “Industry Overview”; APPENDIX VII DOCUMENTS DELIVERED TO THE REGISTRAR OF COMPANIES AND AVAILABLE ON DISPLAY – VII-1 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 430 of 431 -- (i) the PRC Company Law, the Securities Law and the Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Companies together with their unofficial English translations; (j) the service contracts between each of the Directors and the Company referred to in “Appendix VI — Statutory and General Information”; (k) the material contract referred to in “Appendix VI — Statutory and General Information — B. Further Information about the Business — 1. Summary of Material Contract”; and (l) the written consents referred to in “Appendix VI — Statutory and General Information — E. Other Information — 8. Qualifications and Consents of Experts”. APPENDIX VII DOCUMENTS DELIVERED TO THE REGISTRAR OF COMPANIES AND AVAILABLE ON DISPLAY – VII-2 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT -- 431 of 431 --