Our utilization rates exceeded 100% in relevant period, primarily because production in excess of our designed production capacity was achieved through overtime and additional shifts beyond the customary shift pattern.
Business · p. 138
We plan to expand our production capacity at our Suzhou and Dongguan facilities and establish a new facility dedicated to our new application business.
As we improve our production efficiency in connection with the shift towards more complex products, production volume and utilization were insufficient to absorb fixed costs efficiently, which could adversely affect gross profit margins even where sales volume increases.
Financial Information · p. 160
Our property, plant and equipment increased from RMB2,536.3 million as of December 31, 2023 to RMB5,497.9 million as of June 30, 2026
As new facilities take time to become fully operational, initial inefficiencies, and incremental overhead absorption can temporarily depress margins and elevate unit costs until volumes scale to targeted levels.
Financial Information · p. 204
For example, in August 2025, we announced that we planned to invest additional RMB5.0 billion in the high-end production capacity expansion and upgrade of our Jinwan production base (Zhuhai City, Guangdong Province), our core hub for high-end manufacturing in HDI, SLP, and HLC products, to better serve end markets of our products.
Financial Information · p. 204
Our gross profit margin decreased slightly from 21.4% for the six months ended June 30, 2025 to 20.2% for the six months ended June 30, 2026, primarily due to (i) the continued increase in prices of key raw materials, in particular the sustained elevation of prices of copper clad laminates; (ii) intensified price competition in the downstream automotive electronics sector; (iii) the initial ramp-up of our new production bases, where fixed costs were absorbed over lower initial output volumes; and (iv) the relatively low initial yields of our high-end production capacity, particularly for HDI PCB products.
Our utilization rates were relatively lower and fluctuated during the Track Record Period, primarily due to changes in our product mix and our forward-looking capacity planning in support of our development strategy.
Business · p. 126
In particular, the utilization rate of our TCM facilities decreased from 55.6% in 2024 to 35.2% in 2025, primarily because we adjusted production scheduling and inventory planning for certain TCM products in light of market demand and changes in product mix, while maintaining buffer capacity.
Operational risks include the technical challenges associated with maintaining high utilization rates, which have consistently exceeded 100 per cent of designed capacity, and the need to ensure compliance with stringent environmental standards through continuous investment in emissions control technology.
Business · p. 125
Renhe Environment obtained written approval from the Changsha Municipal Bureau of Ecology and Environment, being the relevant competent environmental authority, for the upgraded technical transformation project, which will allow the treatment capacity to reach 1,560 tons per day upon completion.
As customer orders for helmets during the Track Record Period were lower than the historical level, actual production volume remained below production capacity, resulting in relatively low utilization rates.
Business · p. 156
The utilization rate of our LSEV in the PRC Base decreased from 103.6% in 2024 to 3.6% in 2025, primarily reflecting a temporary reallocation of certain final vehicle assembly activities serving the U.S. market to the United States during the tariff period.
Business · p. 157
To address the lower utilization of our PRC facilities, we reallocated the relevant PRC LSEV production lines to powersports products, non-LSEV E-mobility products and selected component production in January 2026.
The production utilization rate for 2023, 2024 and 2025 and the six months ended June 30, 2025 and 2026 was 96.8%, 81.8%, 92.5%, 91.6% and 92.2%, respectively.
Financial Information · p. 210
We recorded a low utilization rate in 2024, which was in line with the market according to Frost & Sullivan, primarily as a result of an oversupply in the lithium battery copper foil market in 2024.
Business · p. 161
Since 2025, our sales have been limited by our production capacity.
We expect to devote our productive forces to our own drug candidates and products as our clinical trials progress and after our commencement of commercialization.
For FY2023, FY2024, FY2025 and 1H2026, our capacity utilization rates for engines were 88.4%, 93.0%, 98.6% and 94.3%, respectively.
Financial Information · p. 227
To meet the anticipated increase in customer demand, we intend to expand our production capacity and install advanced and highly intelligent equipment and production lines, in order to deliver more products and generate more revenue while optimizing our costs and profit margins.
Financial Information · p. 227
The two machining lines and two assembly and testing lines are expected to be completed and become operational in or before 2031.
During the Track Record Period, we produced (i) 4.4×10^17^ vg of FT-017 at our manufacturing facility calculated based on 2,209 vials produced, each containing 5mL at a concentration of 4×10^13^ vg/mL, and (ii) one batch of FT-003 production, with 3.5 L of drug substance at a concentration of 1.1×10^13^ vg/mL, representing a total viral yield of 3.86×10^16^ vg, representing a utilization rate of approximately 16%.
Business · p. 206
The relatively low utilization rate was primarily due to our production planning being driven by the development stage and clinical demand of our drug candidates.
Business · p. 206
Based on the foregoing, we believe our current production capacity is sufficient to support the clinical development and initial commercialization for these candidates, taking into account factors such as the estimated addressable patient populations, anticipated market penetration, the competitive landscape, the clinical profiles of the relevant candidates, and the expected timing of regulatory approvals and commercial launch.
Certain minimally invasive intervention and IVD product lines recorded utilization rates exceeding 100.0%, as we met strong demand by extending working hours through overtime, resulting in actual output surpassing our planned capacity based on standard working hours.
Business · p. 186
Throughout the Track Record Period, the utilization rate of the production capacity for our minimally invasive intervention consumables exceeded or approached full capacity, driven by sustained strong market demand.
Business · p. 186
The utilization rate of the production capacity for our endoscope systems was relatively low at 22.3% in 2023, as the product was launched at the end of 2022 and was in its initial commercialization phase.
(1) The utilization rate of our feed mill exceeded 100% in the first half of 2026, primarily due to: (i) increased demand for our feed products, which led us to operate beyond the standard assumptions used in calculating production capacity; and (ii) a more concentrated production mix of major feed products, which improved production efficiency.
Business · p. 131
Our feed mill commenced production in January 2024. The utilization rate for our feed mill increased from 62.3% in 2024 to 96.7% in 2025, primarily due to the feed mill was still in the ramp-up stage in 2024 and reached nearly full capacity in 2025.
During the Track Record Period, we had one manufacturing facility in operation – Suzhou facility. As of the Latest Practicable Date, our current production facility remains in the clinical sample production stage and has not yet commenced large-scale commercial manufacturing.
Business · p. 200
While our Suzhou facility is expected to reach a maximum full production capacity of 500 batches per year, which is sufficient to meet the demands of the early stage of commercialization, it has limited physical space for further material expansion.
Business · p. 201
Our rationale for this capacity expansion is based on the significant anticipated market demand for solid tumor treatments.
Our existing three factories operate with relatively aging production lines, and upgrading or refurbishing them would involve higher costs, while their current designed capacity is not expected to fully meet our near-term growth in shipment volume.
Financial Information · p. 211
To support anticipated shipment growth and further enhance our production capacity, we plan to establish a factory in Wuzhen, Zhejiang Province and incorporate automated production lines in such factory.
During the Track Record Period, our utilization rate for automotive electronics products was relatively low.
Business · p. 147
Along with the fast industry iteration and rapid changes of the automotive electronics customers, we have adjusted our business strategy from providing products to a large range of customers to focusing on large-scale, leading customers in such industry, leading to the relatively low utilization rate during the transition period.
Business · p. 147
The utilization rate for our smart office products experienced a decrease from 2025 to the five months ended May 31, 2026, primarily due to the commissioning and adjustment period following the relocation of the relevant production lines commencing in early 2026.
The utilization rates of our Foshan Yuanhong, Foshan Hansao, Suzhou Yuen Kee and Foshan Yuanchuang factories decreased in 2024 and/or 2025 primarily due to the expansion of production capacity in order to reserve sufficient capacity for business growth and peak-season production.
Business · p. 139
In addition, the Suzhou Yuen Kee factory added new machinery workshops, handbag workshops and ready-to-eat food workshops in 2024 and 2025, which significantly expanded its overall production capacity.
During the Track Record Period, our production capacity utilization rate for our ESC solutions was 41.0%, 63.2%, 70.8% and 64.2% respectively in 2023, 2024, 2025 and March 31, 2026.
Business · p. 165
As our production volume and production utilization capacity increase, and we optimize our manufacturing processes, we expect to realize significant economies of scale that will improve our gross margins and overall profitability.
The relatively low utilization rate of our Guangzhou clinical drug depot in 2023 was mainly due to (i) lower demand from South China, where fewer of our customers are based, and (ii) such depot having only commenced operations in 2021.
The utilization rate of our production bases amounted to 37.3%, 68.3%, 76.3% and 67.8% in 2023, 2024, 2025 and the five months ended May 31, 2026.
Financial Information · p. 203
As production expansion involves substantial capital investment and ongoing costs, our profitability depends in part on our ability to effectively manage capacity utilization as we scale up production.