Revenue from sales through our sales agents amounted to US$1.8 million, US$1.8 million, US$1.6 million, US$0.9 million and US$1.0 million in 2023, 2024 and 2025 and the six months ended June 30, 2025 and 2026, respectively, representing 0.5%, 0.5%, 0.4%, 0.5% and 0.5% of our total revenue for the respective periods.
Business · p. 147
We believe the risk of channel stuffing in relation to our sales agents is low because (i) we generally require prepayment from our sales agents before shipping our products to them; (ii) we generally do not allow returns or replacements of products sold to our sales agents, unless there are product quality issues caused by us; and (iii) we do not set minimum purchase requirements or sales targets for our sales agents, which are therefore not incentivized or obliged to purchase products exceeding their actual demand.
We regularly monitor our inventory to ensure timely supply of our products and reduce the risk of overstocking.
Business · p. 197
Our distribution agreement does not specify an agreed annual sales target or minimum annual purchase amount.
Business · p. 198
We believe this distribution model helps extend our coverage in a cost-effective manner while retaining proper control over our sales distribution network and enhancing our core commercialization capabilities through direct engagement with downstream hospitals.
We began charging franchise management fees of 6% from 165 of our franchised stores in Zhejiang Province since 1 January 2025. Franchise management fees amounted to RMB2.4 million, RMB2.4 million and RMB10.2 million for the years ended 31 December 2023, 2024 and 2025, respectively.
Financial Information · p. 209
Our results of operation will be affected if we fail to charge our franchised stores the franchise management fees or the fee percentage is reduced.
Financial Information · p. 209
We began to provide more operational management support and technical service support to our franchised stores in Zhejiang Province to enhance their abilities to perform. We also began to rollout our enterprise resource planning system, which manages inventory level, sales and procurement and also enable us to calculate revenue generated, to our franchised stores in 2023.