Hong Kong IPO disclosure precedents · 324 companies, 337 items
sales through distributors: share of revenue, number and movement of distributors, relationship (sell-in / consignment), measures against channel stuffing and inventory build-up
During the Track Record Period, the sales generated from collaboration accounted for less than 0.5% of the total revenue of each period, respectively.
Business · p. 157
The company's explanation, the adviser's view and the page in the filing: see MattersDuring the Track Record Period, our regional partners did not return any solutions and held no inventory of our solutions.
Business · p. 157
We ceased to renew distribution agreements with 12 distributors in 2024 and another 12 distributors during the nine months ended September 30, 2025, primarily due to their failure to meet their sales target following a comprehensive evaluation that also took into account market demand in such distributors’ downstream industries and changes in their own business condition.
Business · p. 171
To the best of our knowledge, our major distributors during the Track Record Period (who, where applicable, collectively accounted for approximately 76%, 61%, 47% and 76% of total revenue from distributorship in each year/period during the Track Record Period) did not maintain any inventory at the end of each year/period during the Track Record Period and up to the Latest Practicable Date.
Business · p. 172
The company's explanation, the adviser's view and the page in the filing: see MattersWith the foregoing policies and in light of the historical purchase patterns of our distributors, we believe that our distributor management policy, including the sales targets, would serve to better incentivize distributors to expand customer reach and promote our products rather than stockpiling inventory, and our risk of channel stuffing associated with distributors is low.
Business · p. 172
For the years ended December 31, 2022, 2023, 2024 and for the nine months ended September 30, 2025, our total sales to distributors amounted to RMB339.2 million, RMB331.5 million, RMB475.3 million and RMB419.6 million, respectively, accounting for 28.4%, 32.0%, 40.7% and 43.8%, respectively, of our revenue (or 74.0%, 79.5%, 85.5% and 90.5% of our revenue from the sales of chip products) for the corresponding periods.
Business · p. 143
Though our distributors maintain a “buy-out” model with us, we are able to monitor our distributors’ inventory level, as agreed by our distributors.
Business · p. 143
The company's explanation, the adviser's view and the page in the filing: see MattersDuring the Track Record Period, to the best knowledge of our Directors, there was no material channel stuffing issue and cannibalization risks among our distributors as a result of their “buy-out” model with us.
Business · p. 143
However, we do not authorize them to acquire end customers, negotiate on our behalf, or maintain inventory for resale.
Business · p. 149
We do not impose sales targets or minimum purchase obligations on our trading partners. Purchase order reflects actual end customer demand, and we do not encourage speculative stocking.
Business · p. 150
The company's explanation, the adviser's view and the page in the filing: see MattersAccordingly, considering that (i) we do not set sales targets or minimum purchase obligations, (ii) our trading partners are generally not permitted to return unsold products, (iii) our products are largely customized and not interchangeable, and (iv) we did not identify any material channel stuffing or cannibalization risks during the Track Record Period and up to the Latest Practicable Date, our Directors are of the view that we do not have any material channel stuffing or cannibalization risks.
Business · p. 151
In 2023, 2024 and 2025, approximately 76.7%, 78.0% and 77.4% of our revenue was generated from sales to our distributors.
Financial Information · p. 216
As of December 31, 2025, we had a distributor network of 1,762 distributors, covering over 30 provinces in China and a broad range of countries and regions across six continents overseas.
Business · p. 156
The company's explanation, the adviser's view and the page in the filing: see MattersOur goal is to encourage distributors to maintain an inventory level to support sales for generally one to three months, ensuring efficient inventory turnover and stable market supply, as well as mitigating any risks associated with channel stuffing.
Business · p. 157
In 2023 and 2024 and the nine months ended September 30, 2024 and 2025, revenue generated from sales to distributors amounted to €27.9 million, €43.8 million, €38.5 million and €38.9 million, respectively, representing 58.1%, 72.2%, 73.1% and 71.8% of our revenue for the respective periods.
Business · p. 108
Our relationship with the distributors is a buyer and seller relationship.
Business · p. 108
The company's explanation, the adviser's view and the page in the filing: see MattersMoreover, we support our distributors and have instituted controls to deter channel stuffing, including: (i) reviewing distributors’ sales plans and targets and proving guidance to prevent inventory build-ups; (ii) conducting routine on-site inspections of distributors’ retail stores for sales, storage conditions, quality control, and inventory levels; and (iii) leveraging digital tools and IoT functionality by encouraging consumers to register in the TENWAYS App and monitoring device activations to assess sell-through performance and identify potential overstock risks.
Business · p. 109
As of September 30, 2025, our distribution network spanned 31 provinces, municipalities and autonomous regions across China.
Business · p. 191
In 2024 and the nine months ended September 30, 2025, revenue from sales of Sangbo'en to distributors in China accounted for 100.0% of our revenue from sales of Sangbo'en during the respective periods.
Business · p. 191
The company's explanation, the adviser's view and the page in the filing: see MattersWe have implemented policies and measures to mitigate the risk of inventory accumulation in the distribution channels.
Business · p. 192
In 2022, 2023, 2024 and the nine months ended September 30, 2024 and 2025, the revenue generated from distributorship amounted to RMB250.4 million, RMB190.1 million, RMB156.3 million, RMB135.2 million and RMB174.6 million, respectively, accounting for approximately 10.9%, 8.9%, 5.3%, 6.2% and 6.2%, respectively, of our total revenue in the same periods.
Business · p. 231
During the Track Record Period, our sales to distributors declined primarily because we sold more products through direct sales after some of our end customers decided to establish direct business relationship with us in place of through distributors and became our direct customers.
Business · p. 231
The company's explanation, the adviser's view and the page in the filing: see MattersDuring the Track Record Period, our number of distributors remained relatively stable.
Business · p. 233
In certain markets with fragmented customer demand, we may adopt a distributorship model to distribute our solutions, such as explosion-proof and industrial electric drive solutions.
Business · p. 132
For instance, we adopt strict product return policies to mitigate channel stuffing risks.
Business · p. 134
The company's explanation, the adviser's view and the page in the filing: see MattersDuring the Track Record Period and up to the Latest Practicable Date, we had no material unresolved disputes or lawsuits with distributors.
Business · p. 133
During the Track Record Period, our additions of new distributors primarily reflected our proactive efforts in expanding our distribution network.
Business · p. 238
The company's explanation, the adviser's view and the page in the filing: see MattersWe monitor our distributors’ inventory levels through on-site visits and regular communication with them to ensure they are well-positioned to meet customer demand promptly, while keeping the risk of channel stuffing low.
Business · p. 240
In 2023, 2024 and the ten months ended October 31, 2025, we had 102, 127, and 106 distributors, respectively.
Business · p. 162
In 2023, 2024, and the ten months ended October 31, 2025, our EV charging network business revenue generated from our distributors amounted to RMB87.1 million, RMB100.3 million and RMB56.0 million, respectively, accounting for approximately 0.7%, 0.7% and 0.5%, respectively, of our total revenue in the same periods.
Business · p. 162
The company's explanation, the adviser's view and the page in the filing: see MattersWe typically grant them exclusive rights within assigned territories and set sales targets periodically.
Business · p. 162
Revenue generated from distributors amounted to RMB1,190.8 million, RMB1,215.5 million, RMB1,289.3 million and RMB931.6 million during the Track Record Period, amount to 22.3%, 21.3%, 18.6% and 15.3% of our total revenue from the respective periods.
Business · p. 167
The significant changes in the number of our distributors during the Track Record Period was primarily due to the fact that many of our products, particularly electronic material products, are commodities that can be used in a wide range of industries and in many day-to-day production or maintenance scenarios, and have a long shelf life.
Business · p. 167
The company's explanation, the adviser's view and the page in the filing: see MattersWe generally require a full payment before delivering products to distributors.
Business · p. 168
For the years ended December 31, 2022, 2023, 2024 and the nine months ended September 30, 2025, our revenue generated from distributors amounted to RMB2.4 million, RMB67.2 million, RMB199.6 million and RMB162.2 million, respectively.
Summary · p. 6
In the nine months ended September 30, 2025, nine of our existing distributors did not have transaction with us in the immediately preceding 12 months due to fluctuations in market demand.
Business · p. 198
The company's explanation, the adviser's view and the page in the filing: see MattersTherefore our Directors are of the view that we are not subject to material risk of channel stuffing.
Business · p. 200
For the years ended December 31, 2022, 2023 and 2024 and for the nine months ended September 30, 2025, our total sales through distributors amounted to RMB978.3 million, RMB126.3 million, RMB540.6 million and RMB614.6 million, respectively, accounting for 26.6%, 5.5%, 14.9% and 15.1%, respectively, of our revenue for the corresponding periods.
Business · p. 212
Our distributors act as agents instead of principals in our transactions with customers, and we pay commissions for orders they obtained at the rates stipulated in the distribution agreements.
Business · p. 212
The company's explanation, the adviser's view and the page in the filing: see MattersDuring the Track Record Period and up to the Latest Practicable Date, we had not received any material product returns or indemnification claims from our distributors, nor had we made any provisions on any product returns or potential indemnification.
Business · p. 215
As of December 31, 2022, 2023, 2024 and August 31, 2025, we sold our own-brand Solar products to 363, 351, 329 and 339 customers, respectively.
Business · p. 180
Our revenue generated from the OBM model was RMB33.7 million, RMB39.6 million, RMB41.3 million and RMB30.4 million, respectively, accounting for 4.1%, 8.5%, 7.2% and 6.6% of our total revenue in the same periods.
Business · p. 180
The company's explanation, the adviser's view and the page in the filing: see MattersIn addition, to mitigate the risk of channel stuffing, we generally do not permit product returns or exchanges, except in specific cases, such as product defects or inconsistencies with product descriptions.
Business · p. 181
During the Track Record Period, the number of our distributors remained stable at three with no changes.
Business · p. 208
To minimise the risk of cannibalisation, we generally take the following measures in relation to our distributors: (i) when selecting our distributors, we take into consideration their respective geographic coverage to avoid potential competition among the distributors within a region; (ii) our distribution agreements specify the designated distribution regions; and (iii) we regularly communicate with our distributors to monitor various aspects of their sales activities and keep track of any potential cannibalisation or competition among our distributors.
Business · p. 209
The company's explanation, the adviser's view and the page in the filing: see MattersWe typically do not set minimum purchase requirements for our distributors.
Business · p. 209
In particular, in 2023 and the nine months ended September 30, 2025, the number of our hog dealers fluctuated, primarily attributable to the fluctuations in the hog market price.
Business · p. 220
Based on the above, we believe there is no channel-stuffing risk with the distribution through our hog deals.
Business · p. 221
The company's explanation, the adviser's view and the page in the filing: see MattersThere were further increase in the numbers of wholesale market customers who ceased to distribute our products in the nine months ended September 30, 2025 primarily due to our focus on key account customers and our efforts to streamline the existing wholesale customer structure to enhance profitability.
Business · p. 223
Our revenue generated from sales to distributors amounted to RMB7,581.0 million, RMB9,911.9 million, RMB13,606.6 million and RMB14,504.8 million in 2022, 2023, 2024 and the nine months ended September 30, 2025, respectively, representing 89.2%, 88.0%, 85.9% and 86.2% of our revenue in each of the corresponding period.
Business · p. 190
In 2022, 2023 and 2024 and the nine months ended September 30, 2025, our partnership with 408, 569, 457 and 319 distribution partners was terminated, which reflected our regular performance-based optimization as part of our channel management strategy.
Business · p. 189
The company's explanation, the adviser's view and the page in the filing: see MattersWe have implemented a comprehensive Inventory Management Policy (《庫存管理辦法》), under which our sales personnel conduct on-site inventory checks at the end of each month.
Business · p. 193
As of September 30, 2025, we were in contract with a total of 9,552 franchisees, operating 19,494 franchised stores across 28 provinces across China.
Business · p. 188
We believe that our sales to franchisees reflect the actual demand from consumers and thus we do not have material risks of channel stuffing and inventory backlog within the franchise network, for the following reasons:
Business · p. 196
The company's explanation, the adviser's view and the page in the filing: see MattersOur business growth depends on cooperation with franchisees who are committed to our value and highly motivated to grow our brands and store network.
Business · p. 188
Revenues from sales of our products and solutions to our distributors represented approximately 48.9%, 47.6%, 44.6% and 46.6% of our revenues in 2022, 2023, 2024 and in the six months ended June 30, 2025, respectively.
Business · p. 228
The number of our distributors decreased from 351 as of December 31, 2023 to 318 as of December 31, 2024, and further to 247 as of June 30, 2025, as we only retain distributors whose performance is satisfactory to us.
Business · p. 230
The company's explanation, the adviser's view and the page in the filing: see MattersThe three largest distributors during each period of 2022, 2023, 2024 and the six months ended June 30, 2025, contributing to 40.4%, 41.4%, 37.2% and 39.5% of our revenue in the same period, are headquartered in Hong Kong and Taiwan.
Business · p. 230