During the Track Record Period, the percentage of dispatch workers engaged by our Company and some of our subsidiaries had exceeded the 10% regulatory limit during times of increased production orders and due to insufficient understanding of the relevant PRC labor laws and regulations and oversight of our human resources department.
Business · p. 175
As of the Latest Practicable Date, our Company and all of our subsidiaries within our Group had less than 10% of dispatched contract workers.
Business · p. 175
Our PRC Legal Advisor is of the opinion that the risk of us and relevant subsidiaries being penalized for labor dispatch non-compliance during the Track Record Period is remote, given that the issue has been rectified in a timely manner, and that neither we nor any of our subsidiaries had been subject to any administrative order or penalties in relation to labor and social security during the Track Record Period.
During the Track Record Period, the number of dispatched workers we engaged had once exceeded 10% of our total labor force, primarily because our operations were in a ramp-up stage in 2024 and 2025, during which we engaged additional dispatched workers on a short-term basis to meet fluctuating production demands.
Business · p. 189
As of December 31, 2025, we had rectified this matter and reduced the ratio of dispatched contract workers to our total workforce to below 10%.