Hong Kong IPO disclosure precedents · 101 companies, 101 items
Companies mainly producing in-house but outsourcing secondary or auxiliary processes and components (e.g. SMT mounting, lens or cable assembly, accessories) to third-party manufacturers, including outsourcing costs and historical transition to self-production.
Our subcontracting charges amounted to US$18.7 million, US$20.9 million, US$19.1 million and US$6.7 million in 2023, 2024 and 2025 and the six months ended June 30, 2026, respectively.
Business · p. 140
We acquired these companies to bring certain processing and manufacturing capabilities in-house, enhance our control over production quality and delivery schedules, and support the continued manufacturing of our HRS.
In 2023, 2024, 2025 and the five months ended May 31, 2026, the costs incurred by such third-party services amounted to RMB57.8 million, RMB66.2 million, RMB66.9 million and RMB37.7 million respectively, which accounted for 11.9%, 11.4%, 10.4% and 12.5% of our total cost of sales for the respective periods.
Business · p. 158
As of the Latest Practicable Date, we primarily cooperated with 17 outsourced service providers which we believe can meet the demands for our operations.
Business · p. 158
Since assembly and packaging are highly standardized and mature processes, we believe partnering with reputable service providers enables specialized expertise and enhances both our cost management and operational efficiency.
materials for consigned processing, mainly representing products and related materials sent to third-party service providers for routine ancillary processing, such as packaging, assembly with lids and plastic components, and application of decorative elements or product markings
Financial Information · p. 223
materials for consigned processing of RMB10.6 million, as we outsourced certain non-core processes of household heat-resistant glass due to stronger customer demand and limited in-house personnel capacity
Specifically, during the Track Record Period, SMT, casing assembly, protective cover production and certain PCB water proofing were fully outsourced.
Business · p. 142
During the Track Record Period, we engaged an aggregate of 23 independent third-party manufacturers for different processes.
Business · p. 145
We apply process controls over our manufacturing partners to help ensure product quality, including controlled custody of consigned materials, acceptance sampling and visual criteria in line with prevailing national/industry standards, on-site oversight and recordkeeping, and at least a 12-month contractual arrangement for free rework for manufacturing-defect units under our standard processing contracts.
During the Track Record Period, we engaged third-party contract manufacturers for the SMT assembly of ICs on PCBs and the front-end focusing lens assembly processes to complement our in-house production.
Business · p. 174
During the same period, our outsourced processing costs in relation to these contract manufacturers amounted to RMB13.0 million, RMB8.3 million, RMB15.1 million and RMB3.4 million, representing 5.0%, 2.3%, 3.0% and 2.1% of our total cost of sales, respectively.
Business · p. 174
We outsource these sub-processes because they require specialized equipment and technical expertise, and engaging third-party contract manufacturers for these specific processes allows us to optimize our overall production efficiency and focus our in-house resources on core manufacturing processes of our spatial sensing products.
Mining operations (drilling, blasting, loading and haulage) are outsourced to a third-party mining engineering company, an Independent Third Party, under a contractor mining arrangement (the "Mining Contractor").
Due to the intensive competition in the relevant contracting service market, we do not believe that it would be difficult for us to find alternative contractors to provide similar services on terms comparable to those with our existing contractors.
During the Track Record Period, we outsourced a limited portion of our supplementary production processes including PCB surface mounting and cable and tire assembly, to certain third-party manufacturers.
Business · p. 164
During the Track Record Period, we engaged 11, 17, 22 and 21 third-party manufacturers, with the outsourced processing costs amounting to RMB1.0 million, RMB7.0 million, RMB34.3 million, and RMB23.8 million, respectively, accounting for 6.7%, 10.9%, 15.5% and 15.0% of our cost of sales in the same periods, respectively.
We may from time to time engage contract manufacturers to manufacture certain components (i.e., raw materials) and certain optical network terminal products (i.e., finished products).
Business · p. 150
Finished products manufactured by our contract manufacturers were zero in 2023 and accounted for approximately 3%, 5% and 7% of our total revenue in 2024, 2025 and the six months ended June 30, 2026, respectively.
Before we transitioned to substantial in-house production, we engaged manufacturing partners to support part of our production needs.
Business · p. 155
Since the commencement of operation of our own production facilities, we no longer engaged Supplier D for assembly services from FY2025 onwards.
Business · p. 164
We engaged this supplier to provide such labour support in order to complement the operation of our robots and ensure the overall completeness and service quality of our RaaS solutions.
On the component level, as of the Latest Practicable Date, we manufactured the main unit in-house and generally outsourced the production of the NO generation reactor and tube accessories to third-party suppliers.
Business · p. 171
For the components we outsource to third parties, we enforce stringent protocols to assure the quality of components we procure, including conducting on-site inspections, monitoring manufacture reports and executing periodic tests.
During the Track Record Period, the fees incurred for OEM partners accounted for approximately 0.7%, 2.1%, 1.8% and 2.1% of the carrying amount of inventories sold, the largest component of our cost of sales, in 2023, 2024 and 2025 and the three months ended March 31, 2026, respectively.
Business · p. 189
All our OEM partners are selected based on strict quality, capacity and compliance criteria, and they are required to comply with our technical standards and inspection protocols.
Business · p. 189
In our production process, key components are procured from third-party suppliers or manufactured by OEM partners based on our specifications, and are subsequently assembled, calibrated and tested in-house to form the final products.
The majority of our on-site deployment services are performed by our in-house team, while under some circumstances, we engage third-party service providers to assist with on-site deployment to meet short-term peak deployment demand and geographical convenience.
Business · p. 161
Our adjusted net loss (non-IFRS measures) increased from 2024 to 2025, primarily reflecting increases in R&D expenses and selling and distribution expenses, as well as a decrease in gross profit margin, which was mainly attributable to higher project deployment costs, including increased personnel outsourcing costs incurred during project implementation.
In addition, as of June 30, 2026, we cooperated with over 80 logistics partners, arranging a daily average of over 600 cold-chain vehicles for delivery of products to our stores.
Financial Information · p. 200
We provide improved routes and outsource the delivery service to logistics service suppliers, who are responsible for arranging vehicles, drivers and delivery services.
During the Track Record Period, we outsourced the processing of certain non-core components of our products and installation and set-up process to third-party manufacturing service providers to maintain a flexible production model and respond to changing market demand.
Business · p. 144
We remain responsible for, and maintain overall control over, the outsourced work process.
Business · p. 144
The increase in the use of outsourced processing service in our green shipping equipment and systems in the Track Record Period was mainly due to our expansion into new business lines.
We operate a hybrid production model that focuses primarily on in-house manufacturing, supplemented by selective outsourcing to expand capacity when needed.
Business · p. 135
Depending on the product type and manufacturing arrangement, external contract manufacturers may also participate in certain production steps, such as PCBA processing, assembly and other manufacturing support services.
Business · p. 115
For customized and melded materials, we require our suppliers to undergo periodic process audits.
In 2023, 2024, 2025 and for the four months ended April 30, 2026, the procurement costs amounted to RMB107.8 million, RMB122.9 million, RMB134.3 million and RMB52.0 million, respectively, for engaging third-party transportation service providers.
Business · p. 148
According to Frost & Sullivan, outsourcing such long-distance transport is an industry norm, and allows service providers like us to focus our resources on the higher-value, compliance-critical last-mile and site-facing logistics.
Business · p. 148
We maintain rigorous quality control over these outsourced services.
We engage qualified third-party manufacturers to undertake limited outsourced processing tasks during the Track Record Period, primarily involving component or module assembly, testing and packaging.
Business · p. 137
Approved manufacturers are subject to ongoing tiered management and periodic performance evaluations, jointly conducted by our engineering, planning, quality, logistics and outsourcing management teams.
Business · p. 137
We grant outsourced manufacturers a limited and non-transferable right to use our intellectual property solely for order fulfillment purposes, subject to confidentiality obligations.
Specifically, we outsource the electrophoresis and PVC coating processes for battery boxes to third parties.
Business · p. 149
Accordingly, the subcontracting fees paid to these subcontractors amounted to RMB33.3 million, RMB15.0 million, RMB5.0 million and RMB0.5 million, respectively, in 2023, 2024, 2025 and for the four months ended April 30, 2026, accounting for 2.8%, 1.6%, 0.7% and 0.2% of our total cost of revenue in each of the respective period.
Business · p. 149
We may conduct on-site inspections of our subcontractors’ production facilities to perform quality checks during the subcontracting process.
These services were primarily used to supplement our manpower on a temporary or project basis and to enhance operational flexibility in response to fluctuations in production demand.
Business · p. 163
During the Track Record Period, the number of personnel arranged by Supplier D and Supplier G to provide services to us as of December 31, 2023, 2024 and 2025, and April 30, 2026, amounted to 1,341, 1,628, 1,886 and 1,823, respectively, representing approximately 66.0%, 38.6%, 41.2%, and 43.2% of the aggregate number of our in-house employees and workforce services staff provided by Supplier D and Supplier G as of the same dates, respectively.