Hong Kong IPO disclosure precedents · 192 companies, 193 items
deterioration after the track record period (lower revenue or margin, loss of a major customer or supplier, regulatory change), or an expected loss for the current year
At the same time, we do not expect recent reports concerning Customer B, regarding, among other things, its plan to reduce its workforce in certain overseas markets and dispose of certain production lines, to have a material adverse impact on the Group.
Business · p. 153
Based on the Company's assessment, our sales to Customer B are driven primarily by Customer B's demand for our products and our ability to meet its specifications and delivery requirements, rather than Customer B's internal headcount or the continued operation of any particular production line.
Business · p. 153
Furthermore, revenue from Customer B amounted to RMB2,521.1 million, RMB3,262.3 million and RMB2,809.0 million in 2023, 2024 and 2025, respectively, and we did not experience material disruption in fulfilling Customer B's orders.
We expect to record an increase in net loss and a substantial increase in adjusted net loss (a non-IFRS measure) in 2026 due to the decrease in gross margin as a result of the fluctuations in the end markets.
Summary · p. 4
The projected market growth primarily reflects an expansion in overall AMOLED DDIC shipment volumes across all product categories and participants, whereas our expected margin deterioration is driven by company-specific pricing pressures — namely, the indirect impact of rising memory chip costs on our customers’ procurement behavior and intensified competition among AMOLED DDIC suppliers — which are expected to outweigh the benefit of broader market growth on our financial results in the near term.
Our Group’s gross profit margin slightly decreased, primarily driven by the consolidation of Shanghai Celludye’s dyes and inks business with relatively lower gross profit margins.
Summary · p. 15
We believe these strategic investments are aligned with our long-term growth objectives, as they focus on driving innovation and strengthening our competitiveness in the market.
We expect a significant increase in our net loss for the year ending December 31, 2026 primarily due to (i) an increase in our research and development expenses mainly as we continue to advance our research and development activities for our Core Products and other pipeline products; and (ii) an increase in administrative expenses mainly as we incurred expenses in relation to the Listing.
Summary · p. 16
Our Directors confirm that there has been no material adverse change in our business, financial condition and results of operations since December 31, 2025, being the latest balance sheet date of our consolidated financial statements in the Accountant's Report set out in Appendix I to this prospectus, and up to the date of this prospectus.
In January 2026, a rocket carrying two of our experimental satellites experienced a launch failure due to rocket technical issues, resulting in the loss of both satellites.
Summary · p. 14
As a result, the loss of the two satellites was not covered by insurance and we do not expect to receive compensation from the launch service provider in connection with this incident.
Summary · p. 14
As (i) both satellites were experimental in nature and the launch was conducted as a joint experimental verification, (ii) the costs and contract value of the satellites involved were relatively limited, and (iii) our maximum payment obligation in respect of the delivery failure is contractually capped at a fixed amount, our Directors are of the view that this incident is not considered to have had a material adverse impact on our customer relationship, business, financial condition or results of operations.
Since the Group continues to incur R&D expenses and administrative expenses (including listing expenses), a net loss is expected for the year ending 31 December 2026.
Summary · p. 15
While the majority of our revenue for the year ended 31 December 2025 was recognised in the first half of the year, revenue from our backlog as at the Latest Practicable Date is expected to be recognised primarily from the second half of 2026 onwards.
Summary · p. 15
Our Directors confirm that, up to the date of this prospectus, there had been no material adverse change in the operational performance, financial or trading positions or prospects of our Group since 31 December 2025 (being the date of which our Group’s latest audited financial statements were made up as set out in the Accountants’ Report in Appendix I) and there had been no event since 31 December 2025 which would materially affect the information shown in “Financial Information” and the Accountants’ Report in Appendix I to this prospectus.
We continued to invest in the R&D of new products for embodied intelligence and emerging technologies, which adversely affected our net profits.
Summary · p. 10
In addition, we recorded certain foreign exchange losses as a result of RMB appreciation against US dollars.
Summary · p. 10
Save as above, our Directors confirm that since December 31, 2025, being the date of the latest combined financial information of our Group, and up to the date of this document, there has been no material adverse change in our business model, financial or trading position and prospects of the overall precision manufacturing industry.
We expect to remain in a net loss position for the year ending December 31, 2026, primarily because we are still in an early stage of commercialization with rapidly iterating products, and we plan to further increase our R&D investments while also scaling up our operations to meet growing market demand and achieve economies of scale, all of which will continue to weigh on our profitability.
While we maintained the momentum for our business growth with an expected increase in our revenue, we anticipate to record a loss for the year ending December 31, 2026.
Summary · p. 8
For the year ending December 31, 2026, our net loss is expected to narrow compared to the year ended December 31, 2025.
Summary · p. 8
Accordingly, the expected net loss for the year ending December 31, 2026 is mainly attributable to the ramp up of new production facilities and the associated fixed cost burden during the initial stage of operation.
Over the same period, the industry average selling price of pigs decreased by 15.9%, from RMB13.8 per kilogram in 2025 to an average selling price of RMB11.6 per kilogram for the three months ended March 31, 2026, primarily due to expanded production capacity in the industry.
Summary · p. 13
According to Frost & Sullivan, the industry average selling price of yellow-feather broilers increased by 2.3%, from RMB12.8 per kilogram in 2025 to an average selling price of RMB13.1 per kilogram for the three months ended March 31, 2026, mainly driven by increased demand for chicken.
We expect our net loss in 2026 to increase, primarily due to (i) fair value losses arising from the remeasurement of preferred shares, classified as financial liabilities at FVTPL prior to the [REDACTED] and (ii) share-based compensation expenses in relation to employee incentives previously granted, notwithstanding our continued efforts to improve operating performance.
Summary · p. 10
We have also completed two rounds of pre-[REDACTED] financings in January 2026 and April 2026, respectively.
Pursuant to the Announcement on the Transition of VAT Preferential Policies after the Implementation of the VAT Law (Announcement No. 10 of 2026) issued by the Ministry of Finance and the State Taxation Administration, effective from January 1, 2026, the simplified 3% VAT regime is no longer generally applicable to ordinary biological products. As a result, certain of our products are now subject to the standard 13% VAT rate, which may have an impact on our future revenue and profitability.
We expect that we will record a net loss in 2026, primarily due to continued R&D expenditures as we advance our preclinical and clinical development programs, as well as interest expenses on redemption liabilities, share-based payments, and listing expenses in connection with the Listing.
Summary · p. 13
Our Directors confirm that, as of the date of this prospectus, there has been no material adverse change in our financial and trading positions or prospects since December 31, 2025, being the date on which our latest unaudited consolidated financial statements were prepared, and there has been no event since December 31, 2025 and up to the date of this prospectus which would materially affect the information in the Accountants’ Report.
We expect to record a net loss for 2026, primarily due to our anticipated substantial research and development expenses and selling and marketing expenses for the year.
Summary · p. 15
Our Directors confirmed that, as of the date of this prospectus, there has been no material adverse change in our financial position since December 31, 2025, and there has been no event since December 31, 2025 that would materially affect the information as set out in the Accountants’ Report in Appendix I to this prospectus.
Based on the latest information available to us, we currently expect to record an increase in net loss for the year ending December 31, 2026, mainly due to (i) the increase in research and development expenses, (ii) fluctuation in the fair value changes on financial liabilities at FVTPL, and (iii) the incurrence of [REDACTED] expenses.
Summary · p. 17
Our Directors confirm that there has been no material adverse change in our financial or trading position prospects since December 31, 2025 and up to the date of this document and there is no event since December 31, 2025 which would materially affect the information shown in our consolidated financial statements included in the Accountants’ Report set out in Appendix I to this document.
We expect to record a net loss for the year ending December 31, 2026 primarily due to (i) the R&D expenses in line with the R&D activities and (ii) the selling and distribution expenses as a result of our commercialization efforts for our commercialized products.
Summary · p. 15
Our Directors confirm that, up to the date of this Prospectus, there has been no material adverse change in our financial, operational or trading positions or prospects since December 31, 2025, being the end of the period reported on as set out in the Accountants’ Report included in Appendix I to this Prospectus.
As a result, we anticipate recording a net loss for 2026.
Summary · p. 14
In addition to these planned investments, a key factor contributing to this forecast loss is the impact of changes in the carrying amount of redemption liabilities, which will no longer be recorded after the Listing.
We expect to incur net losses for the year ending December 31, 2026, mainly because we expect to continually incur (i) significant research and development expenses, as we will continue to devote resources in product iteration and development as well as continued expansion and optimization of our product mix in high-value sectors; (ii) substantial selling and distribution expenses, as we continue to allocate resources in expanding our customer base, strengthening our relationships with key customers, and preparing for entry into the global market, and (iii) cost of sales, as we ramp up the scale of our product sales into mass production, despite out efforts to drive revenue growth, improve gross profit margin and enhance operating efficiency.
We expect to experience a temporary decline in net profit year-over-year in 2026, primarily driven by strategic investments and prudent financial planning, largely attributable to continued investment in research and development to support technology innovation, a continued investment in selling and marketing to expand our customer base and a conservative approach to forecasting non-operating income, such as the share of profits of associates.
Summary · p. 10
The decline in net profit does not reflect a deterioration in our operating fundamentals, but rather a shift in cost structure that supports our strategic objectives.
Summary · p. 10
After performing sufficient due diligence work which our Directors consider appropriate and after due and careful consideration, our Directors confirm that, as of the date of this document, there has been no material adverse change in our financial and trading positions or prospects since December 31, 2025, being the date on which our latest consolidated financial statements were prepared, and that there has been no event since December 31, 2025 which would materially affect the information in the Accountants’ Report set out in Appendix I to this document.
We expect to record a net loss in 2026, primarily due to continued investment in research and development, expansion of our sales and distribution network and ongoing product iteration.
Summary · p. 8
In the first quarter of 2026, we commenced delivery of automotive inductors under our own brand to our customers. We expect our sales under our own brand for automotive inductors will continue to grow, which will have a positive impact on our future operating results.