Hong Kong IPO disclosure precedents · 188 companies, 188 items
Disclosures that raw materials constitute the largest component of cost of sales and that commodity price fluctuations drive results, including quantified cost-share analyses and cases arguing limited exposure due to low purchase share.
In FY2022, FY2023, FY2024, 10MFY2024 and 10MFY2025, our total raw material costs are approximately RMB11,035.0 million, RMB14,424.9 million, RMB15,970.5 million, RMB13,306.7 million and RMB14,234.7 million respectively, accounting for 93.3%, 91.1%, 90.8%, 91.3% and 91.1% of our total cost of sales, respectively.
Financial Information · p. 266
The raw materials used in our production are subject to price volatility caused by external conditions, such as changes in market supply and demand, fluctuations in commodity prices, changes in government policies and natural disasters.
Financial Information · p. 266
As at the Latest Practicable Date, we have not entered into any hedging arrangement to mitigate our exposure to the fluctuations in the cost of raw materials.
Changes in the price of wafers and other raw materials or in the costs of packaging and testing services may result in fluctuations in production costs and our gross profit margin.
Financial Information · p. 293
However, through such close collaboration with our wafer suppliers with advanced technology, we are able to lower costs while maintaining higher average selling prices of products which are hence associated with a higher gross profit margin.
Steel plate is the principal raw material used in our operations and a key cost driver in the PS building market.
Financial Information · p. 360
Specifically, if the market price of steel plate or other essential materials increases by more than a certain percentage number (generally 2%) compared to the baseline price agreed upon at contract execution, an adjustment may be applied.
Business · p. 253
During the Track Record Period and up to the Latest Practicable Date, we had not exercised the price adjustment mechanism, primarily because the price of raw materials was on a downward trend.
In respect of raw materials, the procurement cost of battery cells, a key component of our ESS products, showed an upward trend in 2025 as supply tightened and downstream demand remained strong, particularly in the second half of the year when both sales volume and prices increased.
Summary · p. 33
According to the CIC Report, the average price for battery cells were USD0.13 per Wh in 2022, USD0.11 per Wh in 2023 and USD0.08 per Wh in 2024, respectively.
Business · p. 253
As of the Latest Practicable Date, we mainly relied on (i) our pricing strategy for individual order and the price adjustment mechanism in our sales framework agreements, which allowed us to reflect the price fluctuation in raw materials on our selling prices of our residential ESS; and (ii) the management of our inventory levels based on the prudent estimation of the market trends and our production needs, to mitigate the impact of raw material cost fluctuations on the supply side.
Our material costs amounted to RMB231.2 million, RMB667.1 million, RMB374.8 million and RMB146.8 million, respectively, in 2022, 2023 and 2024 and for the five months ended May 31, 2025, accounting for 66.2%, 69.9%, 41.9% and 73.8% of our total cost of sales in the respective year/period.
Financial Information · p. 369
During the Track Record Period, the market price of SiC substrates, our major raw material, decreased as a result of the manufacturing capacity expansion of upstream raw material suppliers and improvement of SiC substrates production process.
Financial Information · p. 369
Any fluctuation in prices of raw materials could affect our pricing, production costs and, in turn, the gross profit margin of our products.
In 2022, 2023 and 2024, and the five months ended May 31, 2024 and 2025, our raw material costs represented 82.5%, 84.5%, 83.4%, 82.4% and 80.8% of our total cost of sales, respectively, and represented 45.4%, 58.1%, 70.3%, 59.4% and 52.2% of our total revenue, respectively.
Financial Information · p. 241
According to CIC, the fluctuation was primarily driven by the fluctuation in the price of crude oil, a key raw material for the production of electrical grade polypropylene.
Financial Information · p. 241
Our Directors are of the view that the Russia-Ukraine conflict did not and is not expected to materially affect our operation, primarily because (i) we were able to adjust the price of our capacitor film products in 2022 to offset the impact of the increase in the price of electrical grade polypropylene due to the high market demand for our capacitor film products; and (ii) the price of electrical grade polypropylene has been stabilized.
It is worth noting that the relatively lower gross profit margin from ODM in 2022 was primarily due to our Group’s strategic decision to pay a premium for securing critical materials amid shortages, in order to maintain delivery commitments.
During the Track Record Period, baseband chips, radio frequency chips and memory chips represent a substantial majority of our procurement of raw materials.
Business · p. 218
From late 2021 through 2022, the global semiconductor industry experienced supply shortages, driven by the ongoing COVID-19 pandemic, increased demand from the downstream sectors, and widespread supply chain disruptions.
Business · p. 219
In light of the above, and considering our continual sales and revenue growth from 2021 to 2022, our Director is of the view that the global chip supply crunch in 2022 did not have a material impact on our business operations and financial performance.
In 2022, 2023, 2024, and for the five months ended May 31, 2025, our material costs were RMB834.6 million, RMB903.0 million, RMB1,747.3 million and RMB535.6 million, respectively, representing 79.7%, 71.4%, 77.5% and 81.8% of the total cost of sales in the corresponding periods, respectively.
Financial Information · p. 353
The COVID-19 pandemic caused a global chip shortage starting in late 2020 which resulted in a sharp increase in chip prices in 2021 and 2022.
Financial Information · p. 354
Since 2023, the supply of chips has stabilized, leading to a decline in chip prices.
Our revenue derived from the sales of gold was 94.8%, 95.8%, 94.9%, 96.2% and 97.9% in 2022, 2023 and 2024 and the six months ended June 30, 2024 and 2025, respectively. Fluctuations in gold price directly affect our results of operations.
Financial Information · p. 440
The gold price is affected by numerous factors beyond our control, for example, the global economic cycles, fluctuations in the global currency markets, general supply of and demand for gold, gold sales and purchases by central banks, macroeconomic factors such as GDP growth prospects, inflation and interest rates of major economies, geopolitical conflicts, and speculative trading activities.
Financial Information · p. 440
Since June 30, 2025, the gold spot price has been fluctuating from US$3,343.2 per ounce on July 1, 2025 to US$3,344.4 per ounce on August 15, 2025, according to London Bullion Market Association (LBMA) Gold Price.
Prices of certain raw materials of our products are subject to fluctuations driven by global supply and demand dynamics, particularly that of aluminum. We do not engage in hedging using derivative instruments relating to the risk exposures in connection with our raw materials.
Business · p. 162
Our principal raw materials are subject to price volatility caused by external conditions, such as commodity price fluctuations in aluminum.
Financial Information · p. 238
We set forth below a sensitivity analysis on the effects of the fluctuations in the cost of raw materials and consumables used.
In 2022, 2023 and 2024, and the five months ended May 31, 2025, cost of raw materials amounted to RMB2,824.5 million, RMB2,868.8 million, RMB3,097.2 million, and RMB1,357.0 million, respectively, accounting for 83.5%, 84.6%, 82.7% and 85.5% of total costs of sales for the same year or period.
Business · p. 243
According to Frost & Sullivan, in 2022, 2023 and 2024, and for the five months ended May 31, 2025, the market price of LFP was RMB125.0 thousand per ton, RMB72.2 thousand per ton, RMB40.2 thousand per ton and RMB34.1 thousand per ton, respectively.
Business · p. 244
The following sensitivity analysis illustrates the effects of hypothetical fluctuations in our average cost of raw material on our profit before income tax for the years indicated, assuming all other factors affecting our profitability had remained unchanged.
In 2022, 2023 and 2024, purchase costs of our cloud-based communications services, which primarily comprise costs of purchasing communications resources, accounted for 83.0%, 92.0%, and 93.8% of our total cost of sales for the respective periods.
Financial Information · p. 319
An adjustment by telecommunications operators in China would likely negatively affect our results of operations in current contract periods because we may not be able to timely pass on the impact to our customers throughout the current contract periods.
In 2022, 2023 and 2024, our material costs were RMB58.3 million, RMB51.9 million, and RMB69.8 million, respectively, representing 38.9%, 33.2%, and 36.3%, respectively, of our cost of sales during the same year.
Financial Information · p. 328
Our raw materials primarily include protected amino acid, whose price remained relatively stable in 2021 and 2022, and experienced a slight decline in the second half of 2023.
Financial Information · p. 328
During the Track Record Period and up to the Latest Practicable Date, we did not experience any material fluctuations of raw material prices.
Cost of raw materials was the most significant component of our cost of sales during the Track Record Period, amounting to RMB1,500.4 million, RMB3,371.4 million and RMB3,725.1 million, respectively, accounting for approximately 78.9%, 88.8% and 87.9% of our total cost of sales in 2022, 2023 and 2024, respectively.
Financial Information · p. 363
In 2022, 2023 and 2024, our average gold procurement price was RMB347.6/g, RMB401.0/g and RMB487.5/g (exclusive of value-added tax), which was in line with the market prevailing prices.
Financial Information · p. 364
Instead of employing common financial hedging strategies, we manage the volatility of raw material prices through careful management of production and sales cycles.
For the years ended December 31, 2022 and 2023 and 2024, our costs of raw materials and consumables were RMB11,758.4 million, RMB13,115.1 million and RMB14,979.8 million, respectively, accounting for 74.0%, 73.6% and 73.7% of our total cost of revenue during the respective periods.
Business · p. 215
we implement a comprehensive risk management strategy to mitigate the impact of such fluctuations, which primarily involves two independent approaches: (i) incorporating a raw material price linkage mechanism in our contracts with both customers and suppliers, and (ii) employing futures hedging.
Business · p. 215
In addition, we mitigate raw material price risks by utilizing futures hedging to lock in prices for raw materials, thereby offsetting any increases in the bulk commodity costs of copper and aluminium.
In particular, the prices of key raw materials, such as soybeans and sugar, are subject to volatility due to market supply and demand, climate, environmental conditions, commodity price fluctuations, currency fluctuations, changes in governmental policies and natural disasters.
Financial Information · p. 272
Other measures to mitigate the impact of price fluctuations include maintaining diversified suppliers, adopting a centralized procurement system to leverage our scale of procurement and enhance our bargaining power over suppliers, and leveraging our established brand reputation and market position and advantages from economies of scale, to negotiate more favorable terms.
The cost of raw materials in relation to our production amounted to RMB250.9 million, RMB217.5 million and RMB212.1 million for FY2022, FY2023 and FY2024, respectively, and accounted for 82.7%, 82.6% and 84.6% of our total cost of sales for FY2022, FY2023 and FY2024, respectively.
Financial Information · p. 325
We cannot assure that we can fully pass the cost of increase in raw materials onto our customers.
Financial Information · p. 325
For illustrative purpose only, the following sensitivity analysis illustrates the impact of hypothetical fluctuations of our cost of raw materials in relation to our production on our profit before income tax during the Track Record Period.
During the Track Record Period, the cost of raw materials and goods used accounted for approximately 57.0%, 47.6% and 56.6% of our total cost of sales, respectively.
Financial Information · p. 298
We did not adopt hedging policies or other alternative price controls in respect of the fluctuations in the prices of raw materials, sucralose or glycine we procured from our suppliers during the Track Record Period and up to the Latest Practicable Date, as we have adopted a series of measures to improve our resilience to such price fluctuations.