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.
We monitor and manage raw material price fluctuations by establishing strategic relationships with key suppliers, analyzing market conditions, and implementing timely price adjustments.
Zinc, lead and copper are major global and domestic commodities whose prices are influenced by a variety of complex factors.
Financial Information · p. 293
It is important for us to understand these market dynamics, and we have established a comprehensive price monitoring and analysis system to obtain timely market information and adjust concentrate production and sales strategies accordingly.
Financial Information · p. 293
The fluctuation in selling price of our concentrates is generally consistent with the fluctuation in overall industry average selling price during the Track Record Period.
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.
In 2022, 2023, 2024 and for the six months ended June 30, 2024 and 2025, our cost of raw materials and consumables used amounted to RMB160.1 million, RMB290.3 million, RMB395.7 million, RMB187.3 million and RMB220.9 million, respectively, representing 38.3%, 36.3%, 34.3%, 35.6% and 31.4% of our revenue for the same periods.
Financial Information · p. 310
The table below sets forth the sensitivity analysis of the impact on our results of operations during the Track Record Period from the fluctuations of the raw materials and consumables used.
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.
Our results of operations are sensitive to fluctuations in the prices of electrolytic aluminum and alumina.
Financial Information · p. 335
Our profit for the period decreased by 14.4%, from RMB999.4 million in the five months ended May 31, 2024 to RMB855.5 million in the same period of 2025 due to a decrease in gross profit as a result of the increase in market prices of certain key raw materials.
Summary · p. 15
Our profit for the year increased by 18.4% from RMB912.9 million in 2022 to RMB1,080.6 million in 2023, mainly attributable to an increase in the gross profit due to a decrease in the market prices of certain key raw materials.
As a result, the average selling price of our nickel-based materials and cobalt-based materials decreased from RMB123,100 per metric ton in 2022 to RMB82,900 per metric ton in 2024, and RMB327,900 per metric ton in 2022 to RMB106,600 per metric ton, which was in line with the downward trend of the prevailing market price during the same period.
Financial Information · p. 286
As a result of the pricing mechanism discussed above, the fluctuation in prices of raw materials could be effectively reflected on the selling prices of our products and the raw material costs we procured.
Financial Information · p. 286
As of December 31, 2022, 2023 and 2024 and June 30, 2025, the contractual value of our then effective hedging instruments amounted to RMB3,507.3 million, RMB6,379.6 million, RMB10,642.6 million and RMB14,341.0 million.
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.
For illustrative purpose only, the following sensitivity analysis illustrates the impact of hypothetical fluctuations of the subcontracting fees on our profit before income tax, assuming other variables remain unchanged for the dates indicated. Fluctuations in our subcontracting fees are assumed to be 10% and 20%.
Financial Information · p. 250
For illustrative purpose only, the following sensitivity analysis illustrates the impact of hypothetical fluctuations of our cost of materials on our profit before income tax assuming all other variables remain unchanged for the dates indicated. Fluctuations in our cost of materials are assumed to be 5% and 10% with reference to the average of CAGR for the price of air conditioners (being the major components of our cost of materials) in Hong Kong from 2020 to
Financial Information · p. 250
2024 and from 2025 to 2029 as stated in the paragraph headed “Industry Overview — Cost analysis” in this prospectus, and is therefore considered reasonable for the purpose of this sensitivity analysis.
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.
The total costs of raw materials accounted for 90.3%, 91.2%, 92.5%, 91.4% and 93.0% of the total cost of sales for FY2022, FY2023, FY2024, 5M2024 and 5M2025, respectively, whilst gold being the primary raw material used in our production, accounted for over 80% of the total cost of raw materials during the Track Record Period.
Financial Information · p. 482
Assuming our selling price and other factors remained unchanged, the following sensitivity analysis illustrates the impact of hypothetical fluctuations of our cost of raw materials from our cost of sales on our profit before tax during the Track Record Period.
Financial Information · p. 483
During the Track Record Period, we did not utilise hedging instruments to hedge against gold price fluctuations, but we had taken out gold loans from time to time primarily for the purpose of hedging against risks associated with gold price fluctuations.
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.
For example, the changes in commodity price (i.e., tungsten price) are expected to have a significant impact on our operating results because the operating cost of a mine is relatively stable for a certain period of time after the mine is put into production.
Business · p. 273
The tungsten concentrate price has been increasing substantially recently, which may enhance our operation prospects if such trend continues.
Business · p. 273
In addition, according to the Independent Technical Report, a breakeven analysis shows that the post-tax NPV at a discount rate of 10% will become zero when the average tungsten concentrate price is approximately RMB64,000/t, and the payback period, which is the amount of time required to recoup the initial capital cost, is approximately 3.1 years.
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.