Additionally, during the Track Record Period, certain of our PRC subsidiaries historically engaged third-party agencies to make social insurance and housing provident fund contributions on behalf of a small number of their employees, which is not in compliance with relevant PRC regulations requiring employers to handle such payments directly.
Business · p. 208
As of the Latest Practicable Date, we have ceased the practice of using third-party agencies for contribution payments.
Business · p. 209
In addition, the required contribution under the relevant laws to some of our employees were paid by third parties on behalf of the relevant subsidiaries of the Company.
During the Track Record Period and up to the Latest Practicable Date, we did not make social insurance and housing provident fund contributions for certain employees in full in accordance with the applicable PRC laws and regulations.
Risk Factors · p. 31
During the Track Record Period, we did not make social insurance and housing provident fund contributions for some of our employees in full, in accordance with the relevant PRC laws and regulations, primarily because certain employees had chosen for us not to pay the social insurance and housing provident fund contributions in full, as that also requires additional contributions from the employee.
Business · p. 129
our PRC Legal Advisor is of the view that the likelihood that we are (i) subject to material administrative penalties due to our failure to make full contribution of social insurance and housing provident fund contributions and (ii) required by relevant authorities actively to pay the shortfall for social insurance and housing provident fund contributions collectively during the Track Record Period is remote
During the Track Record Period, we engaged third-party human resource agencies to make contributions to social insurance and housing provident funds for certain employees.
Risk Factors · p. 54
Such arrangement is not in strict compliance with relevant PRC laws and regulations.
As advised by our PRC Legal Advisor, during the Track Record Period and up to the Latest Practicable Date, we had made sufficient contributions to social insurance and housing provident funds for our employees in accordance with applicable PRC laws and regulations.
For example, during the Track Record Period, we have engaged certain third parties to make contributions to the social insurance fund and housing provident fund for three of our employees and we have not received any complaints or notices from our employees regarding such practice.
Risk Factors · p. 59
During the Track Record Period, we engaged a third-party human resources service provider to make contributions to the social insurance fund and housing provident fund for three employees in China (the “Third Party Contribution Arrangement”).
Business · p. 198
The Third Party Contribution Arrangement, although not uncommon in China, is not in strict compliance with relevant PRC laws and regulations.
As advised by our PRC Legal Advisors, during the Track Record Period and up to the Latest Practicable Date, we had made sufficient contributions directly or indirectly to social insurance and housing provident funds for our employees in accordance with applicable PRC laws and regulations.
During the Track Record Period and up to the Latest Practicable Date, we did not make full contributions to the social insurance and housing provident funds as required by the relevant PRC laws and regulations for our employees in certain PRC entities of our Group.
Risk Factors · p. 46
The shortfall amount of social insurance and housing provident fund contributions is estimated to be approximately RMB13.7 million, RMB20.1 million, RMB26.5 million, and RMB14.7 million in 2023, 2024, 2025, and for the six months ended June 30, 2026, respectively.
Risk Factors · p. 46
During the Track Record Period and up to the Latest Practicable Date, we did not make contributions to the social insurance and housing provident funds in full amount required by the relevant PRC laws and regulations, primarily because certain employees were unwilling for us to do so, as it would require additional contributions from them.
During the Track Record Period and up to the Latest Practicable Date, (i) we have not made social insurance and housing provident fund contributions for certain employees in full and (ii) we have not made housing provident fund contribution for certain employees, in accordance with the relevant PRC laws and regulations, and the maximum shortfall sum of which in aggregate is immaterial.
Business · p. 162
Based on the best information and knowledge of our Directors, the shortfall for the social insurance and housing provident fund contributions payable by our Group amounted to (i) RMB53,000, RMB67,000, RMB68,000 and RMB13,000; and (ii) RMB142,000, RMB142,000, RMB241,000 and RMB167,000 for FY2023, FY2024, FY2025 and 6M2026, respectively.
Business · p. 163
Our PRC Legal Advisers has advised that, based on the confirmation from the relevant competent authority and the facts stated above, the risk that our Group would be imposed of significant administrative penalties or being proactively initiated collective actions by the relevant competent authorities to recover such shortfalls for the Track Record Period that may cause material adverse impact on the Group is low, provided that there is no significant changes in current policies, regulations and local enforcement practices and supervision or employee complaints, reports and our Group would rectify its non-compliance upon the competent authorities in time.
During the Track Record Period and up to the Latest Practicable Date, we did not make full contributions to social insurance and housing provident funds for certain employees as required by relevant PRC laws and regulations.
Risk Factors · p. 42
During the Track Record Period and up to the Latest Practicable Date, we did not make full contributions to social insurance and housing provident funds for certain employees based on their actual salaries.
Business · p. 173
Our Directors believe, and our PRC Legal Advisor is of the view, that provided there are no material changes to current policies, regulations or regulatory practice and in the absence of group employee complaints, reports or related litigation or arbitration, the risk of us being subject to major administrative penalties and collective recovery of social insurance and housing provident fund contributions by the competent authorities due to not making full contributions based on employees’ actual salaries is low.
During the Track Record Period, we engaged third-party agencies to handle social insurance premiums and housing provident fund contributions for certain employees. This arrangement, established on the basis of practical considerations and employee agreements, failed to fully comply with all applicable PRC laws and regulations.
Risk Factors · p. 47
During the Track Record Period, we engaged a third-party human resources agency to assist with the payment of social insurance and housing provident fund contributions for three employees in Shenzhen and three employees in Xi'an, instead of making such contributions directly. As a result, we recorded a shortfall in certain social insurance and housing provident fund contributions.
Business · p. 192
Furthermore, on March 13, 2026, we established a Xi'an subsidiary to facilitate compliant local payment of social insurance contributions for the relevant employees in Xi'an, and we expect to complete the rectification of the remaining non-compliance in Shenzhen and fully rectify the above non-compliance by September 30, 2026.
In addition, during the Track Record Period, we engaged third-party agencies to make social insurance and housing provident funds for certain employees, because employees needed to pay such contributions in different locations and we had not yet completed the establishment procedures for our subsidiaries in the relevant regions.
Risk Factors · p. 52
During the Track Record Period, we engaged third-party agencies to make social insurance and housing provident funds for certain employees, because employees needed to pay such contributions in different locations and we had not yet completed the establishment procedures for our subsidiaries in the relevant regions.
Business · p. 221
Our PRC Legal Advisor has advised us that the likelihood that our PRC entities would be subject to retrospective collection of unpaid contributions or administrative penalties initiated by the competent authorities in respect of such historical non-compliance is remote
Additionally, we also did not provide housing provident fund contribution for one employee during the Track Record Period.
Risk Factors · p. 47
We expect to fully rectify the housing provident fund shortfall by September 30, 2026.
Business · p. 193
The reason why we did not provide housing provident fund contributions for this employee was due to the fact that this employee voluntarily waived the housing provident fund.
For example, we were historically not in full compliance with respect to the required employer contributions to social insurance plans and other employee benefits.
Risk Factors · p. 71
During the Track Record Period, we were not subject to any administrative penalties in terms of the contribution of social insurance premium and housing provident funds.