In this regard, based on the review of our International Sanctions and Export Control Legal Advisors, of the suppliers and customers with which our Group had dealings during the Track Record Period and up to the Latest Practicable Date: (a) six of our customers, with which we had dealings during the Track Record Period; (b) six of our suppliers, with which we had dealings during the Track Record Period (three of which were also the suppliers of Yangzhou Chiplet during the Track Record Period); and (c) one supplier of Yangzhou Chiplet, with which Yangzhou Chiplet had dealings during the Track Record Period, have been placed on the Entity List maintained by the BIS.
Business · 第 177 页
Revenue generated from transactions with these six customers accounted for only approximately 0.244% of our Group’s total revenue, during the Track Record Period;
Business · 第 178 页
Notwithstanding the above, as also advised by our International Sanctions and Export Control Legal Advisors, the risks of our Group potentially violating U.S. export controls (which, if any, would primarily arise from the Company’s activities) were not material during the Track Record Period, which have remained substantially the same up to the Latest Practicable Date, considering that:
We are aware that Customer B was added to the Entity List by the U.S. Department of Commerce.
Business · 第 149 页
As such, we have implemented rigorous internal control measures to ensure that our cooperation remains in strict compliance with all applicable export control regulations and trade restrictions.
Business · 第 149 页
While we currently do not anticipate any material adverse impact on our ongoing services involving strictly providing content marketing services, we continue to monitor the evolving regulatory landscape closely.
Based on this review, we have confirmed that: one of our suppliers was listed on the NS-CMIC list (the “Relevant Transactions”).
Business · 第 174 页
The Relevant Transactions with the above-mentioned counterparty primarily relate to non-controlled products and services, including smart city software and video analytics infrastructure.
Business · 第 174 页
Accordingly, our commercial dealings with the NS-CMIC designated entity are not prohibited under applicable U.S. or international sanctions laws and do not present a material compliance risk under the current regime.
In 2023, 2024 and 2025, our purchase from Supplier B amounted to RMB66.1 million, RMB265.6 million and RMB312.5 million, respectively, accounting for 20.4%, 37.2% and 49.0% of our total purchases for the corresponding periods.
Business · 第 196 页
Therefore, our relevant procurement did not and will not violate the EAR.
Business · 第 197 页
Therefore, as advised by our International Sanctions Legal Advisor, we believe the export control and sanctions laws and regulations currently do not have material impacts on our business operations and financial performance directly or indirectly, and we are compliant with relevant sanctions laws and there is no material sanctions risk discussed in Chapter 4.4 of the Guide for New Listing Applicants.
The revenue generated from such sales was RMB45.0 million, RMB49.1 million, and RMB29.3 million, representing approximately 0.15%, 0.15% and 0.08% of our total revenue in 2023, 2024 and 2025, respectively.
Summary · 第 20 页
As advised by our International Sanctions Legal Advisors who have performed procedures they deem necessary, given the nature of our transactions with the Relevant Entity (including that no U.S. nexus was involved and the gradual cessation of sales to the Relevant Entity since January 15, 2025), the risk is relatively limited that our transactions with the Relevant Entity during the Track Record Period and up to the Latest Practicable Date would result in the imposition of sanctions on the Relevant Persons.
During the Track Record Period, certain Russian suppliers and banks we transacted with became subject to U.S. blocking sanctions.
Business · 第 180 页
In addition, during the Track Record Period, we sold motorcycles and general-purpose machinery to Iranian distributors, accounting for approximately 3.20%, 2.56% and 2.2% of total revenue in 2023, 2024 and 2025.
Business · 第 180 页
During the Track Record Period, we sourced U.S.-origin chips for AI-driven products.
Based on screening of the supplier and customer lists, we have engaged in procurement transactions from a limited number of entities subject to certain U.S. economic sanctions and we did not engage in any sales transactions to entities subject to certain U.S. economic sanctions.
Business · 第 191 页
As of the Latest Practicable Date, the impact of U.S. and other jurisdictions’ export controls, sanctions and tariff measures on our business operations and financial performance has been minimal according to our Export Control and Sanctions Counsel.
Summary · 第 17 页
With respect to products exported to the U.S., the volume exported to the U.S during the peak periods of reciprocal tariffs was minimal.
During the Track Record Period, two of our customers were listed on the Entity List.
Business · 第 193 页
While we still manufacture certain products for the other customer (“Customer I”), as advised by our U.S. Export Control and Sanctions Counsel, the products we provided for Customer I during the Track Record Period were not subject to the EAR.
Business · 第 193 页
Specifically, for products manufactured for Customer I, we conduct a compliance assessment reviewing information about the counterparty, end user and end use, planned sales region, components, software, technology and equipment used, production and delivery location, logistics route, after-sales spare parts and any third-party service providers before the launch of each project.
However, during the Track Record Period, three of our customers were included on the BIS Entity List.
Business · 第 152 页
The revenue generated from these customers in the aggregate accounted for 0.2%, 0.4% and 0.4% of our total revenue in 2023, 2024 and 2025, respectively.
Business · 第 152 页
Our U.S. legal advisor has advised that based on the information we provided, the items that we sold to these customers do not involve the transfer, export or reexport of items subject to the EAR.
Our sales to the SDN Customer amounted to RMB3.7 million, RMB7.5 million and nil, respectively, for each year during the Track Record Period.
Business · 第 183 页
Our last transaction with the SDN Customer was completed in December 2024, and since then, we have ceased all transactions with the SDN Customer.
Business · 第 183 页
In addition, the secondary sanction risks on our Group and Relevant Persons in connection with our business dealings with the SDN Customer is low because (i) we are not a Sanctioned Trader as the revenue derived from the Sanctioned Targets and Sanctioned Country entities or persons only accounted for 1.1% and nil of our revenue generated for the two years ended year ended December 31, 2024 and 2025; (ii) items sold to the SDN Customer were for civil-use purposes only and not for military or aerospace uses; (iii) transactions with the SDN Customer have no Russian nexus which will not deter the U.S.'s statutory objectives against Russia under the Executive Order 14024, under which the SDN Customer was designated due to its purported Russian-related activities; and (iv) our last transaction with the SDN Customer was completed in December 2024, and since then, we have ceased all transactions with the SDN Customer.
During the Track Record Period, we have sold our products to a customer listed on the Entity List ("EL Customer").
Business · 第 182 页
Given that our last transaction with the EL Customer was in 2023 (i.e. before the Entity List designation), our activities with the EL Customer were not subject to the export controls applicable to the EL Customer as an entity designated on the Entity List.
Business · 第 182 页
In addition, during the Track Record Period, we had transactions with a supplier designated on OFAC's Non-SDN Chinese Military-Industrial Complex Companies List ("CMIC Supplier").
石大胜华新材料集团股份有限公司Shida Shinghwa Advanced Material Group Co., Ltd.
涉受制裁名单对手方及对四国销售
In the course of enhanced diligence and screening of our historical counterparties, we identified nine counterparties (two suppliers and seven customers) that, in 2025, were designated on the OFAC’s Specially Designated Nationals and Blocked Persons List (the “SDN List”), and one additional historical customer that is a blocked person under the OFAC’s “50 Percent Rule.”
Business · 第 139 页
During the Track Record Period, although we engaged in sales activities related to Russia, Belarus, Venezuela and Burma, none of the counterparties involved in such sales activities are designated on any sanctions lists.
Business · 第 140 页
As advised by our International Sanctions Legal Adviser, during the Track Record Period, we have not engaged in any primary sanctioned activity as defined in the sanctions guidance issued by HKEX (the “HKEX Sanctions Guidance”) and no activities taken would constitute a violation of international sanctions regime.
In respect of our sales activities, we conducted limited transactions with two customers that are included on the Entity List maintained by the BIS.
Business · 第 172 页
Based on the advice of our international sanctions advisers, as those transactions did not involved any items subject to the EAR, such transactions did not give rise to violations of applicable U.S. export control regulations.
Two of our previous customers have been listed on the Entity List, one of which has been designated with Footnote 3 (the “Entity List Customer”).
Business · 第 177 页
our International Sanctions Legal Adviser is of the view that transactions with the Entity List Customer would not be subject to the EAR.
Business · 第 177 页
One of our customers and two suppliers are placed on the list of Entities Identified as Chinese Military Companies Operating in the United States under Section 1260H of the William M. Thornberry National Defense Authorization Act for Fiscal Year 2021 (the “Section 1260H List”), also known as the “Chinese Military Companies List” (the “CMC List”) by the United States Department of Defense (the “DoD”).
Certain of our end customers who have purchased our products through the distributors have been placed on the Entity List.
Business · 第 173 页
One of our end customers was listed on the SDN List in October 2024.
Business · 第 174 页
All our historical dealings with that end customer occurred prior to its designation, and we ceased all transactions with that end customer upon learning of the designation.
Certain SMIC affiliates have been included on (1) the Bureau of Industry and Security of the U.S. Department of Commerce (“BIS”) Entity List with Footnote 5 (FN5) designation, (2) the U.S. Department of Defense (now Department of War) List pursuant to section 1260H of the National Defense Authorization Act (the “1260H List”), and (3) the U.S. Treasury’s Non-SDN Chinese Military-Industrial Complex Companies List (the “CMIC List”), and are therefore subject to specific U.S. sanctions and export control restrictions.
Business · 第 189 页
The relevant transactions between us and SMIC or its affiliates, as suppliers to provide wafer to us, are not, under the current laws and regulations, prohibited, primarily because (1) such transactions do not involve U.S. Department of Defense procurement, nor do they fall under restrictions associated with the CMIC List or Section 1260H of the U.S. National Defense Authorization Act; (2) the design files (in GDSII format) provided by us were developed entirely within mainland China, without the use of U.S.-origin controlled items or software, and are therefore not considered subject to the U.S. Export Administration Regulations (“EAR”) under current interpretations; and (3) to the best of our knowledge, the resulting mature-node wafers (180nm−90nm) produced by SMIC can be classified as EAR99 and not intended for any prohibited end-users or end-uses under applicable export control laws.
During the Track Record Period, we procured non-clinical and clinical services and raw material for AK0610 and ziresovir from WuXi AppTec through its subsidiary.
Summary · 第 16 页
We will continue to closely monitor and evaluate the potential impact of the BIOSECURE Act on our business and operations, including the release of forthcoming guidance and regulations, while maintaining strong business relationships with all our existing suppliers and a list of qualified alternative suppliers capable of providing equivalent services.
During the Track Record Period, we had provided supply chain solutions to and imported electronics into China on behalf of four customers (“Designated Entities”), who were added by the U.S. Department of Commerce Bureau of Industry and Security (“BIS”) to the Entity List through amendments to the Export Administration Regulations (“EAR”).
Business · 第 227 页
Considering (i) our revenue attributable to our transactions with the Designated Entities merely amounted to approximately RMB108,312, RMB41,402 and nil collectively in FY2023, FY2024 and FY2025, respectively (ii) our core business does not depend on items subject to the EAR; and (iii) our ability to secure alternative customers for our services, our Directors are of the view, with the Sole Sponsor concurring that, our termination of the business relationship with the Designated Entities and compliance with the EAR will not have any material adverse impact on our business operation, financial positions and prospects.
Business · 第 229 页
During the Track Record Period, we had provided export solutions to two China-based customers and assisted them with customs clearance and transportation services for their export of Chinese-origin point-of-sale machines, repair parts, rack-mounted servers, switches and network management devices to a consignee in Zimbabwe and an entity in Russia.
For the years ended December 31, 2022, 2023, 2024 and the nine months ended September 30, 2025, our revenue from SDN Customer was approximately RMB607,080, RMB30,973, nil and nil, accounting for approximately 0.004%, 0.0002%, nil and nil of our total revenue for the same periods, respectively.
Business · 第 157 页
As a result, our International Sanctions Legal Adviser confirmed that SDN Transactions and Bank Payments Transactions did not constitute U.S. primary sanctions violations.
Business · 第 157 页
As of the Latest Practicable Date, we had ceased the SDN Transactions and we no longer accept payments from the Designated Bank.
During the Track Record Period, we have sold our products to certain China-based customers that have been designated by the BIS to the Entity List, with revenue amounting to RMB11.5 million, RMB2.6 million, RMB0.6 million and RMB0.4 million for 2022, 2023, 2024 and the nine months ended September 30, 2025, respectively.
Summary · 第 6 页
After the said customer’s inclusion in the Entity List and designation as an SDN, we ceased all transactions with the said customer.
Business · 第 177 页
our Directors are of the view that the International Sanctions and U.S. export control rules do not have a material adverse impact on our business operations and financial performance