Our results of operations are affected by seasonal fluctuations in demand for our solutions, reflecting traditional insurance seasonality patterns.
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For example, we generally experience less order volume during national holidays in China, particularly during the Chinese New Year holiday season in the first half of each year.
As a result, we typically experience higher sales in the third and fourth quarters of the year due to the stock preparation of customers in response to the new vehicle launch and increased promotion activities during the holiday seasons.
Historically, we have observed a relatively lower volume of subscriptions from new and existing customers in the first quarter of each year. We believe that it results from reduced business activities during the Chinese New Year holiday. As this seasonal effect impacts the overall business activities in China, we expect it to persist in the future.
In 2023, 2024 and 2025, revenue generated in the second half of the year accounted for 65.5%, 59.7% and 49.2% of our annual revenue, respectively.
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The temporary decline in the second half of 2025 was primarily attributable to our strategic business realignment to enhance our overall financial performance.
As of February 28, 2026, RMB9.5 million, or 28.7% of our inventories as of December 31, 2025 had been subsequently sold or utilized, primarily due to the business off-season around the Chinese New Year, resulting in a slower inventory turnover.
Revenue in the second half of each year is typically higher than the first half, largely reflecting increased demand from certain customers in connection with year-end holiday sales, in particular customers in the consumer electronics sector.
Revenue typically trends lowest in the first quarter of the year, primarily due to OEMs’ production schedules and temporary slowdowns around the Chinese New Year holiday period.
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This seasonality also affects working capital dynamics, as higher production levels in the second half of the year often lead to increased inventory, which may temporarily impact our cash flow and liquidity.
For instance, we typically experience sales peaks during major festivals such as the New Year and Christmas, as well as during the summer period, which is largely attributable to the summer vacation.
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In anticipation of increased orders during these peak seasons, we strategically maintain higher inventory levels in the preceding weeks to ensure supply continuity.
江苏瘦西湖文化旅游股份有限公司Jiangsu Slender West Lake Culture and Tourism Co., Ltd.
船票及观光车收入季节性波动明显
Our water sightseeing boat service and sightseeing tour bus service are subject to the seasonal fluctuations throughout the year.
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Due to the seasonal fluctuations, a significant portion of our annual revenue is concentrated in a few key months, particularly during spring time, major holidays and long weekends. As a result, our financial results may vary significantly from quarter to quarter and are not necessarily indicative of long-term trends.
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diversifying our ‘‘Boat+’’ services: we have proactively diversified our service offering through value-added sightseeing boat services that are subject to weather and natural conditions, thereby broadening our revenue base during off-peak seasons and enhancing operational stability throughout the year.
上海锦江国际酒店股份有限公司Shanghai Jin Jiang International Hotels Co., Ltd.
酒店业务收入存在季节性波动
Due to the nature of our operations, the first quarter, in which both the New Year and Chinese Spring Festival holidays fall, accounts for a lower percentage of our annual revenue than other quarters of the year.
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The third quarter of each year is the traditional peak season for the hotel industry, and income performance is often the strongest during this time.
Our delivery of solution typically increases in the second half of the year, which is generally in line with the trend of sales volume of passenger vehicles in China according to Forst & Sullivan.
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According to Frost & Sullivan, the operating conditions in the smart cockpit software solution industry are influenced by seasonal fluctuations in the vehicle market, driven by factors including but not limited to (i) vehicle dealers usually hosting large-scale promotional events at the year-end to meet annual sales targets; (ii) increased traveling and consumer spending during major holidays such as the PRC National Day holidays and shopping festivals such as “Double 11”, which boost new vehicle sales; and (iii) the peak season for vehicle shows, which typically occurs in the fourth quarter.
In China, OEMs typically determine their annual technology roadmaps and begin to prepare supplier contracts around mid-year. This results in a concentrated period of development activity in the second half of the year, during which we complete development, deliver solutions for customer acceptance, and recognize revenue accordingly.
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Because of these seasonal and customer-specific dynamics, our quarterly or half-year results may not accurately reflect our full-year performance.
We typically recognize a substantial portion of our revenue in the second half of each fiscal year.
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Our sales pattern exhibits clear seasonality, with revenue typically peaking in the latter half of each year, and therefore our third and fourth quarter revenue generally exceeds that of other quarters.
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We prepare for these seasonal fluctuations by adjusting inventory levels and working capital.
浙江凯乐士科技集团股份有限公司Zhejiang Galaxis Technology Group Co., Ltd.02729.HK
客户下半年下单致业务存在季节性波动
Many of our customers — particularly those purchasing our multi-function comprehensive systems — tend to set annual budgets and place orders toward the second half of the calendar year.
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These seasonal ordering trends often result in a higher volume of orders in the fourth quarter, with corresponding revenue typically recognized in the second half of the following year, after project completion and customer acceptance.
江苏泽景汽车电子股份有限公司JIANGSU NEW VISION AUTOMOTIVE ELECTRONICS CO., LTD.02632.HK
HUD解决方案销售存在季节性波动
Our HUD solution sales generally experience seasonal fluctuations. Sales tend to be lower during the first quarter, particularly around the Chinese New Year holiday period when vehicle manufacturing activities slow down.
Our Group’s business is subject to seasonality, with higher sales and momentum typically in the second half of the year.
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According to the Frost & Sullivan, it is an industry norm that there is seasonality in the marketing services market, as (i) brands are willing to allocate more budget toward marketing services for products and services in the second half of the year and during periods of heightened demand such as the summer season; and (ii) although New Year’s Day and Chinese New Year occur in the first half of the year, brands may begin planning in advance and launching their holiday marketing campaigns in advance during the second half of the preceding year.
Our revenue from chip products generated from September to December contributed to approximately 40% of our annual chip products revenue during the Track Record Period, being 41.4% in 2023 and 37.7% in 2024, except for 2022 (23.9%) when the market price and market demand decline adversely impacted our revenue in the second half of the year.
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The results of operations of our lithium-ion battery anode material products business have been subject to certain seasonality as we typically generate over a majority of revenue from this business line in the third and fourth quarters of a calendar year, being 55.3%, 52.2% and 59.1% in 2022, 2023 and 2024, respectively, primarily because these are the peak sales seasons for new energy automobile and our revenue from downstream customers in power battery industry was typically higher.
We generally recognize a higher portion of our revenue in the fourth quarter of our fiscal year than other quarters, primarily because certain of our customers tend to schedule their procurement in advance of the major holidays in China, to avoid potential supply chain issues.
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For instance, revenue from the three months ended March 31, 2024 accounted for 20.5% of our revenue for the year ended December 31, 2024.
Our business operations are subject to seasonal fluctuations, which are primarily in line with the procurement, budgeting, and project implementation cycles of our major customers, particularly those in the power and infrastructure sectors.
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Generally, the first half of the fiscal year is focused on the initiation of bidding and procurement activities, while the completion, acceptance, and settlement of projects tend to be more concentrated in the latter half of the year.
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We actively manage the impact of this seasonality by optimizing our manufacturing planning and ensuring efficient resource allocation throughout the year.