UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 20-F

☐ REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934

OR

☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2025

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

OR

☐ SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Date of event requiring this shell company report

For the transition period from ________ to ________

Commission file number: 001-42454

Smart Logistics Global Limited

(Exact name of Registrant as specified in its charter)

N/A

(Translation of Registrant’s name into English)

Cayman Islands

(Jurisdiction of incorporation or organization)

Unit No. 805, 8th Floor, Capital Centre

151 Gloucester Road, Wanchai

(Address of principal executive offices)

Mr. Hue Kwok Chiu

Telephone: +852 6741 7569

E-mail: boris@smartlogisticsglobal.com

At the address of the Company set forth above

(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)

Securities registered or to be registered pursuant to Section 12(b) of the Act.

Securities registered or to be registered pursuant to Section 12(g) of the Act.

None

(Title of Class)

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act.

None

(Title of Class)

Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report.

An aggregate of 43,000,000 Ordinary Shares, par value HK$0.0001 per share, as of December 31, 2025. 

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes ☐ No ☒

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.

Yes ☐ No ☒

Note - Checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 from their obligations under those Sections.

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging growth company. See definition of “large accelerated filer,” “accelerated filer,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

TABLE OF CONTENTS

INTRODUCTION

In this annual report on Form 20-F, unless the context otherwise requires, references to:

This annual report on Form 20-F includes our audited consolidated financial statements for the years ended December 31, 2025, 2024 and 2023. In this annual report, we refer to assets, obligations, commitments, and liabilities in our consolidated financial statements in United States dollars. These dollar references are based on the exchange rate of Hong Kong dollars to United States dollars, determined as of a specific date or for a specific period. Changes in the exchange rate will affect the amount of our obligations and the value of our assets in terms of United States dollars which may result in an increase or decrease in the amount of our obligations and the value of our assets.

FORWARD-LOOKING STATEMENTS

This annual report contains forward-looking statements that reflect our current expectations and views of future events. The forward-looking statements are contained principally in “Item 3. Key Information—D. Risk Factors,” “Item 4. Information on the Company—B. Business Overview,” and “Item 5. Operating and Financial Review and Prospects.” These forward-looking statements are made under the “safe-harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. Known and unknown risks, uncertainties and other factors, including those listed under “Item 3. Key Information—D. Risk Factors,” may cause our actual results, performance, or achievements to be materially different from those expressed or implied by the forward-looking statements.

The words “may,” “might,” “will,” “could,” “would,” “should,” “expect,” “intend,” “plan,” “goal,” “objective,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “continue” and “ongoing,” or the negative of these terms, similar expressions or other comparable terminology intended to identify statements about the future. We have based these forward-looking statements largely on our current expectations and projections about future events that we believe may affect our financial condition, results of operations, business strategy, and financial needs. These forward-looking statements include statements relating to:

These forward-looking statements involve various risks and uncertainties. Although we believe that our expectations expressed in these forward-looking statements are reasonable, our expectations may later be found to be incorrect. Our actual results could be materially different from our expectations. Important risks and factors that could cause our actual results to be materially different from our expectations are generally set forth in “Item 3. Key Information—D. Risk Factors,” “Item 4. Information on the Company—B. Business Overview,” “Item 5. Operating and Financial Review and Prospects,” and other sections in this annual report. You should read thoroughly this annual report and the documents that we refer to with the understanding that our actual future results may be materially different from and worse than what we expect. We qualify all of our forward-looking statements by these cautionary statements.

Our business in China is conducted by our subsidiaries in RMB. Our consolidated financial statements are presented in RMB. In this annual report, we refer to assets, obligations, commitments, and liabilities in our consolidated financial statements in RMB. This annual report contains translations of certain foreign currency amounts into U.S. dollars for the convenience of the reader. Unless otherwise noted, all translations from RMB to U.S. dollars and from U.S. dollars to RMB in this annual report were calculated at the noon buying rate of US$1 = RMB 6.9949 on December 31, 2025, where applicable, as published in H.10 statistical release of the United States Federal Reserve Board. No representation is made that the RMB amounts could have been, or could be, converted, realized or settled into US$ at such rate, or at any other rate.

Part I

Item 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS

Not applicable.

Item 2. OFFER STATISTICS AND EXPECTED TIMETABLE

Not applicable.

Item 3. KEY INFORMATION

A. [Reserved]

B. Capitalization and indebtedness.

Not applicable.

C. Reasons for the offer and use of proceeds.

Not applicable.

D. Risk factors.

Risk Factors Summary

Our business is subject to a number of risks, including risks that may prevent us from achieving our business objectives or may materially and adversely affect our business, financial condition, results of operations, cash flows and prospects that you should consider before making a decision to invest in our Ordinary Shares. These risks include, but are not limited to, the following:

Risks Related to Our Business and Industry

Risks Related to Doing Business in China

Risks Related to Our Company

Risks Related to Our Securities

Risks Related to Our Business and Industry 

We face risks associated with the freight handled through our network.

We handle a large volume of freight shipments across our network on a daily basis, and we face challenges with respect to the protection and examination of freights. Freight shipments within our network may be damaged, stolen, or lost for various reasons, and we may be perceived or found liable for such incidents. In addition, due to the sheer volume of freights we handle daily, it is impracticable for us to examine every part of our freights, and we may fail to detect unknown, unsafe, prohibited, or restricted items in our freights. Furthermore, certain of our freight shipments involve inherent safety risks, such as flammability, water damage and extremely heavy weights, and may injure recipients and harm the personnel and assets of us and/or the truckers if accidents take place. If we fail to prevent prohibited or restricted items from entering into our network and if we participate in the transportation and delivery of such items, we may be subject to administrative or even criminal penalties, and if any personal injury or property damage is concurrently caused, we may be further liable for civil compensation.

The transportation of freight also involves inherent risks. We constantly have a large number of vehicles and personnel in transportation across our network, and are therefore subject to risks associated with transportation safety, and the insurance maintained by us may not fully cover the damages caused by transportation related injuries or loss. From time to time, our vehicles and personnel as well as the truckers may be involved in transportation accidents, and the freight carried by them may be lost or damaged.

Any of the foregoing risks could disrupt our services, cause us to incur substantial expenses, and divert the time and attention of our management. We may face claims and incur significant liabilities if found liable or partially liable for any of injuries, damages, or losses. Claims against us may exceed the amount of our insurance coverage, or may not be covered by insurance at all. Governmental authorities may also impose significant fines on us or require us to adopt costly preventive measures. Furthermore, if our services are perceived to be insecure or unsafe by our clients, our business volume may be significantly reduced, and our business, financial condition, and results of operations may be materially and adversely affected.

Failure to sufficiently invest in information technology and equipment could cause economic losses and put us at a disadvantage to our competitors.

The satisfactory performance, reliability, and availability of our technology system is critical to our ability to provide high-quality services to our customers. In addition, the maintenance and processing of various operating and financial data is essential to the daily operations of our business and formulation of our development strategies. Therefore, our business operations and growth prospects depend, in part, on our ability to maintain and make timely and cost-effective enhancements and upgrades to our technology systems and to introduce innovative additions which can meet changing operational needs. Failure to sufficiently invest in information technology and equipment could cause economic losses and put us at a disadvantage to our competitors. We can provide no assurance that we will be able to keep up with technological improvements or that the technology developed by others will not render our services less competitive or attractive.

Any interruptions caused by telecommunications failures, computer viruses, hacking, or other attempts to harm our systems that result in the unavailability or slowdown of our systems could quickly impact the workflow in a large portion of, if not the entire, network. We can provide no assurance that our current security mechanisms will be sufficient to protect our technology systems from any third-party intrusions, viruses or hacker attacks, information or data theft, or other similar activities. Any such occurrences could disrupt our services, damage our reputation, and harm our results of operations.

Our business and results of operations may be materially and adversely affected if we or the truckers are unable to provide high-quality services to our clients.

The success of our business largely depends on our ability to maintain and further enhance our service quality. Together with the truckers, we provide B2B (business-to-business) freight transportation services to our customers. Fuzhou Feiyi also provides vehicle repair and maintenance services to our customers in our logistics park. If we or the truckers are unable to provide services in a timely, reliable, safe, and secure manner, our reputation and client loyalty could be negatively affected. If our client service personnel fails to satisfy client needs and respond effectively to client complaints, we may lose potential or existing clients and experience a decrease in client orders, which could have a material adverse effect on our business, financial condition and results of operations.

Failure to renew our current leases or locate desirable alternatives for our facilities could materially and adversely affect our business.

We lease properties for our offices and FTL centres. We may not be able to successfully extend or renew such leases upon expiration of the current term on commercially reasonable terms or at all, and may therefore be forced to relocate the affected operations. This could disrupt operations and result in significant relocation expenses, which could adversely affect our business, financial condition, and results of operations. In addition, we compete with other businesses for premises at certain locations or of desirable sizes. As a result, even if we could extend or renew our leases, rental payments may significantly increase as a result of the high demand for the leased properties. In addition, we may not be able to locate desirable alternative sites for our facilities as our business continues to grow and failure in relocating our affected operations could adversely affect our business and operations.

Moreover, certain lessors have not provided us with valid ownership certificates. Under the relevant PRC laws and regulations, if the lessors are unable to obtain certificates of title because such properties were built illegally or failed to pass the inspection or other reasons, such lease agreements may be recognized as void and as a result, we may be required to vacate the relevant properties. In addition, if our lessors are not the owners of the properties and they have not obtained consents from the owners or their lessors or permits from the relevant government authorities, our leases could be invalidated. As a result, we may be subject to challenges, lawsuits or other actions taken against us with respect to the properties leased to us that are without valid title certificates from the relevant lessors.

Under PRC laws, all lease agreements are required to be registered with the local housing authorities. Some of our lease agreements have not been registered with the relevant government authorities. Failure to complete these required registrations may expose our landlords, lessors and the Company to potential monetary fines.

The loss of any of our key customers could materially and adversely affect our business, financial conditions and results of operation.

For the year ended December 31, 2025, 2024 and 2023, one customer accounted for 13%, 13% and 12% of the Group’s total revenues, respectively. Our ability to maintain stable business relationships with our customers, especially our major ones, will affect our revenue generated from our provision of contract logistics solutions to them. If we are unable to enter into new service contracts with our customers upon expiry of the current contracts, or there is a reduction or cessation of demands from these customers for whatever reasons and we are unable to enter into service contracts of comparable size and terms in substitution, our business, financial conditions and results of operation may be materially and adversely affected.

There can be no assurance that we will maintain or improve the relationships with these customers, or that we will be able to continue to supply these customers at current levels or at all. Any failure to pay by these customers could have a material negative effect on our company’s business. In addition, having a relatively small number of customers may cause our quarterly results to be inconsistent, depending upon when these customers pay for outstanding invoices.

Potential impact of customer concentration on financial stability and liquidity.

For the years ended December 31, 2025, 2024 and 2023, one customer accounted for approximately 10%, 15% and 8%, respectively, of the Group’s total contract assets. This concentration presents a potential risk to the Group’s financial stability and liquidity, as a significant portion of recognized revenue and future cash flows is tied to a single customer relationship.

Although this customer is a long-standing partner with a consistent history of timely invoicing and settlement within agreed credit terms, any adverse changes in its business operations, financial condition, or purchasing behavior could materially impact the Group’s contract asset balance, revenue recognition, and cash flow timing. A reduction in demand, delay in payments, or termination of the relationship could result in increased credit risk, reduced liquidity, and greater volatility in the Company’s financial performance.

The Group plans to continue to monitor the customer exposure and seeks to diversify its customer base to mitigate concentration risks. However, there can be no assurance that such efforts will fully offset the potential impact of reliance on a major customer.

We face intense competition which could adversely affect our results of operations and market share.

We operate in a highly competitive and fragmented industry. We compete with many local, regional, and national logistics providers. We compete with them based on a number of factors, including service pricing, transportation speed, service offerings, and service quality. In particular, we may face downward pricing pressure from our competitors. If we cannot effectively control our costs to remain competitive, our market share and revenue may decline. Furthermore, as we diversify service offerings and further expand our client base, we may face competition from existing or new players in those new sectors. If these players succeed in doing so, our business could be encroached by their entrance and adversely affected.

Certain of our current and potential competitors, as well as international logistics operators with presence in China, may have significantly greater resources, longer operating histories, larger client bases, and greater brand recognition than us. They may be acquired by, receive investment from, or enter into strategic relationships with, established and well-financed companies or investors which would help enhance their competitiveness. In view of this, some of our competitors may adopt more aggressive pricing policies or devote greater resources to marketing and promotional campaigns than us. We may not be able to compete successfully against current or future competitors, and competitive pressures may have a material and adverse effect on our business, financial condition, and results of operations.

Changes in industry regulations and industrial policies may affect our future performance.

Providing logistics services requires business licensing and is subject to various laws, administrative rules and industry standards. To support the development of the logistics industry, governments at various levels have successively introduced a number of industrial support and encouragement policies.

Pursuant to the Administrative Provisions Concerning the Running of Cargo Vehicles with Out-of-Gauge Goods promulgated by the PRC Ministry of Transport, which became effective on September 21, 2016, cargo vehicles running on public roads shall not carry cargo weighing more than, and their dimensions shall not exceed, the limits set forth by such provisions. The operation of our vehicle fleet is subject to these provisions. If our trucks are not in compliance with such provisions, we may be required to reduce the length of our trucks or purchase new ones to replace them. Otherwise, we may be subject to penalties if we continue to operate those trucks that exceed the limits set forth in the provisions.

New laws and regulations may be promulgated from time to time and the interpretation and implementation of current and future PRC laws and regulations applicable to our businesses are subject to change and will continue to evolve. Any of these actions by the PRC government may have a material and adverse effect on our results of operations.

Relevant state policies on environmental protection may affect our future performance.

We, as a logistics service company and provider, rely on various types and models of transportation vehicles to perform its daily operations, but due to heavy regulations in environmental protection, energy conservation, and emission reductions, an increase in expenses is expected to incur, which may directly or indirectly affect our future performances.

Risk of inability to obtain necessary future financing.

The Company anticipates it will need to secure additional financing in the future to fund its operations, expansion, product development, and response to customer needs. The precise timing, amount, and nature of such financing will depend on numerous factors, including the pace of growth, the scope of development initiatives, operational cash flow, potential losses, and unforeseen expenditures. There is material uncertainty regarding both the extent of future capital requirements and the Company’s ability to obtain additional financing on acceptable terms, or at all. Any future debt financing or issuance of senior equity securities could subordinate the rights of existing shareholders. Furthermore, any issuance of additional equity securities would likely result in significant dilution to existing shareholders.

Fuel price fluctuations may have a material adverse effect on our business, results of operations and financial condition.

The military conflicts in the middle-east area could potentially cause the increase of the fuel oil price. Transportation cost is one of the major costs of companies in the contract logistics industry, and fuel cost is a significant component of transportation cost. Fluctuation of fuel prices has a certain impact on the profitability of contract logistics service providers like us. Not only will rises in fuel price increase the transportation cost of our own vehicles, it will also increase that of the truckers, which will in turn increase our operation costs as well. If fuel prices rise significantly in the future, we will experience pressure of increased costs which may adversely affect our profitability. While we may try to pass through the increased transportation costs to our customers, we cannot guarantee that we can successfully do so.

We use third-party services in connection with our business, and any disruption to these services could result in a disruption to our business, negative publicity, and a slowdown in the growth of our customer base, materially and adversely affecting our business, financial condition, and results of operations.

Our business depends on the services provided by, and relationships with, various third parties, including third-party payment and administrative services providers and, through such payment and administrative services providers, transportation services providers such as truckers. Since the year ended December 31, 2021, Fuzhou JB has engaged two third-party payment and administrative services suppliers which primarily provide us with the service of handling third-party payments and administrative matters with individual truckers on normal commercial course and accounted for a significant part of the total cost of revenue of the Group. Fuzhou JB continued to engage them for the years ended December 31, 2025, 2024 and 2023.   Since the first quarter of 2026, Xuzhou JB, a new subsidiary of the Company, also began handling third-party payments and administrative matters with individual truckers. In respect of transportation services providers such as truckers, by which most of our transportation orders were completed, we could be materially and adversely affected if transportations are improperly executed, whether as a result of system failure, accident, human error or purposeful delay or malfeasance. We are also dependent in part on third-party transportation services providers to report certain events to us, such as delivery information. We cannot assure you that we will be able to obtain access to preferred third-party transportation services providers at attractive rates or that these providers will have adequate capacity available to meet the needs of our customers. The failure of these and other third parties to perform in compliance with our agreements may negatively impact our business.

We provided loans and excess payments to our two third-party payment and administrative services suppliers. Failure to collect repayment and excess payment balances or to utilize excess payment balance from them could result in a disruption to our business, financial condition, and results of operations.

Fuzhou JB engages two third-party payment and administrative services suppliers which primarily provide us with the service of handling third-party payments and administrative matters with individual truckers on normal commercial course and accounted for a significant part of the total cost of revenue of the Group. Fuzhou JB also provided loans to these two suppliers in 2023 and 2024 for their business needs on normal commercial terms. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations Results of Operations - Liquidity and Capital Resources”. For the material terms of our arrangements with them, see “Business - Payment and engagement of truckers.” Any failure to collect repayment from these two suppliers, if we extend loans to them in the future, or to utilize excess payment balance could have a material negative effect on our company’s business, financial condition, and results of operations.

Fuzhou JB, Mr. Hue and Jiabin HK entered into a debt assignment agreement to resolve the related party transactions but it is possible that PRC government will deem such agreement invalid.

As of December 31, 2025, 2024 and 2023, the balance due to a related party was RMB4,697,488, RMB1,290,837, and RMB128,318,360 respectively, which represented advances from Mr. Hue Kwok Chiu, the controlling shareholder and also the Chief Executive Officer and Board Chair of the Company. The balances were unsecured, non-interest bearing and repayable on demand. In August and September 2023, Mr. Hue borrowed an aggregate of RMB120.0 million from Fuzhou JB for his personal use. All such loans were secured by our balance due to Mr. Hue from time to time, all carrying interests at a simple rate of 3.55% per annum, and all repayable on December 31, 2023. Pursuant to a supplemental agreement among Fuzhou JB, Mr. Hue and Jiabin HK, dated December 14, 2023, parties agreed that the loan owed to Mr. Hue and accrued interest will become repayable before December 30, 2024 or be settled with the Group’s amounts owed to Mr. Hue through Jiabin HK by entering into a debt assignment agreement. On May 31, 2024, Fuzhou JB, Mr. Hue and Jiabin HK entered into such debt assignment agreement in the form of a tripartite deed (the “Deed”) pursuant to which (i) Jiabin HK has agreed to assume and repay any and all of liabilities Mr. Hue owed to Fuzhou JB under the Debt Agreements of a loan facility in the aggregate amount of RMB120 million and all accrued interest thereunder in the amount of RMB3.27 million between Fuzhou JB and Mr. Hue (the “Original Hue Loan”); and (ii) Fuzhou JB has agreed to seek repayment of all liabilities under the Original Hue Loan from Jiabin HK and not Mr. Hue. As a result, Mr. Hue is deemed to have discharged all his liabilities under the Debt Agreements owed to Fuzhou JB. As of the date of this annual report, the balance due to Mr. Hue Kwok Chiu was approximately RMB7.9 million. Since Fuzhou JB and Jiabin HK are parties to the Deed, the debt assignment arrangement can be considered a cross-border transaction. Although it is possible that the debt assignment arrangement can be deemed to be subject to PRC’s foreign exchange regulations or prior approval from the State Administration of Foreign Exchange (“SAFE”) or other government authorities, we believe that the likelihood of that finding is rather remote. However, there is no guarantee that the PRC government will agree with our position. We cannot assure you that the PRC government would not deem the Deed invalid in that case.

We may keep incurring losses in the future.

We had net loss of approximately RMB18.2 million (US$2.6 million) and net income of approximately RMB8.7 million, and net income of approximately RMB9.4 million for the years ended December 31, 2025, 2024 and 2023, respectively. Net income decreased from RMB 8.7 million in 2024 to a net loss of RMB 18.2 million in 2025, primarily due to a material non-cash share-based consulting expense amounting RMB 27.0 million recognized during 2025 in connection with the issuance of unrestricted ordinary shares to a third-party consultant. The expense significantly increased selling and marketing expenses for the year and was the principal driver of the Company’s net loss. We anticipate that our operating expenses, together with the increased general administrative expenses of a growing public company, will increase in the foreseeable future as we seek to maintain and continue to grow our business, attract potential customers and further enhance our product offering. These efforts may prove more expensive than we currently anticipate, and we may not succeed in increasing our revenue sufficiently to offset these higher expenses. As a result of the foregoing and other factors, we may incur net losses in the future and may be unable to achieve or maintain profitability on a quarterly or annual basis for the foreseeable future.

If we are unable to manage our growth or execute our strategies effectively, our business and prospects may be materially and adversely affected.

To accommodate our growth, we anticipate that we will need to implement a variety of new and upgraded operational and financial systems, procedures and controls, including the improvement of our accounting and other internal management systems. We will also need to continue to expand, train, manage and motivate our workforce and manage our relationships with customers and suppliers. All of these endeavors involve risks, and will require substantial management effort and significant additional expenditures. We may not be able to manage our growth or execute our strategies effectively, and any failure to do so may have a material adverse effect on our business and prospects.

Default in payment by clients that have large account receivable balances could adversely impact our cash flows, working capital, results of operations and financial condition.

Our accounts receivable include amounts due from our customers. Our net accounts receivable balance was approximately RMB7.1 million (US$1.0 million), RMB15.7 million, and RMB14.3 million as of December 31, 2025, 2024 and 2023, respectively.

We are subject to the risk that we may be unable to collect accounts receivable in a timely manner, or at all. Such risk was higher as a result of the outbreak of COVID-19 resulting in financial difficulties of certain of our customers. As a result, our customers may not be able to pay us in a timely fashion and our accounts receivable and allowance for credit losses may accordingly increase. Our liquidity and cash flows from operations may be adversely affected if our accounts receivable cycles or collections periods lengthen or if we encounter a material increase in defaults of payment of our account receivable.

In order to mitigate such risks, we conduct rigorous due diligence checks on the customers and regularly assess the creditworthiness of corporate account clients. However, these mitigating efforts cannot ensure that we will be able to collect accounts receivable. If the accounts receivable cannot be collected in time, or at all, a significant amount of bad debt expense will occur, and our business, financial condition and results of operation will likely be materially and adversely affected.

We currently do not hold any issued patent or registered trademark outside of the PRC.

As of the date of this annual report, we have 36 patents registered in the PRC, 4 trademarks registered in the PRC, 4 copyrights registered in the PRC and 1 domain name registered in the PRC. At this time, we do not hold any issued patent or registered trademark outside of the PRC.

In addition, the rights granted under any issued patents may not provide us with proprietary protection or competitive advantages. The claims under any patents that issue from our patent applications may not be broad enough to prevent others from developing technologies that are similar or that achieve results similar to ours. It is also possible that the intellectual property rights of others will bar us from licensing and from exploiting any patents that are issued from our pending applications. Numerous patents and pending patent applications owned by others exist in the fields in which we have developed and are developing our technology. These patents and patent applications might have priority over our patent applications and could subject our patent applications to invalidation. Finally, in addition to those who may claim priority, any of our existing or pending patents may also be challenged by others on the basis that they are otherwise invalid or unenforceable.

We may not be able to prevent others from unauthorized use of our intellectual property, which could harm our business and competitive position.

Although we currently do not hold any issued patent or registered trademark outside of the PRC, we consider our copyrights, trademarks, trade names, internet domain names, patents and other intellectual property rights invaluable to our ability to continue to develop and enhance our brand recognition. We have invested significant resources to develop our own intellectual property. Failure to maintain or protect these rights could harm our business. We rely on a combination of patents, patent applications, trade secrets, including know-how, copyright laws, trademarks, intellectual property licenses, contractual rights and any other agreements to establish and protect our proprietary rights in our technology. Statutory laws and regulations are subject to judicial interpretation and enforcement which will continue to evolve and are subject to changes. Contractual rights may be breached by counterparties, and there may not be adequate remedies available to us for any such breach.

The measures we take to protect our intellectual property rights may not be sufficient or adequate to prevent infringement on or misuse of our intellectual property. Any unauthorized use of our intellectual property by third parties may adversely affect our current and future revenues and our reputation. Preventing unauthorized uses of intellectual property rights could be difficult, costly and time-consuming. Litigation may be necessary to enforce our intellectual property rights. Initiating infringement proceedings against third parties can be expensive and time-consuming, and divert management’s attention from other business concerns. We may not prevail in litigation to enforce our intellectual property rights against unauthorized use. Furthermore, the practice of intellectual property rights enforcement by the PRC regulatory authorities will continue to evolve and are subject to change. Failure to adequately protect our intellectual property could harm our brand name and materially affect our business and results of operations.

We may be materially and adversely affected by negative publicity.

We rely heavily on our brand image in selling our services. Negative publicity relating to our services and solutions, shareholders, management, employees, operations, distributors, suppliers, dealers, industry or products similar to ours, could materially and adversely affect consumer perceptions of our brand and result in decreased demand for our services. As of the date of this annual report, we had not received any negative publicity. However, there can be no assurance that we will not experience negative publicity in the future or that such negative publicity will not have a material adverse effect on our business, results of operations, financial condition or prospects.

We retain certain personal information about our users and may be subject to various privacy and consumer protection laws.

Our business involves collecting and retaining personal information including the truckers’ or carriers’ name, date of birth, identity card, driver’s licence number, mobile phone number, bank account, name and telephone number of the shipper’s or receiver’s contact person for transport orders. In order to carry out the necessary internal management, the Company collects some of the personal information of our employees, mainly including their names, gender, age, ID card number, telephone number, e-mail address, home address, family status, educational background and bank account. The above collected data are all from PRC entities, and the Company itself and its entities not located in the PRC do not have the authority to directly access, retrieve, download and export the above operating data and information, except for some of the personal information of the employees of the PRC entities.

In November 2016, the SCNPC passed the Cybersecurity Law of PRC (the “CSL”), which became effective in June 2017. The CSL is the first PRC law that systematically lays out the regulatory requirements on cybersecurity and data protection, subjecting many previously under-regulated or unregulated activities in cyberspace to government scrutiny. The legal consequences of violation of the Cybersecurity Law of PRC include penalties of warning, confiscation of illegal income, suspension of related business, winding up for rectification, shutting down the websites, and revocation of business license or relevant permits. On November 16, 2021, the CAC promulgated the revised Cybersecurity Review Measures, effective on February 15, 2022, which require that where any of the following conditions are met, a network security review shall be conducted: (i) a CIO purchases network products or services, which affects or may affect national security; (ii) online platform operators carry out data processing activities, which affect or may affect national security; (iii) to list abroad, an online platform operator who possesses the personal information of more than 1 million users. We were not required to apply for the cybersecurity review for our initial public offering under the Cybersecurity Review Measures. As of the date of this annual report, the Company has not received any notification from any authority that it is a CIIO, or that the Company’s data processing practices, or its listing in the U.S., affect or may affect national security. Moreover, the number of individuals whose personal information is held by the Company is less than 1 million. We are not sure, however, that regulators in China will not take a contrary view or will not subsequently require us to undergo the cybersecurity review and subject us to penalties for non-compliance. As of the date of this annual report, the Company and its PRC enterprises have never received any notification from any administrative authority requiring the Company and its PRC enterprises to conduct cybersecurity review, nor have they received any investigation, warning or penalty in relation thereto.

On August 20, 2021, the SCNPC promulgated the Personal Information Protection Law of the PRC (the “PIPL”), which took effect on November 1, 2021. As the first systematic and comprehensive law specifically for the protection of personal information in the PRC, the PIPL provides, among others, that (i) an individual’s separate consent shall be obtained before operation of such individual’s sensitive personal information, e.g., biometric characteristics and individual location tracking, (ii) personal information operators operating sensitive personal information shall notify individuals of the necessity of such operations and the influence on the individuals’ rights, (iii) if personal information operators reject individuals’ requests to exercise their rights, individuals may file a lawsuit with a People’s Court in China. As of the date of this annual report, we are in compliance with the PIPL in all material aspects, and have not been involved in any investigations on cybersecurity or data security initiated by related governmental regulatory authorities, and we have not received any inquiry, notice, warning, or sanction in such respect. However, we cannot assure you that we will comply with such regulations in all respects and we may be ordered to rectify or terminate any actions that are deemed illegal by regulatory authorities. We may also become subject to fines and/or other sanctions which may have material adverse effect on our business, operations and financial condition.

As of the date of this annual report, based on the existing rules and regulations in PRC, neither we nor any of our PRC subsidiaries has been required by any PRC governmental authority to apply for cybersecurity review because neither we nor any of our PRC subsidiaries qualifies as a critical information infrastructure operator or has conducted any data processing activities that affect or may affect national security or holds personal information of more than one million users. Nor have we or any of our PRC subsidiaries received any inquiry, notice, warning, sanction in such respect or been denied permission from any PRC regulatory authority to list on U.S. exchanges. There remains uncertainty, however, as to how the Cybersecurity Review Measures will be interpreted or implemented and whether the PRC regulatory agencies, including the CAC, may adopt new laws, regulations, rules, or detailed implementation and interpretation related to the Cybersecurity Review Measure. If any such new laws, regulations, rules, or implementation and interpretation come into effect, we expect to take all reasonable measures and actions to comply and to minimize the adverse effect of such laws on us. We cannot guarantee, however, that our PRC subsidiaries will not be subject to cybersecurity review in the future. During such reviews, our PRC subsidiaries may be required to suspend their operations or experience other disruptions to their operations. Cybersecurity review could also result in negative publicity with respect to our Company and diversion of our managerial and financial resources, which could materially and adversely affect our business, financial conditions, and results of operations. If we or any of our PRC subsidiaries inadvertently concludes that such permission or approval is not required, or if applicable laws, regulations or interpretations change and obligate us to obtain such permission or approvals in the future, we or our PRC subsidiaries may be subject to fines, suspension of business, website closure, revocation of business licenses or other penalties, as well as reputational damage or legal proceedings or actions against us, which may have a material adverse effect on our business, financial condition or results of operations.

We are subject to a variety of costs and risks due to our continued expansion that may not be successful and could adversely affect our profitability and operating results.

We may enter into new geographic markets where we have limited or no experiences in marketing, selling, and localizing and deploying our services. Business expansion may be subject to risks such as:

The occurrence of any of these risks could negatively affect our business in the new markets and consequently our business and operating results. In addition, the concern over these risks may also prevent us from entering into or releasing certain services in certain markets.

Our success depends on our ability to retain our core management team and other key personnel.

Our performance depends on the continued service and performance of our directors, officers and senior management as they are expected to play an important role in guiding the implementation of our business strategies and future plans. If any of our directors, officers or any members of our senior management were to terminate their service or employment, there can be no assurance that we would be able to find suitable replacements in a timely manner, at acceptable cost or at all. The loss of services of key personnel or the inability to identify, hire, train and retain other qualified and managerial personnel in the future may materially and adversely affect our business, financial condition, results of operations and prospects. Additionally, we rely on our research and development personnel for product development and technology innovation. If any of our key research and development personnel were to leave us, we cannot assure you that we can secure equally competent research and development personnel in a timely manner, or at all.

Our directors’ and executive officers’ other business activities may pose conflicts of time commitment and conflicts of interest.

Our directors and executive officers have other business interests outside the Company that could potentially give rise to conflicts of time commitment. For example, since February 2013, Mr. Hue has been serving as the chairman of the board of directors at e Lighting Group Holdings Limited (Stock Code: 8222), a company listed on GEM of the Hong Kong Stock Exchange, and is engaging in the sale of lighting products and designer furniture. He is also a director of certain private companies.

Mr. Hue has historically devoted approximately 80% of his time to matters concerning the Company, and approximately 20% of his time to matters concerning e Lighting Group Holdings Limited and other companies. As Mr. Hue devotes considerable time and effort to other companies, these sort of business activities could both distract him from focusing on the Company and pose a conflict of time commitment.

Our Chief Financial Officer did not previously serve as a chief financial officer of any publicly held company in the U.S. and his lack of experience in managing a public company with securities listed on Nasdaq may adversely affect our operation as a public company.

Our Chief Financial Officer, Mr. Lo Tai On, joined us in January 2024. He and the rest of the management team previously did not have any experience working together operating a publicly held company. While Mr. Lo has rich experience in corporate finance, he previously did not act as a chief financial officer of any publicly held company in the U.S., and had no experience in managing public companies whose securities are listed on the Nasdaq. His lack of experience in managing a public company with securities listed on Nasdaq may adversely affect our operation as a public company

Our business plans require a significant amount of capital. In addition, our future capital needs may require us to issue additional equity or debt securities that may dilute the interests of our shareholders or introduce covenants that may restrict our operations or our ability to pay dividends.

We will need significant capital to, among other things, expand our business operations and invest into logistics technologies to keep our competitiveness. We also expect to require significant capital and incur substantial costs in upgrading and expanding our smart logistics parks and FTL centres in China. As we ramp up our operations, and research and development, we may also require significant capital to maintain our property and equipment and such costs may be greater than anticipated.

Our ability to obtain the necessary financing to carry out our business plan is subject to a number of factors, including general market conditions and investor acceptance of our business plan. These factors may make the timing, amount, terms and conditions of such financing unattractive or unavailable to us. If we are unable to raise sufficient funds, we will have to significantly reduce our spending, delay or cancel our planned activities or substantially change our current corporate structure. We might not be able to obtain any funding, and we might not have sufficient resources to conduct our business as projected, both of which could mean that we would be forced to curtail or discontinue our operations.

We have limited insurance coverage, which could expose us to significant costs and business disruption.

We are exposed to various risks associated with our business and operations, and we have limited liability insurance coverage. A successful liability claim against us due to injuries or damages suffered by our users could materially and adversely affect our reputation, results of operations and financial conditions. Even if unsuccessful, such a claim could cause us adverse publicity, require substantial costs to defend, and divert the time and attention of our management. In addition, we do not have any business disruption insurance. Any business disruption event could result in substantial costs to us and a diversion of our resources.

Competition for highly skilled personnel is often intense and we may incur significant costs or be unsuccessful in attracting, integrating, or retaining qualified personnel to fulfil our current or future needs.

We have, from time to time, experienced, and we expect to continue to experience, difficulty in hiring and retaining highly skilled employees with appropriate qualifications. In addition, if any of our senior management or key personnel joins a competitor or engages in a competing business, we may lose business, knowhow, trade secrets, business partners and key personnel. Furthermore, prospective candidates and existing employees often consider the value of the equity awards they receive in connection with their employment. Thus, our ability to attract or retain highly skilled employees may be adversely affected by declines in the perceived value of our equity or equity awards. Furthermore, there are no assurances that the number of shares reserved for issuance under our share incentive plans will be sufficient to grant equity awards adequate to recruit new employees and to compensate existing employees.

If we fail to implement and maintain an effective system of internal controls, we may be unable to accurately report our results of operations, meet our reporting obligations or prevent fraud, and investor confidence and the market price of our shares may be materially and adversely affected.

Section 404 of the Sarbanes-Oxley Act of 2002 requires that we include a report of management on our internal control over financial reporting beginning with our second annual report on Form 20-F. In addition, once we cease to be an “emerging growth company” as such term is defined under the JOBS Act, our independent registered public accounting firm must attest to and report on the effectiveness of our internal control over financial reporting. Our management may conclude that our internal control over financial reporting is not effective. Moreover, even if our management concludes that our internal control over financial reporting is effective, our independent registered public accounting firm, after conducting its own independent testing, may issue a report that is qualified if it is not satisfied with our internal controls or the level at which our controls are documented, designed, operated or reviewed, or if it interprets the relevant requirements differently from us. In addition, as we are a public company, our reporting obligations may place a significant strain on our management, operational and financial resources and systems for the foreseeable future. We may be unable to timely complete our evaluation testing and any required remediation.

During the course of documenting and testing our internal control procedures, in order to satisfy the requirements of Section 404 of the Sarbanes- Oxley Act of 2002, we may identify weaknesses and deficiencies in our internal control over financial reporting. Based upon that evaluation, our management has concluded that, as of December 31, 2025, our disclosure controls and procedures were not effective to accomplish their objective at the reasonable assurance level. Our failure to correct the material weaknesses or our failure to discover and address any other material weaknesses or control deficiencies could result in inaccuracies in our financial statements and could also impair our ability to comply with applicable financial reporting requirements and related regulatory filings on a timely basis. As a result, our business, financial condition, results of operations and prospects, as well as the trading price of our Shares, may be materially and adversely affected. Moreover, ineffective internal control over financial reporting significantly hinders our ability to prevent fraud.

In addition, if we fail to maintain the adequacy of our internal control over financial reporting, as these standards are modified, supplemented or amended from time to time, we may not be able to conclude on an ongoing basis that we have effective internal control over financial reporting. If we fail to achieve and maintain an effective internal control environment, we could suffer material misstatements in our financial statements and fail to meet our reporting obligations, which would likely cause investors to lose confidence in our reported financial information. This, and/or any failure to maintain effective disclosure controls and procedures, could in turn limit our access to capital markets, harm our results of operations and lead to a decline in the trading price of our shares. Additionally, ineffective internal control over financial reporting could expose us to increased risk of fraud or misuse of corporate assets and subject us to potential delisting from the stock exchange on which we list, regulatory investigations and civil or criminal sanctions. We may also be required to restate our financial statements from prior periods.

Risks Related to Doing Business in China

Because SLG Cayman is a holding company conducting all its operations through PRC subsidiaries, the PRC government’s exercise of oversight over our Group’s business, and the intervention, influence, or control by the PRC government has or may have material impact on our business and on the value of our securities.

SLG Cayman is a holding company, which has no material operations of its own and conducts all of its operations through the operating entities established in the People’s Republic of China, or the PRC. Because all of the operations of the Group are conducted in China through SLG Cayman’s wholly-owned subsidiaries, the Chinese government’s exercise of oversight over the conduct of our Group’s business and may influence our Group’s operations, which could result in a material change in our operations and/or the value of SLG Cayman’s Shares. The PRC government may choose to exercise significant oversight and discretion, and the regulations to which we are subject may change. New laws, regulations, and other government directives in China may also be costly to comply with, and such compliance or any associated inquiries or investigations or any other government actions may:

The promulgation of new laws or regulations, or the new interpretation of existing laws and regulations, in each case that restrict or otherwise unfavorably impact the ability or manner in which we conduct our business could require us to change certain aspects of our business to ensure compliance, which could decrease demand for our products, increase costs, require us to obtain more licenses, permits, approvals or certificates, or subject us to additional liabilities. For example, we may be required to obtain extra licenses for our operations in PRC, and we may be classified as a PRC resident enterprise if the existing regulations or measures will change in the future, which will result in more costs for our PRC operations. Future changes in governmental currency conversion regulations may limit our ability to utilize our revenues effectively and affect the value of your investment. And since we may rely on dividends and other distributions on equity paid by our PRC subsidiaries for our cash and financing requirements, if the existing PRC company’s dividends and distributions regulations change in the future, it may affect the PRC subsidiaries’ ability to pay the dividends and distributions, which may affect our operations and the value of your investment. To the extent any new or more stringent measures are required to be implemented, our operations could be materially and adversely affected as well as the value of our Shares.

The PRC government may intervene or influence our operations in China (including Hong Kong) at any time, which could result in a material change in our operations and/or the value of our securities. It may significantly limit or completely hinder our ability to offer or continue to offer securities to investors, and cause the value of our securities to significantly decline or in extreme cases, become worthless.

Our business is subject to governmental supervision and regulation by the relevant PRC governmental authorities, including but not limited to the State Administration for Market Regulation and the State Administration for Industry and Commerce. Together, these governmental authorities promulgate and enforce regulations at any time that cover many aspects of our day-to-day operations. If we are deemed to be not in compliance with these requirements, we may be subject to fines and other administrative penalties from the relevant PRC government authorities. In case of our failure to rectify our noncompliance within required period by the relevant PRC government authorities, we may be forced to suspend our operation.

The PRC government has significant oversight and discretion over the conduct of our business and may intervene or influence our operations at any time as the government deems appropriate to further regulatory, political and societal goals. The PRC government has published new policies that significantly affected certain industries, such as the education and internet industries, and we cannot rule out the possibility that it will in the future release regulations or policies regarding our industry that could adversely affect our business, financial condition and results of operations. Furthermore, the PRC government has recently indicated an intent to exert more oversight and control over securities offerings and other capital markets activities that are conducted overseas and foreign investment in China-based companies like us. Any such action, once taken by the PRC government, could significantly limit or completely hinder our ability to offer or continue to offer securities to investors and cause the value of such securities to significantly decline or in extreme cases, become worthless. See “If the Chinese government chooses to exert more oversight and control over offerings that are conducted overseas and/or foreign investment in China-based issuers, such measures may limit our ability to continue to offer Shares to investors and cause the value of our Shares to significantly decline or be worthless.”

Uncertainties regarding interpretation and enforcement of the laws, rules and regulations in China may impose adverse impact on our business, operations and profitability.

The operations of our operating entities in China are governed by PRC laws and regulations. Our PRC subsidiaries are generally subject to laws and regulations applicable to foreign investments in China and, in particular, laws and regulations applicable to wholly foreign-owned enterprises. The PRC legal system is based on statutes. Prior court decisions may be cited for reference but have limited precedential value.

Since 1979, PRC legislation and regulations have significantly enhanced the protections afforded to various forms of foreign investments in China. However, China has not developed a fully integrated legal system and recently enacted laws and regulations may not sufficiently cover all aspects of economic activities in China. In particular, because these laws and regulations are relatively new, and because of the limited volume of published decisions and their nonbinding nature, the interpretation and enforcement of these laws and regulations involve uncertainties. In addition, the PRC legal system is based in part on government policies and internal rules (some of which are not published on a timely basis or at all) that may have a retroactive effect. For instance, we may have to resort to administrative and court proceedings to enforce the legal protections to which we are entitled to by law or contract. However, since PRC administrative and court authorities have significant discretion in interpreting statutory and contractual terms, it may be difficult to evaluate the outcome of administrative court proceedings and the level of law enforcement that we would receive in more developed legal systems. As a result, we may not be aware of our violation of these policies and rules until sometime after the violation. In addition, any litigation in China may be protracted and result in substantial costs and diversion of resources and management attention. Such uncertainties, including the inability of our subsidiaries to enforce their contracts, could have significant effects on economic conditions in the PRC and could materially affect our business and operation and/or the value of securities we are registering for sale.

PRC regulation of loans and direct investment by offshore holding companies to PRC entities may delay or prevent us from using the proceeds of our future offerings to make loans or additional capital contributions to our PRC subsidiaries, which could materially and adversely affect our liquidity and our ability to fund and expand our business.

Changes in the policies, regulations and rules, and the enforcement of laws of the PRC government may be implemented quickly with little advance notice and could have a significant impact upon our subsidiaries’ ability to operate profitably in the PRC and could result in a material change in our operations and/or the value of securities we are registering for sale. Therefore, our assertions and beliefs of the risk imposed by the PRC legal and regulatory system cannot be certain.

In 1979, the PRC government began to promulgate a comprehensive system of laws and regulations governing economic matters in general. The overall effect of legislation over the past several decades has significantly enhanced the protections afforded to various forms of foreign investment in China. Our subsidiaries are subject to PRC laws and regulations. However, these laws and regulations change frequently. Our ability to operate profitably in the PRC may be adversely affected by changes in policies by the PRC government, including changes in laws, regulations or their interpretation. In addition, confidentiality protections in China may not be as effective as in the United States or other countries. Accordingly, we cannot predict the effect of future developments in the PRC legal system, particularly with regard to our business, including the promulgation of new laws. This may include changes to existing laws or the interpretation or enforcement thereof, or the preemption of local regulations by national laws. These uncertainties could limit the availability of law enforcement.

Changes in China’s economic or social conditions or government policies could have a material and adverse effect on our business and results of operations.

All of our revenues are derived in China  and all of our operations, is conducted in China. Accordingly, our results of operations, financial condition and prospects are influenced by economic and legal developments in China. China’s economy has its own characteristics including with respect to the amount of government involvement, growth rate, control of foreign exchange and allocation of resources. The PRC government oversees China’s economic growth through strategically allocating resources, controlling the payment of foreign currency-denominated obligations, setting monetary policy and providing preferential treatment to particular industries or companies. Any adverse changes in economic conditions in China, in the policies of the Chinese government or in the laws and regulations in China could have a material adverse effect on the overall economic growth of China. Such developments could adversely affect our business and operating results, leading to reduction in demand for our products and services and adversely affect our competitive position.

Evolving interpretation and enforcement of PRC laws and regulations could limit the legal protections available to you and us.

The PRC legal system is a civil law system based on written statutes. Unlike the common law system, prior court decisions may be cited for reference but have limited precedential value. Our PRC subsidiaries are foreign-invested enterprises and are subject to laws and regulations applicable to foreign-invested enterprises as well as various Chinese laws and regulations generally applicable to companies incorporated in China. However, since these laws and regulations are relatively new and the PRC legal system continues to evolve, the interpretations and enforcement of these laws, regulations and rules may change.

From time to time, we may have to resort to administrative and court proceedings to enforce our legal rights. However, since the PRC administrative and court authorities have discretion in interpreting and implementing statutory and contractual terms, it may be difficult to evaluate the outcome of administrative and court proceedings and the level of protection we enjoy. In the event that we are not aware of our violation of any of these policies and rules until sometime after the violation, such violation could cause significant negative effect on our ability to continue our operations.

You may experience difficulties in effecting service of legal process, enforcing foreign judgments, or bringing actions in China (including Hong Kong) against us or our management named in the annual report based on foreign laws. It will be difficult for you or overseas regulators to conduct investigations or collect evidence within China.

We are a company incorporated under the laws of the Cayman Islands, and our Group conducts our operations in China and our assets are located in China. In addition, all our senior executive officers reside within China (including Hong Kong)for a significant portion of the time. As a result, it may be difficult for you to effect service of process upon us or those persons inside China. In addition, there is no guarantee as to whether the courts of the Cayman Islands or the PRC would recognize or enforce judgments of U.S. courts against us or such persons predicated upon the civil liability provisions of the securities laws of the U.S. or any state.

The recognition and enforcement of foreign judgments are provided for under the PRC Civil Procedures Law. PRC courts may recognize and enforce foreign judgments in accordance with the requirements of the PRC Civil Procedures Law based either on treaties between China and the country where the judgment is made or on principles of reciprocity between jurisdictions. At present, China does not have any treaties or other forms of written arrangement with the U.S. that provide for the reciprocal recognition and enforcement of foreign judgments. In addition, according to the PRC Civil Procedures Law, the PRC courts will not enforce a foreign judgment against us or our directors and officers if they decide that the judgment violates the basic principles of PRC laws or national sovereignty, security, or public interest. As a result, there is no guarantee that a PRC court would enforce a judgment rendered by a court in the U.S.

It will be difficult for you or overseas regulators to conduct investigations or collect evidence within China. Although the authorities in China may establish a regulatory cooperation mechanism with its counterparts of another country or region to monitor and oversee cross-border securities activities, such regulatory cooperation with the securities regulatory authorities in the United States may not be efficient in the absence of a practical cooperation mechanism. Furthermore, according to Article 177 of the PRC Securities Law, or “Article 177,” which became effective in March 2020, no overseas securities regulator is allowed to directly conduct investigations or evidence collection activities within the territory of the PRC. Article 177 further provides that Chinese entities and individuals are not allowed to provide documents or materials related to securities business activities to foreign agencies without prior consent from the securities regulatory authority of the State Council and the competent departments of the State Council.

All of our directors and officers reside in Hong Kong outside the United States. There is uncertainty as to whether the courts of Hong Kong would (i) recognize or enforce judgments of United States courts obtained against us or our directors or officers predicated upon the civil liability provisions of the securities laws of the United States or any state in the United States or (ii) entertain original actions brought in Hong Kong against us or our directors or officers predicated upon the securities laws of the United States or any state in the United States.

A judgment of a court in the United States predicated upon U.S. federal or state securities laws may be enforced in Hong Kong at common law by bringing an action in a Hong Kong court on that judgment for the amount due thereunder, and then seeking summary judgment on the strength of the foreign judgment, provided that the foreign judgment, among other things, is (1) for a debt or a definite sum of money (not being taxes or similar charges to a foreign government taxing authority or a fine or other penalty) and (2) final and conclusive on the merits of the claim, but not otherwise. Such a judgment may not, in any event, be so enforced in Hong Kong if (a) it was obtained by fraud; (b) the proceedings in which the judgment was obtained were opposed to natural justice; (c) its enforcement or recognition would be contrary to the public policy of Hong Kong; (d) the court of the United States was not jurisdictionally competent; or (e) the judgment was in conflict with a prior Hong Kong judgment.

Hong Kong has no arrangement for the reciprocal enforcement of judgments with the United States. As a result, there is uncertainty as to the enforceability in Hong Kong, in original actions or in actions for enforcement, of judgments of United States courts of civil liabilities predicated solely upon the federal securities laws of the United States or the securities laws of any State or territory within the United States.

As a holding company, we may rely on dividends and other distributions on equity paid by our PRC subsidiaries to fund any cash and financing requirements we may have, and any limitation on the ability of our PRC subsidiaries to make payments to us could have a material and adverse effect on our ability to conduct our business.

We are a holding company, and we may rely on dividends and other distributions on equity paid by our PRC subsidiaries for our cash and financing requirements, including the funds necessary to pay dividends and other cash distributions to our shareholders and service any debt we may incur. Current PRC regulations permit our PRC subsidiaries to pay dividends to us only out of their accumulated after-tax profits upon satisfaction of relevant statutory conditions and procedures, if any, determined in accordance with Chinese accounting standards and regulations. In addition, each of our PRC subsidiaries is required to set aside at least 10% of its accumulated profits each year, if any, to fund certain reserve funds until the total amount set aside reaches 50% of its registered capital. Additionally, if our PRC subsidiaries incur debt on their own behalf in the future, the instruments governing their debt may restrict their ability to pay dividends or make other distributions to us.

Any limitation on the ability of our PRC subsidiaries to pay dividends or make other distributions to us could materially and adversely limit our ability to grow, make investments or acquisitions that could be beneficial to our business, pay dividends, or otherwise fund and conduct our business.

Increases in labor costs and enforcement of stricter labor laws and regulations in the PRC may adversely affect our business and our profitability.

China’s overall economy and the average wage in China have increased in recent years and are expected to continue to grow. The average wage level for our employees has also increased in recent years. We expect that our Group’s labor costs, including wages and employee benefits, will continue to increase. Unless we are able to pass on these increased labor costs to those who pay for our services, our profitability and results of operations may be materially and adversely affected.

In addition, we have been subject to stricter regulatory requirements in terms of entering into labor contracts with our employees and paying various statutory employee benefits, including pensions, housing fund, medical insurance, work-related injury insurance, unemployment insurance and maternity insurance to designated government agencies for the benefit of our employees. Pursuant to the PRC Labor Contract Law and its implementation rules, employers are subject to stricter requirements in terms of signing labor contracts, minimum wages, paying remuneration, determining the term of employee’s probation and unilaterally terminating labor contracts. In the event that we decide to terminate some of our employees or otherwise change our employment or labor practices, the PRC Labor Contract Law and its implementation rules may limit our ability to effect those changes in a desirable or cost-effective manner, which could adversely affect our business and results of operations.

In October 2010, the Standing Committee of the National People’s Congress promulgated the PRC Social Insurance Law, effective on July 1, 2011. On April 3, 1999, the State Council promulgated the Regulations on the Administration of Housing Funds, which was amended on March 24, 2002. Companies registered and operating in China are required under the Social Insurance Law and the Regulations on the Administration of Housing Funds to apply for social insurance registration and housing fund deposit registration within 30 days of their establishment and to pay for their employees different social insurance including pension insurance, medical insurance, work-related injury insurance, unemployment insurance and maternity insurance to the extent required by law. We could be subject to orders by the competent labor authorities for rectification and failure to comply with the orders may further subject us to administrative fines.

As the interpretation and implementation of labor-related laws and regulations are still evolving, we cannot assure you that our employment practices do not and will not violate labor-related laws and regulations in China, which may subject us to labor disputes or government investigations. We cannot assure you that we have complied or will be able to comply with all labor-related law and regulations including those relating to obligations to make social insurance payments and contribute to the housing provident funds. If we are deemed to have violated relevant labor laws and regulations, we could be required to provide additional compensation to our employees and our business, financial condition and results of operations will be adversely affected.

Our business would be adversely affected if the truckers we use were classified as employees, workers or quasi-employees.

The classification of the truckers may be challenged in courts, by legislators and by government agencies in China and abroad. While we have not been involved in any legal proceedings, including putative class and collective class action lawsuits, demands for arbitration, charges and claims before administrative agencies, and investigations or audits by labor, social security, and tax authorities that claim that the truckers should be treated as our employees (or as workers or quasi-employees where those statuses exist), rather than as independent contractors, we could be. We believe that the truckers are independent contractors because, among other things, they can choose whether, when, and where to provide services on our platform, are free to provide services on our competitors’ platforms, and provide a truck to perform services on our platform. Nevertheless, we may not be successful in defending the classification of the truckers in China where we operate our business. Furthermore, the costs associated with defending, settling, or resolving potential lawsuits (including demands for arbitration) relating to the classification of the truckers may be material to our business.

Changes to foreign, provincial and local laws governing the definition or classification of independent contractors, or judicial decisions regarding independent contractor classification, could require classification of the truckers as employees (or workers or quasi-employees where those statuses exist) and/or representation of the truckers by labor unions. If, as a result of legislation or judicial decisions, we are required to classify the truckers as employees, we would incur significant additional expenses for compensating the truckers, including expenses associated with the application of wage and hour laws (including minimum wage, overtime, and meal and rest period requirements), employee benefits, social security contributions, taxes (direct and indirect), and potential penalties. In this case, we anticipate significant price increases for our clients to offset these additional costs; however, we believe that the financial impact to us would be moderated by the likelihood of other industry participants being similarly affected. Additionally, our Group may not have adequate trucker supply as the truckers may opt out of our platform given the loss of flexibility under an employment model, and our Group may not be able to hire a majority of the truckers currently using our platform. Further, any such reclassification would require us to fundamentally change our business model, and consequently have an adverse effect on our business, results of operations, financial position and cash flows.

Fluctuations in exchange rates could have a material and adverse effect on our results of operations and the value of your investment.

The value of Renminbi against the U.S. dollar and other currencies is affected by changes in China’s economic conditions and by China’s foreign exchange policies, among other things. In July 2005, the PRC government changed its decades-old policy of pegging the value of Renminbi to the U.S. dollar, and Renminbi appreciated more than 20% against the U.S. dollar over the following three years. Between July 2008 and June 2010, this appreciation halted and the exchange rate between Renminbi and the U.S. dollar remained within a narrow band. Since June 2010, Renminbi has fluctuated against the U.S. dollar, at times significantly and unpredictably. With the development of the foreign exchange market and progress towards interest rate liberalization and Renminbi internationalization, the PRC government may in the future announce further changes to the exchange rate system and we cannot assure you that Renminbi will not appreciate or depreciate significantly in value against the U.S. dollar in the future. It is difficult to predict how market forces or PRC or U.S. government policy may impact the exchange rate between Renminbi and the U.S. dollar in the future.

Any significant appreciation or depreciation of Renminbi may materially and adversely affect our revenues, earnings and financial position. For example, to the extent that we needed to convert U.S. dollars we receive from our initial public offering into Renminbi to pay our operating expenses, appreciation of Renminbi against the U.S. dollar would have an adverse effect on the RMB amount we would receive from the conversion. Conversely, a significant depreciation of Renminbi against the U.S. dollar may significantly reduce the U.S. dollar equivalent of our earnings.

Very limited hedging options are available in China to reduce our exposure to exchange rate fluctuations. To date, we have not entered into any hedging transactions in an effort to reduce our exposure to foreign currency exchange risk. While we may decide to enter into hedging transactions in the future, the availability and effectiveness of these hedges may be limited and we may not be able to adequately hedge our exposure or at all. Fluctuations in exchange rates may have a material adverse effect on your investment.

If we fail to complete foreign exchange registrations or obtain such approvals, our ability to use the proceeds we received or expect to receive from our offshore offerings and to capitalize or otherwise fund our PRC operations may be negatively affected, which could materially and adversely affect our liquidity and our ability to fund and expand our business.

Under PRC laws and regulations, we are permitted to utilize the proceeds from our initial public offering to fund our PRC subsidiaries by making loans to or additional capital contributions to our PRC subsidiaries, subject to applicable government registration, statutory limitations on amount and approval requirements. The amount of capital contributions that we may make to our PRC subsidiaries is unlimited and do not require approvals from SAFE or other government authorities. Additionally, our PRC subsidiaries may increase their registered capital to receive additional capital contributions from us and currently there is no statutory limit to increasing their registered capital, subject to satisfaction of applicable government registration and filing requirements. Pursuant to relevant PRC regulations, we may provide loans to our PRC subsidiaries up to the larger amount of (i) the balance between the registered total investment amount and registered capital of our PRC subsidiaries, or (ii) twice the amount of the net assets of our PRC subsidiaries calculated in accordance with PRC GAAP. These PRC laws and regulations may significantly limit our ability to use Renminbi converted from the net proceeds of our initial public offering to fund the establishment of new entities in China by our PRC subsidiaries, to invest in or acquire any other PRC companies through our PRC subsidiaries, or to establish new variable interest entities in China. Moreover, we cannot assure you that we will be able to complete the necessary registrations or obtain the necessary government approvals on a timely basis, if at all, with respect to future loans to our PRC subsidiaries or future capital contributions by us to our PRC subsidiaries. If we fail to complete such registrations or obtain such approvals, our ability to use the proceeds we received or expect to receive from our offshore offerings and to capitalize or otherwise fund our PRC operations may be negatively affected, which could materially and adversely affect our liquidity and our ability to fund and expand our business.

On December 26, 2017, China’s National Development and Reform Commission, or the NDRC, issued the Management Rules for Overseas Investment by Enterprises, or the NDRC Order 11. On February 11, 2018, the Catalog on Overseas Investment in Sensitive Industries (2018 Edition), or the Sensitive Industries List, was promulgated. “Overseas investment” as defined in the NDRC Order 11 refers to the investment activities conducted by an enterprise located in the territory of China either directly or through an overseas enterprise under its control by making investment with assets and equities or providing financing or guarantee in order to obtain overseas ownership, control, management rights and other related interests. Overseas investment by a Chinese individual through overseas enterprises under his/her control is also subject to the NDRC Order 11. According to the NDRC Order 11, (i) direct overseas investment by Chinese enterprises or indirect overseas investment by Chinese enterprises or individuals in sensitive industries or sensitive countries and regions requires prior approval by the NDRC; (ii) direct overseas investment by Chinese enterprises in non-sensitive industries and non-sensitive countries and regions requires prior filing with the NDRC; and (iii) indirect overseas investment of over US$300 million by Chinese enterprises or individuals in non-sensitive industries and non-sensitive countries and regions requires reporting with the NDRC. We are not sure if we were to use a portion of the proceeds raised from our initial public offering to fund investments in and acquisitions of complementary business and assets outside of China, such use of U.S. dollars funds held outside of China would be subject to the NDRC Order 11. We will continue to monitor any new rules, interpretation and guidance promulgated by the NDRC and communicate with the NDRC and its local branches to seek their opinions, when necessary. If it turns out that the NDRC Order 11 applies to our use of proceeds from our initial public offering mentioned above and we fail to obtain the approval, complete the filing or report our overseas investment using our initial public offering proceeds, as the case may be, in a timely manner as provided under the NDRC Order 11, we may be forced to suspend or cease our investment, or be subject to penalties or other liabilities, which may materially and adversely affect our business, financial condition and prospects.

Governmental oversight of currency conversion may limit our ability to utilize our revenues effectively and affect the value of your investment.

The PRC government oversees the convertibility of Renminbi into foreign currencies and, in certain cases, the remittance of currency out of China (including Hong Kong). Under existing PRC foreign exchange regulations, payments of current account items, such as profit distributions and trade and service-related foreign exchange transactions, can be made in foreign currencies without prior approval from the State Administration of Foreign Exchange, or SAFE, by complying with certain procedural requirements. However, approval from or registration with appropriate governmental authorities is required where Renminbi is to be converted into foreign currency and remitted out of China to pay capital expenses such as the repayment of loans denominated in foreign currencies.

There is no guarantee that the PRC government will not restrict access in the future to foreign currencies for current account transactions. We receive all of our revenues in RMB. If we do not comply with the foreign exchange registration requirements, there is no assurance that we will be able to pay dividends in foreign currencies to our shareholders.

China’s M&A Rules and certain other PRC regulations establish complex procedures for some acquisitions of PRC companies by foreign investors, which could make it more difficult for us to pursue growth through acquisitions in China.

On August 8, 2006, six PRC regulatory authorities, including the MOFCOM and other government authorities jointly issued the Rules on Mergers and Acquisitions of Domestic Enterprise by Foreign Investors which was effective as of 8 September 2006, and amended on 22 June 2009 (the “M&A Rules”). The M&A Rules, and other recently adopted regulations and rules concerning mergers and acquisitions established additional procedures and requirements that could make merger and acquisition activities by foreign investors more time consuming and complex. For example, the M&A Rules require that MOFCOM be notified in advance of any change-of-control transaction in which a foreign investor takes control of a PRC domestic enterprise, if any important industry is concerned, such transaction involves factors that impact or may impact national economic security, or such transaction will lead to a change in control of a domestic enterprise which holds a famous trademark or PRC time-honoured brand.

Moreover, the Anti-monopoly Law of the PRC promulgated by the SCNPC effective in August 2008 and the Provisions of the State Council on the Thresholds for Declaring Concentration of Business Operators require that transactions which are deemed concentrations and involve parties with specified turnover thresholds must be cleared by anti-monopoly enforcement authority before they can be completed.

In the future, we may pursue potential strategic acquisitions that are complementary to our business and operations. Complying with the requirements of these regulations to complete such transactions could be time-consuming, and any required approval processes, including obtaining approval or clearance from MOFCOM, may delay or inhibit our ability to complete such transactions, which could affect our ability to expand our business or maintain our market share.

If we are classified as a PRC resident enterprise for PRC income tax purposes, such classification could result in unfavorable tax consequences to us and our non-PRC shareholders.

Under the PRC Enterprise Income Tax Law and its implementation rules, an enterprise established outside of the PRC with a “de facto management body” within the PRC is considered a PRC resident enterprise. The implementation rules define the term “de facto management body” as the body that exercises full and substantial control over and overall management of the business, productions, personnel, accounts and properties of an enterprise. In 2009, the State Administration of Taxation (“SAT”) issued a circular, known as Circular 82, which provides certain specific criteria for determining whether the “de facto management body” of a PRC-controlled enterprise that is incorporated offshore is located in China. Although Circular 82 only applies to offshore enterprises controlled by PRC enterprises or PRC enterprise groups, not those controlled by PRC individuals or foreigners like us, the criteria set forth in the circular may reflect the State Administration of Taxation’s general position on how the “de facto management body” test should be applied in determining the tax resident status of all offshore enterprises. According to Circular 82, an offshore incorporated enterprise controlled by a PRC enterprise or a PRC enterprise group will be regarded as a PRC tax resident by virtue of having its “de facto management body” in China and will be subject to PRC enterprise income tax on its global income only if all of the following conditions are met: (i) the primary location of the day-to-day operational management is in the PRC; (ii) decisions relating to the enterprise’s financial and human resource matters are made or are subject to approval by organizations or personnel in the PRC; (iii) the enterprise’s primary assets, accounting books and records, Company seals, and board and shareholder resolutions, are located or maintained in the PRC; and (iv) at least 50% of voting board members or senior executives habitually reside in the PRC.

We believe that none of our entities outside of China is a PRC resident enterprise for PRC tax purposes. However, the tax resident status of an enterprise is subject to determination by the PRC tax authorities. If the PRC tax authorities determine that we are a PRC resident enterprise for enterprise income tax purposes, we will be subject to the enterprise income tax on our global income at the rate of 25% and we will be required to comply with PRC enterprise income tax reporting obligations. In addition, gains realized on the sale or other disposition of our Shares may be subject to PRC tax, at a rate of 10% in the case of non-PRC enterprises or 20% in the case of non-PRC individuals (in each case, subject to the provisions of any applicable tax treaty), if such gains are deemed to be from PRC sources. It is unclear whether non-PRC shareholders of our Company would be able to claim the benefits of any tax treaties between their country of tax residence and the PRC in the event that we are treated as a PRC resident enterprise.

We are subject to the reporting obligations and consequences of indirect transfers of equity interests in PRC resident enterprises by their non-PRC holding companies.

In February 2015, the State Administration of Taxation issued the Public Notice Regarding Certain Corporate Income Tax Matters on Indirect Transfer of Properties by Non-Resident Enterprises, or SAT Public Notice 7. SAT Public Notice 7 extends its tax jurisdiction to not only indirect transfers but also transactions involving transfer of other taxable assets, through the offshore transfer of a foreign intermediate holding company. In addition, SAT Public Notice 7 provides certain criteria on how to assess reasonable commercial purposes and has introduced safe harbors for internal group restructurings and the purchase and sale of equity through a public securities market. SAT Public Notice 7 also brings challenges to both the foreign transferor and transferee (or other person who is obligated to pay for the transfer) of the taxable assets. Where a non-resident enterprise conducts an “indirect transfer” by transferring the taxable assets indirectly by disposing of the equity interests of an overseas holding Company, the non-resident enterprise being the transferor, or the transferee, or the PRC entity which directly owned the taxable assets may report to the relevant tax authority such indirect transfer. Using a “substance over form” principle, the PRC tax authority may disregard the existence of the overseas holding Company if it lacks a reasonable commercial purpose and was established for the purpose of reducing, avoiding or deferring PRC tax. As a result, gains derived from such indirect transfer may be subject to PRC enterprise income tax, and the transferee or other person who is obligated to pay for the transfer is obligated to withhold the applicable taxes, currently at a rate of 10% for the transfer of equity interests in a PRC resident enterprise. On October 17, 2017, the SAT issued the Announcement of the State Administration of Taxation on Issues Concerning the Withholding of Non-resident Enterprise Income Tax at Source, or SAT Bulletin 37, which came into effect on December 1, 2017. The SAT Bulletin 37 further clarifies the practice and procedure of the withholding of non-resident enterprise income tax.

We are subject to the reporting obligations and consequences of future private equity financing transactions, share exchanges or other transactions involving the transfer of shares in our Company by investors that are non-PRC resident enterprises. The PRC tax authorities may pursue such non-resident enterprises with respect to a filing or the transferees with respect to withholding obligation, and request our PRC subsidiaries to assist in the filing. As a result, we and non-resident enterprises in such transactions may become at risk of being subject to filing obligations or being taxed under SAT Public Notice 7 and SAT Bulletin 37.

If the custodians or authorized users of controlling non-tangible assets of our Company, including our corporate chops and seals, fail to fulfil their responsibilities, or misappropriate or misuse these assets, our business and operations could be materially and adversely affected.

Under PRC law, legal documents for corporate transactions are executed using the chops or seal of the signing entity or with the signature of a legal representative whose designation is registered and filed with the relevant branch of the Administration of Industry and Commerce.

Although we usually utilize chops to enter into contracts, the designated legal representatives of each of our subsidiaries have the apparent authority to enter into contracts on behalf of such entities without chops and bind such entities. All designated legal representatives of our subsidiaries are members of our senior management team who have signed employment agreements with us or our subsidiaries under which they agree to abide by various duties they owe to us. In order to maintain the physical security of our chops and chops of our subsidiaries, we generally store these items in secured locations accessible only by the authorized personnel in the legal or finance department of each of our subsidiaries. Although we monitor such authorized personnel, there is no assurance such procedures will prevent all instances of abuse or negligence. Accordingly, if any of our authorized personnel misuse or misappropriate our corporate chops or seals, we could encounter difficulties in maintaining control over the relevant entities and experience significant disruption to our operations. If a designated legal representative obtains control of the chops in an effort to obtain control over any of our subsidiaries, we or our subsidiary would need to pass a new shareholder or board resolution to designate a new legal representative and we would need to take legal action to seek the return of the chops, apply for new chops with the relevant authorities, or otherwise seek legal redress for the violation of the representative’s fiduciary duties to us, which could involve significant time and resources and divert management attention away from our regular business. In addition, the affected entity may not be able to recover corporate assets that are sold or transferred out of our control in the event of such a misappropriation if a transferee relies on the apparent authority of the representative and acts in good faith.

Our leased property interest may be defective and our right to lease the properties may be affected by such defects challenged, which could cause significant disruption to our business.

Under PRC law, all lease agreements are required to be registered with the local housing authorities. Our Group presently leases 12 premises in China, and the landlords of these premises have not completed the registration of their ownership rights or the registration of our Group’s leases with the relevant authorities. Failure to complete these required registrations may expose our landlords, lessors and us to potential monetary fines. If these registrations are not obtained in a timely manner or at all, we may be subject to monetary fines or may have to relocate our offices and incur the associated losses.

Certain lessors of our leased properties in PRC have not provided us with valid property ownership certificates or any other documentation proving their right to lease those properties to us. If our lessors are not the owners of the properties or they have not obtained consents from the owners or their lessors or permits from the relevant government authorities, and if a third party disputes the ownership or tenancy of the premises, this may affect our continued tenancy of the premises.

Some of our leased properties in PRC are allocated on allocated land without PRC governmental approval. According to PRC law, the rental of properties located on allocated land should be approved by governmental authorities. Unauthorized leasing of the properties on allocated land may expose our landlords and lessors to potential confiscation of illegal proceeds and monetary fines, which may affect our continued tenancy of the premises.

If the Chinese government chooses to exert more oversight and control over offerings that are conducted overseas and/or foreign investment in China-based issuers, such measures may limit our ability to continue to offer Shares to investors and cause the value of our Shares to significantly decline or be worthless.

On February 17, 2023, the China Securities Regulatory Commission, or the CSRC, announced the Circular on the Administrative Arrangements for Filing of Securities Offering and Listing By Domestic Companies (the “Circular”), and released a set of new regulations which consists of the Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Companies (the “Trial Measures”), and five supporting guidelines. The Trial Measures came into effect on March 31, 2023. The Trial Measures subject both direct and indirect overseas offering and listing activities to the CSRC filing-based administration. Requirements for filing entities, time points and procedures are specified. A PRC domestic company that seeks to offer and list securities in overseas markets shall fulfil the filing procedure with the CSRC per the requirements of the Trial Measures. Where a PRC domestic company seeks to indirectly offer and list securities in overseas markets, the issuer shall designate a major domestic operating entity, which shall, as the domestic responsible entity, file with the CSRC. The Trial Measures also lay out requirements for the reporting of material events. Breaches of the Trial Measures, such as offering and listing securities overseas without fulfilling the filing procedures, shall bear legal liabilities, including a fine between RMB1.0 million (approximately $150,000) and RMB10.0 million (approximately $1.5 million), and the Trial Measures heighten the cost for offenders by enforcing accountability with administrative penalties and incorporating the compliance status of relevant market participants into the Securities Market Integrity Archives.

Under the Trial Measures, any overseas offering and listing made by an issuer that meets both of the following conditions will be deemed as indirect overseas offering and listing that should be filed with the CSRC: (A) 50% or more of any of the indicators of the issuer’s operating revenue, total profit, total assets or net assets as documented in its audited consolidated financial statements for the most recent fiscal year is accounted for by PRC domestic companies; and (B) the key aspects of the issuer’s business activities are conducted in mainland China, or its main places of operations are located in mainland China, or the senior managers in charge of its operation and management are mostly Chinese citizens or domiciled in the PRC. Given that our domestic operating entities generated a substantial amount of our total revenue, and that our business activities are mainly conducted in the PRC, the Company may be required to go through the filing procedures with the CSRC within 3 working days after the submission of application documents for future listing and offering to the U.S. Securities and Exchange Commission.

The Confidentiality Provisions require that, among other things, (a) a PRC domestic company that plans to, either directly or through its overseas listed entity, publicly disclose or provide to relevant individuals or entities including securities companies, securities service providers and overseas regulators, any documents and materials that contain state secrets or working secrets of government agencies, shall first obtain approval from competent authorities according to law, and file with the secrecy administrative department at the same level; and (b) a PRC domestic company that plans to, either directly or through its overseas listed entity, publicly disclose or provide to relevant individuals and entities including securities companies, securities service providers and overseas regulators, any other documents and materials that, if leaked, will be detrimental to national security or public interest, shall strictly fulfil relevant procedures stipulated by applicable national regulations. Any failure or perceived failure by the company, its PRC subsidiary to comply with the above confidentiality and archives administration requirements under the Confidentiality Provisions, and other PRC laws and regulations may result in the relevant entities being held legally liable by competent authorities, and referred to the judicial organ to be investigated for criminal liability if suspected of committing a crime. Any failure or perceived failure by the PRC domestic companies to comply with the above confidentiality and archives administration requirements under the Confidentiality Provisions and other PRC laws and regulations may result in that the relevant entities would be held legally liable by competent authorities, and referred to the judicial organ to be investigated for criminal liability if suspected of committing a crime.

For our IPO, the CSRC published the new filing results on the CSRC website on April 15, 2025 and we completed our IPO within 12 months from the issuance date of the notification. As of the date of this annual report, we have not received any formal inquiry, notice, warning, sanction, or objection from the CSRC with respect to our IPO. However, as the filing requirements and the implementation of the Trial Measures may continue to evolve and subject to change, if we conduct any overseas offerings under PRC law in the future, we cannot be sure that we will be able to fulfil all the regulatory requirements thereunder at all times. Any failure or perceived failure of us to fully comply with such new regulatory requirements could limit our ability to offer or continue to offer securities to investors, cause significant disruption to our business operations, and severely damage our reputation, which could materially and adversely affect our financial condition and results of operations and could cause the value of our securities to significantly decline or be worthless.

If escalating trade conflicts between the United States and China continue, we may face a range of potential challenges that could materially and adversely affect our business, financial condition and results of operations.

Certain trade disputes have had negative economic consequences on U.S. and China markets and could present additional potential risks and consequences for us. If trade-related issues persist, including as a result of geo-political tensions, to the extent that such a trade dispute escalates into a “trade war” between the U.S. and China or another country, which could lead to additional significant impacts on the industries in which our customers participate. Customers navigating an uncertain trade environment might seek to renegotiate or cancel logistics contracts, defer new orders or shift to alternative providers, all of which could reduce our revenue and growth prospects. These factors may increase our operating costs, constrain service volumes, pressure our pricing structure and impair our ability to execute on strategic initiatives, each of which could have a material adverse effect on our business and results of operations.

We are currently operating in a period of economic uncertainty, capital markets disruption, and supply chain interruptions, which have been significantly impacted by geopolitical instability due to the ongoing military conflict between Russia and Ukraine, attacks on shipping vessels in the Red Sea, the ongoing conflicts in the Gaza Strip and the surrounding region and the military conflicts between U.S., Israel, and Iran. Our business may be materially adversely affected by any negative impact on the global economy, capital markets, or supply chain resulting from these conflicts or any other geopolitical tensions, or otherwise.

Various social and political circumstances in the U.S. and around the world (including wars and other forms of conflict, including rising trade tensions between the United States and China, and other uncertainties regarding actual and potential shifts in the U.S. and foreign, trade, economic and other policies with other countries, terrorist acts, security operations and catastrophic events such as fires, floods, earthquakes, tornadoes, hurricanes and global health epidemics), may contribute to increased market volatility and economic uncertainties or deterioration in the U.S. and worldwide. Specifically, the rising conflict between Russia and Ukraine, and the rising conflicts in the Middle East, and resulting market volatility could adversely affect the Company’s ability to complete a Business Combination. In response to the conflict between Russia and Ukraine, the U.S. and other countries have imposed sanctions or other restrictive actions against Russia.

In addition to the Russia-Ukraine conflict and the Israel-Hamas conflict, the geopolitical landscape has been significantly affected by the escalation of hostilities between the United States, Israel and Iran. Following prior exchanges of strikes between Israel and Iran in 2024 and a twelve-day conflict involving U.S. and Israeli strikes on Iranian nuclear facilities and military sites in June 2025, the United States and Israel launched a large-scale joint military operation against Iran beginning on February 28, 2026. The operation has targeted Iranian military infrastructure, nuclear program assets, senior government and military officials. Iran has responded with retaliatory missile and drone strikes against targets in Israel and U.S. military installations across the Persian Gulf region, including in Bahrain, Jordan, Kuwait and Qatar. This conflict represents a material escalation in regional instability, the full scope, duration and consequences of which remain highly uncertain.

The U.S.-Israel-Iran conflict has had immediate and substantial effects on global trade, energy markets and financial markets. Iran’s Islamic Revolutionary Guard Corps has effectively closed the Strait of Hormuz — through which approximately 20% of global seaborne oil trade transits — to commercial shipping, leading major container carriers and tanker operators to suspend transits and reroute vessels. Concurrently, Iran-backed Houthi forces in Yemen have announced a resumption of attacks on commercial shipping in the Red Sea and the Bab el-Mandeb Strait, creating a dual chokepoint crisis that has disrupted global shipping lanes. Major shipping companies have suspended operations through both maritime corridors and rerouted vessels around the Cape of Good Hope, significantly increasing transit times and freight costs and disrupting global supply chains. War risk insurance for the Strait of Hormuz has been withdrawn or repriced at prohibitive levels, and airspace closures across multiple Gulf states have grounded thousands of flights. Brent crude oil prices have surged, and analysts have projected prices could reach $100 per barrel or higher if supply disruptions persist. Global stock markets have experienced significant declines, with indices in Asia, Europe and the United States falling sharply, and safe-haven assets such as gold and U.S. Treasuries have seen increased demand. The conflict has also prompted heightened sanctions enforcement activity and new compliance risks across financial markets.

Although the length, impact, and outcome of the these military conflicts are highly unpredictable, this conflict could similarly lead to market disruptions, including volatility in commodity prices, credit and capital markets, as well as supply chain interruptions, shipping and trade route restrictions, inflationary pressures on raw materials, interest rate fluctuations, energy price fluctuations, as well as political, social and economic instability and other material and adverse effects on macroeconomic conditions. At this time, it is not possible to predict or determine the ultimate consequence of this regional conflict. The conflicts in the Red Sea, between Hamas and Israel and their broader impacts as well as between U.S., Israel and Iran could have a lasting effect on the short- and long-term operations and financial condition of our business and the global economy.

Risks Related to Our Company

We are a “controlled company” within the meaning of the Nasdaq Stock Market Rules and, as a result, may rely on exemptions from certain corporate governance requirements that provide protection to shareholders of other companies.

We are a “controlled company” as defined under the Nasdaq Stock Market Rules because our founder and chief executive officer, Mr. Hue Kwok Chiu, beneficially owns approximately 93.0% of our issued and outstanding Shares and is able to exercise approximately 93.0% of the total voting power of our issued and outstanding Shares. For so long as we remain a controlled company under that definition, we are permitted to elect to rely on, and may rely on, certain exemptions from corporate governance rules, including an exemption from the rule that a majority of our board of directors must be independent directors. As a result, you may not have the same protection afforded to shareholders of companies that are subject to these corporate governance requirements.

Our chief executive officer is also our principal shareholder. He has substantial influence over our company. His interests may not be aligned with the interests of our other shareholders, and he could prevent or cause a change of control or other transactions.

As of the date of this annual report, our founder and chief executive officer, Mr. Hue Kwok Chiu, beneficially owns approximately 93.0% of our issued and outstanding Shares and is able to exercise approximately 93.0% of the total voting power of our issued and outstanding Shares.

Accordingly, Mr. Hue Kwok Chiu could have significant influence in determining the outcome of any corporate transaction or other matter submitted to the shareholders for approval, including mergers, consolidations, the election of directors and other significant corporate actions. Without the consent of our largest shareholder, we may be prevented from entering into transactions that could be beneficial to us or our minority shareholders. In addition, our directors and officers could violate their fiduciary duties by diverting business opportunities from us to themselves or others. The interests of our largest shareholder may differ from the interests of our other shareholders. The concentration in the ownership of our Shares may cause a material decline in the value of our Shares. For more information regarding our principal shareholder, see “Principal Shareholders.”

We are a “foreign private issuer” and, as a result, will not be subject to U.S. proxy rules and will be subject to more lenient and less frequent Exchange Act reporting obligations than a U.S. issuer.

Because we qualify as a foreign private issuer under the Exchange Act, we are exempted from certain provisions of the Exchange Act that are applicable to U.S. public companies, including:

In addition, foreign private issuers are not required to file their annual report on Form 20-F until 120 days after the end of each fiscal year, while U.S. domestic issuers that are not large accelerated filers or accelerated filers are required to file their annual report on Form 10-K within 90 days after the end of each fiscal year. Foreign private issuers are also exempt from Regulation FD, aimed at preventing issuers from making selective disclosures of material information. As a result, you may not have the same protections afforded to shareholders of companies that are not foreign private issuers. In addition, our officers, directors and principal shareholders are exempt from the reporting and “short-swing” profit recovery provisions of Section 16 of the Exchange Act and the rules thereunder. Therefore, our shareholders may not know on a timely basis when our officers, directors and principal shareholders purchase or sell our Shares.

Even if we cease to be a foreign private issuer in the future, for as long as we are an emerging growth company, we will not be required to comply with certain reporting requirements, including those relating to accounting standards and disclosure about our executive compensation, that apply to other public companies.

In April 2012, President Obama signed into law the JOBS Act. We are classified as an “emerging growth company” under the JOBS Act. For as long as we are an emerging growth company, which may be up to five full fiscal years, unlike other public companies, we will not be required to, among other things, (i) provide an auditor’s attestation report on management’s assessment of the effectiveness of our system of internal control over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act, (ii) comply with any new requirements adopted by the PCAOB requiring mandatory audit firm rotation or a supplement to the auditor’s report in which the auditor would be required to provide additional information about the audit and the financial statements of the issuer, (iii) provide certain disclosure regarding executive compensation required of larger public companies or (iv) hold nonbinding advisory votes on executive compensation. We will remain an emerging growth company for up to five years, although we will lose that status sooner if we have more than $1.235 billion of revenues in a fiscal year, have more than $700 million in market value of our Shares held by non-affiliates, or issue more than $1.0 billion of non-convertible debt over a three-year period.

To the extent that we rely on any of the exemptions available to emerging growth companies, you will receive less information about our executive compensation and internal control over financial reporting than issuers that are not emerging growth companies. If some investors find our Shares to be less attractive as a result, there may be a less active trading market for our Shares and our share price may be more volatile. In addition, taking advantage of reduced disclosure obligations may make comparison of our financial statements with other public companies difficult or impossible. If investors are unable to compare our business with other companies in our industry, we may not be able to raise additional capital as and when we need it, which may materially and adversely affect our financial condition and results of operations.

As a company incorporated in the Cayman Islands, we may adopt certain home country practices in relation to corporate governance matters that differ significantly from Nasdaq corporate governance listing standards. These practices may afford less protection to shareholders than they would enjoy if we complied fully with Nasdaq corporate governance listing standards.

As a company incorporated in the Cayman Islands that is listed on Nasdaq, we are subject to Nasdaq corporate governance listing standards. However, Nasdaq rules permit a foreign private issuer like us to follow the corporate governance practices of its home country. Certain corporate governance practices in the Cayman Islands which is our home country, may differ significantly from Nasdaq corporate governance listing standards, including, but not limited to, board of directors independent requirements, director nomination procedures, compensation committee matters. We may follow our home country law instead of the Nasdaq listing rules that require us to obtain shareholder approval for certain dilutive events, such as certain transactions other than a public offering involving issuances of a 20% or greater interest in the Company, and acquisitions of the stock or assets of another Company. As a result, our shareholders may be afforded less protection than they otherwise would enjoy under Nasdaq corporate governance listing standards applicable to U.S. domestic issuers.

Provisions in our amended and restated memorandum and articles of association may inhibit a takeover of us, which could limit the price investors might be willing to pay in the future for our shares and could entrench management.

Our amended and restated memorandum and articles of association contain provisions that may discourage unsolicited takeover proposals that shareholders may consider to be in their best interests. These provisions include a staggered board of directors and the ability of the board of directors to designate the terms of and issue new series of preferred shares, which may make the removal of management more difficult and may discourage transactions that otherwise could involve payment of a premium over prevailing market prices for our shares.

You may face difficulties in protecting your interests, and your ability to protect your rights through U.S. courts may be limited, because we are incorporated under Cayman Islands law.

We are an exempted company incorporated under the laws of the Cayman Islands. Our corporate affairs are governed by our memorandum and articles of association, as amended and restated from time to time, the Companies Act (As Revised) of the Cayman Islands and the common law of the Cayman Islands. The rights of shareholders to take action against the directors, actions by minority shareholders and the fiduciary duties of our directors to us under Cayman Islands law are to a large extent governed by the common law of the Cayman Islands. The common law of the Cayman Islands is derived in part from comparatively limited judicial precedent in the Cayman Islands as well as from the common law of England, the decisions of whose courts are of persuasive authority, but are not binding, on a court in the Cayman Islands. The rights of our shareholders and the fiduciary duties of our directors under Cayman Islands law are not as clearly established as they would be under statutes or judicial precedent in some jurisdictions in the United States and some states (such as Delaware) have more fully developed and judicially interpreted bodies of corporate law than the Cayman Islands. In addition, Cayman Islands companies may not have standing to initiate a shareholder derivative action in a federal court of the United States.

Shareholders of Cayman Islands exempted companies like us have no general rights under Cayman Islands law to obtain copies of the register of members or corporate records of the company. They will, however, have such rights as may be set out in the company’s articles of association. A Cayman Islands exempted company may maintain its principal register of members and any branch registers in any country or territory, whether within or outside the Cayman Islands, as the company may determine from time to time. There is no requirement for an exempted company to make any returns of members to the Registrar of Companies in the Cayman Islands. The names and addresses of the members are, accordingly, not a matter of public record and are not available for public inspection. However, an exempted company shall make available at its registered office, in electronic form or any other medium, such register of members, including any branch register of member, as may be required of it upon service of an order or notice by the Tax Information Authority pursuant to the Tax Information Authority Act (2013 Revision) of the Cayman Islands. This may make it more difficult for you to obtain the information needed to establish any facts necessary for a shareholder motion or to solicit proxies from other shareholders in connection with a proxy contest.

There can be no assurance that we will not be a passive foreign investment company, or PFIC, for United States federal income tax purposes for any taxable year, which could subject United States investors in our Shares to significant adverse United States income tax consequences.

In general, we will be treated as a passive foreign investment company (“PFIC”) for any taxable year in which either (1) at least 75% of our gross income (looking through certain 25% or more-owned subsidiaries) is passive income or (2) at least 50% of the average value of our assets (looking through certain 25% or more-owned subsidiaries) is attributable to assets that produce, or are held for the production of, passive income. Passive income generally includes, without limitation, dividends, interest, rents, royalties, and gains from the disposition of passive assets. If we are determined to be a PFIC for any taxable year (or portion thereof) that is included in the holding period of a U.S. Holder (as defined in the Section of this annual report captioned “Certain United States Federal Income Tax Considerations”) of our securities, the U.S. Holder may be subject to increased U.S. federal income tax liability and may be subject to additional reporting requirements. The determination of whether we are a PFIC is a fact-intensive determination made on an annual basis applying principles and methodologies that in some circumstances are unclear and subject to varying interpretation. Our actual PFIC status for any taxable year will not be determinable until after the end of such taxable year. Accordingly, there can be no assurance with respect to our status as a PFIC for our current taxable year or any subsequent taxable year. We urge U.S. Holders to consult their own tax advisors regarding the possible application of the PFIC rules in light of their individual circumstances.

We are subject to changing laws, rules and regulations in the U.S. regarding regulatory matters, corporate governance and public disclosure that will increase both our costs and the risks associated with non-compliance.

We are subject to rules and regulations by various governing bodies and self-regulatory organizations, including, for example, the SEC and The Nasdaq Stock Market, which are charged with the protection of investors and the oversight of companies whose securities are publicly traded, and to new and evolving regulatory measures under applicable law. Our efforts to comply with new and changing laws and regulations have resulted in and are likely to continue to result in increased general and administrative expenses and a diversion of management time and attention from revenue-generating activities to compliance activities.

Moreover, because these laws, regulations and standards are subject to varying interpretations, their application in practice may evolve over time as new guidance becomes available. This evolution may result in continuing uncertainty regarding compliance matters and additional costs necessitated by ongoing revisions to our disclosure and governance practices. If we fail to address and comply with these regulations and any subsequent changes, we may be subject to penalty and our business may be harmed.

Risks Related to Our Securities

An active trading market for our Shares or our Shares may not continue and the trading price for our Shares may fluctuate significantly.

We cannot assure you that a liquid public market for our Shares will continue. If an active public market for our Shares does not continue, the market price and liquidity of our Shares may be materially and adversely affected. We can provide no assurance that the trading price of our Shares will not decline. As a result, investors in our securities may experience a significant decrease in the value of their Shares.

The trading price of our Shares may be volatile, which could result in substantial losses to investors.

The trading price of our Shares may be volatile and could fluctuate widely due to factors beyond our control. This may happen because of the broad market and industry factors, like the performance and fluctuation of the market prices of other companies with business operations located mainly in China that have listed their securities in the United States. A number of Chinese companies have listed or are in the process of listing their securities on U.S. stock markets. The securities of some of these companies have experienced significant volatility, including price declines in connection with their initial public offerings. The trading performances of these Chinese companies’ securities after their offerings may affect the attitudes of investors toward Chinese companies listed in the United States in general and consequently may impact the trading performance of our Shares, regardless of our actual operating performance.

In addition to market and industry factors, the price and trading volume for our Shares may be highly volatile for factors specific to our own operations, including the following:

Any of these factors may result in large and sudden changes in the volume and price at which our Shares trade.

Recently, there have been instances of extreme stock price run-ups followed by rapid price declines and strong stock price volatility with a number of recent initial public offerings, especially among companies with relatively smaller public floats. As a relatively small-capitalized company with relatively small public float after the initial public offering, we may experience greater stock price volatility, lower trading volume and less liquidity than large-capitalized companies. In particular, our Shares may be subject to rapid and substantial price volatility, low volumes of trades and large spreads in bid and ask prices due to factors beyond our control. Such volatility, including any stock-run up, may be unrelated to our actual or expected operating performance and financial condition or prospects, making it difficult for prospective investors to assess the rapidly changing value of our Shares.

In the past, shareholders of public companies have often brought securities class action suits against those companies following periods of instability in the market price of their securities. If we were involved in a class action suit, it could divert a significant amount of our management’s attention and other resources from our business and operations and require us to incur significant expenses to defend the suit, which could harm our results of operations. Any such class action suit, whether or not successful, could harm our reputation and restrict our ability to raise capital in the future. In addition, if a claim is successfully made against us, we may be required to pay significant damages, which could have a material adverse effect on our financial condition and results of operations.

If securities or industry analysts do not publish research or reports about our business, or if they adversely change their recommendations regarding our Shares, the market price for our Shares and trading volume could decline.

The trading market for our Shares is influenced by research or reports that industry or securities analysts publish about our business. If one or more analysts who cover us downgrade our Shares, the market price for our Shares would likely decline. If one or more of these analysts cease to cover us or fail to regularly publish reports on us, we could lose visibility in the financial markets, which in turn could cause the market price or trading volume for our Shares to decline.

The sale or availability for sale of substantial amounts of our Shares could adversely affect their market price.

Sales of substantial amounts of our Shares in the public market, or the perception that these sales could occur, could adversely affect the market price of our Shares and could materially impair our ability to raise capital through equity offerings in the future. As of the date of this annual report, we have 43,000,000 Shares outstanding. The Shares sold in our initial public offering are freely tradable without restriction or further registration under the Securities Act, and shares held by our controlling shareholder may also be sold in the public market in the future subject to the restrictions in Rule 144 and Rule 701 under the Securities Act and the applicable lock-up agreements. We cannot predict what effect, if any, market sales of securities held by our significant shareholders or any other shareholder or the availability of these securities for future sale will have on the market price of our Shares.

Techniques employed by short sellers may drive down the market price of the Shares.

Short selling is the practice of selling securities that the seller does not own but rather has borrowed from a third party with the intention of buying identical securities back at a later date to return to the lender. The short seller hopes to profit from a decline in the value of the securities between the sale of the borrowed securities and the purchase of the replacement shares, as the short seller expects to pay less in that purchase than it received in the sale. As it is in the short seller’s interest for the price of the security to decline, many short sellers publish, or arrange for the publication of, negative opinions and allegations regarding the relevant issuer and its business prospects in order to create negative market momentum and generate profits for themselves after selling a security short. These short attacks have, in the past, led to selling of shares in the market. If we were to become the subject of any unfavorable allegations, whether such allegations are proven to be true or untrue, we could have to expend a significant amount of resources to investigate such allegations and/or defend ourselves. While we would strongly defend against any such short seller attacks, we may be constrained in the manner in which we can proceed against the relevant short seller by principles of freedom of speech, applicable state law or issues of commercial confidentiality.

Because we do not expect to pay dividends in the foreseeable future, you must rely on price appreciation of our Shares for return on your investment.

We currently intend to retain all of our available funds and any future earnings to fund the development and growth of our Group’s business. As a result, we do not expect to pay any cash dividends in the foreseeable future. Therefore, you should not rely on an investment in our Shares as a source for any future dividend income.

Our board of directors or the Company in general meeting has discretion as to whether to distribute dividends. Even if our board of directors or the Company in general meeting decides to declare and pay dividends, the timing, amount and form of future dividends, if any, will depend on, among other things, our future results of operations and cash flow, our capital requirements and surplus, the amount of distributions, if any, received by us from our subsidiaries, our financial condition, contractual restrictions and other factors deemed relevant by our board of directors. Accordingly, the return on your investment in our Shares will likely depend entirely upon any future price appreciation of our Shares. There is no guarantee that our Shares will appreciate in value in the future or even maintain the price at which you purchased our Shares. You may not realize a return on your investment in our Shares and you may even lose your entire investment.

If we fail to meet applicable continuing listing requirements, Nasdaq may delist our Shares from trading, in which case the liquidity and market price of our Shares could decline.

We cannot assure you that we are able to meet the continued listing standards of Nasdaq. If we fail to comply with the applicable listing standards and Nasdaq delists our Shares, we and our Shareholders could face significant material adverse consequences, including:

The National Securities Markets Improvement Act of 1996, which is a federal statute, prevents or preempts the states from regulating the sale of certain securities, which are referred to as “covered securities.” Because our Shares are listed on Nasdaq, such securities will be covered securities. Although the states are preempted from regulating the sale of our securities, the federal statute does allow the states to investigate companies if there is a suspicion of fraud, and, if there is a finding of fraudulent activity, then the states can regulate or bar the sale of covered securities in a particular case. Further, if we were no longer listed on Nasdaq, our securities would not be covered securities and we would be subject to regulations in each state in which we offer our securities.

E. Enforceability of civil liabilities

We are incorporated under the laws of the Cayman Islands because of certain benefits associated with being a Cayman Islands exempted Company, such as political and economic stability, an effective judicial system, a favorable tax system, the absence of foreign exchange control or currency restrictions and the availability of professional and support services. However, the Cayman Islands has a less developed body of securities laws than the United States and provides less protection for investors. In addition, Cayman Islands companies may not have standing to sue before the federal courts of the United States.

All of our assets are located outside the United States. In addition, all of our directors and officers are nationals or residents of jurisdictions other than the United States and all or a substantial portion of their assets are located outside the United States. As a result, it may be difficult for investors to effect service of process within the United States upon us or these persons, or to enforce judgments obtained in U.S. courts against us or them, including judgments predicated upon the civil liability provisions of the securities laws of the United States or any state in the United States. It may also be difficult for you to enforce judgments obtained in U.S. courts based on the civil liability provisions of the U.S. federal securities laws against us and our officers and directors.

With respect to Cayman Islands law, any final and conclusive judgment for a definite sum (not being a sum payable in respect of taxes or other charges of a like nature nor a fine or other penalty) and/or certain non-monetary judgments rendered in any action or proceedings brought against our Company in a foreign court (other than certain judgments of a superior court of certain states of the Commonwealth of Australia) will be recognised as a valid judgment by the courts of the Cayman Islands without re-examination of the merits of the case.  On general principles, we would expect such proceedings to be successful provided that the court which gave the judgment was competent to hear the action in accordance with private international law principles as applied in the Cayman Islands and the judgment is not contrary to public policy in the Cayman Islands, has not been obtained by fraud or in proceedings contrary to natural justice.

With respect to PRC law, the recognition and enforcement of foreign judgments are provided for under the PRC Civil Procedure Law. PRC courts may recognize and enforce foreign judgments under certain circumstances in accordance with the requirements of the PRC Civil Procedure Law. Under PRC law, a foreign judgment that does not otherwise violate basic legal principles, state sovereignty, safety or social public interest may be recognized and enforced by a PRC court, based either on bilateral treaties or international conventions contracted by China and the country where the judgment is made or on reciprocity between jurisdictions. As there currently exists no bilateral treaty, international convention or other form of reciprocity between China and the United States governing the recognition of judgments, including those predicated upon the liability provisions of the U.S. federal securities laws, there is no guarantee that a PRC court would enforce judgments rendered by U.S. courts.

All of our directors and officers reside in Hong Kong outside the United States. There is uncertainty as to whether the courts of Hong Kong would (i) recognize or enforce judgments of United States courts obtained against us or our directors or officers predicated upon the civil liability provisions of the securities laws of the United States or any state in the United States or (ii) entertain original actions brought in Hong Kong against us or our directors or officers predicated upon the securities laws of the United States or any state in the United States.

A judgment of a court in the United States predicated upon U.S. federal or state securities laws may be enforced in Hong Kong at common law by bringing an action in a Hong Kong court on that judgment for the amount due thereunder, and then seeking summary judgment on the strength of the foreign judgment, provided that the foreign judgment, among other things, is (1) for a debt or a definite sum of money (not being taxes or similar charges to a foreign government taxing authority or a fine or other penalty) and (2) final and conclusive on the merits of the claim, but not otherwise. Such a judgment may not, in any event, be so enforced in Hong Kong if (a) it was obtained by fraud; (b) the proceedings in which the judgment was obtained were opposed to natural justice; (c) its enforcement or recognition would be contrary to the public policy of Hong Kong; (d) the court of the United States was not jurisdictionally competent; or (e) the judgment was in conflict with a prior Hong Kong judgment.

Hong Kong has no arrangement for the reciprocal enforcement of judgments with the United States. As a result, there is uncertainty as to the enforceability in Hong Kong, in original actions or in actions for enforcement, of judgments of United States courts of civil liabilities predicated solely upon the federal securities laws of the United States or the securities laws of any State or territory within the United States.

Item 4. INFORMATION ON THE COMPANY

A. History and Development of the Company

SLG Cayman was incorporated on October 8, 2020 as an exempted company structured as a holding company incorporated under the laws of Cayman Islands. Immediately prior to our initial public offering, we were owned by ASL Ventures Limited, a company formed under the laws of the British Virgin Islands and wholly owned by Mr. Hue, our founder, Chairman and Chief Executive Officer. In January 2021, SLG Cayman incorporated Amelia Global Limited (“Amelia”), a BVI corporation.

Mr. Hue, together with his nominated party, incorporated our predecessor, Jiabin HK, in May 2017. It began its operations in China in July 2017 and currently conducts our business through our subsidiaries. In July 2017, Jiangxi JB and Fuzhou JB were incorporated under the laws of the PRC as wholly owned by Jiabin HK with Fuzhou JB to engage in the business of contract logistics business and Jiangxi JB being Fuzhou JB’s holding entity. In September 2019, Mr. Hue became the sole shareholder of Jiabin HK through acquiring the remaining interests of Jiabin HK held by the third party shareholder. In October 2020, Fuzhou Feiyi was incorporated to engage in the business of logistics parks operations and was 100% held by Jiangxi JB.

A reorganization of our legal structure was completed in 2023. On July 19, 2023, Mr. Hue, the former shareholder of Jiabin HK, transferred his 100% ownership interest in Jiabin HK (together with its subsidiaries, which were the three PRC corporations) to Amelia, which is wholly owned by our Company. In consideration of such transfer, Amelia issued 10 ordinary shares to our Company, as directed by Mr. Hue. After the reorganization, the Company owns 100% equity interests of Amelia, Jiabin HK, Jiangxi JB, Fuzhou JB and Fuzhou Feiyi. The controlling shareholder of the Company is same as that of Fuzhou JB and Fuzhou Feiyi before and after the reorganization.

In December 2025, the Company, through Jiangxi JB, incorporated Xuzhou JB. As a result, Xuzhou JB is an indirect, wholly-owned subsidiary of the Company.

We currently have six wholly owned subsidiaries, including Amelia, a company formed under the laws of the British Virgin Islands, Jiabin HK, a limited liability company formed under the laws of Hong Kong, Jiangxi JB, a company formed under the laws of PRC and three operating subsidiaries Fuzhou JB, Fuzhou Feiyi and Xuzhou JB, each a limited liability company formed under the laws of the PRC. Through Amelia, Jiabin HK and Jiangxi JB, we own 100% of the equity interest of the three operating subsidiaries.

On February 19, 2024, a Board of Directors meeting was held regarding the increase of authorized capital. According to the approval of the Board of Directors, the authorized capital of the Company increased from HK$380,000 to HK$15,600,000, with the corresponding authorized shares increased from 38,000,000 shares to 1,560,000,000 shares.

On September 24, 2024, it was resolved in a meeting of the board of directors of the Company (i) that the amended and restated memorandum and articles of association of the Company be adopted to effectuate that the Company’s issued and outstanding shares be sub-divided on the basis of 1 share being divided into 100 shares, resulting in the authorized share capital of the Company be changed from HK$15,600,000 divided into 1,560,000,000 shares with a nominal or par value of HK$0.01 each to HK$15,600,000 divided into 156,000,000,000 shares with a nominal or par value of HK$0.0001 each (the “Stock Split”). As a result of the Stock Split but before the Share Subscription (as defined below), ASL Ventures Limited held 100 shares of the Company; and (ii) that the Company would issue and ASL Ventures Limited would subscribe for 39,999,900 shares of the Company with a par value of HK$0.0001 each for a cash consideration of HK$3,999.99 (the “Share Subscription”). On September 24, 2024, ASL Ventures Limited passed the resolutions of the sole shareholder of the Company to effectuate the amended and restated memorandum and articles of association of the Company, the Stock Split and Share Subscription. Accordingly, the amended and restated memorandum and articles of association of the Company was deemed adopted and the Stock Split and Share Subscription were deemed completed on September 24, 2024, and ASL Ventures Limited held 40,000,000 shares of the Company immediately afterward.

On October 14, 2025, we adopted post-offering amended and restated memorandum and articles of association, effective October 16, 2025. On October 16, 2025, the Company closed its initial public offering, issuing a total of 1,000,000 Shares at a public offering price of US$5.00 per share for total gross proceeds of US$5,000,000, before deducting underwriting discounts and other offering expenses.

The following diagram illustrates our corporate structure, including our subsidiaries as of the date of this annual report:  

As of the date of this annual report, all the ownerships illustrated above are direct equity interests, and there is no variable interest entity or other arrangements.

Capital Expenditures and Divestitures

Since the beginning of the Company’s last three fiscal years, our principal capital expenditures have primarily related to the development and enhancement of our smart logistics park and related infrastructure in the People’s Republic of China. These expenditures mainly included construction works, infrastructure improvements and other operational assets supporting our contract logistics business.

During the periods presented, the Company did not undertake any material capital divestitures and did not acquire or dispose of material equity interests in other companies. As of December 31, 2025, capital expenditures in progress were focused on ongoing infrastructure development at our smart logistics park in Jiangxi Province, PRC. As of that date, the Company had incurred construction-related capital commitments of approximately RMB20.5 million, of which approximately RMB5.0 million is expected to be paid within the next twelve months, with the remaining balance payable thereafter in accordance with contractual terms and construction progress.

All capital expenditures currently in progress are located within the PRC and have been financed primarily through internally generated cash flows.

The SEC maintains a website at www.sec.gov that contains reports, proxy, and information statements, and other information regarding issuers that file electronically with the SEC using its EDGAR system. We maintain a corporate website athttps://www.smartlogisticsglobal.com/. The information contained in, or accessible from, our website or any other website does not constitute a part of this annual report.

B. Business Overview

Unless otherwise stated, the terms “SLG Cayman,” “the Company” and “our Company” this section refer to Smart Logistics Global Limited. The terms “we,”, “us,” “Group,” “our Group” and “our” refer to Smart Logistics Global Limited and its subsidiaries.

OUR MISSION

Our mission is to develop a road-transport smart logistics digital ecosystem through innovation, digital analytics and infrastructure establishment.

OVERVIEW 

We are a well-established, reputable and innovative business-to-business contract logistics solution provider in the PRC focusing on industrial raw materials line-haul transportation business. Leveraging on our intelligence on the macro-logistics landscape of our targeted markets, we are able to offer our customers cost-efficient, flexible and reliable logistic solutions with optimized transportation methods and routes tailored to their varying needs. We primarily provide land-only transportation as of the date of this annual report. A significant portion of our customers are large institutional customers, with whom we have maintained long-term relationship and typically enter into contracts for our provision of logistics solutions on a yearly basis. It is our strategy to prioritize these large customers because they have a consistent demand for high volume and long distance transportations between designated locations, which are generally more favourable for our operational efficiency, cost management and pricing, and provide more stable recurring revenue stream.

Our business model has the following characteristics:

We have an integrated and scalable operation model that is best suited for our expansion. We have developed a digitalized, systematic and integrated operation model, which is well-suited to serve fragmented contract logistics clientele base, with that we can efficiently replicate our existing business model in regions covering regions such as Bohai Bay, Chengdu-Chongqing-Kunming economic circle, Pearl River Delta, Yangtze River Delta and Huazhong District in PRC. Furthermore, our development in establishing our national logistics network allows us to provide customers with greater geographic reach at a lower cost. We also enjoy network synergy in the context where our service becomes more reputable in potential customers and operating leverage alongside with our expansion.  

The following dashboard sets forth certain milestones of our operation record since our establishment in 2017:

We offer our customers compelling value propositions which make us their preferred logistics solution provider. We strategically aim at serving customers in four major sectors, namely paper, steel, coal and food, as we believe these are core sectors driving the PRC economies and are relatively immune to cyclical economic changes. In the paper manufacturing industry, we have Lee & Man Paper Manufacturing Ltd listed on the Stock Exchange of Hong Kong as one of our major customers. In the food industry, our customers include China Starch Holdings Limited listed on the Hong Kong Stock Exchange. In the coal and steel industry, our customers include major trading enterprises located in Southwest and Northeast part of China. Generally, our PRC subsidiaries enter into transportation services contracts with our customers, some having long-term relationship with us of up to approximately six years, which generally have a term of one year. Our PRC subsidiaries also recurringly seek to bid for renewing transportation services contracts with our customers.

Through years of business relationship established in the industry, we are able to understand the evolving needs of our customer on an on-going basis and to provide customized solutions to meet their needs. For example, our PRC subsidiaries advised customers how to modify their packaging to suit regular truckload size, resulting in cost-savings for customers. Our PRC subsidiaries may also advise customers on multimodal transportation which typically combines road transport with water transport to achieve cost-efficiencies. Our national recognitions include being one of the first group of foreign-owned enterprise to receive online logistics platform recognition in the PRC, the National AAAA Logistics Enterprise. National AAAA Logistics Enterprise is evaluated by China Federation of Logistics and Procurement. The evaluation system includes enterprise management, assets, equipment, facilities, management and service, personnel quality and information level. It is recognized in China by the government, market and society, which has a high degree of credibility. As our further recognitions, our operations are certified with GB/T 19001-2016/ISO 9001:2015 (a set of quality management systems standards by the International Organization for Standardization) standards.

We generate revenue from our transportation services. Our total revenue was RMB706.7 million, RMB678.2 million, and RMB628.5 million (US$89.9 million) for the years ended December 31, 2023, 2024 and 2025, respectively, representing a decrease of approximately 4.0% from 2023 to 2024, and a decrease of approximately 7.3% from 2024 to 2025. We recorded net income of approximately RMB9.4 million, RMB8.7 million, and net loss of approximately RMB18.2 million (US$2.6 million) for the years ended December 31, 2023, 2024 and 2025, respectively.

Given that the road transport industry in many regions of PRC is still fragmented, we aim to capture additional market share by leveraging the strengths we have developed during the past years as described in “Competitive Strength” below and continue to grow our business by implementing a number of strategies as described in “Our Strategies” below.

COMPETITIVE STRENGTH

We believe that the following competitive strengths are the key factors that have contributed to our success to date:

We are an established and reputable contract logistics solution provider with national recognition and recognition from well-known enterprises

From 2018 to now, we have become an established reputable contract logistics solution provider in the PRC.  Our national recognitions include being one of the first group of foreign-owned enterprise to receive an online logistics platform recognition in the PRC, National AAAA Logistics Enterprise. National AAAA Logistics Enterprise is evaluated by China Federation of Logistics and Procurement. The evaluation system includes enterprise management, assets, equipment, facilities, management and service, personnel quality and information level. It is recognized in China by the government, market and society, which has a high degree of credibility.

Our customer-centric approach is a key component of our success. Through years of business relationships, we have developed a deep understanding of the evolving needs of our clients and are able to adjust our services to meet those changing needs. This includes advising logistics solutions beneficial to our customers. Additionally, our PRC subsidiaries provide customized solutions to customers such as modifying packaging bags to suit standard truckload sizes, resulting in significant cost savings for our customers. These tailored solutions enable us to deliver optimized logistics services that are uniquely suited to the needs of each individual customer order.

Unlike other platform providers in our industry, we prioritize the provision of premium contract logistics solutions to our shippers. We have a rigorous screening process of truckers, by requiring that all the truckers carrying out the delivery process for us are registered with us, qualified with appropriate driving licenses, and legally authorized to ship the relevant freight. Additionally, we ensure that truckers have a track record of delivering the relevant route, further ensuring the safety and efficiency of the delivery process. For example, our PRC subsidiaries carefully select appropriate truckers for each unique delivery need and employ best practices to enhance the delivery process. For instance, when transporting paper loads, our PRC subsidiaries require truckers to thoroughly clean the cargo trunk and lay plywood to create a soft buffer that reduces damage to the paper goods. Furthermore, our PRC subsidiaries have dispatchers on hand to inspect the cleanliness of the cargo trunk during the loading of goods, ensuring that truckers adhere to our strict operational guidelines and best practices.

For heavy-duty freight such as steel and coal, our PRC subsidiaries select customized trucks that are specifically designed to transport these types of cargo. Our approach prioritizes safety, quality, and efficiency, ensuring that our shippers receive a level of contract logistics solutions that is unparalleled in the industry.

We also endeavor to maintain satisfactory compliance standard during the provision of our contract logistics services in the sense that we keep comprehensive record for customers and regulators, for both business and tax purpose. We maintain a software system that attains reconciliation of multi-data flows, which data flow of goods, commerce, record and money are reconciliated and synchronized. Our logistics solutions are therefore well managed, with proper document record trail and allow examination of records by customer and government regulators when needed.

We have a proven scalable business model as illustrated with our rapid growth and robust financial results

Established in May 2017, we have grown rapidly and have successfully reached a considerable scale across different regions in China while enjoying robust financial results.  We have obtained over 180 customers while our logistics routes have grown to over 60,000 routes. Our total revenue was approximately RMB706.7 million, RMB678.2 million, and RMB628.5 million (US89.9 million) for the years ended December 31, 2023, 2024 and 2025, respectively.

We have an integrated and scalable operation model that is best suited for our expansion. It is scalable in the way that our business model can be scaled up by opening more FTL centres to increase regional coverage and by replicating our smart logistics park to more regional zones. Our digitalised, systematic and integrated operation model is well-suited to serve fragmented contract logistics clientele base, and we can efficiently replicate our existing business model in different regions in the PRC. We also enjoy network synergy in the context where our service becomes more reputable in potential customers and operating leverage alongside with our expansion.  Furthermore, the growth of our national logistics network allows us to provide shippers with greater geographic reach at a lower cost.

We believe the logistics industry is an essential sector that supports the development of the national economy. The scaling up of our business is in line with guiding policies issued in relation to the logistics industry’s development direction. These policies covered the construction of modernised logistics infrastructure, digitalised intelligent logistics, data sharing and monitoring, mainly aimed at improving efficiency and raising the service standard of the road transport logistics industry.

Proprietary data analytics ability plus established logistics network

Logistics network and data are the foundation of our business. We accumulate large amounts of applicable data from our day-to-day operations through FTL centres and users’ interactions in our software system. This includes rich and structured data on routing (such as origin and destination), shipment (such as weight, type and required truck capabilities), matching (such as trucker and shipment locations, profiles and track record), and business intelligence (such as the seasonality of industries, the flow of raw materials, the business connections between shippers and receivers and the approximate production output volume).

As of the date of this annual report, our road transport logistics capacity consists of over 160,000 truckers who are registered with updated information on our proprietary database. These truckers have voluntarily signed up to drive for us. They have provided us with information of the trucks they possess and the validity of their licenses. This data enables us to dispatch the right truckers to serve each shipper. We also maintain good and healthy relationship with truckers, and we believe many truckers reserve capacity for our dispatchment and rely on our services for their living.

Data analytics: We possess intelligence on macro-logistics landscape of our targeted markets. With such intelligence, our PRC subsidiaries provide optimized logistics solutions to customers and improve logistics efficiency. Our logistics solutions are cost-efficient, reliable, punctual and flexible and we are capable of multimodal transportation.  

Logistics network: Our smart logistics park is equipped with cutting edge technologies such as 5G network and will combine pallet storage with cloud technologies when the logistics park completed construction. We will provide informative and reliable services to trace transiting goods. In addition, our FTL centres provide us with on the ground market intelligence.  The FTL centres functioned as local market intelligence for sourcing new customers, existing customer relationship frontier and truckers’ real-time support centre.

We believe our logistics network together with data analytics can change the landscape of traditional logistics.  It helps truckers to avoid:   

Long-Standing Relationship with Our Sizeable Customers

We have been able to maintain stable business relationships with our major customers, including large manufacturers in the PRC. We have focused on providing customized, quality and cost-efficient services to meet our customers’ needs, which in turn, has enabled us to establish a strong customer base in diverse industries. We believe working with sizeable customers has strengthened our company’s reputation and credibility in the transportation industry.

We strategically aim at serving customers in four major sectors, namely paper, steel, coal and food, as we believe these are core sectors driving the PRC economies and are relatively immune to cyclical economic changes.

We offer customers compelling value propositions, which we believe make us their preferred logistics service provider. We possess a valuable digital platform which can add value and empower customers on their distribution.  With respect to our existing customers, our FTL centres proactively communicate with them to collect their feedbacks periodically through telephone calls and meetings. Some of our customers have developed their own key performance indicators (KPIs) to review and evaluate our trucking services and to ascertain if our trucking services can meet their standards. This has provided us with clear minimum guidelines to meet and surpass.

Experienced and Motivated Management Team

We believe that the extensive industry expertise and experience of our management team is essential to our success.

Mr. Hue, our founder, chairman and CEO, has over 27 years of management and entrepreneurship experience. He has profound understanding of manufacturing and logistics industry in PRC. He provides leadership and vision to our Group.

Mr. Lo, our CFO, has extensive experience in financial planning, financial reporting and internal controls.

Our other senior management members have over 12 years of experience in the transportation industry in the PRC.

We believe that the experience and knowledge of our management team would enable us to keep abreast of our competitiveness and market landscape from time to time, recognize the needs of our customers more readily and manage our operations efficiently.

OUR STRATEGIES

Our principal objectives are to sustain the continuous growth of our business and maintain our competitive advantages such that we can be positioned as a leading player in the transportation industry in the PRC. We plan to implement the following steps to further develop our transportation business and reputation in the PRC.

Scale up by growing our customer base and customer mix

Our major objective is to acquire quality B2B customers with strong regional market influence and extensive industry resources in their respective sectors. We intend to proactively source new customers by leveraging the strengths and local connections of our FTL centres. We also rely on our established relationship with existing customers, customer referrals and our reputation in the industry to expand our business. We also expect to further expand our customer base into new geographic areas and new industry segments with promising growth potential, to achieve steady growth in revenue.

We historically focused on acquiring a higher proportion of sizable customers by offering competitive price to establish our reputation and brand image within the industry and to quickly scale up our business. As we have now achieved a significant business scale, we are seeking to diversify our customer mix to increase the percentage of small to medium-sized customers that have less bargaining power and typically provides a higher gross profit margin for us.

We intend to expand our customer base and diversify our customer mix by setting up more FTL centres across wide geographical areas to penetrate into more manufacturing zones in the PRC. Based on our current business scale and anticipated increase in future demand for our services with the development of new smart logistics parks in the future, we plan to increase the number of our operating FTL centres and expand our network. We also intend to refine our operations within major geographic regions in PRC by enhancing the accessibility of our operational staff to our customers, and deepening our penetration into regional markets. We provide attractive incentives for our sales team to regularly contact customers to maintain good business relationship and expand our network by soliciting new customers through referrals from existing customers.

Invest in infrastructure to develop our logistic hubs

The acquisition of our smart logistics park in Jiangxi in 2018 has played a vital role in our success and we believe the development and acquisition of new smart logistics parks are essential for our future business expansion. Each smart logistics park can be upgraded into logistics hubs to become part of our logistics network laid across PRC.  A logistics hub is formed when there is a combination of logistics nodes and logistic facilities (i.e. warehouses, dock, operation centres) in the region. It possesses the capacity to offer intricate logistics services and we can effectively manage logistics operations in the area of the logistics hub. Acting as buffers, the logistics hub facilitates traffic flow regulation for seamless coordination and integration of cargo and information.

We intend to expand the functionality of the facilities within our existing smart logistics park from traditional individually offered services, such as storage and shipping, to sophisticated and highly automated value-added services, ranging from consolidation, specialized storage, to final assembly, maintenance and financial services. For example, by way of asset sharing and co-operation with third parties, we can provide cost advantages and efficiency for tapping into the less-than-truckload market sector. We also plan to deploy value-added services into the smart logistics parks to improve truckers’ experience.

The development of our smart logistics parks will enable us to increase our efficiency in providing services as a result of economies of scale, which our management believes will ensure stable delivery of services in a timely manner. It is expected that our upgraded smart logistics parks will have a larger capacity for warehousing, security check, repackaging, labelling and sorting of goods, specialised storage and final assembly, and thus improve our capability in goods transhipments and will further consolidate our market position and facilitate our expansion into the LTL market sector.

Expand into the LTL market sector

Road transportation market is largely separated into express parcel, LTL and FTL sectors. Historically we focused on FTL B2B contract logistics, which is characterised by point-to-point delivery, standard routes and full truckload packaging. While our strategic focus shall remain in capitalizing on our advantages in providing FTL B2B contract logistics services, we foresee that business opportunities in the LTL market sector (which is generally referred to the logistics market where the total weight per transportation is within 3-30 tons truck load) will arise as our business volume expands with the development of new smart logistics parks and FTL centres in the future, and we endeavour to capture these opportunities to diversify our revenue stream. The LTL sector will involve shipment of less than truckload goods and therefore assembly packaging, consolidation of orders and multiple points delivery are common practice for optimisation of logistics resources.

Management believes that we are well positioned to excel in the LTL sectors and have the capabilities to expand into LTL sectors without incurring substantial start-up costs as we can leverage on our comprehensive logistics experience. Further, our smart logistics park can be utilized for temporary storage, consolidation of orders, assembly packaging, repacking, pallet storage and tracing of goods flow. Our data analytic abilities allow us to choose suitable carrier for the best route for each order for multi-point delivery, generating scientific and most economical instructions for assembly packaging and multi-point delivery and providing certainty and goods tracing in assembly packaging, cross dockings, batch delivery and multimodal transportation.

Expand our value-added services in our smart logistics parks and further diversifying our revenue stream

We believe that there are significant commercial values and monetization potential surrounding our contract logistics business targeting at truckers and their trucks. We strive to create a vibrant truck aftermarket ecosystem and provide a range of value-added services to truckers including the following:

Fuzhou Feiyi has already been providing vehicle repair and maintenance services inside our smart logistics park during the years ended December 31, 2023, 2024 and 2025, respectively.

With a view to further diversifying our revenue stream, we aim to create a one-stop shop for truckers by providing more comprehensive value-added services for capturing the truckers’ spending potential while they stayed in our smart logistics park. We plan to achieve this by investing in various infrastructures in our smart logistics park, including the following, by the end of year 2026:  

We also plan to further deepen our services for truckers and develop cooperation with upstream truckers and venture into truck sales and financing services. Given that there is a trend for logistics parks in the PRC to gradually allow only the entry and operation of new energy trucks, we believe the prevalence of electric trucks will be exacerbated and will gradually replace some of the traditional trucks in PRC.  We therefore aim to provide the following value-added services in order to capture the anticipated increase in demand for new energy trucks by the end of year 2026:   

We have been using portion of the net proceeds from our initial public offering to fund our expansion plans above. See “Item 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS - Use of Proceeds.” However, the exact amount of proceeds we use for our expansion plan and operations also depends on the amount of cash generated from our operations and any strategic decisions we may make that could alter our expansion plan and the amount of cash necessary to fund these plans. In addition, changes in business conditions or other developments, or the arising of new opportunities for other investments, acquisitions, capital expenditures or similar actions, could also cause us to alter our expansion plans, investment amounts and/or their expected implementation timetable.

Continue to invest in technological innovation

We intend to further develop and deploy software and systems that create value in the industry value chain. We maintain our transportation management system, allowing us to monitor job completion progress and customers are able to track the movements of their cargos delivery status through GPS by accessing into our system interface.  Our transport management system has become one of our major competitive edges. We also have multiple internal systems in relation to data analytics and automated management of our smart logistics parks.

We intend to further upgrade and integrate our digital systems. Such synchronised systems will increase the efficiency of our operations by reducing the manual input of orders into our separate systems and minimizing the risks of mistakes caused by manually inputting data into each separate system. We believe this can secure our advantage and to distinguish us from traditional logistics services providers. We intend to further explore opportunities in developing tailor-made customised digital platforms and user-interfaces for our customers.  

OUR SMART LOGISTICS SERVICES AND OPERATION 

Our B2B contract logistics business provide transportation and delivery of goods, mainly raw materials, from our customers’ designated pick up locations to their designated destinations with the aid of our system Apps, which connects customers with our Group and our Group with truckers. With our market positioning, we enjoy recurring customer orders, high volume of transactions per customer and serving regular and long-distance transportation route, allowing us to have advantages on operational efficiency, cost management and pricing.

Our B2B contract logistics business operate out of our smart logistics park in Jiangxi Province, as our Southern supply chain center, Northern supply chain center in Jiangsu Province, and 7 FTL centres spread in different areas in PRC. Each major customer is assigned a dedicated FTL centre for serving them. FTL centres assign suitable dispatchers, truckers and trucks depending on the customers’ need and usually reserve a predetermined set of drivers and vehicles to ensure customers’ orders can be fulfilled timely with suitable trucks. For examples, for shipment of papers, trucks will be thoroughly cleaned, and soft wood planks and rain shield will be laid to ensure the papers are well protected. For shipment of steel, our FTL centres and dispatchers will select reinforced trucks to ensure it meets with the endurance level.

Apart from engaging truckers and dispatchers to handle customers’ order, our PRC subsidiaries also possess our own fleet of trucks. As of March 31, 2026, our PRC subsidiaries maintain an in-house fleet of truckers of 65 trucks, who provide readily available logistics capacity to us. They are valuable logistics capacity buffer as they can cover situations where when it is not commercially feasible to engage external truckers such as the Chinese New Year or other festive holiday and when there is sudden absence of available trucks in the market.

Our delivery network covers over 300 cities out of over 30 provinces and autonomous regions in PRC, representing a nationwide network coverage.

The location of our existing seven FTL centres and our intended coverage of five major national economic and industrial economic zones shaded in different colours in the PRC to be covered by the cloning of our smart logistics parks are as illustrated below.

We promote the collaboration between such ecosystem participants through our digitalized services and we facilitate the transfer of available road logistics capacity to the needed customers, and at the same time help truckers establish more steady and reciprocal relationships through repeated transactions with us.

The following pictures illustrate our trucks and the repair depot in our smart logistics park.

OUR OPERATION FLOW

The following illustrates the general workflow for our contract logistics solutions:

Step 1: Order input

Our customers place their shipment orders with us by contacting our operators or dispatcher directly. They usually specify the required time of delivery, intended pick-up point and destination, and the quantity and type of freight to be delivered. Upon receiving the shipment orders, our PRC subsidiaries’ operators will screen and process the shipment order by inputting the processed information into our TMS system. Once the essential specifications of the shipment order are determined and finalized, the details of the shipment order will be forwarded to our dispatchers, who are the on-site coordinators directing truckers on the loading of goods.  Our customers can also instruct our dispatchers directly specifying the requirement and special arrangement for each loading if necessary.

Step 2: Truckers selection

Our PRC subsidiaries’ dispatchers reach out to suitable truckers to obtain price quotations for the shipment order. The dispatchers then select the appropriate truckers for performing the shipment order based on factors such as track record of the trucker, the suitability of the truck, the price, the delivery time and the cooperation of truckers to ensure that our customer attains the most efficient and effective freight delivery service.

Step 3: Truckers receiving orders

After confirming the trucker for the shipment order, our dispatchers will contact the trucker about the shipment arrangements. The dispatcher will also be responsible for liaising with the selected trucker and ensure that the trucker follows the instructions in detail, which include attending to the delivery schedule and route with the assigned truck, as well as attending to the specific loading and unloading arrangements.

Step 4: Loading at pick-up points

The truckers will then arrive at the designated pick-up point according to the pre-agreed schedule, and the dispatcher will monitor the loading of the freight on-site.

Step 5: Freight delivery

The transportation vehicles will depart the designated pick-up point according to the delivery schedule and travel to the designated destination via the pre-assigned route.

After the freight has arrived at the designated destination, the freight will be unloaded according to the pre-agreed arrangements. Once the consignee confirms receipt through signature, our service cycle is complete. The unloading of the freight is generally handled by the consignee itself. If it is anticipated that the arrival or in-transit will be affected by adverse conditions such as weather, road accident, traffic and sickness of truckers, the dispatcher will take mitigation measures and report to our management team.

Our PRC subsidiaries issue monthly invoices to our customers after confirmation of the actual service amount incurred in the past month, and customer generally settle our invoices within 15-45 days, depending on the credit terms with the relevant customer.  

OUR TMS SYSTEM

We provide a range of logistics solutions that cater to the specific needs of manufacturers. The diagram below illustrates the functions of our TMS, owned by Jiangxi JB. Our mobile application, although the use of which is not compulsory for completing a transportation, is the user interface of the different ports of our TMS system. Users of our mobile application are verified by us and will be assigned access rights to the port based on their role.

Complete record trail

Enabled by our TMS system, our contract logistics services provide services beyond logistics -- it includes leaving a “complete and proven” record for clients and regulators, for both business and tax purpose. Through the TMS system that reconciles multi-data flows, which data flow of goods, commerce, records are reconciled and synchronized.

TRUCKS

As of March 31, 2026, our PRC subsidiaries maintained an in-house fleet of 65 trucks mainly stationed in Jiangsu, Guangdong and Shandong district, who provided readily available logistics capacity to us. They are valuable logistics capacity buffer as they can cover situations where when it is not commercially feasible to engage external truckers such as the Chinese New Year or other festive holiday and when there is sudden absence of available trucks in the market.

LEASED REAL PROPERTIES

As of the date of this annual report, we are leasing the following real properties:

OUR SMART LOGISTICS PARK

Our headquarter and administrative functions are located at our smart logistics park in Jinxi County at Jiangxi Province in PRC.

We have completed the first stage of construction which includes our main building, the truck repair depot, carparks, a warehouse and a 5G network tower.

We are still in the process of erecting more warehouses and putting them into operation. Please refer the paragraphs headed “Our Strategies” in this section for further descriptions on our expansion plan.

As disclosed in the section headed “Our Strategies”, we intend to further develop our smart logistics park by doing the following:

The following diagram illustrates the land plan of our planned smart logistics park after completion of construction work.

5G network tower

As of the date of this annual report, the smart logistics park we owned included two properties in the PRC with an aggregate land area of approximately 109,000 m² and building area of approximately 10,500 m², which were of industrial used purpose.

CUSTOMERS

Our customers are mainly large enterprises in the manufacturing industry. During the years ended December 31, 2023, 2024 and 2025, we had over 191, 182 and 212 customers, respectively. All of our major customers are unaffiliated third parties. For the years ended December 31, 2023, 2024 and 2025, one customer with its 11 subsidiaries accounted for 35%, 37% and 32% of the Group’s total revenues, respectively. Fuzhou JB entered the transport agreement with each of this customer’s ten subsidiaries.

Pursuant to the current transport agreements signed with the ten subsidiaries associated with this customer:

We strategically aim at serving customers for four major manufacturing sectors, namely paper, steel, coal and food, as we believe these are core sectors driving the PRC economies and are relatively immune to cyclical economic changes.

Our PRC subsidiaries submit tender and bid to our customers for each routes individually. Depending on market competition and our internal capacity availability, our PRC subsidiaries would adjust our bidding price to optimise our commercial interest. Our customers generally evaluate tenders received and select one when deciding their logistics service provider for a specified route.  

Although we strategically aimed at serving four major sectors’ customers, being paper manufacturing, coal, steel and food industries, our services are not specifically designed to cater solely for only these sectors. In contrast, we are flexible and adaptable in serving different sectors’ needs, except for transportation of hazardous goods. Our services can be readily transferred to serve other potential new customers and satisfy their needs. The preparation works required for serving new customers usually include understanding the industry and finding available trucks which best fit the industry, fine-tuning quality procedures to suit individual customer requirements, coordinating with new customers, re-designing the delivery route, allocating warehousing space and updating digital systems to facilitate the process.

We believe that our continuous effort in providing high quality trucking services to our customers is the key to enlarge our market share in the road traffic industry, strengthen our customer base as well as enhance our marketing effectiveness. Our FTL centres generally handles inquiries, complaints and feedbacks from our customers and will maintain a regular contact with our truckers with the goal of resolving issues such as late deliveries or complaints from customers in a timely fashion.

We recognize that having a high level of customer satisfaction is crucial in maintaining our reputation in the market and cultivating customer loyalty. Thus, our PRC subsidiaries follow up with the orders and keep track of the level of satisfaction of our customers. Our PRC subsidiaries also gather customers’ feedbacks and review the flow of our trucking services in order to increase our customers’ satisfaction and improve our service quality.

FTL Centres for customer acquisition

We have established FTL centres headed by our senior management to oversee and provide customer services on a 24/7 basis and the implementation of rules and policies designed to protect the interests of our platform users. Users can submit inquiries and complaints through our mobile applications or call our customer service hotline. Our PRC subsidiaries are committed to addressing user inquiries and complaints in a prompt and fair manner.

Our new customers are mainly developed through our FTL centres. From time to time, our PRC subsidiaries also receive referrals from our existing customers which in our view, is a reflection of our existing customers’ satisfaction with our services.  Our primary strategy for new customer acquisition is to further establish more FTL centres. We plan to expand into new geographic regions through the opening of new FTL centres in new locations.

Our PRC subsidiaries are committed to protecting the interests of all of our TMS platform users. We have implemented rules to address common bad behavior of ecosystem participants, such as order cancelation, misrepresentation of cargo information or non-payment of shipping fees by shippers and late or poor service by truckers. We designed these rules based on our extensive industry knowledge and data insights. For example, we set rules and standards for order cancelation by truckers. Parties that violate our rules may be banned from our platform in the future.

Service engagement method

We obtain our service engagements with our customers mainly by way of referral and customary communications.

For certain manufacturing customers, our PRC subsidiaries need to undergo a tendering process to become the designated service providers for a period usually 1 year.  In a tendering process, our customers would invite us and our competitors to submit fixed price tender offers for each individual routes per trip for the tendered period. For each route, the customer evaluates the tenders received and selects the chosen logistics company for the tendered period for the specified route. Once selected, the customer will engage the selected logistics services providers for all its orders for the route tendered.  Towards the end of the contracted period, the customers will conduct another round of tendering process for logistics services providers to re-submit tenders for each of its tendered route.

In a quotation process, our PRC subsidiaries give a fixed price quote for the delivery route that a potential or existing customer is looking to fulfil. The quotation will include the details of the delivery job and the payment terms. If the price and terms for the delivery service is accepted, our PRC subsidiaries would assign our operator and dispatcher to carry out the job.

Due to our reputation and track record in the transportation industry in the PRC, we have experienced success in both tendering and quotation.

PAYMENT AND ENGAGEMENT OF TRUCKERS

For the past three fiscal years, Fuzhou JB has worked with two external transportation companies as our suppliers to support our operations. These transportation companies provided us third-party payment and administrative services including but not limited to: (1) providing the services of payment and administrative to individual truckers; (2) coordinating with truckers requests and demands; (3) settling individual truckers’ payments directly; and (4) handling matters in relation to the truckers’ withholding taxes, insurances, claims and other administrative matters.

Below are the material terms of the current cooperation agreements signed with these two suppliers:

After a shipment order has been completed, instead of us paying the individual truckers on the spot in cash, we would settle relevant payments with our suppliers on a daily basis. Our suppliers pay each individual trucker accordingly, and carry out reconciliation and billing record on a monthly basis.

Such arrangements can ensure our management can focus on providing smart logistics solutions and serving our customers’ need, instead of being overwhelmed by the massive number of payments with truckers and handling of their requests and enquiries each day.    

Fuzhou JB engaged these two suppliers for the years ended December 31, 2023, 2024 and 2025. They are not related parties of the Group. These two suppliers can be easily replaced by other payment and administrative services providers in the market at any time without material delay or disruptions to the Group’s business, because there are a large amount of other suppliers who could provide similar services to the Group, and the Group’s communications with truckers in respect of handling transportation orders from the Group’s customers, the vital part of the Group’s operations, do not depend on these two suppliers. Therefore, management does not believe that the Group’s business depends on either of these two suppliers.

Fuzhou JB also provided loans to these two suppliers in 2023 and 2024 because they were in need for financial resources. Based on Fuzhou JB’s established relationship and arm’s-length negotiations with them, Fuzhou JB provided such loans to the two suppliers at interest rates comparable to market rates.

The 2023 Loan

The 2024 Loan

(1) 2023 Loan

During the year ended December 31, 2023, the Group entered into a new loan arrangement with supplier B, providing a maximum borrowing amount of RMB 27,000,000 (the “2023 Loan”) at a fixed interest rate of 4.12% per annum. During the year ended December 31, 2024, the Group collected RMB 27,000,000 in cash for the 2023 Loan.

During the years ended December 31, 2023 and 2024, the Group recognized interest income for the 2023 Loan amounting of RMB 763,385 and RMB 665,145, respectively, which were included in the interest income, net in the audited consolidated financial statements. As of December 31, 2023 and 2024, the interest receivable for the 2023 Loan was RMB 0.8 million and RMB nil, respectively.

(2) 2024 Loan

On October 10 2024, the Group entered into a loan agreement with each of the two suppliers, providing them with a maximum borrowing amount of RMB 25 million (“2024 Loan”) for the entire year at a fixed interest rate of 4.12% per annum. During the year ended December 31, 2024, the Group collected RMB 25,000,000 in cash for the 2023 Loan.

During the year ended 2024, the Group recognized interest income for the 2024 Loan amounting of RMB 340,357, which were included in the interest income, net in the audited consolidated financial statements. As of December 31, 2024, the interest receivable for the 2024 Loan was fully repaid.

The suppliers are third-party business strategic partners who assist the Group to manage and coordinate with the independent truckers for payments and administrative services. The purpose of the loans to the two suppliers were for their business needs. Fuzhou JB did not provide any loans to these two suppliers in 2025.

Engagement with Supplier A and Supplier B 

For the year ended December 31, 2023, supplier A and supplier B from which the Group’s purchases of transportation services accounted for 65% and 31% of the Group’s total costs of transportation service, respectively.

For the year ended December 31, 2024, supplier A and supplier B from which the Group’s purchase of transportation services accounted for 87% and 11% of the Group’s total costs of services, respectively.

For the year ended December 31, 2025, supplier A and supplier B from which the Group’s purchase of transportation services accounted for 97% and 1% of the Group’s total costs of services, respectively.

As of December 31, 2023, the balance of accounts payable generated from supplier A accounted to 85% and supplier C accounted for 12% of the Group’s total balances of accounts payable. As of December 31, 2024, the balance of accounts payable generated from supplier A accounted for 84% and supplier C accounted for 15% of the Group’s total balances of accounts payable.  As of December 31, 2025, the balance of accounts payable generated from supplier A accounted for 0% and supplier C accounted for 95% of the Group’s total balances of accounts payable.  

Supplier A and supplier B primarily assist the Group to manage and coordinate with the independent truckers for payments and administrative services. The transportation service fees are paid to truckers through the supplier A and supplier B’s services. Supplier C is a constructor which provided the Company with construction services.

Our management is of the view that our substantial purchase amounts with Supplier A is mainly due to the following:

Since Supplier A is a major and reliable third-party payment and administrative services provider, as part of our commitment for truckers’ satisfaction, we plan to continue our business relationship with Supplier A as one of our major suppliers.

AWARDS AND RECOGNITIONS

SEASONALITY

Our management believes that our industry is subject to seasonality. We usually experience a slight increase in freight volume in the fourth quarter of each year as such period are peak seasons for manufacturers to ramp up operation activities and slight decrease in freight volume in the first quarter of each year as manufacturers slow down businesses on Chinese New Year holidays.

EMPLOYEES

As of the date of this annual report, we had a total of 68 full-time employees. Apart from our management staff based in Hong Kong, all of our employees are based in PRC, primarily in Jiangxi and Suzhou Changshu, with the rest in other cities. The following table sets for the breakdown of our employees as of December 31, 2025, 2024 and 2023, and as of the date of this annual report, by function:

Apart from our management staff based in Hong Kong, our other employees may sometimes work in different locations of our Group according to our various business needs, so our employees may not be stationary in one office or location. In general, around one-third of our employees worked in our smart logistics park, while the remaining ones were distributed among our FTL centres, but the actual number of employees in each location could slightly fluctuate from time to time due to different business needs and arrangements. We conduct regular performance evaluations of our employees to provide feedback on their performance and assess their strengths. We provide training sessions tailored to the needs of our employees in different functions. Topics covered by such training sessions and internal guidelines include our corporate culture, internal rules and policies, road safety for truckers, work safety at our smart logistics park and emergency handling.

COMPETITION

Based on our management’s industry knowledge and experience, we believe that the business to business contract logistics industry in China is highly competitive and extremely fragmented, with our competitors consisting of tens of thousands of regional and national small to mid-sized logistics companies and truckers, particularly those focusing in the paper, steel, coal and food industries. Due to the highly fragmented nature of the contract logistics industry, we consider a few private companies as our main competitors.

Entry barriers in the contract logistics industry include high investment costs associated with entering the industry, having an established transportation network, industry reputation and know-how. We believe our relatively long operating history, well established relationship with market leaders in our focused market sectors, our national geographical reach and reputation within the industry provides us with competitive advantages over others. However, as we look to expand our service offerings and client base, we may face new competitors.

RESEARCH AND DEVELOPMENT

We engaged third-party software companies to develop our proprietary digitized system, Transportation Management System (TMS), from 2017 to 2019. TMS stores typical logistics data we gathered throughout our years of operation, such as truck load information, driving patterns, route choices, typical traffic conditions and patterns in various locations, time and cost of transportations for our use and analysis. We own such software system through Jiangxi JB with all rights since its development, and have been using it in our course of operation. During the three years ended December 31, 2025, we did not engage in any material research and development activities.

In the future, we believe that technological development and automation will be of increasing importance to the contract logistics industry. For instance, the developments of big data infrastructure, blockchain and internet-of-things technologies are widely believed to revolutionize the logistics industry be reducing costs and increasing efficiency. Hence we intend to further develop and deploy software and systems that can better serve our customers when necessary and appropriate, which we believe to be crucial in retaining and expanding our business with existing customers and attracting new ones. We also believe that with the expansion or opening of our smart logistics park and FTL centres in the future, we will need to develop systems and technologies to better manage the operations and coordination between our various places of operation. Therefore, we also expect to engage in research and development in this respect in the future to maintain satisfactory management efficiency.  

INTELLECTUAL PROPERTY

As of the date of this annual report, our major intellectual property rights includes 36 patents registered in the PRC, 4 trademarks registered in the PRC, 4 copyrights registered in the PRC and 1 domain name registered in the PRC. We currently do not hold any issued patents or registered trademarks or copy rights outside of the PRC.

Our patents include inventions such as smart trolley and smart shelf space, as well as utilities such as loading and unloading gears and various storage container systems. As of the date of this annual report, our copyrights mainly relate to our TMS system. We engaged a third party software company for the development of our TMS system in 2017, and engaged another software company for upgrading the same in 2019. Jiangxi JB, one of SLG Cayman’s subsidiaries, owns the TMS system. For the years ended December 31, 2023, 2024 and 2025, we did not have material spending on the development of our TMS system nor other research and development related items.

We are not aware of any material infringement by us of any intellectual property rights owned by third parties, or by any third parties of any intellectual property rights owned by us. Despite our efforts to carefully limit access to information on different ports of our TMS APP, third parties may obtain and misappropriate our intellectual property without authorization. Such unauthorized use of our intellectual property by third parties and the expenses incurred in protecting our intellectual property rights may adversely affect our business and results of operations. See “Risk Factors—Risks Relating to Our Business and Industry—We may not be able to prevent others from unauthorized use of our intellectual property, which could harm our business and competitive position.”

INSURANCE

We maintain logistics liability insurance, third party insurance for our smart logistics park, employer’s liability insurance and drivers liability insurance for our in-house truckers. Although we maintain logistics liability insurance, in most cases, the shippers have purchased their own insurances and truckers are covered by their own drivers liability insurance and therefore rarely rely on the insurance purchased by us.  For the years ended December 31, 2023, 2024 and 2025, we had not been subject to any claim against us that was not covered by insurance and that are material to our business, result of operations and financial conditions. We believe that our insurance coverage is sufficient to cover the risks involved in our business.

Pursuant to PRC regulations, our PRC subsidiaries provide social insurance including pension insurance, unemployment insurance, work-related injury insurance for our employees based in China. We do not maintain business interruption insurance or key-man insurance. We believe that our insurance coverage is in line with the industry standards and adequate to cover our key assets, facilities and potential liabilities.

LEGAL PROCEEDINGS

We are currently not a party to any material legal or administrative proceedings. We may from time to time be subject to various legal or administrative claims and proceedings arising from the ordinary course of business. Litigation or any other legal or administrative proceeding, regardless of the outcome, is likely to result in substantial cost and diversion of our resources, including our management’s time and attention.  

RISK MANAGEMENT AND INTERNAL CONTROL

We strive to comply with applicable rules, laws, regulations and industry standards on workplace safety and environmental matters. Our management would, if necessary, adjust our internal policies to accommodate material changes to relevant safety, data security, IP and environmental laws and regulations.

Workplace safety

We provide safety training tailored to our human resource management policies, and the needs of our employees in different departments. We, including our PRC subsidiaries from time to time organize safety training session for our employees covering aspects of our business operations and compliance issues, such as behaviour protocols inside our smart logistics parks, safety handbook when operating our truck maintenance depot, safety handbook in construction sites and road safety.

Through these training sessions, we strive to ensure that our employee’s knowledge level of our internal policies remain up-to-date, and to enable them to better protect themselves while complying with applicable laws and regulations in the course of business. We also post safety signages and warning signals in potentially dangerous spots inside our work premises.

Data Privacy and Personal Information protection

Our Group respects legal rights of privacy when collecting, storing, using and transmitting personal data. It is our policy to comply with the requirements of data privacy laws in PRC and all its related codes of practice. In doing so, we will ensure compliance by our staff to the strictest standards of security and confidentiality.

We limit the access, collection and use of data to the specific information that we need to operate our business, provide our services.

We take practical steps to keep personal data confidential. We limit data accessing right strictly to our staff who is necessary required to use such personal data. We transfer/assign such data to outside parties only under necessary situations including:

Intellectual Property protection

We protect our intellectual property rights, including trademarks, patents, copyrights and domain names, strictly in accordance with the relevant laws and regulations, and we regularly improve and update our intellectual property management system in line with business development.

Proprietary know-how are sometimes not patentable. We strive to control and limit the users to safeguard our interests in this respect. We have entered into employment agreements with confidentiality terms, with our employees, requiring them to strictly comply with our confidentiality requirements. Such confidentiality agreements, or confidentiality provisions in the employment agreements with our employees, generally contain no definite termination date, and such confidentiality obligations generally survive the termination of the employment relationship.

ESG

Under our ESG policy, we aim to promote “Green Logistics”. Green Logistics refers to the use of environmentally friendly practices and technologies in our PRC line haul business.

Instead of adding to our costs, our Jiabin Green Logistics policies are designed to provide a range of benefits to us when implemented, from cost savings and improved operational efficiency to enhanced environment KPI performance and increased competitiveness. We have designed our Jiabin Green Logistics to cover the following major areas:

By using data analytics, we believe our logistics solutions and optimised logistics route planning can change the landscape of traditional logistics. It can help the road transport industry and reduce carbon emission of fossil fuel by avoiding empty trip, prolonged waiting in vehicle and insufficient loading per trip.

Further, by using mobile applications and cloud storage, we achieved a reduction of the use of paper in road freight transportation process communication. It also helps to save the costs of keeping physical copies of paper transaction orders and invoices records.

Looking into future, we intend to advance our ESG attempts by way of supporting the use of electric vehicles.

In line with government policies such as the exemption of certain taxes related to the purchase of new energy vehicles, and the nationwide construction of charging facilities for new energy trucks, we intend to provide new energy trucks leasing and financing agency services for truckers to adapt and transform into operating new energy trucks. In addition, we will build battery charging and battery swapping facilities in our future smart logistics parks, inter-linking our future smart logistics parks by having new energy trucks travelling in-between them.   

PRC REGULATIONS 

Our Group operates its business in the PRC under a legal regime consisting of the National People’s Congress, which is the country’s highest legislative body, the State Council, which is the highest authority of the executive branch of the PRC central government, and several ministries and agencies under its authority, including the State Administration of Foreign Exchange, or SAFE, the Ministry of Commerce, or MOFCOM, the National Development and Reform Commission, or NDRC, or the State Administration for Market Regulation, or SAMR, formerly known as the State Administration for Industry and Commerce, and their respective authorized local counterparts.

This section sets forth a summary of the most significant rules and regulations that affect our business activities in the PRC.

Regulations Relating to Foreign Investment

The Foreign Investment Law, promulgated by the National People’s Congress (the “NPC”) on March 15, 2019, came into effect on January 1, 2020, and has replaced the major existing laws and regulations governing foreign investment in the PRC, including the Sino-foreign Equity Joint Ventures Enterprises Law, the Sino-foreign Co-operative Enterprises Law, the Wholly Foreign-owned Enterprise Law, and their implementation rules and ancillary regulations. Pursuant to the Foreign Investment Law, the existing foreign-invested enterprises (the “FIEs”) established prior to the effective date of the Foreign Investment Law may keep their corporate organization forms within five years after the effective date of the Foreign Investment Law before such existing FIE change their organization forms, organization structures, and their activities of FIEs in accordance with the Company Law, the Partnership Enterprise Law, and other laws. According to the Foreign Investment Law, the FIEs thereof refers to enterprises that are wholly or partly invested by foreign investors and registered within China under the PRC laws, “foreign investment” thereof refers to any foreign investor’s direct or indirect investment in China, including: (i) establishing FIEs in China either individually or jointly with other investors; (ii) obtaining stock shares, stock equity, property shares, other similar interests in Chinese domestic enterprises; (iii) investing in new projects in China either individually or jointly with other investors; and (iv) making investment through other means provided by laws, administrative regulations, or State Council provisions.

Investments conducted by foreign investors in the PRC are subject to the Catalogue of Industries for Encouraging Foreign Investment (the “Catalogue”) and the Special Management Measures for the Access of Foreign Investment (the “Negative List”), which were jointly issued by the National Development and Reform Commission (the “NDRC”) and the Ministry of Commerce of the PRC (the “MOFCOM”). The version of the Catalogue currently in force was amended in 2022 and became effective on January 1, 2023, and the version of the Negative List currently in force was amended in 2021 and became effective on January 1, 2022, both of which further reduce restrictions on foreign investment.

On December 26, 2019, the State Council issued the Implementation Regulations for the Foreign Investment Law (the “Implementation Regulations”) which came into effect on January 1, 2020. According to the Implementation Regulations, in the event of any discrepancies between the Foreign Investment Law, the Implementation Regulations, and relevant provisions on foreign investment promulgated prior to January 1, 2020, the Foreign Investment Law and the Implementation Regulations shall prevail. The Implementation Regulations also indicated that foreign investors that invest in sectors on the Negative List in which foreign investment is restricted shall comply with special management measures with respect to shareholding, senior management personnel, and other matters in the Negative List.

Regulations Relating to Road Transportation

Pursuant to the PRC Road Transport Regulation which was promulgated by the State Council in April 2004 and most recently amended in March 2022, and the Administrative Provisions on Road Freight Transportation and Stations (sites) issued by the Ministry of Transport in June 2005 and most recently amended in September 2022, the business operations of road freight transportation refer to road freight transportation activities of a commercial nature that provide public services to the society. Road freight transportation includes general road freight transportation, special road freight transportation, road transport of large articles as well as road transport of dangerous goods. The Road Transport Regulation set forth detailed requirements with respect to vehicles and drivers.

Where an operator uses an ordinary freight vehicle of 4,500 kilograms or less to engage in ordinary freight transportation business operations, it is not required to apply for an Operation License for Road Transport and a Road Transport Certificate in accordance with these Provisions. Except the foregoing, under the Road Transport Regulation, those engaging in the business of operating road freight transportation or stations (sites) must obtain a road transportation operation permit from the competent authority of transport at the county level, and each vehicle used for road freight transportation must have a road transportation certificate

Our national recognitions include being one of the first group of foreign-owned enterprise to receive an online logistics platform recognition in the PRC, National AAAA Logistics Enterprise. National AAAA Logistics Enterprise is evaluated by China Federation of Logistics and Procurement. The evaluation system includes enterprise management, assets, equipment, facilities, management and service, personnel quality and information level. It is recognized in China by the government, market and society, which has a high degree of credibility.

Regulations Relating to Road Freight Transport Business on Online Platforms

The Interim Measures for Administration of the Road Freight Transport Business on Online Platforms (“the Interim Measures”) which was jointly promulgated by the Ministry of Transport and the State Taxation Administration in September 2019, came into effect in January 2020. Pursuant to the Interim Measures, the term “online freight business” refers to the road freight transport business activities in which an operator integrates and allocates transport resources on an online platform, enters a transport contract with the consignor in the capacity of a carrier, entrusts an actual carrier to complete the road freight transport, and assumes the responsibility of the carrier. Online freight transport business does not include the activities of only providing information intermediary and transaction matching services for the consignor and the actual carrier. Actual carriers refer to the business operators that, as entrusted by the business operators of online freight transport, engage in road freight transport with qualified cargo vehicles and drivers. To engage in online freight transport businesses, an operator shall have online service capabilities such as information interaction and processing and whole process tracking and recording that are suitable for business operation. Pursuant to the Service Guidance of the Road Freight Transport Business on Online Platforms (“the Service Guidance”) which was promulgated by the Ministry of Transport and came into effect on the same day, online freight transport business operator shall obtain a value-add telecommunications business permit, complying with the requirements for classified protection of information system, accessing the provincial network freight information monitoring system and obtaining identification result regarding online service capabilities for information dissemination, online transaction, whole process monitoring, financial payment, consulting and complaints, online assessment, inquiry, and statistical work and data collection.

Regulations Relating to Leasing

Pursuant to the Law on Administration of Urban Real Estate of the PRC (the “Law on Administration of Urban Real Estate”) promulgated by the Standing Committee of the NPC (the “SCNPC”) on July 5, 1994, and last amended on August 26, 2019, and took effect on 1 January 2020, when leasing premises, the lessor and lessee are required to enter into a written lease contract, containing provisions such as the leasing term, use of the premises, rental, and repair liabilities, and other rights and obligations of both parties. Pursuant to the Administrative Measures on Leasing Commodity House which was promulgated by the Ministry of Housing & Urban-Rural Development of the PRC on December 1, 2010, and took effect on February 1, 2011, both lessor and lessee are also required to register the lease within 30 days from execution of the property lease contract with the real estate administration department. If the lessor and lessee fail to complete the registration procedures, both lessor and lessee may be subject to fines ranging from CNY1,000 (approximately US$145) to CNY10,000 (approximately US$1,449). Our leases have not completed the registration. However, according to the Civil Code of the PRC, which was promulgated by the NPC on May 28, 2020, and came into effect on January 1, 2021, if the parties to a lease contract fail to go through the formalities of registration of such contract accordance with the provisions of laws and administrative regulations, the validity of the contract shall not be affected.

Pursuant to the Law on Administration of Urban Real Estate, where the owner of a building leases, with a profit-making purpose, buildings on State-owned land for which the land use right is granted to the owner of the building by way of allocation, the gains on land included in the rental shall be turned over to the State. Moreover, according to the Provisional Regulations of the PRC for the Grant and Assignment of the Right to Use State Land in Urban Areas, which was promulgated on May 19, 1990 and last amended on November 29, 2020, the allocated land use rights and the ownership of buildings and other attachments on the land may be transferred, leased or mortgaged upon approval by the land administration and property management departments of the municipal or county people’s governments if the following conditions are met: (i) the land users are companies, enterprises, other economic organizations and individuals; (ii) with a state-owned land use certificate; (iii) having proof of lawful ownership of the buildings and other attachments on the ground; (iv) signing a contract for the granting of land use rights in accordance with the provisions of Chapter II of these Regulations and paying the premium for the granting of land use rights to the local municipal or county people’s government or using the proceeds from the transfer, lease or mortgage to offset the premium for the granting of land use rights. Where an entity or individual assigns, leases, or mortgages an allocated land use right without approval, the land administration department of the municipal or county Government shall confiscate its/his illegal revenue and impose a fine in light of the seriousness of the case.

Regulations Relating to Cyber and Data Security and Privacy Protection

Regulations on cyber security

On November 7, 2016, the Cybersecurity Law of the PRC was promulgated by SCNPC and became effective on June 1, 2017. According to the Cybersecurity Law, network operators must comply with applicable laws and regulations and fulfil their obligations to safeguard cybersecurity in conducting business and providing services. For the construction and operation of the network or the provision of services through the network, technical and other necessary measures shall be taken as required by law and the compulsory requirements of national standards to ensure the safe and stable operation of the network, respond to cybersecurity incidents effectively, prevent illegal and criminal activities, and maintain the integrity, confidentiality, and usability of network data. Network operators shall not collect personal information irrelevant to their services. In the event of any unauthorized disclosure, damage, or loss of collected personal information, network operators shall take immediate remedial measures, notify the affected users, and report the incidents to the relevant authorities in a timely manner.

On May 28, 2020, the NPC issued the Civil Code of the PRC which took effect on January 1, 2021. According to the Civil Code, a natural person’s personal information shall be protected by law, and the processing of personal information shall be subject to the principle of legitimacy, rightfulness, and necessity, with no excessive processing.

On December 28, 2021, the Cyberspace Administration of China (the “CAC”), the National Development and Reform Commission (the “NDRC”), the Ministry of Industry and Information Technology (the “MIIT”), the Ministry of Public Security, the Ministry of State Security, the Ministry of Finance, the Ministry of Commerce, the People’s Bank of China (the “PBOC”), the State Administration of Radio and Television (the “SAMR”), the China Securities Regulatory Commission (the “CSRC”), the State Secrecy Administration and the State Cryptography Administration jointly promulgated the Cybersecurity Review Measures which became effective on February 15, 2022. To ensure the supply chain security of critical information infrastructure, safeguard network security and data security, and maintain national security, the Cybersecurity Review Measures stipulates that where any of the following conditions are met, a network security review shall be conducted: (i) a CIIO purchases network products or services, which affects or may affect national security; (ii) online platform operators carry out data processing activities, which affect or may affect national security; (iii) to list abroad, an online platform operator who possesses the personal information of more than 1 million users. The cybersecurity review will evaluate, among others, the risk of critical information infrastructure, core data, important data, or a large amount of personal information being influenced, controlled, or maliciously used by foreign governments and the risk of network data security after going public overseas.

According to Security Protection Regulations for Critical Information Infrastructure which was promulgated on July 30, 2021, and came into effect on September 1, 2021, critical information infrastructure refers to the important network facilities and information systems in important industries and fields such as public telecommunications, information services, energy, transportation, water conservancy, finance, public services, e-government and national defense science, technology, and industry, as well as other important network facilities and information systems which, in case of destruction, loss of function or leak of data, may result in serious damage to national security, the national economy and the people’s livelihood and public interests. The competent authorities and supervisory authorities are the authorities responsible for the security protection of critical information infrastructure, being responsible for organizing the identification of critical information infrastructure of respective industries and fields, notifying the operators concerned of the identification results promptly, and reporting the same to the public security department under the State.

Regulations on data security

The Data Security Law of the PRC was released by the SCNPC on June 10, 2021, and became effective on September 1, 2021. The Data Security Law introduces a data classification and hierarchical protection system based on the materiality of data in economic and social development, as well as the degree of harm it will cause to national security, public interests, or legitimate rights and interests of individuals or entities when such data is tampered with, destroyed, divulged, or illegally acquired or used. It also provides a security review procedure for the data processing activities which may affect national security. According to the Data Security Law, data processing activities shall be carried out in accordance with PRC laws and regulations, establishing and improving the data security management system of the whole process, organizing, and carrying out data security education and training, and taking corresponding technical measures and other necessary measures to safeguard data security. Where data processing activities are carried out through the Internet and other information networks, the above-mentioned data security protection obligations shall be fulfilled based on the hierarchical network security protection system. In carrying out data processing activities, risk monitoring shall be strengthened, and remedial measures shall be taken immediately when data security defects, loopholes, and other risks are found. In the event of a data security incident, the processors of data shall take immediate measures to deal with it, inform the user in time, and report to the competent authorities in accordance with relevant provisions. Any organization or individual carrying out data processing activities that violate the Data Security Law shall bear the corresponding civil, administrative, or criminal liability depending on the specific circumstances.

On July 7, 2022, the CAC promulgated the Security Assessment Measures for Outbound Data Transfers (the “Assessment Measures”) which came into effect on 1 September 2022. The Assessment Measures is enacted in accordance with the Cybersecurity Law, the Data Security Law, the Personal Information Protection Law, and other laws and regulations to regulate outbound data transfers, protect personal information rights and interests, safeguard national security and social and public interests, and promote the security and free flow of data across borders. The Assessment Measures applies to the security assessment of the data processor who provides critical data and personal information overseas that are collected and generated in the operation of the PRC.

Regulations on privacy protection

Pursuant to the Decisions on Strengthening the Protection of Online Information, issued by the SCNPC on December 28, 2012, and the Protection Provisions for the Personal Information of Telecommunications and Internet Users promulgated by the MIIT on July 16, 2013, telecommunication business operators and internet service providers are required to set up their own rules for collecting and use of internet users’ information and are prohibited from collecting or use such information without consent from users. Moreover, telecommunication business operators and internet service providers shall strictly keep users’ personal information confidential and shall not divulge, tamper with, damage, sell or illegally provide others with such information.

On August 20, 2021, the SCNPC Promulgated the Personal Information Protection Law of the PRC (the “PIPL”) became effective on November 1, 2021, which further completes China’s legal regime in the field of privacy protection. The PIPL requires the person information processor to obtain the prior consent of the personal provider before process the personal information except: (i) when it is necessary for entering into or performing a contract to which an individual is a party, or for implementing human resources management pursuant to employment policies legally established and collective contracts legally concluded; (ii) where it is necessary for fulfilling statutory duties or obligations; (iii) where it is necessary for responding to public health emergencies or protecting life, health and property safety of a natural person in case of emergency; (iv) where such acts as news reporting and public supervision are carried out for the public interest, and the processing of personal information is within a reasonable scope; (v) where the personal information has been made public either by the individual or by other lawful means and the processing of such information is limited to a reasonable scope in accordance with this Law; and (vi) other circumstances stipulated by laws and administrative regulations.

Regulations Relating to Intellectual Property Rights

Patent

Patents in the PRC are principally protected under the Patent Law of the PRC promulgated by the SCNPC in 1984 and then respectively amended in 1992, 2000, 2008, and 2020, of which the amendment in 2020 has become effective on June 1, 2021, and its implementation rules. Novelty, inventiveness, and practicality are three essential factors of patents in the PRC. The latest amendment provides that, in general, the protection period is 20 years for an invention patent, 10 years for a utility model patent, and 15 years for a design patent, commencing from their respective application dates.

Copyright

The Copyright Law of the PRC (the “Copyright Law”), promulgated in 1990 and amended in 2001, 2010, and 2020, of which the amendment in 2020 has become effective on June 1, 2021, and its related implementing regulations, promulgated in 2002 and amended in 2013, are the principal laws and regulations governing copyright-related matters. The Copyright Law provides that Chinese citizens, legal persons, or other organizations shall, whether published or not, enjoy copyright of their works, which includes, among others, works of literature, art, natural science, social science, engineering technology, and computer software. Under the Copyright Law, the term of protection for copyrighted software is 50 years. The Regulation on the Protection of the Right to Communicate Works to the Public over Information Networks, which was amended on 30 January 2013, provides specific rules on fair use, statutory license, and a safe harbor for the use of copyrights and copyright management technology, and specifies the liabilities of various entities for violations, including copyright holders, libraries, and internet service providers.

Trademark

The Trademark Law of the PRC was adopted in 1982 and then amended in 1993, 2001, 2013, and 2019 respectively. The implementation rules of the Trademark Law of the PRC were adopted in 2002 and amended in 2014. Registered trademarks are protected under the Trademark Law of the PRC and related rules and regulations. The Trademark Office of National Intellectual Property Administration handles trademark registrations and grants a protection term of ten years to registered trademarks. Where registration is sought for a trademark that is identical or similar to another trademark that has already been registered or given preliminary examination and approval for use in the same or similar category of commodities or services, such application for registration of this trademark may be rejected. Trademark registrations are renewable unless otherwise revoked.

Domain name

The MIIT promulgated the Administrative Measures on Internet Domain Name (the “Domain Name Measure”) on August 24, 2017, to protect domain names. According to the Domain Name Measures, domain name applicants are required to duly register their domain names with domain name registration service institutions. The applicants will become the holder of such domain names upon the completion of the registration procedures. The permits for registered domain names are effective for five years and are subject to renewals, cancellations, or revocations.

Trade secrets

According to the PRC Anti-Unfair Competition Law, promulgated by the SCNPC in September 1993 and last amended on April 23, 2019, the term “trade secrets” refers to technical, operational, or other commercial information that is unknown to the public, has utility, may create business interests or profits for its legal owners or holders, and is maintained as a secret by its legal owners or holders through corresponding confidentiality measures. Under the PRC Anti-Unfair Competition Law, business persons are prohibited from infringing others’ trade secrets by (i) obtaining the trade secrets from the legal owners or holders by any unfair methods such as theft, bribery, fraud, coercion, electronic intrusion, or any other illicit means; (ii) disclosing, using or permitting others to use the trade secrets obtained illegally under item (i) above; or (iii) disclosing, using or permitting others to use the trade secrets, in violation of any contractual agreements or any requirements of the legal owners or holders to keep such trade secrets in confidence; or (iv) abetting a person, or tempting, or aiding a person into or in acquiring, disclosing, using, or allowing another person to use the trade secret of the rightful holder in violation of his or her non-disclosure obligations or the requirements of the rightful holder for keeping the trade secret confidential.

Regulations Relating to Employment

The Labor Law and the Labor Contract Law

According to the Labor Law of the PRC (the “Labor Law”), which was promulgated on July 5, 1994, and last amended and came into effect on December 29, 2018, enterprises and institutions shall establish, provide, and improve their system of workplace safety and sanitation, strictly follow state rules and standards on workplace safety and the relevant articles of occupational protection, and educate employees in occupational safety and sanitation in the PRC. Occupational safety and sanitation facilities shall comply with state-fixed standards.

The Labor Contract Law of the PRC (the “Labor Contract Law”), which was issued on June 29, 2007, amended on December 28, 2012, and became effective on July 1, 2013, and its implementation rules provide requirements concerning employment contracts between an employer and its employees. If an employer fails to enter into a written employment contract with an employee after the lapse of more than one month, but less than one year from the date on which the employment relationship is established, the employer must rectify the situation by entering into a written employment contract with the employee and pay the employee twice the employee’s salary for the period from the date of establishment of the employment relationship to the day prior to the execution of the written employment contract. The Labor Contract Law and its implementation rules also require compensation to be paid upon certain terminations. In addition, if an employer intends to enforce a non-compete provision in an employment contract or non-competition agreement with an employee, it has to compensate the employee monthly during the term of the restriction period after the termination or expiration of the labor contract.

Employers in most cases are also required to provide severance payments to their employees after their employment relationships are terminated. The Labor Contract Law also provides that enterprises accepting labor dispatch services shall strictly control the number of dispatched workers and the proportion of dispatched workers shall not exceed the percentage prescribed by competent labor administrative departments.

Social Insurance and Housing Funds

Pursuant to the Interim Regulations on Levying Social Insurance Premiums, promulgated on January 22, 1999, and revised on March 24, 2019, the Decision of the State Council on Improving the Basic Endowment Insurance System for Enterprise Employees, promulgated on December 3, 2005, and the Decision on Establishment of Basic Medical Insurance System for Urban Employees, issued by State Council and became effective on December 14, 1998, the Regulations on Unemployment Insurance, which became effective on January 22, 1999, the Regulations on Work-Related Injury Insurance, promulgated on April 27, 2003, amended on December 20, 2010 and became effective on January 1, 2011, and the Interim Measures concerning the Maternity Insurance for Enterprise Employees, promulgated on December 14, 1994, and became effective on January 1, 1995, employers are required to register with the competent social insurance authorities and provide their employees with welfare schemes covering pension insurance, unemployment insurance, maternity insurance, work-related injury insurance and medical insurance. Pursuant to the Opinions of the General Office of the State Council on Comprehensively Advancing Combined Implementation of Maternity Insurance and Basic Medical Insurance for Employees, promulgated by the General Office of State Council on March 6, 2019, maternity insurance funds shall merge into the basic medical care insurance funds for employees to unify payment and harmonize consolidation level. The new ratio of employers’ contributions to basic medical care insurance for employees is determined based on the aggregate of the ratios of employers’ contributions to maternity insurance and basic medical care insurance for employees, and an individual is not required to pay for maternity insurance. Therefore, after March 6, 2019, the Company has no record of maternity insurance funds in the payment details of social security since it has been merged into the basic medical care insurance funds. Pursuant to the Social Insurance Law of the PRC (the “Social Insurance Law”), which became effective on July 1, 2011, with the last amendment on December 29, 2018, all employees are required to participate in basic pension insurance, basic medical insurance schemes and, unemployment insurance, which must be contributed by both the employers and the employees. All employees are required to participate in work-related injury insurance and maternity insurance schemes, which must be contributed by the employers. Employers are required to complete registrations with local social insurance authorities. Moreover, employers must timely make all social insurance contributions. Except for mandatory exceptions such as force majeure, social insurance premiums shall not be paid late, reduced, or exempted. The employer shall pay the basic pension insurance and work injury insurance fees in accordance with the proportion of the total wages of the employees of the employer as stipulated by the State. Where an employer fails to make social insurance contributions in full and on time, the social insurance contribution collection agencies shall order it to make all or outstanding contributions within a specified period and impose a late payment fee at the rate of 0.05% per day from the date on which the contribution becomes due. If an employer fails to make the overdue contributions within the time limit, the relevant administrative department may impose a fine equivalent to 1-3 times the overdue amount.

Pursuant to the Emergency Notice on Practicing Principles of the State Council Executive Meeting and Stabilizing Work on Collecting Social Insurance Premiums, promulgated by the Ministry of Human Resources and Social Security on September 21, 2018, local authorities are prohibited from recovering the unpaid social insurance premiums from enterprises on their own.

Pursuant to the Administrative Regulations on the Housing Provident Fund, which became effective on April 3, 1999, and was amended on March 24, 2002, and March 24, 2019, enterprises are required to register with the competent administrative centers of housing provident fund and open bank accounts for housing provident funds for their employees. Employers are also required to timely pay all housing fund contributions for their employees. The monthly contribution to the housing fund contributed by the employer for the employee is the employee’s average monthly salary for the previous year multiplied by the housing fund contribution ratio. Where an employer fails to submit and deposit registration of housing provident funds or fails to complete the formalities of opening housing provident fund accounts for its employees, the housing provident fund management center shall order it to complete the formalities within a prescribed time limit. Failing to comply by the expiration of the time limit will subject the employer to a fine ranging from CNY10,000 (approximately US$1,449) to CNY50,000 (approximately US$7,245). When an employer fails to pay housing provident funds due in full and on time, the housing provident fund center is entitled to order it to rectify, and failing to comply could result in enforcement exerted by the court.

Regulations Relating to Tax

Enterprise income tax

According to the Enterprise Income Tax Law of the PRC (the “EIT Law”) which was promulgated on March 16, 2007, became effective from January 1, 2008, and was recently amended on December 29, 2018, enterprises and other organizations that derive income from or have income accruing in PRC shall be divided into resident enterprises and non-resident enterprises. A resident enterprise refers to an enterprise lawfully incorporated in PRC, or an enterprise established outside the PRC with de facto management bodies within the PRC. A non-resident enterprise refers to an enterprise lawfully incorporated pursuant to the laws of a foreign country (region) that has an office or premises established in PRC with no actual management functions performed in PRC, or an enterprise that has income derived from or accruing in PRC although it does not have an office or premises in PRC. The corporate income tax shall be at the rate of 25%. The non-resident enterprise has no office or premises established in PRC or the income derived or accrued has no de facto relationship with the office or premises established, the applicable income tax rate shall be subject to a reduced tax rate of 10%. According to the Implementation Regulations for the Corporate Income Tax Law of the PRC which was promulgated on April 23, 2019, and came into effect on the same day, actual management organizations refer to organizations implementing substantive and comprehensive management and control over the production and business operations, staff, accounts and property, etc. of an enterprise.

Value-added tax

Pursuant to the Provisional Regulations of the PRC on Value-added Tax, which was promulgated by the State Council on December 13, 1993, and recently amended on November 19, 2017, and the Implementation Rules for the Provisional Regulations the PRC on Value-added Tax, which was promulgated by the MOF and the SAT on December 25, 1993, became effective on the same day and recently amended on October 28, 2011, the tax rate for taxpayers engaging in the sale of transportation, postal, basic telecommunications, construction, lease of immovables, sale of immovable, transfer of land use rights, sale or importation of the following goods shall be 11%. On March 23, 2016, the MOF and the SAT jointly promulgated the Notice on Full Launch of the Pilot Scheme on Levying Value-added Tax in Place of Business Tax and the Measures for the Implementation of the Pilot Scheme on Levying Value-added Tax in Place of Business Tax, which stipulate that for provision of transportation, postal, basic telecommunication, construction services, leasing of immovables, sale of immovables and transfer of land use right, the tax rate shall be 11%. Pursuant to the Notice of Taxation on the Adjustment to VAT Rates, or the SAT Circular No.32 which was promulgated on April 4, 2018, by the MOF and the SAT, for VAT taxable sales acts or import of goods originally subject to VAT rates of 17% and 11% respectively, such tax rates shall be adjusted to 16% and 10%, respectively. On March 20, 2019, the MOF, the SAT, and the General Administration of Customs jointly promulgated the Announcement on Policies for Deepening the VAT Reform (“the Announcement”) which became effective on April 1, 2019. According to the Announcement, for general VAT payers’ sales activities or imports that are subject to VAT at an existing applicable rate of 16% or 10%, the applicable VAT rate is adjusted to 13% or 9% respectively.

Regulations Relating to Foreign Exchange

According to the Foreign Exchange Control Regulations of the PRC promulgated on January 29, 1996, and last amended on August 5, 2008, the CNY is generally freely convertible for current account items, including the distribution of dividends, trade, and service-related foreign exchange transactions, but not for capital account items, such as direct investment, loan, repatriation of investment and investment in securities outside the PRC, unless the prior approval of the SAFE or its designated banks is obtained.

On May 10, 2013, the SAFE promulgated the Notice of the SAFE on Promulgation of the Provisions on Foreign Exchange Control on Direct Investments in China by Foreign Investors and Supporting Documents, or the SAFE Circular No.21, which was last amended and became effective on December 30, 2019. It provided for and simplified the operational steps and regulations on foreign exchange matters related to direct investment by foreign investors, including foreign exchange registration, account opening and use, receipt and payment of funds, and settlement and sales of foreign exchange.

Pursuant to the Notice of the SAFE on Further Improvements and Adjustments to Foreign Exchange Control Policies for Direct Investments, or the SAFE Circular No.59, promulgated by the SAFE on November 19, 2012, became effective on December 17, 2012, and was further amended on October 10, 2018, approval is not required for opening a foreign exchange account and depositing foreign exchange into the account relating to the direct investments. The SAFE Circular No.59 also simplified the capital verification and confirmation formalities for foreign-invested entities, the foreign capital and foreign exchange registration formalities required for the foreign investors to acquire equities from Chinese parties, and further improved the administration on exchange settlement of foreign exchange capital of foreign-invested entities.

Regulations Relating to Dividend Distributions

The principal regulations governing the distribution of dividends of the wholly foreign-owned enterprises (the “WFOE”) include the PRC Company Law. Under these regulations, WFOEs in China may pay dividends only out of their accumulated profits, if any, determined in accordance with the PRC accounting standards and regulations. In addition, FIEs in the PRC are required to allocate at least 10% of their accumulated profits each year, if any, to fund certain reserve funds unless these reserves have reached 50% of the registered capital of the enterprises. These reserves are not distributable as cash dividends.

Regulations Relating to M&A and Overseas Listing

On August 8, 2006, six PRC regulatory agencies, including the CSRC, promulgated the Rules on the Merger and Acquisition of Domestic Enterprises by Foreign Investors (the “M&A Rules”), which became effective on September 8, 2006, and were amended on June 22, 2009. The M&A Rules, among other things, require offshore special purpose vehicles formed for overseas listing purposes through acquisitions of PRC domestic companies and controlled by PRC domestic enterprises or individuals to obtain the approval of the CSRC prior to the listing and trading of such special purpose vehicle’s securities on an overseas stock exchange. In September 2006, the CSRC published on its official website procedures regarding its approval of overseas listings by special purpose vehicles. The CSRC approval procedures require the filing of a number of documents with the CSRC. Although (i) the CSRC currently has not issued any definitive rule or interpretation concerning whether offerings like our initial public offering are subject to the M&A Rules; and (ii) no provision in the M&A Rules clearly classifies contractual arrangements as a type of transaction subject to the M&A Rules, the interpretation, and application of the regulations to be further confirmed, our overseas offering in the future may ultimately require approval from the CSRC. If CSRC approval is required, it is uncertain whether it would be possible for us to obtain the approval and any failure to obtain or delay in obtaining CSRC approval for any overseas offering would subject us to sanctions imposed by the CSRC and other PRC regulatory agencies.

The M&A Rules and other regulations and rules concerning mergers and acquisitions established additional procedures and requirements that could make merger and acquisition activities by foreign investors more time-consuming and complex. For example, the M&A Rules require that MOFCOM be notified in advance of any change-of-control transaction in which a foreign investor takes control of a PRC domestic enterprise, if (i) any important industry is concerned, (ii) such transaction involves factors that impact or may impact national economic security, or (iii) such transaction will lead to a change in control of a domestic enterprise which holds a famous trademark or PRC time-honored brand.

In addition, according to the Notice on Establishing the Security Review System for Mergers and Acquisitions of Domestic Enterprises by Foreign Investors issued by the General Office of the State Council on February 3, 2011, and became effective on March 3, 2011, the Rules on Implementation of Security Review System for the Merger and Acquisition of Domestic Enterprises by Foreign Investors issued by MOFCOM on August 25, 2011, and became effective on September 1, 2011, mergers and acquisitions by foreign investors that raise “national defense and security” concerns and mergers and acquisitions through which foreign investors may acquire de facto control over domestic enterprises that raise “national security” concerns are subject to strict review by MOFCOM, and the regulations prohibit any activities attempting to bypass such security review, including by structuring the transaction through a proxy or contractual control arrangement.

On July 6, 2021, the General Office of the Central Committee of the Communist Party of China and the General Office of the State Council jointly issued the Opinions on Severely Cracking Down on Illegal Securities Activities According to Law (the “Opinions”). The Opinions emphasized the need to strengthen the administration over illegal securities activities, and the need to strengthen the supervision of overseas listings by Chinese companies. Measures, including promoting the construction of relevant regulatory systems, will be taken to control the risks and handle the incidents from China-concept overseas listed companies.

On December 24, 2021, the CSRC promulgated the draft of Administration Rules in respect of Overseas Securities Offering and Listing of Domestic Enterprise (the “Draft of New Overseas Listing Rules”) for public comments. The Draft of New Overseas Listing Rules requires Chinese domestic enterprises to complete filings with relevant governmental authorities and report related information under certain circumstances, such as (i) an issuer making an application for an initial public offering and listing in an overseas market; (ii) an issuer making overseas securities offering after having been listed on an overseas market; (iii) an issuer offering securities on an overseas market to purchase assets after having been listed overseas; and (iv) a PRC domestic company seeking an overseas direct or indirect listing of its assets through single or multiple acquisition(s), share swap, transfer of shares or other means. On February 17, 2023, the CSRC promulgated the Trial Measures for the Administration of Overseas Issuance and Listing of Securities by Domestic Enterprises (the “Trial Measures”), and five supporting guidelines, which came into effect on March 31, 2023. The Trial Measures and its supporting guidelines, reiterate the basic principles of the New Overseas Listing Rules and impose substantially the same requirements for overseas securities offering and listing by domestic enterprises. Pursuant to the Trial Measures, (i) PRC domestic companies that seek to offer or list securities overseas, both directly and indirectly, should fulfil the filing procedure and report relevant information to CSRC; if a PRC domestic company fails to complete the filing procedure or conceals any material fact or falsifies any major content in its filing documents, such PRC domestic company may be subject to administrative penalties, such as order to rectify, warnings, fines, and its controlling shareholders, actual controllers, the person directly in charge and other directly liable persons may also be subject to administrative penalties, such as warnings and fines; (ii) if the issuer meets both of the following conditions, the overseas offering and listing shall be determined as an indirect overseas offering and listing by a PRC domestic company: (i) any of the total assets, net assets, revenues or profits of the domestic operating entities of the issuer in the most recent accounting year accounts for more than 50% of the corresponding figure in the issuer’s audited consolidated financial statements for the same period; (ii) its major operational activities are carried out in mainland China or its main places of business are located in mainland China, or the senior managers in charge of operation and management of the issuer are mostly citizens from mainland China or are domiciled in mainland China; and (iii) where a PRC domestic company seeks to indirectly offer and list securities in an overseas market, the issuer shall designate a major domestic operating entity responsible for all filing procedures with CSRC, and where an issuer makes an application for redacted in an overseas market, the issuer shall submit filings with the CSRC within three business days after such application is submitted. If the issuer submits the application documents for issuance and listing abroad in a secret or non-public manner, the issuer can submit a statement at the time of filing and apply for a delay in publicizing the filing information and should report to CSRC within three business days after the application documents for issuance and listing are made public abroad.

For domestic enterprises that have been listed overseas, upon the occurrence of any of the material events specified below after an issuer has offered and listed securities in an overseas market, the issuer shall submit a report thereof to CSRC within three business days after the occurrence and public disclosure of the event: (i) change of control; (ii) investigations or sanctions imposed by overseas securities regulatory agencies or other relevant competent authorities; (iii) change of listing status or transfer of listing segment; (iv) voluntary or mandatory delisting. Where an issuer’s main business undergoes material changes after overseas offering and listing and is therefore beyond the scope of business stated in the filing documents, such issuer shall submit to the CSRC an ad hoc report and a relevant legal opinion issued by a domestic law firm within three business days after the occurrence of the changes.

Regulations Relating to Confidentiality

On February 24, 2023, the CSRC, together with the Ministry of Finance of the PRC, the National Administration of State Secrets Protection, and the National Archives Administration of China issued the Provisions on Strengthening Confidentiality and Archives Administration of Overseas Securities Offering and Listing by Domestic Companies (the “Confidentiality and Archives Administration Provisions”). The Confidentiality and Archives Administration Provisions came into effect on March 31, 2023, based on the Regulations on strengthening confidentiality and file management in relation to the issuance and listing of securities abroad, issued in 2009, expanding the application to cover indirect overseas offering and listing, as is consistent with the Trial Measures. The Confidentiality and Archives Administration Provisions require that, including, but not limited to, (i) the domestic operating entities of indirect foreign listing issuers shall establish a sound system of confidentiality and archives work and adopt the requisite measures to perform the responsibilities of confidentiality and archives administration; where it is unclear or controversial as to whether a document or material is a State secret, such document or material shall be reported to the relevant secrecy administrative department for determination; where it is unclear or controversial as to whether the document or material is a work secret of a State agency, such document or material shall be reported to the relevant competent authority for determination; (ii) a PRC domestic company that plans to, either directly or indirectly through its overseas listed entity, publicly disclose or provide to relevant individuals or entities including securities companies, securities service providers and overseas regulators, any documents and materials that contain state secrets or working secrets of government agencies, shall first obtain approval from competent authorities according to law, and file with the secrecy administrative department at the same level; and (iii) a PRC domestic company that plans to, either directly or indirectly through its overseas listed entity, publicly disclose or provide to relevant individuals and entities including securities companies, securities service providers and overseas regulators, any other documents and materials that, if leaked, will be detrimental to national security or public interest, shall strictly fulfill relevant procedures stipulated by applicable national regulations; (iv) when providing documents and materials to the relevant securities companies and securities service agencies, domestic enterprises shall handle the relevant documents and materials in accordance with the relevant provisions of the State for the confidentiality of secrets, and provide the relevant securities companies and securities service agencies with a written statement; moreover, the relevant securities companies or securities service agencies shall properly retain the foregoing written statement for future reference.

C. Organizational Structure

See “—A. History and Development of the Company.”

D. Property, Plants and Equipment

See “—B. Business Overview.” 

Item 4A. UNRESOLVED STAFF COMMENTS

Not applicable.

Item 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS

The following discussion of our financial condition and results of operations is based upon and should be read in conjunction with our consolidated financial statements and their related notes included in this annual report. This annual report contains forward-looking statements. In evaluating our business, you should carefully consider the information provided under the caption “Item 3. KEY INFORMATION—D. Risk Factors” in this annual report. We caution you that our businesses and financial performance are subject to substantial risks and uncertainties.

A. Operating Results

Overview

We are a well-established, reputable and innovative business-to-business contract logistics solution provider in the PRC focusing on industrial raw materials line-haul transportation business. We offer our customers cost-efficient, flexible and reliable logistic solutions. We strategically serve customers in the paper, steel, coal, and food sectors. A significant portion of our customers are large institutional clients with whom we maintain long-term, typically annual, contracts.

Results of Operations

The following table summarizes our consolidated results of operations of the Company and its wholly owned subsidiaries for the years presented.

Year ended December 31, 2025 compared to year ended December 31, 2024

Revenue

We provide transportation services pursuant to our contract logistics business. Our major customers are usually based in the PRC and in the paper manufacturing, steel, coal and food industries.

We derived our revenue primarily from the provision of transportation services. Our total revenue was approximately RMB628.5 million (US$89.9 million) and RMB678.2 million for the years ended December 31, 2025 and 2024, respectively. This represents a decrease of approximately 7.3% in 2025 compared to 2024.

This decline was mainly due to reduced customer demand, as evidenced by a 13.6% drop in the total number of transportation orders and a 13.0% decrease in total weight transported. However, the total distance in kilometers increased by 11.7%, reflecting a shift toward longer-haul transportation despite lower overall volumes.

The contraction in order volume and tonnage was largely attributable to continued weakness in certain sectors (namely coal and steel industry) of the PRC economy during 2025. Nevertheless, the increase in transportation distance highlights the Company’s ability to capture demand in longer-distance routes. Management remains confident that the economic downturn will not persist throughout 2026 and expects a gradual recovery in the PRC economy, supported by the Company’s ongoing efforts to optimize service efficiency and strengthen customer relationships.

Revenue disaggregation

The Group primarily derives its transportation service revenue by providing transportation services based on customers’ orders.

In respect of the Group’s revenues generated from providing transportation services, a substantial part of the revenue was recognized from using third-party truckers to provide industrial raw materials or necessities line-haul transportation services for industrial customers, and there were no substantial differences in the nature, amount, timing and uncertainty of the revenues and cash flows among different industrial customers, regions, or between third-party truckers and the self-owned fleet.

Costs of Revenue

Our costs of revenue mainly consisted of the cost of transportation services. The cost of transportation services comprises of payments made to truck drivers through the administrative service suppliers, depreciation expenses, employee wages and benefits, fuel cost and maintenance or insurance costs of vehicles.

Cost of revenues decreased 7.9% to RMB599.2 million (US$85.7 million) in 2025 from RMB650.7 million in 2024, generally in line with the decrease in revenue. Over 98% of such costs of revenue for both years was attributable to logistics service charges incurred from using third-party truckers or our self-owned fleet to provide transportation services to the Group’s customers. In general, these charges were aligned with the volume of the Group’s transportation services. As a result, the decrease in the Group’s costs of revenue, which mainly consisted of the aforesaid logistics service charges, during the year ended December 31, 2025 was generally in line with the decrease in our revenue from the provision of transportation services during the year. The remaining less than 2% of the Group’s costs of revenue for both years ended December 31, 2025 and 2024, were primarily depreciation, fuel cost, maintenance or insurance costs of vehicles and others, which were insignificant.

Gross profit margin

Our gross profit margin improved from approximately 4.1% in 2024 to 4.7% in 2025, despite the decline in revenue. This increase reflects the Company’s ability to maintain stable mark-ups to customers during a period of reduced demand and economic downturn in the PRC. The resilience in margin performance highlights effective cost management and pricing discipline, which helped offset the impact of lower order volumes and tonnage, and positions the Company to benefit from an anticipated recovery in transportation demand as the PRC economy stabilizes in 2026.

Selling and marketing expenses

Our selling and marketing expenses consist primarily of employee wages, benefits for sales staff, rental expense, and other daily expenses which are related to the sales and marketing functions.

Our selling and marketing expenses increased significantly to RMB32.2 million (US$4.6 million) in 2025 from RMB5.0 million in 2024. This increase of 546% was primarily attributable to a non-cash, share-based consulting expense of RMB 27.7 million (US$3.9 million) recognized in connection with the issuance of ordinary shares to a third-party consultant. Excluding this one-time item, selling and marketing expenses would have been approximately RMB5.2 million. On December 4, 2025, the Company issued 2,000,000 unrestricted ordinary shares to a third party consultant as compensation for professional services pursuant to a consultancy agreement approved by the Compensation Committee. The expense was measured at the fair value of the Company’s ordinary shares on the issuance date and was fully recognized in selling and marketing expenses during the year in accordance with ASC 718, Compensation—Stock Compensation. This transaction did not involve any cash outflow and had a material impact on operating expenses and net loss for the year ended December 31, 2025. Management does not expect to enter into equity settled consulting arrangements of a similar magnitude on a recurring basis; however, the Company may continue to use equity based compensation selectively to align incentives and preserve liquidity.

General and Administrative Expenses

Our general and administrative expenses consisted primarily of employee wages and benefits for corporate employees, office expenses, rental expenses, depreciation charge and other expenses which are related to the general corporate functions.

Our general and administrative expenses remained relatively stable at RMB11.3 million (US$1.6 million) in 2025 compared to RMB11.1 million in 2024. For the year ended December 31, 2025, our general and administrative expenses generally consisted of (i) salaries, employee benefits and travel expenses of approximately RMB6.0 million in aggregate; (ii) audit fees of approximately RMB2.3 million; (iii) depreciation costs and amortization of approximately RMB1.4 million in aggregate; (iv) general and office expenses of RMB0.8 million; and (v) others of RMB0.8 million. For the year ended December 31, 2024, our general and administrative expenses generally consisted of (i) salaries, employee benefits and travel expenses of approximately RMB5.5 million in aggregate; (ii) audit fees of approximately RMB2.7 million; (iii) depreciation costs and amortization of approximately RMB1.8 million in aggregate; (iv) general and office expenses of RMB0.6 million in aggregate; (v) professional and consulting expenses of approximately RMB0.1 million and (vi) others of RMB0.4 million in aggregate.

Income (Loss) from operations

We recorded a loss from operations of RMB14.2 million (US$2.0 million) in 2025, compared to income from operations of RMB11.4 million in 2024 and RMB10.8 million in 2023. The shift to an operating loss in 2025 was directly caused by the non-cash share-based consulting expense. Excluding this item, income from operations for 2025 would have been positive.

Total other income (expenses), net

Our total other income (expenses), net consisted of (i) foreign exchange gain; (ii) other expenses or income, net; and (iii) interest income, net for the years ended December 31, 2025 and 2024, respectively. Our total other income, net decreased from approximately RMB1.7 million to total other expenses, net approximately RMB 1.2 million (US$0.2 million) for the years ended December 31, 2024 and 2025, respectively. Total other income (expenses), net, was an expense of RMB1.2 million (US$0.2 million) in 2025, compared to income of RMB1.7 million in 2024. The shift to a net expense in 2025 was primarily due to a decrease in net interest income. Interest income from loans to the controlling shareholder and third-party vendors decreased, while interest expense increased in line with higher average balances of short-term bank loans.

For the year ended December 31, 2025 and 2024, respectively, (i) our foreign exchange (loss) gain was RMB(28,184) (US$(4,029)) and RMB3,382; (ii) our other (expenses) income was RMB(23,276) (US$(3,328)) and RMB80,660; and (iii) our interest (expenses) income, net was approximately RMB(1.2million) (US$(0.2 million)) and approximately RMB1.6 million to which was primarily due to an increase of interest expenses for the short-term-bank loan as the principal of the bank loan increased, while interest income from both the shareholder loan and vendors’ loan decreased.

Income Tax Expense

Our income tax expense decreased to RMB2.8 million (US$0.4million) in 2025 from RMB4.5 million in 2024. This was primarily attributable to the decrease in our taxable income. Our effective tax rate was approximately 17.9% and 34.2% for the years ended December 31, 2025 and 2024, respectively. This reduction was primarily driven by a reduction in non-deductible expenses, favorable adjustments related to offshore entities’ net losses (which are not deductible for tax purposes), and other discrete items that lowered the overall tax burden. The combined effect of these factors contributed to the material decrease in total income tax expense for the year ended December 31, 2025.

Net Income (Loss)

As a result of the foregoing, we reported a net loss of RMB18.2 million (US$2.6 million) for 2025, compared to net income of RMB8.7 million in 2024. Net profit / (loss) margin was approximately (2.9%) and 1.3% for 2025 and 2024, respectively.

Year ended December 31, 2024 compared to year ended December 31, 2023

Revenue

We provide transportation services pursuant to our contract logistics business. Our major customers are usually based in the PRC and in the paper manufacturing, steel, coal and food industries.

We derived our revenue primarily from the provision of transportation services during the years ended December 31, 2024 and 2023, respectively. Our revenue from the provision of transportation services was approximately RMB678.2 million (US$92.9 million) and RMB706.7 million for the years ended December 31, 2024 and 2023, respectively, representing a decrease of approximately 4.0%.

The decrease in our revenue from the provision of transportation services was primarily attributable to the reduced demand from customers. In particular, the total number, distance in kilometers and weight in tons of our transportation orders decreased by approximately 6.9%, 6.0% and 2.9%, respectively, for the year ended December 31, 2024 when compared with those for the preceding year. This decrease in our customers’ needs and demands for our transportation services was primarily attributable to the economic downturn in the PRC for the year.

Revenue disaggregation

The Group primarily derives its transportation service revenue by providing transportation services based on customers’ orders.

In respect of the Group’s revenues generated from providing transportation services, a substantial part of the revenue was recognized from using third-party truckers to provide industrial raw materials or necessities line-haul transportation services for industrial customers, and there were no substantial differences in the nature, amount, timing and uncertainty of the revenues and cash flows among different industrial customers, regions, or between third-party truckers and the self-owned fleet.

Costs of Revenue

Our costs of revenue mainly consisted of the cost of transportation services. The cost of transportation services comprises of payments made to truck drivers through the administrative service suppliers, depreciation expenses, employee wages and benefits, fuel cost and maintenance or insurance costs of vehicles.

Our costs of revenue decreased 4.1% to RMB650.7 million (US$89.1 million) in 2024 from approximately RMB678.7 million in 2023. Over 97% of such costs of revenue for both years was attributable to logistics service charges incurred from using third-party truckers or our self-owned fleet to provide transportation services to the Group’s customers. In general, these charges were aligned with the volume of the Group’s transportation services. As a result, the decrease in the Group’s costs of revenue, which mainly consisted of the aforesaid logistics service charges, during the year ended December 31, 2024 was generally in line with the decrease in our revenue from the provision of transportation services during the year. The remaining less than 3% of the Group’s costs of revenue for both years ended December 31, 2023 and 2024, were primarily depreciation, fuel cost, maintenance or insurance costs of vehicles and others, which were insignificant.

Gross profit margin

Our gross profit margin was approximately 4.1% and 4.0% for the years ended December 31, 2024 and 2023, respectively. The Company maintained a stable mark-up to customers during the year ended December 31, 2024 in response to the economic downturn.

Selling and marketing expenses

Our selling and marketing expenses consist primarily of employee wages, benefits for sales staff, rental expense, and other daily expenses which are related to the sales and marketing functions.

Our selling and marketing expenses was approximately RMB5.0 million (US$0.7 million) and RMB5.1 million for the years ended December 31, 2024 and 2023, respectively, representing a decrease of approximately 2.0%. As we primarily targeted large institutional customers instead of retail ones, our selling expenses were insignificant in terms of amount and relative to our revenue. Its decrease over the said years was primarily attributable to less business travels and social networking with existing or potential customers during 2024.

General and Administrative Expenses

Our general and administrative expenses consisted primarily of employee wages and benefits for corporate employees, office expenses, rental expenses, depreciation charge and other expenses which are related to the general corporate functions.

Our general and administrative expenses decreased to approximately RMB11.1 million (US$1.5 million) from approximately RMB12.1 million to for the years ended December 31, 2024 and 2023, respectively, representing a decrease of approximately 8.3%. For the year ended December 31, 2024, our general and administrative expenses generally consisted of (i) salaries, employee benefits and travel expenses of approximately RMB5.3 million in aggregate; (ii) audit fees of approximately RMB2.8 million; (iii) depreciation costs and amortization of approximately RMB1.8 million in aggregate; (iv) general and office expenses of RMB0.6 million; and (v) others of RMB0.6 million. For the year ended December 31, 2023, our general and administrative expenses generally consisted of (i) salaries, employee benefits and travel expenses of approximately RMB4.6 million in aggregate; (ii) audit fees of approximately RMB4.2 million; (iii) depreciation costs and amortization of approximately RMB1.8 million in aggregate; (iv) general and office expenses of RMB0.6 million in aggregate; and (v) others of RMB0.9 million in aggregate.

Income from operations

As a result of the foregoing, our income from operations increased to approximately RMB11.4 million (US$1.6 million) from approximately RMB10.8 million to for the years ended December 31, 2024 and 2023, respectively. It was mainly a consolidated effect of the decrease in our selling and marketing expenses and general and administrative expenses over the said years.

Total other income, net

Our total other income, net consisted of (i) foreign exchange gain; (ii) other expenses or income, net; and (iii) interest income, net for the years ended December 31, 2024 and 2023, respectively. Our total other income, net decreased to approximately RMB1.7 million (US$0.2 million) from approximately RMB4.5 million for the years ended December 31, 2024 and 2023, respectively.

For the year ended December 31, 2024 and 2023, respectively, (i) our foreign exchange gain was RMB3,382 (US$463) and RMB42,147; (ii) our other income was RMB80,660 (US$11,050) and RMB59,317; and (iii) our interest income, net decreased to approximately RMB1.6 million (US$0.2 million) from approximately RMB4.4 million which was primarily due to an increase of interest expenses for the short-term-bank loan as the principal of the bank loan increased, while interest income from both the shareholder loan and vendors’ loan decreased.

Income Tax Expense

Our income tax expense decreased to approximately RMB4.5 million (US$0.6 million) from approximately RMB5.9 million for the years ended December 31, 2024 and 2023, respectively. This was primarily attributable to the decrease in our taxable income. Our effective tax rate was approximately 34.2% and 38.8% for the years ended December 31, 2024 and 2023, respectively. The lower effective tax rate for the years ended December 31, 2024 was mainly due to the decrease of tax effect for offshore entity’s net loss which is nondeductible for tax purposes and a permanent difference, as well as a decrease in income before income taxes.

Net Income

As a result of the foregoing, our net income slightly decreased to approximately RMB8.7 million (US$1.2 million) for 2024 from approximately RMB9.4 million for 2023. Net profit margin was approximately 1.3% for the years ended December 31, 2024 and 2023.

Liquidity, assets and liabilities

The following table set forth our current assets and current liabilities as of the dates indicated:

Since its establishment, the Group has been generally financed by our net cash provided by operating activities, supported by bank loans and advances from our controlling shareholder, Mr. Hue Kwok Chiu, when necessary.

The Company listed its Shares on the Nasdaq Stock Market on October 15, 2025 and completed its initial public offering on October 16, 2025. The offering resulted in the issuance of 1,000,000 new ordinary shares and generated gross proceeds of USD5.0 million. This transaction represents a significant milestone in the Company’s development, enhancing its capital structure and providing additional liquidity to support future growth. Management has been utilizing the proceeds to strengthen the Company’s balance sheet, fund ongoing infrastructure investments, and pursue expansion into new markets. The initial public offering has also increased the Company’s visibility among global investors, which is expected to facilitate access to capital markets for future financing needs.

As of December 31, 2025, our current assets exceed our current liabilities by approximately RMB73.9 million (US$10.6 million). We achieved net income (loss) of RMB8.7 million and (RMB18.2 million) (US$(2.6 million)) for the years ended December 31, 2024 and 2025, respectively. Net cash provided by operating activities was RMB12.5 million for the year ended December 31, 2024, compared with net cash used in operating activities of RMB40.7 million (US$5.8 million) for the year ended December 31, 2025. Historically, we have been able to generate sufficient operating cash to cover the current liabilities. In the year ended December 31, 2025, the Group maintained cash of RMB3.1 million (US$0.4 million) and net current assets of RMB73.9 million (US$10.6 million), representing a current ratio of 2.3. Over the next twelve months, the Group expects to incur approximately RMB 5 million of capital commitments related to three buildings within construction-in-progress (out of total commitments of RMB 20.5 million).

In the opinion of management, the Group’s existing working capital and committed credit facilities are sufficient to meet the Group’s anticipated requirements for at least twelve months from the date of this filing.

Short-term bank loans

In December 2025, the Group entered into guarantee loan agreement of RMB5,000,000 (fixed interest rate of 3.20% per annum) with a term of one-year and guaranteed by Jiangxi JB and Ms. Gong Su Fang (the legal representative of Jiangxi JB).

In June 2025, the Group entered into guarantee loan agreement of RMB13,000,000 (fixed interest rate of 3.3675% per annum) with a term of one-year and guaranteed by Ms. Gong Su Fang (the legal representative of Jiangxi JB).

In August 2025, the Group entered into guarantee loan agreement of RMB4,900,000 (fixed interest rate of 4.9% per annum) with a term of one-year and guaranteed by Jiangxi JB, third-party supplier A and Mr. Hue Kwok Chiu.

The short-term bank loans outstanding as of December 31, 2024 and 2025 carried a weighted average interest rate of approximately 3.94% and 3.58%, respectively. The interest expenses of the short-term bank loans for the years ended December 31, 2024 and 2025 were RMB1,158,894 and RMB1,199,391 (US$171,467) respectively, which were included as an item under interest income, net.

Shareholder advances, borrowings and settlement

The balance represented advances from the controlling shareholder. The balances were unsecured, non-interest bearing and repayable on demand.

During the year ended December 31, 2025, Jiabin HK borrowed from and also made repayments to Mr. Hue Kwok Chiu which was approximately RMB8.4 million and RMB 4.9 million respectively. As of March 31, 2026, the balance due to Mr. Hue Kwok Chiu was approximately RMB7.9 million.

On December 14, 2023, Fuzhou JB, Mr. Hue Kwok Chiu and Jiabin HK entered into a supplemental agreement pursuant to which it was agreed that, among other things, Mr. Hue Kwok Chiu’s loans due to Fuzhou JB in the aggregate amount of RMB120,000,000 (US$16,901,647) and the carrying interests at a simple rate of 3.55% per annum would become repayable before December 31, 2024.

On May 31, 2024, Fuzhou JB, Jiabin HK and Mr. Hue Kwok Chiu entered into the Deed. Pursuant to the Deed, (i) Mr. Hue Kwok Chiu transfers his obligation under the Debt agreement to Jiabin HK, and Jiabin HK agrees to assume and repay any and all of liabilities of Mr. Hue Kwok Chiu under the Debt Agreements between Mr. Hue Kwok Chiu and Fuzhou JB in the aggregate amount of RMB120 million (US$16.5 million) and all accrued interest thereunder amounting to RMB 3.27 million and (ii) Fuzhou JB agrees to seek repayment of these liabilities exclusively from Jiabin HK and not to seek repayment of any such liability from Mr. Hue Kwok Chiu. After completion of such transactions, Mr. Hue Kwok Chiu shall be deemed to have discharged his liabilities under the Debt Agreement.

On December 24, 2024, Fuzhou JB entered into a supplemental agreement pursuant to which it was agreed that, among other things, Jiabin HK’s loans due to Fuzhou JB in the aggregate amount of RMB120,000,000 and the carrying interests at a simple rate of 3.55% per annum would become repayable before December 30, 2025.

On December 2, 2025, Fuzhou JB received its shareholder approval, pursuant to which it agreed that, among other things, Jiabin HK’s loans due to Fuzhou JB in  the aggregate amount of RMB120,000,000 (US$17,155,356) and the carrying interests at a simple rate of 3.55% per annum will become repayable before December 30, 2026.

Dividend declared

On October 17, 2024 and November 11, 2024:

The declaration of dividends by the PRC subsidiaries and the distribution by the Hong Kong entity are legally distinct actions, each based on the respective entity’s liquidity and financing arrangements. The obligation of the PRC subsidiaries to remit the declared dividends, net of applicable withholding tax, remains outstanding as of the date of this filing. Settlement of this dividend payable between Fuzhou Jiabin, Jiangxi Jiabin and Jiabin HK is contingent upon the PRC subsidiaries generating sufficient operating cash flows.

Share-Based Compensation

On October 12, 2025, the Company’s sole shareholder passed written resolution to approve equity incentive plan named the Smart Logistics Global Limited 2025 Incentive Securities Plan (the “Plan”).

On November 25, 2025, the board of directors of the Company adopted the Plan and appointed the Compensation Committee to administer the Plan. The Company filed with the U.S. Securities and Exchange Commission a Registration Statement on Form S-8 (file No.: 333-291785), pursuant to which the Company registered 8,200,000 ordinary shares, par value HKD0.0001 each.

On December 4, 2025, the Company issued 2,000,000 unrestricted ordinary shares under the Plan to a third-party consultant as compensation for professional marketing services rendered. The issuance was approved by the Compensation Committee in accordance with the consultancy agreement. The fair value of the shares was determined based on the market price on the grant date of USD 1.935 per share, resulting in a total expense of approximately USD 3.9million. This expense is included in selling and marketing expenses for the year ended December 31, 2025.

The issuance did not involve any cash outflow and was accounted for as an equity-settled share-based payment under ASC 718. The Company believes this arrangement supports its strategic objectives by leveraging external expertise.

Cash Flows

Our use of cash primarily related to operating activities and capital expenditure. We have historically financed our operations primarily through our cash flow generated from our operations. The following table sets forth a summary of our cash flows information for the years indicated:

Operating activities

Our cash inflow from operating activities was principally from the revenue from transportation services, while our cash outflow used in operating activities principally consisted of payments for logistics services, maintenance service, staff costs, and other costs and expenses.

Net cash provided by operating activities reflects our net profit adjusted for (i) non-cash item, namely depreciation and amortization of our property, equipment and software, amortization of land use right and right-of-use assets, deferred income tax, foreign exchange loss or gain and interest income accrued for loans to third-party suppliers; and (ii) the effects of changes in operating assets and liabilities, which mainly comprised our accounts receivables, prepaid expenses and other current assets, contract assets, accounts payable and accrued expenses and other current liabilities.

Net cash used in operating activities was RMB40.7 million (US$5.8 million) in 2025, compared to net cash provided by operating activities of RMB12.5 million in 2024 and RMB38.6 million in 2023. The negative cash flow in 2025 was driven by the net loss and changes in working capital, notably an increase in prepayments and other current assets.

Net cash used in operating activities was approximately RMB40.7 million (US$5.8 million) for the year ended December 31, 2025. This was primarily attributable to the Company’s net loss of approximately RMB18.2 million (US$2.6 million) for the year, adjusted for non-cash items and changes in working capital. Non-cash adjustments mainly consisted of share-based compensation of approximately RMB27.0 million (US$3.9 million) and depreciation and amortization of property, equipment and software of approximately RMB1.5 million (US$0.2 million). Net cash outflows from operating activities were further driven by increases in contract assets of approximately RMB15.5 million (US$2.2 million), accounts receivable of approximately RMB8.7 million (US$1.2 million) and other non-current assets of approximately RMB5.0 million (US$0.7 million), as well as decreases in accrued expenses and other current liabilities and income tax payable, each of approximately RMB0.7 million (US$0.1 million). These cash outflows were partially offset by decreases in prepayments and other current assets of approximately RMB69.2 million (US$9.9 million), increases in accounts payable of approximately RMB8.1 million (US$1.2 million) and deferred income tax of approximately RMB4.5 million (US$0.6 million), among other factors.

Net cash provided by operating activities was approximately RMB12.5 million for the year ended December 31, 2024, primarily attributable to the Company’s net income of approximately RMB8.7 million for the year, adjusted for non-cash items and changes in working capital. Adjustments to net income mainly reflected a decrease in depreciation and amortization of property, equipment and software of approximately RMB1.7 million, as well as decreases in income tax payable of approximately RMB2.6 million, accrued expenses and other current liabilities of approximately RMB1.6 million, and contract assets of approximately RMB4.0 million. These effects were partially offset primarily by changes in working capital, including decreases in interest receivable of approximately RMB2.9 million, accounts receivable of approximately RMB1.4 million, and increases in accounts payable of approximately RMB2.2 million, among other factors.

Net cash provided by operating activities was approximately RMB38.6 million for the year ended December 31, 2023, primarily attributable to the Company’s net income of approximately RMB9.4 million for the year, adjusted for non-cash items and changes in working capital. Adjustments to net income mainly reflected depreciation and amortization of property, equipment and software of approximately RMB2.3 million, as well as increases in accounts receivable of approximately RMB2.9 million, contract assets of approximately RMB3.1 million, and accounts payable of approximately RMB26.8 million. These effects were partially offset primarily by decreases in interest receivable of approximately RMB5.2 million and income tax payable of approximately RMB3.1 million, among other factors.

Investing activities

Our cash used in investing activities was principally for the purchase of property, equipment and software, and loan to third parties.

Net cash used in investing activities was approximately RMB0.3 million (US$0.04 million) for the year ended December 31, 2025, which was mainly attributable to purchase of property, equipment and software.

Net cash provided by investing activities was approximately RMB34.9 million for the year ended December 31, 2024, which was mainly attributable to loan provided to and repayment from third-party suppliers of RMB25.0 million and RMB60.1 million, respectively, and purchase of property, equipment and software of approximately RMB0.2 million.

Net cash used in investing activities was approximately RMB56.8 million for the year ended December 31, 2023, which consisted of loan provided to and repaid by the controlling shareholder of RMB134.3 million and RMB14.3 million, respectively, loan provided to and repaid by third-parties suppliers of RMB27.0 million and RMB103.7 million, respectively, and purchase of property, equipment and software of approximately RMB13.5 million.

Financing activities

Net cash provided by financing activities was approximately RMB33.5 million (US$4.8 million) for the year ended December 31, 2025, which was primarily attributable to proceeds from initial public offering, amount received from the controlling shareholder and loan received from the bank being partially offset by repayment of bank loan, payment of deferred issuance cost and amount repaid to the controlling shareholder.

Net cash used in financing activities was approximately RMB47.1 million for the year ended December 31, 2024, which was primarily attributable to amount received from the controlling shareholder and loan received from the bank being partially offset by repayment of bank loan, payment of deferred issuance cost, amount repaid to the controlling shareholder and dividend paid.

Net cash provided by financing activities was approximately RMB23.0 million for the year ended December 31, 2023, which was primarily attributable to amount received from the controlling shareholder and loan received from the bank being partially offset by repayment of bank loan, payment of deferred issuance cost, repayment of long-term loan to a third-party customer and amount repaid to the controlling shareholder.

Cash

The Company’s subsidiaries in PRC conduct their business in the local currency, Renminbi (RMB), as their functional currency and reporting currency.

We had cash of RMB10.5 million and RMB3.1 million as of December 31, 2024 and 2025, respectively. The cash disaggregated by currency denomination are as follow:

In managing our liquidity risk, we monitor and maintain a level of cash and cash equivalents deemed adequate by our management to finance our operations and mitigate the effects of unexpected fluctuations in cash flows. We regularly monitor the repayment dates of financial liabilities, including accounts payable, other payables and accrued charges, etc. to match with financial resources available to us from time to time. We manage liquidity risk by maintaining adequate financial resources, including existing cash and bank balances and operating cash flows.

Off-Balance Sheet Arrangements

The Company has no off-balance sheet arrangements, including arrangements that would affect its liquidity, capital resources, market risk support, and credit risk support or other benefits.

Future Financings

The Company may sell its ordinary shares in order to fund its business growth. Issuances of additional shares will result in dilution to existing shareholders. There is no assurance that the Company will achieve sales of the equity securities or arrange for debt or other financing to fund its growth in case it is necessary, or if the Company is able to do so, there is no guarantee that existing shareholders will not be substantially diluted.

B. Liquidity and capital resources 

Our primary sources of liquidity are cash generated from operating activities and cash and cash equivalents on hand. We have historically funded our operations mainly through internally generated cash flows and have not relied on material long term borrowings.

As of December 31, 2025, management believes that the Company has sufficient working capital to meet its operating requirements, committed capital expenditures, and contractual obligations for at least the next twelve months.

Liquidity and Cash Flows

Net cash provided by operating activities is derived primarily from our contract logistics services and is affected by operating performance and changes in working capital, including accounts receivable, contract assets and accounts payable. Customer payment terms generally range from 15 to 45 days.

Substantially, all of our revenues and operating cash flows are generated by our PRC subsidiaries. As a holding company, we depend on dividends or other distributions from these subsidiaries to meet offshore obligations. Under PRC laws and regulations, such distributions may only be made from accumulated profits after statutory reserves are set aside, which may restrict the timing and amount of cash transfers to the Company.

We have not declared or paid any cash dividends and do not expect to do so in the foreseeable future.

Capital Expenditures and Commitments

Our capital expenditures primarily relate to the development of our smart logistics park and related infrastructure.

As of December 31, 2025, the Company had incurred construction related capital commitments of approximately RMB20.5 million, mainly associated with infrastructure development at the smart logistics park. Of this amount, approximately RMB5.0 million is expected to be paid within the next twelve months, with the remaining balance payable thereafter in accordance with contractual milestones and construction progress. Management expects these commitments to be funded primarily through cash generated from operating activities and does not believe they will have a material adverse impact on near term liquidity.

Contractual Obligations and Financing

Our material contractual obligations consist primarily of operating lease commitments and the construction related commitments described above. We do not have material off balance sheet arrangements or guarantees. As of December 31, 2025, we did not have material long term interest bearing debt outstanding.

Liquidity Outlook

Management believes that existing cash balances and expected operating cash flows will be sufficient to meet working capital needs, lease obligations and committed capital expenditures over the next twelve months. Long term liquidity requirements will depend on future expansion plans and capital investment decisions. The Company may seek additional equity or debt financing to support long term growth initiatives, although no such financing arrangements have been committed as of the date of this report.

C. Research and Development, Patents and Licenses, etc.

See “Item 4. Information on the Company—B. Business Overview—Research and Development” and “Item 4. Information on the Company—B. Business Overview—Intellectual Property.”

D. Trend Information

Other than as disclosed elsewhere in this annual report on Form 20-F, we are not aware of any trends, uncertainties, demands, commitments, or events for the year ended December 31, 2025 that are reasonably likely to have a material adverse effect on our net revenue, income, profitability, liquidity, or capital resources, or that caused the disclosed financial information to be not necessarily indicative of future operating results or financial condition.  

E. Critical Accounting Policies and Estimates

The Company does not have critical accounting estimates.

Item 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

A. Directors and Senior Management

The following table sets forth information regarding our executive officers and directors as of the date of this annual report.