With comprehensive insight in business management, we have an established business model that meets industry needs. Different downstream customers have varying requirements for the specifications, performance, and cost of SiC epitaxial wafers, influenced by factors such as their technical processes, device product performance, market positioning, and cost control. To address these diverse needs and foster the acquisition of new customers, we implement a sales model that prioritizes direct sales while using distribution as a supplementary channel. We primarily adopt a sales volume-based production model, and our procurement strategy emphasizes production based on procurement, with appropriate reserves. This approach enhances our ability to manage procurement and inventory effectively.

We have established stable production capacity, which enables us to achieve economies of scale. Our production base is located in Dongguan, Guangdong province, serving customers across China and internationally. Our current production base at our headquarters in Dongguan covers a GFA of approximately 35,978 sq.m., primarily focusing on the production of 6-inch SiC epitaxial wafers. Additionally, we have acquired a piece of land in the Ecological Park production site based in Dongguan, Guangdong province, laying the groundwork for future capacity expansion. We have completed construction of the new production base on this land, which will be put in use by the end of 2025. Our Ecological Park production site includes office areas, factories, R&D buildings, dormitories, and other supporting facilities.  We are currently the largest producer of 6-inch SiC epitaxial wafers in China, and possessed the capability of mass production of 8-inch SiC epitaxial wafers. As of May 31, 2025, our existing headquarters production base possessed an annual production capacity of approximately 420,000 pieces of SiC epitaxial wafers. We expect that our new Ecological Park production base, will, once all equipment and necessary technical personnel are in place and subject to actual downstream demands, bring an additional annual planned production capacity of approximately 380,000 pieces of SiC epitaxial wafers within 2025, making our total annual planned production capacity to approximately 800,000 pieces of SiC epitaxial wafers. As production capacity would be one of the key consideration factors in order to assess the overall competence of the suppliers by their downstream customers, we believe this large-scale production will effectively reduce unit product costs, enhance our profit margins, and maintain our market competitiveness.