Background and Objectives of the Current Issuance
(I) Background of the Current Issuance
The Company is a specialized automotive parts manufacturer focused on the research, development, manufacturing, and sales of automotive bearings. With years of experience in the automotive parts sector, and recognizing the strong commonalities in structural design, precision manufacturing, and industrial chain systems between the automotive parts and robotics industries, the Company has leveraged its technical expertise and first-mover advantage to actively expand into robotics components, continuously optimizing its product portfolio. This issuance will help expand the production capacity of the Company's core products, increase revenue and profitability, and enhance overall competitiveness.
- National industrial policies create a favorable environment for the development of the bearing and robotics industries.
The bearing and robotics industries are strategic emerging industries strongly encouraged and supported by the state. The promulgation of relevant national laws, regulations, and policies provides a favorable environment and impetus for the development of these industries, driving technological innovation and industrial upgrading, and creating favorable conditions for the Company's business development.
In September 2025, six departments including the Ministry of Industry and Information Technology released the "Work Plan for Stabilizing Growth in the Machinery Industry (2025-2026)," which calls for continuous improvement in the reliability, consistency, and stability of high-end bearings and other common basic components. In March 2024, the State Administration for Market Regulation and 18 other departments issued the "Action Plan for Implementing the National Standardization Development Outline (2024-2025)," which specifies the revision of common technical standards for high-end bearings and other core basic components (elements) to address key issues such as product performance, high reliability, and long lifespan. In December 2023, the National Development and Reform Commission revised and issued the "Catalogue of Industries for Guiding Industrial Structure Adjustment (2024 Edition)," including automotive key components, new energy vehicle key components, and key bearings in the encouraged category. In June 2023, the Ministry of Industry and Information Technology and other departments released the "Opinions on Improving the Reliability of Manufacturing," emphasizing the need to enhance the reliability of high-end bearings, precision gears, and other common basic components.
In March 2026, the State Council released the "Outline of the 15th Five-Year Plan for National Economic and Social Development of the People's Republic of China," which calls for accelerating the development of strategic emerging industries such as new-generation information technology, new energy, new materials, intelligent connected new energy vehicles, robotics, biopharmaceuticals, high-end equipment, and aerospace. In March 2024, the Ministry of Industry and Information Technology and seven other departments jointly issued the "Implementation Plan for Equipment Renewal in the Industrial Sector," which proposes focusing on the transformation of production, warehousing, logistics, and quality control processes to promote the renewal of general intelligent manufacturing equipment such as industrial robots.
In summary, the continuous issuance of industrial policies has created a favorable policy environment for the development of the bearing and robotics industries, and also provides policy support for the implementation of the Company's fundraising investment projects, creating favorable external conditions.
- Continuous growth in downstream market size drives sustained demand for supporting components.