Company: XHG
Filing Date: 2025-01-22
Form Type: 20-F
Source: 0001213900-25-005499
Chunk: 22

Company: XChange TEC.INC
Filing Date: 2025-01-22
Form: 20-F
Item: Item 3
Chunk 22
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 volume and/or not be able to continue to attract
new customers or maintain existing customers. If any of the foregoing occurs, our business, results of operations and financial condition
may be materially and adversely affected.

We are subject to customer concentration risk.

We are subject to customer concentration risk.
In 2023 and the six months ended June 30, 2024, the commission revenue generated from one client, a state-owned insurance company exceeded
10% of the total revenue for the respective period. In addition, we also face concentration from specific geographical regions. A significant
number of our commission received of our policies sold are located in three provinces in Northern China, which collectively contributed
over 50% of our commission revenue in 2022, 2023 and the six months ended, June 30, 2024. Factors such as localized economic downturn,
or new regulations imposed by local authorizes, or any adverse event or circumstances unique to these regions could have an impact on
our overall business.

There are a number of factors, other than our
performance, that could cause the loss of, or decrease in the volume of business from, a customer. We cannot assure you that we will
continue to maintain the business cooperation with these customers at the same level, or at all. The loss of business from any of these
significant customers, or any downward adjustment of the commission rates paid to us, could materially adversely affect our revenue and
profit. Furthermore, if any significant customer terminates its relationship with us, we cannot assure you that we will be able to secure
an alternative arrangement with comparable insurance company in a timely manner, or at all.

Our business is substantially dependent on revenue from our
automobile insurance company partners and is subject to risks related to automobile insurance industry. Our business may also be adversely
affected by downturns in the life, health, group accident and other property-related insurance industries.

A majority of the insurance purchased through
our platform and agency services is automobile insurance. Our overall operating results are substantially dependent upon our success
in our automobile segment. For the years ended December 31, 2022, 2023 and the nine months ended September 30, 2024, 50.4%, 77.3% and
75.0%, respectively, of Alpha Mind’s total revenue was derived from its automobile segment. Our success in the automobile insurance
market will depend upon a number of additional factors, including:

  our ability to continue to adapt our sales to various