Company: XHG
Filing Date: 2025-01-22
Form Type: 20-F
Source: 0001213900-25-005499
Chunk: 23

Company: XChange TEC.INC
Filing Date: 2025-01-22
Form: 20-F
Item: Item 3
Chunk 23
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  our ability to retain partnerships with enough insurance                                                

  our ability to leverage technology in order to sell,                                                           

  the effectiveness of our competitors’ marketing  

These factors could prevent our automobile segment
from successfully marketing, which would harm our business, results of operation, financial condition and prospects. We are also dependent
upon the economic success of the life, health, group accident and other property-related insurance industries. Declines in demand for
life, health, group accident and other property-related insurance could cause fewer end customers to shop for such policies through us.
Downturns in any of these markets, which could be caused by a downturn in the economy at large, could materially and adversely affect
our business, results of operation, financial condition and prospects.

End customers may increasingly decide to purchase insurance
directly from insurance companies, which would have a material adverse impact on our financial condition, results of operations and prospects.

The advancement of financial technologies, or
FinTech, and the emergence of internet insurance products allow insurance companies to directly access to a broader customer base at
a low cost, and end customers may increasingly decide to purchase insurance directly from insurance companies. A rising number of traditional
insurance companies have established their own online platforms to sell Internet insurance products directly to end customers. The process
of eliminating agencies as intermediaries, known as “disintermediation,” could place us at a competitive disadvantage and
reduce the need for our products and services. Disintermediation could also result in significant decrease in business volume and loss
of commission income from our insurance agency business, which could have a material adverse effect on our business, financial condition,
results of operations and prospects.

Our SaaS platform may not gain market acceptance, which could
adversely affect our results of operations.

We launched our SaaS platform in 2023 to further
expand our insurance agency business from offline to online. Although we have not generated any revenue from our SaaS platform to date,
we expect it will become a source of our revenue going forward. The success of our SaaS platform depends on the adoption of SaaS platform
in China’s insurance industry, which may be affected by, among other things, regulatory requirements and widespread acceptance
of SaaS platform in general.

Market acceptance of SaaS platform depends on
a variety of factors, including but not limited to price, security, reliability, performance, customer preferences, public concerns regarding
privacy and the enactment of restrictive laws or regulations. It is difficult to predict the demand