Company: XHG
Filing Date: 2025-01-22
Form Type: 20-F
Source: 0001213900-25-005499
Chunk: 34

Company: XChange TEC.INC
Filing Date: 2025-01-22
Form: 20-F
Item: Item 3
Chunk 34
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 to the internet in China is
maintained through state-owned telecommunication operators under the administrative control and regulatory supervision of the Ministry
of Industry and Information Technology, or the MIIT. Moreover, we primarily rely on a limited number of telecommunications service providers
to provide us with data communications capacity through local telecommunications lines and internet data centers to host our servers.
We have limited access to alternative networks or services in the event of disruptions, failures or other problems with the internet
infrastructure or the telecommunications networks in China. We cannot assure you that these infrastructures will be able to support the
demands associated with the continued growth in usage.

With the expansion of our business, we may be
required to upgrade our facilities, technology, operational and information technology infrastructure to keep up with our business growth,
which may require substantial investment. In addition, we may need to devote significant resources to creating, supporting and maintaining
our mobile applications, given the increasing trend of accessing the internet through smart phones, tablets and other mobile devices
and the continual release of new mobile devices and mobile platforms. However, we may not be able to effectively develop or enhance these
technologies on a timely basis or at all, which may decrease end customers’ satisfaction and efficiency of our business process.
Our failure to keep pace with rapid technological changes may impact our ability to retain or attract end customers of our products and
services or generate income, and have an adverse effect on our business and results of operations.

Our businesses are subject to regulation and administration
by the CBIRC and other government authorities, and failure to comply with any applicable regulations and rules by us could result in
financial losses or harm to our business.

We are subject to the PRC Insurance Law, Regulatory
Provisions on Professional Insurance Agencies, and related rules and regulations. Our businesses in automobile insurance and other insurance
areas are extensively regulated by the CBIRC, which has been given wide discretion in its administration of these laws, rules and regulations
as well as the authority to impose regulatory sanctions on us. Under the amendments to the PRC Insurance Law promulgated in 2009, the
CBIRC has been granted greater regulatory oversight over the PRC insurance industry, in part to afford policyholders more protection.

The terms and premium rates of the insurance
products we carry, the commission rates we earn, as well as the way we operate our insurance agency businesses, are subject to regulations.
Changes in these regulations may affect our profitability on the products we sell. Any tightening of regulations or administrative measures