Company: FSTWF
Filing Date: 2025-05-15
Form Type: 20-F
Source: 0001213900-25-044386
Chunk: 76

Company: FST Corp.
Filing Date: 2025-05-15
Form: 20-F
Item: Item 4A
Chunk 76
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 in meaningful results, such as new golf shaft material composition, improvement in manufacturing efficiency,
the results of operation, business and financial condition of the Group may be materially and adversely affected.

Competition

In order to attract consumers,
golf brand suppliers keep innovating their products to shorten the product life cycle and development schedule significantly. In order
to satisfy customers’ demand for launch of new products, it is necessary to develop new products and implement the mass production
in a short time. The Group appoints dedicated personnel to follow PGA players when they attend any games and provide feedback to the R& D
team based on the players’ suggestions and needs. Meanwhile, in recent years, it has catered to consumers’ needs and
verified the market development trend by managing the KBS brand flagship store. It continues to improve the shaft design and invests capital
in the development of new product designs to satisfy customers’ needs rapidly.

The Group faces fierce competition
in all product categories. In the premium shaft sector, the Group competes with other international brands that are more well-known and
have more financial resources, such as Tempest, Nippon, and Project X. In the standard and economy shaft sector, the Group competes
with other OEMs in Taiwan, People’s Republic of China or other regions both on pricing, delivery lead time, manufacturing capacity
and production yield. There is no guarantee that the Group will be able to maintain its competition positioning in any product sector.
If the Group’s competition positioning deteriorates, the results of operation, business and financial condition of the Group will
be materially and adversely affected.

Basis of Presentation

The Group’s consolidated
financial statements have been prepared in accordance with Generally Accepted Accounting Principles in the United States (“ U. S. GAAP”). All
intercompany accounts and transactions have been eliminated on consolidation. For the purposes of presenting consolidated financial statements,
its assets and liabilities and its foreign operations (including subsidiaries in other countries that use currencies which are different
from our functional currency) are translated into USD using exchange rates prevailing at the end of each reporting period. Income and
expense items are translated at the average exchange rates for the period. Exchange differences arising, if any, are recognized in other
comprehensive income and accumulated in equity.

Components of Results of Operations

Revenue

The Group generates revenue
primarily from the sales of golf shafts, sales of sports accessories, food and beverage and software service. The total revenue for the
year ended December 31, 202