Company: JL
Filing Date: 2025-05-20
Form Type: 20-F/A
Source: 0001213900-25-045507
Chunk: 51

Company: J-Long Group Ltd
Filing Date: 2025-05-20
Form: 20-F/A
Chunk 51
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. If we fail to manage our inventory effectively, our results of operations, financial condition and liquidity may be materially and adversely affected. Our inventories are mostly products which consist of reflective and non-reflective garment trims. For our non-branded products, we depend on our demand and storage capacity forecast to make procurement decisions and to manage our inventory. As the authorized distributor of our licensed U.S. brand, we also have non-mandatory procurement targets under the license agreement; as such, although there is no penalty for not meeting our target, we maintain a certain level of inventory and make procurement if the level falls below our pre-determined threshold. As with our non-branded products, these procurement decisions are determined by our management based on the anticipated demand from our customers. Such demand, however, can change significantly between the time inventory is ordered and the date by which we hope to sell. Demand may be affected by seasonality, the economy and changes in trends and consumers’ preferences. Consequently, our customers may not order products in the quantities that we anticipate. In addition, procurement of certain types of inventories may require significant lead time and prepayment. Furthermore, as we plan to continue expanding our product offerings, we expect to include a wide variety of products in our inventory, which will make it more challenging for us to manage our inventory and logistics effectively. We cannot guarantee that our inventory levels will be able to meet the demands of our customers, which may adversely affect our sales. If we fail to manage our inventory effectively, we may be subject to the risk of inventory obsolescence resulting in decline in inventory value, and inventory write-downs or write-offs. Any of the above may materially and adversely affect our results of operations and financial condition. On the other hand, if we underestimate demand for our products, or if our suppliers fail to supply materials and products in a timely manner, we may experience inventory shortages, which might result in diminished customer loyalty and loss in revenue, either of which could harm our business and reputation. We are exposed to credit risks of our customers. We are exposed to credit risks of our customers. We do not have access to all the information necessary to form a comprehensive view of our customers’ creditworthiness. The complete financial and operational conditions of customers are not always available to us, and we may not be in any position to obtain such information. As a result, if any of our major customers experiences financial difficulty and fails to settle the outstanding amounts due to us in accordance with the agreed credit terms, our