Company: XHG
Filing Date: 2025-01-22
Form Type: 20-F
Source: 0001213900-25-005499
Chunk: 82

Company: XChange TEC.INC
Filing Date: 2025-01-22
Form: 20-F
Item: Item 4
Chunk 82
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 underwrite insurance policies, the insurance purchasers or policy holders do
not have any direct recourse with us for insurance claims as the insurance contract is entered into directly between the policy holders
and the insurance companies, we only play the role of facilitating the claim process.

We generate revenue
from our insurance agency business primarily through collecting commissions from insurance companies for successful sales of their insurance
products, which are typically based on a percentage of the premium paid by insurance policy purchasers. The commission rates are typically
set by insurance companies and vary for different product types, different insurance companies and different geographic regions in which
the insurance products are sold. The commission rates are also subject to adjustments by insurance companies from time to time based
on their expectation on profits, consumer demand for insurance products in the market, the availability and pricing of comparable products
from other insurance companies, regulatory requirements and governmental policies, and other factors that affect insurance companies
at the relevant time. In this connection, the average commission rates also varied between different cities in which we operate our insurance
agency business, and in 2023 and September 30, 2024, Alpha Mind’s by-city average commission rates ranged from 9% to 33% and 4%
to 35%, respectively, while its overall average commission rate was 14% and 10%, respectively.

Our SaaS Platform

In 2023, capitalizing
on the growing prevalence of mobile internet, Alpha Mind introduced a SaaS platform to enhance its insurance agency business. The implementation
of our SaaS platform has allowed us to offer more comprehensive services and expand our reach from offline to online customers. We continue
to refine the functions of this platform to suit the needs of the insurance agency business. We believe this platform has several key
advantages that further augment our services:

  Insurance product front – The SaaS platform                                                                                          

  Sales front – Through the SaaS platform,                                                                                            

  Training front – Our SaaS platform offers                                                                                            

  End customer front – The SaaS platform                                                                                                    

The SaaS platform serves principally as a backstage
management system to facilitate the process of the insurance agency business. The targeted users of the SaaS platform are primarily insurance
agents. Through this SaaS platform, insurance agents are able to help end-customers to access insurance companies’ platform which
streamlines the process of signing insurance policies with the insurance companies online. The main features of the SaaS platform include:

  Personnel management – The SaaS platform                                                                                              

  Financial