Company: XHG
Filing Date: 2025-01-22
Form Type: 20-F
Source: 0001213900-25-005499
Chunk: 35

Company: XChange TEC.INC
Filing Date: 2025-01-22
Form: 20-F
Item: Item 3
Chunk 35
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on insurance premiums or insurance agency commissions could have material adverse impact on the revenue and profitability of our insurance
agency business, if we are not able to increase our insurance business volume sufficiently to compensate for the reduced revenue generated
from automobile insurance commission, or pass on any downward impact on our commission rates to our external referral sources. Regardless,
failure to comply with any of the laws, rules and regulations to which we are subject could result in fines, restrictions on business
expansion, which could materially and adversely affect us.

Failure to obtain, renew, or retain certain licenses, permits
or approvals may materially and adversely affect our ability to conduct our business.

We are required by PRC laws and regulations to
hold various licenses, permits and approvals issued by relevant regulatory authorities to allow us to conduct our business operations
including license for operating insurance agency service. Any infringement of legal or regulatory requirements, or any suspension or
revocation of these licenses, permits and approvals may have a material adverse impact on our business. The licensing requirements within
the insurance and insurance agency industry are constantly evolving and we may be subject to more stringent regulatory requirements due
to clarification or change in interpretation or implementation of laws and regulations, or promulgation of new regulations or guidelines
in China. We may be required to obtain other licenses, permits or approvals, or otherwise comply with additional regulatory requirements
in the future. We cannot assure you that we will be able to retain, obtain or renew relevant licenses, permits or approvals in the future.
This may, in turn, hinder our business operations and materially and adversely affect our business, results of operations and financial
condition.

Examinations and investigations by the PRC regulatory authorities
may result in fines and/or other penalties that may have a material adverse effect on our reputation, business, results of operations
and financial condition.

From time to time, the CBIRC carries out comprehensive
evaluations and inspections of the internal control and financial and operational compliance of PRC insurance agency companies in China.
As a participant in the insurance agency industry in China, we are subject to periodic or ad hoc examinations and investigations by various
PRC regulatory authorities in respect of our compliance with PRC laws and regulations, which may impose fines and/or other penalties
on us. There is no assurance that we will be able to meet all applicable regulatory requirements and guidelines, or comply with all applicable
regulations at all times, or that we will not be subject to fines or other penalties in the future as a result of regulatory inspections.

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