Product and Service Safety Guarantee

To fulfill our management commitment to customer health and safety, approximately 94.7% of Hotai Leasing HLC 's revenue comes from long-term leasing rental services, and with new vehicle leasing accounted for 80% of the total leased vehicles for leasing.  New vehicle models are specified by customers and supplied by major brands, and have passed manufacturer safety inspections and domestic regulatory certifications to ensure safety in use. As for used vehicle leasing, approximately 60% of vehicles are sourced from the Company’s long-term lease returns, all of which are 100% inspected and certified by professional institutions. The remaining 40% are sourced from external dealers and undergo the Company’s standardized inspection and safety evaluation procedures, about 63.5% of which are verified by professional institutions to ensure vehicle safety and quality consistency. In 2024, Hotai Leasing HLC had no incidents of non-compliance with product and service health and safety regulations. 

In the used car business, we have recognized that traditional used car dealers lack standardized inspection processes and cannot provide reliable, impartial vehicle condition inspection results, often leading to information asymmetry disputes between buyers and sellers. HAA has established a vehicle inspection system since 2008. This system performs vehicle inspections for all vehicles listed for auction, and it currently encompasses a comprehensive vehicle inspection process with 236 inspection items. All auctioned vehicles must undergo this inspection process. After professional grading of the vehicle condition, the results are disclosed on the auction platform alongside the vehicle, to help car dealer members fully keep abreast of vehicle information, thus enhancing the transparency and safety of used car transactions. 

Since 2016, building upon its well-established leveraging it’s rigorous vehicle inspection technology and practical experience, HAA established the independent third-party certification body "HAA Professional Certification," an independent third-party certification body. It has developed high-standard used car quality certification standards to objectively and neutrally assist used car dealers and consumers in clearly understanding the true condition of used cars. Furthermore, it launched the "30-times high compensation for false certification" commitment, which not only demonstrates confidence in its professional technology but also provides the most trustworthy and strong guarantee for consumers when purchasing used cars. 

Vehicle Safety Tracking

To ensure that vehicles consistently remain in a safe and good operating condition, HLC proactively estimates upcoming maintenance cycles based on customers’ driving habits and historical mileage. When a vehicle approaches the manufacturer's recommended regular maintenance mileage or time threshold, a service personnel will proactively contact the customer to inquire about their vehicle's status. If the vehicle is assessed to meet the manufacturer's maintenance requirements, we will promptly assist it in arranging for maintenance. This helps prevent potential risks, extend the vehicle's lifespan, and enhance overall vehicle safety management. 

As the Company's leasing business primarily deals with motor vehicles (including but not limited to cars and large motorcycles) and machinery equipment, all of which have brand information. For motor vehicles, which may have defects from the production process or in parts or software/firmware, most responsible manufacturers have established recall policies. 

Upon receiving a recall notification from the original manufacturer, HLC, due to vehicle safety, will identify the affected customers and compile a recall list. Service personnel will proactively notify customers about bringing their vehicles in for service. This notification process must be completed within three months. If direct notification is not possible, a written notice will be used instead. The progress of these recall notifications will be routinely reviewed at the monthly Service Personnel Supervisors' meeting. Furthermore, to ensure customers’ convenience and rights, if a vehicle's recall-related repair time exceeds 24 hours, HLC will, in accordance with the contract, proactively provide a loaner car to customers whose agreements include a replacement vehicle, to ensure that their transportation needs are not affected.