Lung Hsin Universal: The additional tariff measures imposed by Mexico will have a very limited direct impact on the company's existing business.

On December 12th, Loxin Group stated on its interactive platform that, after a careful evaluation, it believes the direct impact of the recent increase in tariffs on imports from Mexico will be very limited on its existing business. Firstly, the core business model effectively avoids the risk of vehicle tariffs. This time, Mexico has raised the tariff on imported motorcycles from China to 35%. However, the company has long used the IKD model for exports to Mexico, which means products are exported in completely knocked-down (CKD) form and assembled in local factories in Mexico. Therefore, this tariff on complete vehicles does not apply to the company's existing export business. Secondly, the impact on other related goods is very limited. According to our preliminary analysis of the legislation, the definition of other motorcycle-related goods mentioned usually does not include "knocked-down" or "kit" parts intended for assembly. Therefore, this part of the legislation is expected to have limited impact on the company's business as well. In conclusion, the company's current business structure is able to effectively mitigate the impact of this tariff policy adjustment.