| Financial Instruments |
Note 22. Financial Instruments | (a) | Categories of financial instruments |
| | | | | | | | December 31, | | December 31, | | | 2024 | | 2025 | | | | | (in thousands) | Financial assets measured at fair value through profit or loss (including current and noncurrent) | | $ | 25,694 | | 52,520 | Financial assets measured at fair value through other comprehensive income | | | 28,226 | | 56,836 | Measured at amortized cost: | | | | | | Cash and cash equivalents | | | 218,148 | | 257,504 | Financial assets at amortized cost | | | 4,286 | | 2,714 | Accounts receivable and other receivables (including related parties) | | | 242,491 | | 203,115 | Restricted deposit (including current and noncurrent) | | | 503,731 | | 568,200 | Refundable deposits (including current and noncurrent) | | | 232,349 | | 203,982 | Subtotal | | | 1,201,005 | | 1,235,515 | Total | | $ | 1,254,925 | | 1,344,871 |
| (ii) | Financial liabilities |
| | | | | | | | December 31, | | December 31, | | | 2024 | | 2025 | | | | (in thousands) | Measured at amortized cost: | | | | | | Short-term unsecured borrowings | | $ | — | | 140 | Short-term secured borrowings | | | 503,700 | | 568,200 | Accounts payables and other payables (including related parties) | | | 160,940 | | 197,430 | Long-term unsecured borrowings (including current portion) | | | 34,500 | | 28,500 | Lease liabilities (including current and noncurrent) | | | 7,160 | | 4,218 | Guarantee deposits | | | 1,006 | | 1,005 | Total | | $ | 707,306 | | 799,493 |
The following, except for payables (including related parties) that are repayable within a year, are the contractual maturities of financial liabilities, including estimated interest payments of unsecured borrowings, secured borrowings and lease liabilities. | | | | | | | | | | | | | | | | Contractual | | Within 6 | | 6‑12 | | | | | | Over 5 | (in thousands) | | cash flows | | months | | months | | 1‑2 years | | 2‑5 years | | years | December 31, 2024 | | | | | | | | | | | | | | Non-derivative financial liabilities | | | | | | | | | | | | | | Short-term secured borrowings | | $ | 504,061 | | 504,061 | | — | | — | | — | | — | Long-term unsecured borrowings (including current portion) | | | 40,745 | | 4,079 | | 3,944 | | 7,591 | | 20,527 | | 4,604 | Lease liabilities | | | 7,449 | | 2,788 | | 1,062 | | 1,621 | | 1,978 | | — | Guarantee deposits | | | 1,006 | | 1,006 | | — | | — | | — | | — | | | $ | 553,261 | | 511,934 | | 5,006 | | 9,212 | | 22,505 | | 4,604 | December 31, 2025 | | | | | | | | | | | | | | Non-derivative financial liabilities | | | | | | | | | | | | | | Short-term unsecured borrowings | | $ | 140 | | 140 | | — | | — | | — | | — | Short-term secured borrowings | | | 568,518 | | 568,518 | | — | | — | | — | | — | Long-term unsecured borrowings (including current portion) | | | 31,556 | | 3,605 | | 3,547 | | 6,880 | | 17,524 | | — | Lease liabilities | | | 4,386 | | 989 | | 859 | | 1,385 | | 1,153 | | — | Guarantee deposits | | | 1,005 | | 1,005 | | — | | — | | — | | — | | | $ | 605,605 | | 574,257 | | 4,406 | | 8,265 | | 18,677 | | — |
The Company does not expect the cash flows included in the maturity analysis to occur significantly earlier or at significantly different amounts. i. Exposure to foreign currency risk The Company’s significant exposure to foreign currency risk was as follows: | | | | | | | | | | | | | | | December 31, 2024 | | December 31, 2025 | | | Foreign | | Exchange | | Functional | | Foreign | | Exchange | | Functional | (in thousands) | | currency | | rate | | currency | | currency | | rate | | currency | Financial assets | | | | | | | | | | | | | Monetary items | | | | | | | | | | | | | NTD | | 235,638 | | 32.785 | | 7,187 | | 409,509 | | 31.43 | | 13,029 | CNY | | 38,575 | | 7.1884 | | 5,366 | | 21 | | 7.0288 | | 3 | JPY | | 352,275 | | 156.1934 | | 2,255 | | 9,400 | | 156.5239 | | 60 | Financial liabilities | | | | | | | | | | | | | Monetary items | | | | | | | | | | | | | NTD | | 1,246,126 | | 32.785 | | 38,010 | | 1,472,661 | | 31.43 | | 46,855 | JPY | | 375,040 | | 156.1934 | | 2,401 | | 1,249 | | 156.5239 | | 8 |
ii. Sensitivity analysis The Company’s exposure to foreign currency risk arises from the translation of the foreign currency exchange gains and losses on cash and cash equivalents, accounts receivable, other receivable, accounts payable, other payable and lease liabilities that are denominated in foreign currency. Depreciation or appreciation of the USD by 10% against the New Taiwan Dollars (NTD), CNY and JPY at December 31, 2024 and 2025, while all other variables were remained constant, would have increased or (decreased) the net profit before tax of $2,560 thousand and $3,377 thousand, respectively. iii. Interest rate risk The Company’s short-term unsecured borrowings, secured borrowings and long-term unsecured borrowings carried floating interest rates and fixed interest rates. The Company’s exposure to changes in interest rates is mainly from floating-rate borrowings. Any change in interest rates will cause the effective interest rates of borrowings to change and thus cause the future cash flows to fluctuate over time. The following sensitivity analysis is determined based on the exposure to interest rate risk. For floating-rate debts, the analysis assumes that the balances of outstanding debts at the end of the reporting period had been outstanding for the entire year. For the Company’s floating-rate debts, assuming all other variables were remained constant, an increase or a decrease in the interest rate by 0.25% would have resulted in a decrease or an increase in the net profit before tax for the years ended December 31, 2024 and 2025 by $86 thousand and $71 thousand, respectively. | (d) | Fair value information |
i. Financial instruments not measured at fair value The Company considers that the carrying amounts of financial assets and financial liabilities measured at amortized cost approximate their fair values. ii. Financial instruments measured at fair value (1) Fair value hierarchy | | | | | | | | | | | | | | December 31, 2024 | | | Carrying | | Fair Value | (in thousands) | | Amount | | Level 1 | | Level 2 | | Level 3 | | Total | Financial assets measured at fair value through profit or loss | | | | | | | | | | | | Money market fund | | $ | 2,140 | | 2,140 | | — | | — | | 2,140 | Equity securities-unlisted company | | | 23,554 | | — | | — | | 23,554 | | 23,554 | Subtotal | | | 25,694 | | 2,140 | | — | | 23,554 | | 25,694 | Financial assets measured at fair value through other comprehensive income | | | | | | | | | | | | Equity securities-listed company | | | 27,932 | | 3,774 | | 24,158 | | — | | 27,932 | Equity securities-unlisted company | | | 294 | | — | | — | | 294 | | 294 | Total | | $ | 53,920 | | 5,914 | | 24,158 | | 23,848 | | 53,920 |
| | | | | | | | | | | | | | December 31, 2025 | | | Carrying | | Fair Value | (in thousands) | | Amount | | Level 1 | | Level 2 | | Level 3 | | Total | Financial assets measured at fair value through profit or loss | | | | | | | | | | | | Money market fund | | $ | 24,732 | | 24,732 | | — | | — | | 24,732 | Equity securities-unlisted company | | | 26,758 | | — | | — | | 26,758 | | 26,758 | Warrant-unlisted company | | | 1,030 | | — | | — | | 1,030 | | 1,030 | Subtotal | | | 52,520 | | 24,732 | | — | | 27,788 | | 52,520 | Financial assets measured at fair value through other comprehensive income | | | | | | | | | | | | Equity securities-listed company | | | 56,212 | | 7,278 | | 48,934 | | — | | 56,212 | Equity securities-unlisted company | | | 624 | | — | | — | | 624 | | 624 | Total | | $ | 109,356 | | 32,010 | | 48,934 | | 28,412 | | 109,356 |
(2) Valuation techniques and assumptions used in fair value measurement The fair value of financial instruments traded in active markets is determined with reference to quoted market prices. The fair value of financial instruments is based on the valuation techniques. The fair value using valuation techniques refers to the current fair value of other financial instruments with similar conditions and characteristics, or using a discounted cash flow method, or other valuation techniques which include model calculating with observable market data at the reporting date. The fair value of equity securities-unlisted company is determined by reference to market valuations for similar operating entities quoted in an active market based on the net assets value of investees. The significant unobservable input is primarily the liquidity discounts, 28% for 2025. The estimated fair value would increase (decrease) if the liquidity discount rate were lower (higher). (3) Transfer between levels of the fair value hierarchy There were no transfers between levels for the years ended December 31, 2024 and 2025. (4) Movement in financial assets included in Level 3 of fair value hierarchy | | | | | | | | | | | | | Financial assets | | | | | Financial assets | | at fair value | | | | | at fair value | | through other | | | | | through profit or | | comprehensive | | | (in thousands) | | loss | | income | | Total | January 1, 2024 | | $ | 21,650 | | 507 | | 22,157 | Addition | | | 5,628 | | — | | 5,628 | Disposal | | | (4,630) | | — | | (4,630) | Capital reduction of investment | | | (338) | | — | | (338) | Recognized in other comprehensive income | | | — | | (213) | | (213) | Recognized in profit or loss | | | 1,244 | | — | | 1,244 | December 31, 2024 | | $ | 23,554 | | 294 | | 23,848 |
| | | | | | | | | | | | | Financial assets | | | | | Financial assets | | at fair value | | | | | at fair value | | through other | | | | | through profit or | | comprehensive | | | (in thousands) | | loss | | income | | Total | January 1, 2025 | | $ | 23,554 | | 294 | | 23,848 | Acquisitions through business combinations | | | 18 | | — | | 18 | Addition | | | 3,153 | | 799 | | 3,952 | Disposal | | | — | | — | | — | Capital reduction of investment | | | (89) | | — | | (89) | Recognized in other comprehensive income | | | — | | (469) | | (469) | Recognized in profit or loss | | | 1,152 | | — | | 1,152 | December 31, 2025 | | $ | 27,788 | | 624 | | 28,412 |
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