Core Viewpoint - Semiconductor stocks in Hong Kong have shown strong performance, with several companies experiencing significant gains in their stock prices [1]. Group 1: Stock Performance - Shun Tai Holdings (01335) increased by 7.83%, reaching a price of 0.124 with a market capitalization of 302 million [2]. - InnoCare Pharma (02577) rose by 7.90%, with a latest price of 62.150 and a total market value of 555.87 billion [2]. - Shanghai Fudan (01385) saw a gain of 6.18%, priced at 33.180 and a market cap of 27.255 billion [2]. - Hua Hong Semiconductor (01347) grew by 5.96%, with a price of 41.800 and a market capitalization of 72.192 billion [2]. - Meijiayin Holdings (06939) increased by 4.44%, priced at 0.470 and a market cap of 24.4 million [2]. - SMIC (00981) rose by 2.80%, with a price of 51.450 and a total market value of 410.883 billion [2]. - Brainhole Technology (02203) increased by 2.65%, priced at 0.194 with a market cap of 15.5 million [2]. - Jingmen Semiconductor (02878) saw a rise of 2.25%, priced at 0.455 and a market cap of 113.6 million [2]. - China Electric Huada Technology (00085) increased by 2.11%, with a price of 1.450 and a market capitalization of 29.43 billion [2].

| 1. 股份分類 | 普通股 | 股份類別 | 不適用 | | 於香港聯交所上市 (註1) | | 是 | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | | 證券代號 (如上市) | 00085 | 說明 | | | | | | | | | | 法定/註冊股份數目 | | | 面值 | | 法定/註冊股本 | | | 上月底結存 | | | 30,000,000,000 | HKD | | 0.01 HKD | | 300,000,000 | | 增加 / 減少 (-) | | | | | | HKD | | | | 本月底結存 | | | 30,000,000,000 | HKD | | 0.01 HKD | | 300,000,000 | 本月底法定/註冊股本總額： HKD 300,000,000 股份發行人及根據《上市規則》第十九B章上市的香港預託證券發行人的證券變動月報表 截至月份: 2025年7月31日 狀態: 新提交 致：香港交易及結算所有限公司 公司名稱: 中國電子華大科技有限公司 呈交日期: 2025年8月1日 I. 法定 ...

Group 1 - The "China Electronic Cloud Artificial Intelligence Innovation Development Forum" was held in Shanghai, focusing on the development of the digital intelligence industry and AI innovation applications [1] - Shanghai is seizing strategic opportunities to deepen the layout of the entire AI industry chain, aiming to exceed 100,000 PetaFLOPS in intelligent computing capacity by the end of 2025 [1] - The city is developing a unique route of "4 basic models + N vertical models" and plans to enhance the quality of data supply systems and accelerate the construction of an AI "highland" [1] Group 2 - Challenges in China's AI industry include issues in chips, computing power, data, and ecosystem, with a focus on developing low-cost personal inference machines and improving the usability of domestic intelligent computing systems [3] - The KTransformers system is highlighted as a way to make AI more accessible through a storage-to-computation approach [3] - Companies are encouraged to embrace AI by identifying core issues, utilizing high-quality data, and fine-tuning foundational large models [3] Group 3 - AI is reshaping the world at an unprecedented speed, with high-quality datasets being crucial for training and optimizing large models [5] - The construction of high-quality datasets faces challenges such as unclear objectives, fragmented implementation paths, and weak technical foundations [5] - Strong policy support from national ministries and local governments is driving the development of high-quality datasets, with new data labeling and synthetic data methods providing solutions [5] Group 4 - China Electronics is establishing a complete integrated circuit industry chain and has developed a full-stack innovation base represented by various companies [7] - The CECSTACK cloud platform, developed by China Electronic Cloud, integrates general computing, intelligent computing, and supercomputing to support AI application development [7] - The company aims to inject new momentum into the "AI+" initiative by creating industry models in key sectors such as government, healthcare, and finance [7]

Company News - JD Logistics (02618.HK) has begun recruiting full-time delivery riders for its food delivery service [1] - Cao Cao Travel (02643.HK) announced the results of its share distribution, with a global offering of 44.1786 million H-shares, and a 21.14 times subscription for the Hong Kong public offering, raising approximately HKD 1.718 billion, with a share price of HKD 41.94 [2][3] - Kangji Medical (00867.HK) proposed to list its ordinary shares on the Singapore Exchange as a secondary listing [4][8] - China Electric Power Technology (00085.HK) expects a mid-term net profit of approximately HKD 135 million to HKD 150 million, compared to HKD 309.5 million in the same period last year [5][6] - Chang Gao Mei Group (08371.HK) reported a net profit attributable to shareholders of HKD 95.533 million for the year ending March 31, 2025, representing a year-on-year increase of 5.61% [7] - Li Ning (02331.HK) saw an increase of 6.4 million shares purchased by Li Jin at a price of approximately HKD 14.96 per share [8] - BOSS Zhipin (02076.HK) plans to issue 30 million new shares, aiming to raise a maximum of approximately HKD 2.2613 billion [9]

Core Viewpoint - *ST Gaohong (000851.SZ) reported a significant decline in revenue and net profit for Q1 2025, indicating ongoing financial challenges and a need for strategic reassessment. Financial Performance - As of March 31, 2025, *ST Gaohong's total revenue was 182 million yuan, ranking 57th among peers, a decrease of 182 million yuan or 50.01% year-on-year [1] - The net profit attributable to shareholders was -42.69 million yuan, ranking 82nd among peers, a decline of 149 million yuan or 140.08% year-on-year [1] - Operating cash flow showed a net inflow of 50.52 million yuan, ranking 20th among peers, an increase of 206 million yuan year-on-year, marking two consecutive years of growth [1] Financial Ratios - The latest debt-to-asset ratio was 82.15%, ranking 88th among peers, a decrease of 0.29 percentage points from the previous quarter but an increase of 29.91 percentage points year-on-year [3] - The gross profit margin was 16.53%, ranking 72nd among peers, an increase of 8.05 percentage points from the previous quarter and an increase of 8.42 percentage points year-on-year [3] - Return on equity (ROE) was -7.20%, ranking 86th among peers, a decrease of 10.74 percentage points year-on-year [3] Earnings Per Share and Turnover Ratios - The diluted earnings per share was -0.04 yuan, ranking 71st among peers, a decrease of 0.13 yuan or 142.55% year-on-year [3] - The total asset turnover ratio was 0.04 times, ranking 80th among peers, a decrease of 0.01 times or 17.54% year-on-year [4] - The inventory turnover ratio was 0.30 times, ranking 75th among peers, a decrease of 0.17 times or 36.58% year-on-year [4] Shareholder Information - The number of shareholders was 58,100, with the top ten shareholders holding 201 million shares, accounting for 17.38% of the total share capital [4] - The largest shareholder, Telecom Science and Technology Research Institute Co., Ltd., holds 12.86% of the shares [5]

Financial Performance - The Group achieved sales revenue of HK$2,349.0 million for the year 2024, representing a decrease of 22.2% compared to the previous year[13]. - Profit attributable to shareholders was HK$587.5 million, a decrease of 14.4% year-on-year, with basic earnings per share at HK28.94 cents[13][28]. - For the year ended December 31, 2024, the Group's revenue amounted to HK$2,349.0 million, representing a decrease of 22.2% compared to the previous year[31][35][37]. - The profit attributable to equity holders was HK$587.5 million, a decline of 14.4% year-on-year, with basic earnings per share at HK$28.94 compared to HK$33.82 in 2023[31]. - The total sales volume decreased by 9.7% year-on-year, influenced by sluggish market demand and inventory depletion among customers[34][36]. Dividend Recommendations - The Board recommends a dividend of HK9.0 cents per share for the year ended 31 December 2024, down from HK10.5 cents in 2023[15][18]. - The Board recommends a dividend of HK9.0 cents per share for the year ended 31 December 2024, totaling HK$182,688,000, a decrease from HK$213,137,000 in 2023[199]. Research and Development - The Group plans to enhance investment in research and development of security chips for mobile terminals, Internet of Things, and Internet of Vehicles[17][19]. - Research and development costs increased to HK$447.6 million, accounting for 19.1% of revenue, up from 14.0% in 2023, focusing on security SE chips and microcontroller unit chip products[42][44]. - The Group obtained 19 new patents, registered 1 new software copyright, and 3 new integrated circuits layout designs during the year[29]. Market Conditions - The global macroeconomic environment remains weak, with smart card demand expected to continue in a downward cycle, increasing competition and downward pressure on prices[16]. - The Group aims to dynamically adjust production and sales strategies to better meet customer needs amid changing market trends[16]. - The range of application for security SE chips and security microcontroller unit chips is expected to expand, presenting new market opportunities[16]. - The Group will closely monitor domestic and international market trends to identify potential market expansion opportunities[16]. Corporate Governance - The Company has complied with all applicable code provisions in the Corporate Governance Code throughout the year, except for one provision related to meeting attendance[63][67]. - The Group is committed to achieving high corporate governance standards, focusing on accountability, transparency, and fairness[62][66]. - The Board has ensured the adequacy of resources, staff qualifications, training programs, and budget for accounting, internal audit, and financial reporting functions[144]. - The Board consists of 87% male and 13% female members, with one female director currently serving[81]. - The Group has a Board Diversity Policy to ensure diversity among board members, currently having one female director[76]. Board Composition and Meetings - The Board comprised two executive directors, two non-executive directors, and four independent non-executive directors as of December 31, 2024, with separate roles for the chairman and the chief executive[70][73]. - The Board holds meetings at least 4 times a year, with management providing regular updates on the Group's performance and financial position[87]. - The attendance record of directors at meetings held in 2024 is documented in the annual report[88]. - The company reported a total of 7 board meetings attended by executive directors, with Chang Feng attending all 7 meetings[181]. - Non-executive director Chan Kay Cheung attended all 8 board meetings, demonstrating strong engagement[185]. Risk Management and Internal Controls - The audit committee is tasked with overseeing the Group's financial, risk management, and internal control systems, reporting to the Board on their effectiveness annually[134]. - The management is responsible for the design and implementation of risk management and internal control systems, while the audit committee oversees their effectiveness[136]. - The Group's risk management and internal control systems were reported as effective and adequate throughout the year ended December 31, 2024[142]. - The audit department is responsible for analyzing and assessing the adequacy and effectiveness of the Group's risk management and internal control systems, reporting directly to the audit committee[121]. Shareholder Communication - The Company maintains ongoing communication with shareholders through various channels, including the annual general meeting where management addresses shareholder inquiries[158]. - The Company's Shareholders' Communication Policy is available on its website, ensuring timely access to corporate information[162]. - Procedures for shareholders to convene a special general meeting require at least 10% of the paid-up capital[145]. - Shareholders holding at least 5% of the paid-up capital can request the Company to give notice of any resolution intended to be moved at a general meeting[151]. Employee and Management Policies - Employee benefit expenses for the year amounted to HK$352.6 million, with approximately 33.3% of the 470 employees being female[58][61]. - The Group emphasizes a strict recruitment policy and performance appraisal scheme, with remuneration policies aligned with industry practices and regularly reviewed[59]. - The company is focused on strategic appointments to strengthen its management and operational capabilities[176].

Financial Performance - The total revenue for the year ended December 31, 2024, was HKD 2,348,984,000, a decrease of 22.2% compared to HKD 3,019,120,000 in 2023[2] - The gross profit for the same period was HKD 1,134,963,000, down from HKD 1,298,063,000, reflecting a gross margin of approximately 48.3%[2] - The operating profit decreased to HKD 652,072,000 from HKD 757,257,000, representing a decline of 13.9%[2] - The net profit for the year was HKD 588,684,000, a decrease of 14.4% from HKD 687,365,000 in 2023[3] - Basic earnings per share for 2024 were HKD 28.94, down from HKD 33.82 in 2023, indicating a decline of 14.5%[3] - Profit attributable to equity holders of the company was HKD 587.5 million, down 14.4% from the previous year, with basic earnings per share at HKD 28.94 (2023: HKD 33.82)[25][22] - The company proposed a dividend of HKD 182,688,000, down from HKD 213,137,000 in the previous year, representing a decrease of 14.3%[3] - The company proposed a dividend of HKD 182.7 million for 2024, down from HKD 213.1 million in 2023, translating to HKD 0.09 per share (2023: HKD 0.105)[21] Assets and Liabilities - The total assets as of December 31, 2024, were HKD 4,174,001,000, a decrease from HKD 4,326,786,000 in 2023[5] - The total liabilities decreased to HKD 1,702,975,000 from HKD 2,180,565,000, reflecting a reduction of 21.9%[6] - The contract liabilities as of December 31, 2024, were HKD 134,229,000, significantly lower than HKD 392,756,000 in 2023[13] - Trade receivables increased to HKD 350.2 million in 2024 from HKD 315.0 million in 2023, with a notable rise in receivables within 30 days[23] - Trade payables rose to HKD 416.9 million in 2024, compared to HKD 390.5 million in 2023, with significant increases in payables within 30 days and 31 to 60 days[24] - The company held cash and cash equivalents of HKD 743.0 million as of December 31, 2024, down from HKD 1,107.5 million in 2023[32] - The company's net current assets were HKD 1,563.6 million as of December 31, 2024, compared to HKD 1,459.9 million in 2023[33] Income and Expenses - Total other income for 2024 was HKD 125.6 million, significantly up from HKD 69.1 million in 2023, driven by government grants of HKD 88.4 million[16] - Research and development costs recognized as expenses for the year amounted to HKD 447.6 million, an increase from HKD 421.4 million in 2023, primarily due to higher employee costs[17] - The net financing cost for 2024 was HKD 23.2 million, a decrease from HKD 20.8 million in 2023[18] - The company recorded a tax expense of HKD 45.1 million for 2024, a slight decrease from HKD 49.3 million in 2023[19] - Sales and marketing expenses were HKD 45.6 million, down from HKD 79.4 million in 2023, representing 1.9% of revenue compared to 2.6% the previous year[28] - Research and development costs rose to HKD 447.6 million, accounting for 19.1% of revenue, up from 14.0% in 2023[28] Market and Business Outlook - The company reported that nearly 100% of its revenue comes from the mainland China market, with over 90% of its non-current assets located in mainland China[15] - The company anticipates continued challenges in the smart card market due to increased competition and declining sales prices, but sees opportunities in the growing demand for security SE chips and main control chips[30] - The total sales volume for the integrated circuit design business decreased by 9.7% compared to the previous year, with a notable decline in SIM card and financial card chip sales due to market conditions[26] Corporate Governance - The board consists of two non-executive directors, two executive directors, and four independent non-executive directors[43] - The chairman of the board is Mr. Sun Jie, and the vice chairman and managing director is Mr. Chang Feng[43] - The company has a total of six board members, ensuring a diverse governance structure[43] - The independent non-executive directors include Mr. Chen Qichang, Mr. Qiu Hongsheng, Mr. Zou Canlin, and Ms. Huang Yaping[43] - The board composition reflects a balance between executive and non-executive oversight[43] - The company is committed to maintaining high standards of corporate governance through its board structure[43] - The presence of independent directors enhances the board's ability to make unbiased decisions[43] - The board's leadership is expected to drive strategic initiatives and company performance[43] - The governance framework aims to align the interests of shareholders and management[43] - The board is positioned to navigate future challenges and opportunities in the market[43] Employee Information - The company employed approximately 470 employees, with total employee benefits expenses amounting to HKD 352.6 million for the year[35] - The company plans to enhance its research and development efforts in security chips for mobile terminals, IoT, and vehicle networking applications[31]

Financial Performance - Revenue for the six months ended June 30, 2024, was HK$1,360,635,000, a decrease of 24.7% from HK$1,807,007,000 in the same period of 2023[7] - Gross profit for the period was HK$567,368,000, down 32.4% from HK$840,667,000 year-on-year[7] - Operating profit decreased to HK$354,569,000, representing a decline of 44.4% compared to HK$636,615,000 in the previous year[7] - Profit for the period attributable to owners of the Company was HK$309,545,000, a significant drop of 44.0% from HK$552,885,000 in 2023[7] - Basic earnings per share decreased to 15.25 HK cents, down 44.0% from 27.24 HK cents in the same period last year[7] - Total comprehensive income for the period was HK$293,128,000, a decrease of 38.6% from HK$477,164,000 in 2023[9] Expenses and Costs - Selling and marketing costs were HK$26,815,000, slightly up from HK$26,116,000 in 2023[7] - Administrative expenses rose to HK$238,040,000, compared to HK$207,794,000 in the same period last year[7] - The company reported finance costs of HK$19,530,000, down from HK$21,736,000 in the previous year[7] - Research and development costs for the six months ended June 30, 2024, amounted to HK$183,250,000, an increase of 12.5% from HK$162,991,000 in 2023[38] - Employee costs within R&D were HK$108,473,000, up from HK$97,079,000 in 2023, while material costs rose to HK$36,413,000 from HK$24,458,000[39] Assets and Liabilities - Total assets increased to HK$4,458,193, up from HK$4,326,786 as of December 31, 2023, representing a growth of 3.05%[11] - Total equity attributable to owners of the Company rose to HK$2,225,212, up from HK$2,146,221, reflecting an increase of 3.7%[13] - Non-current liabilities decreased significantly to HK$170,637 from HK$425,914, a reduction of 60.0%[13] - Trade and other receivables increased to HK$738,861, compared to HK$574,285 as of June 30, 2023, indicating a growth of 28.7%[11] - Inventories decreased to HK$712,178, down from HK$848,621, a decline of 16.0%[11] Cash Flow and Financial Position - Cash and cash equivalents at the end of the period reached HK$1,375,327, compared to HK$1,216,178 for the same period in 2023, marking an increase of 13.1%[19] - Net cash flows generated from operating activities were HK$146,006, a decrease of 62.3% from HK$387,497 in the previous year[17] - Cash flows from investing activities generated a net cash flow of HK$134,059, a significant improvement from a net outflow of HK$290,044 in the previous year[17] - The Group's net current assets decreased to HK$1,199.5 million as of June 30, 2024, from HK$1,459.9 million as of December 31, 2023, reflecting a decline of approximately 17.8%[86] Market and Operational Insights - Nearly 100% of the Group's revenue is attributed to the Mainland China market, indicating a strong regional focus[32] - The Group's non-current assets are over 90% located in Mainland China, emphasizing its operational concentration in this market[32] - The global demand for smart cards and secure element chips is expected to continue in a downward cycle, with intensified competition and declining product prices[83] Governance and Compliance - The Company did not purchase, sell, or redeem any of its shares during the six months ended 30 June 2024[95] - The Company has complied with all applicable code provisions in the Corporate Governance Code throughout the six months ended 30 June 2024, except for code provision C.1.6[96] - An independent non-executive director was unable to attend the special general meeting and the annual general meeting held on 28 June 2024 due to other engagements[97] Shareholder Information - China Electronics Corporation holds 40.03% of the shares in the Company, while (BVI) Holdings Company Limited holds 59.42%[93] - Huada Semiconductor has a 100% equity interest in (BVI) Holdings Company, which is deemed to hold 812,500,000 shares of the Company[93] - China Electronics Limited holds 58.07% equity interest in Huada Semiconductor, and CEC holds 81.66% equity interest in China Electronics Limited[93]

Financial Performance - Revenue for the six months ended June 30, 2024, was HKD 1,360,635 thousand, a decrease of 24.7% compared to HKD 1,807,007 thousand for the same period in 2023[12] - Gross profit for the same period was HKD 567,368 thousand, down 32.4% from HKD 840,667 thousand in 2023[3] - Operating profit decreased to HKD 354,569 thousand, a decline of 44.4% from HKD 636,615 thousand in the previous year[3] - Net profit for the period was HKD 308,772 thousand, representing a 44.0% decrease from HKD 551,366 thousand in 2023[4] - Basic earnings per share for the six months ended June 30, 2024, was HKD 15.25, down from HKD 27.24 in the same period last year[4] - Profit attributable to equity holders for the same period was HKD 309.5 million, down 44.0% year-on-year, with basic earnings per share at 15.25 HK cents (2023: 27.24 HK cents)[24][20] Assets and Liabilities - Total assets as of June 30, 2024, increased to HKD 4,458,193 thousand from HKD 4,326,786 thousand at the end of 2023[7] - Non-current assets rose to HKD 1,197,390 thousand, compared to HKD 1,112,203 thousand at the end of 2023[6] - Current assets totaled HKD 3,260,803 thousand, slightly up from HKD 3,214,583 thousand at the end of 2023[7] - Total liabilities increased to HKD 2,231,981 thousand from HKD 2,180,565 thousand at the end of 2023[9] - The net current asset value as of June 30, 2024, was HKD 1,199.5 million, down from HKD 1,459.9 million as of December 31, 2023[29] Expenses - The group incurred research and development costs of HKD 183.25 million for the six months ended June 30, 2024, compared to HKD 162.99 million in 2023, with employee costs accounting for HKD 108.47 million[16] - Selling and marketing expenses for the period were HKD 26.8 million, up from HKD 26.1 million in 2023, with the percentage of revenue increasing from 1.4% to 2.0%[25] - Administrative expenses for the six months ended June 30, 2024, were HKD 238.0 million, an increase of 14.6% compared to the same period last year, representing 17.5% of revenue, up from 11.5%[26] - Research and development costs for the same period were HKD 183.3 million, compared to HKD 163.0 million in 2023, accounting for 13.5% of revenue, up from 9.0%[26] - The group recorded a tax expense of HKD 34.24 million for the six months ended June 30, 2024, down from HKD 73.32 million in the previous year[17] Market and Operations - The company operates primarily in the mainland China market, with close to 100% of its revenue derived from this region[13] - The total sales volume decreased by 14.9% year-on-year, impacting revenue due to lower sales prices in the smart card and security chip market[25] - The company plans to closely monitor domestic market demand and actively explore potential customers to maintain its leading position in the smart card and security chip sectors[27] Innovation and Development - The group added 11 new patents and registered 1 new software copyright during the period, indicating ongoing investment in innovation despite market challenges[25] - The group recognized government grants of HKD 36.65 million in the first half of 2024, significantly higher than HKD 11.32 million in the same period of 2023[14] Cash and Financing - The company holds cash and cash equivalents of HKD 1,375.3 million as of June 30, 2024, compared to HKD 1,107.5 million as of December 31, 2023[28] - Bank and other borrowings amounted to HKD 493.1 million as of June 30, 2024, all due within one year and denominated in RMB, consistent with the previous year[29] - The group reported a net financing cost of HKD 10.93 million for the six months ended June 30, 2024, down from HKD 12.21 million in the previous year[15] Dividends and Shareholder Returns - The group did not declare any dividends for the six months ended June 30, 2024, consistent with the previous year[19] - The company has not declared any dividends for the six months ended June 30, 2024, consistent with the previous year[28] - The company has not repurchased or sold any of its shares during the six months ended June 30, 2024[31] Employee Information - The company employed approximately 450 employees as of June 30, 2024, with employee benefit expenses totaling HKD 162.5 million during the period[30]

Financial Performance - For the year 2023, the Group achieved sales revenue of HK$3,019.1 million, representing an increase of 21.6% compared to the previous year[6]. - Profit attributable to shareholders was HK$686.4 million, reflecting a 29.2% increase year-on-year[6]. - Basic earnings per share increased to HK33.82 cents from HK26.18 cents in 2022[12]. - The total sales volume for the year increased by 6.9% compared to last year, with bank card chip sales rising, while sales of third-generation social security card chips and identity authentication products saw a decline[14][16]. - Gross profit rose to HK$1,298,063, representing a 16.7% increase compared to HK$1,112,245 in the previous year[198]. - Operating profit improved to HK$757,257, a 19.8% increase from HK$631,945 in 2022[198]. - Profit for the year attributable to owners of the company was HK$686,431, up 29.2% from HK$531,431 in 2022[198]. - Total comprehensive income for the year reached HK$655,928, compared to HK$417,254 in 2022, marking a 57.2% increase[199]. - Total assets as of December 31, 2023, amounted to HK$4,326,786, up from HK$4,056,750 in 2022, reflecting a growth of 6.6%[200]. - Cash and cash equivalents decreased to HK$1,107,515 from HK$1,172,748 in the previous year[200]. - Trade and other receivables decreased to HK$574,285 from HK$731,544 in 2022, indicating a reduction of 21.5%[200]. - Inventories decreased slightly to HK$848,621 from HK$884,693 in 2022, a decline of 4.1%[200]. Dividend and Shareholder Returns - The Board recommends a dividend of HK10.5 cents per share for 2023, up from HK8.0 cents in 2022[8]. - Proposed dividend for the year is HK$213,137, an increase from HK$162,390 in 2022[198]. - Distributable reserves of the Company at December 31, 2023, amounted to HK$385,468,000, down from HK$407,119,000 in 2022[104]. - The company aims to provide stable dividends to shareholders, considering financial performance and future funding requirements when formulating dividend proposals[108][112]. Research and Development - The Group obtained 30 new patents, registered 3 new software copyrights, and 2 new integrated circuits layout designs in 2023[13]. - The Group plans to strengthen research and development in secure element chips for the Internet of Things and intelligent connected vehicles[9]. - Research and development costs for the year were HK$421.4 million, maintaining a steady percentage of 14.0% of revenue[19][20]. Market and Industry Outlook - The global demand for smart cards is expected to continue in a downward cycle, with intensified competition and declining selling prices anticipated in 2024[8]. - The Group aims to adjust production and sales strategies to provide more diverse and competitive products to meet customer needs[8]. - The Group's products are primarily used in identity authentication, financial payment, government utilities, telecommunications, Internet of Things, and intelligent connected vehicles[13]. - The integrated circuits market in Mainland China is highly competitive, with the group's performance depending on the successful execution of its business strategy[117]. Corporate Governance - The Company is committed to corporate governance practices and has complied with all applicable code provisions in the Corporate Governance Code throughout 2023[27]. - The Board consists of two executive directors, two non-executive directors, and three independent non-executive directors, with a clear separation of roles between the chairman and the chief executive[33]. - 42% of the Board members are independent non-executive directors, ensuring a strong independent element within the Board[39]. - The Board meets regularly, at least four times a year, and receives regular updates from senior management regarding business activities and developments[41]. - The Board has reviewed the implementation and effectiveness of the Board Diversity Policy, confirming that diversity has been achieved among Board members[37]. - The Company emphasizes the importance of diversity in the board's composition, considering factors such as gender, age, and professional experience[46]. Audit and Financial Reporting - The consolidated financial statements for the year ended 31 December 2023 have been audited by PricewaterhouseCoopers[166]. - The consolidated financial statements provide a true and fair view of the Group's financial position as at 31 December 2023, in accordance with Hong Kong Financial Reporting Standards[170]. - The audit committee oversees the Group's financial, risk management, and internal control systems, reporting to the Board on their effectiveness annually[63]. - Key audit matters included provisions for expected credit losses of trade receivables and provisions for inventories[177]. - The auditor's objective is to obtain reasonable assurance that the consolidated financial statements are free from material misstatement due to fraud or error[189]. Related Party Transactions - The Company has entered into a business services agreement with CEC for continuing connected transactions from July 1, 2021, to June 30, 2024[136]. - The Company considers all independent non-executive directors to be independent as per the Listing Rules[125]. - All related party transactions have been reviewed by independent non-executive directors and confirmed to be in accordance with relevant agreements and pricing policies[147]. Employee and Workforce - Employee benefit expenses for the year amounted to HK$337.8 million, with approximately 430 employees, of which 33.7% were female[26]. - The Company will invest more resources in training and recruiting high-performing female employees to promote them to senior management or directorship positions[39]. Environmental and Regulatory Compliance - The company is committed to environmentally-friendly operations and has achieved safe and environmentally-friendly operation for the year ended December 31, 2023[119][122]. - The group has complied with all relevant laws and regulations throughout the year ended December 31, 2023[121][123].