Group 1 - The stock of China Silver Technology in Hong Kong has dropped over 80% [1] - The stock had previously surged, increasing fourfold from May 20 to June 4 [1]

Company Overview - Chuanghua Silver Technology Holdings Limited is one of the top ten printed circuit board manufacturers in Hong Kong and China, founded in 1988 and listed on the Hong Kong Stock Exchange in 2006 [3] - The company has been developing LED lighting business since 2010 and emphasizes research and development in green lighting technology, holding over 20 patents in the LED field [3] Financial Performance - As of December 31, 2024, the company reported total revenue of 37.36 million yuan, a year-on-year decrease of 84.61%, and a net profit attributable to shareholders of -48.97 million yuan, down 70.34% year-on-year [2] - The gross profit margin stands at 5.72%, with a debt-to-asset ratio of 100.26% [2] Stock Performance - In the past month, Chuanghua Silver Technology has seen a cumulative increase of 16.67%, and since the beginning of the year, it has risen by 85.71%, outperforming the Hang Seng Index by 16.31% [2] - The stock closed at 0.144 HKD per share on May 20, with a significant increase of 58.24% and a trading volume of 82.96 million shares [1] Industry Context - The average price-to-earnings (P/E) ratio for the industrial engineering sector is 14.82 times, while the median is 2.45 times. Chuanghua Silver Technology has a P/E ratio of -1.95 times, ranking 171st in the industry [2] - Other companies in the sector have P/E ratios ranging from 0.32 to 2.44 times, indicating a challenging valuation environment for Chuanghua Silver Technology [2] Future Outlook - The company plans to continue expanding its LED and PCB businesses, leveraging its technological capabilities and partnerships to enhance competitiveness and market share [3] - The LED industry is expected to continue its robust growth due to rapid urbanization in China and favorable government policies [3]

Financial Performance - Revenue for the twelve months ended December 31, 2024, was HKD 40,340,000, a decrease of 84.6% compared to HKD 262,134,000 for the previous year[7] - Gross profit for the same period was HKD 2,308,000, down 88.4% from HKD 19,956,000[7] - The company reported a loss before tax of HKD 54,005,000, compared to a loss of HKD 33,796,000 in the previous year, indicating a 59.8% increase in losses[7] - The net loss attributable to owners of the company was HKD 52,879,000, compared to HKD 31,043,000 in the previous year, reflecting a 70.5% increase in losses[8] - Total comprehensive loss for the period was HKD 52,070,000, significantly higher than HKD 23,281,000 from the previous year, marking a 123.5% increase[8] - The basic and diluted loss per share was HKD 5.55, compared to HKD 4.64 in the previous year, indicating a worsening of financial performance[8] - The company reported a net loss of approximately HKD 53.61 million for the year ending December 31, 2024[17] - The loss before tax for the period was HKD 54,005,000, compared to a loss of HKD 33,796,000 in the previous year, indicating a worsening financial performance[21] - The basic and diluted loss per share for the twelve months ended December 31, 2024, was HKD 55.55, compared to HKD 46.38 for the previous year[26] - The sales of single-sided PCB decreased by 99.8% to HKD 106 thousand, while double-sided PCB sales decreased by 84.0% to HKD 33.09 million[41] - The gross profit margin for the twelve months ended December 31, 2024, was approximately 5.7%, down from 7.6% in the previous year[48] - The net loss attributable to shareholders increased to approximately HKD 52.9 million, compared to HKD 31.0 million in the previous year[48] Assets and Liabilities - Non-current assets increased to HKD 572,294,000 from HKD 529,860,000, representing an 8% growth[9] - Current assets decreased to HKD 105,883,000 from HKD 170,235,000, a decline of 37.8%[9] - Current liabilities increased to HKD 648,014,000 from HKD 666,805,000, a decrease of 2.8%[10] - The company's equity attributable to owners decreased to HKD 61,273,000 from HKD 65,321,000, a decline of 6.3%[10] - Current liabilities exceeded current assets by approximately HKD 542.13 million as of December 31, 2024[17] - The total assets as of December 31, 2024, were approximately HKD 678.2 million, a decrease from HKD 700.1 million in the previous year[49] - The current ratio as of December 31, 2024, was approximately 0.16, down from 0.26 in the previous year[49] - The total trade and other receivables, net of expected credit loss provisions, amounted to HKD 53,287,000, down from HKD 60,991,000 in the previous year[28] - The total trade payables decreased to HKD 34,748,000 in 2024 from HKD 45,522,000 in 2023, reflecting a reduction of about 23.8%[32] - The company's other payables increased to HKD 154,218,000 in 2024 from HKD 122,621,000 in 2023, representing a rise of approximately 25.7%[32] - The total assets pledged as collateral for bank financing increased to HKD 453,926,000 in 2024 from HKD 441,753,000 in 2023[39] Cash Flow and Financing - Cash and cash equivalents decreased by HKD 4.24 million, ending at HKD 4.63 million as of December 31, 2024[15] - The company generated a net cash outflow of HKD 19.24 million from operating activities for the year ending December 31, 2024[15] - The company raised HKD 46.34 million through new share issuance during the financing activities[15] - The company reported a significant increase in cash flow from investing activities, totaling HKD 40.71 million from the withdrawal of pledged bank deposits[15] - New bank loans obtained in 2024 amounted to HKD 13,088,000, significantly lower than HKD 299,282,000 in 2023[35] - The company issued convertible bonds with a principal amount of HKD 16,065,967.80 at an annual interest rate of 8%, with an initial conversion price of HKD 0.10 per share, representing a premium of about 132.56% over the market price at the time of agreement[57] - The net proceeds from the issuance of convertible bonds amount to approximately HKD 15.80 million, with HKD 14 million allocated for repaying due loans and HKD 1.80 million for working capital[58] Operational Strategies - The company plans to focus on cost control measures to improve operational performance and cash flow[17] - The company is in discussions with potential long-term tenants for property rentals in mainland China[18] - The company emphasizes the importance of increasing R&D efforts to upgrade products, particularly focusing on high-value PCB products for clean environmental applications[59] - The company plans to focus on credit management and optimizing the collection of trade receivables in its LED division, targeting shorter and more profitable receivable cycles[59] - The group continues to adjust operations to overcome challenges posed by geopolitical tensions and supply chain issues, focusing on cost control and quality improvement[61] - The group aims to attract more sales orders through strategic pricing policies and active marketing efforts[61] Shareholder and Capital Structure - The total number of issued and paid-up shares as of December 31, 2024, was 1,133,298,000, reflecting a stable share count compared to previous periods[36] - The company has conditionally agreed to issue 133,883,000 shares at a subscription price of HKD 0.10 per share, representing approximately 20.00% of the issued share capital prior to the issuance and about 16.67% after[55] - The total gross proceeds from the first subscription amount to approximately HKD 13.4 million, with a net amount of about HKD 13.2 million, of which HKD 11.2 million is intended for repaying due debts and HKD 2 million for working capital[55] - A second subscription agreement was established for 330,000,000 shares at HKD 0.108 per share, equating to about 41.08% of the issued share capital prior to the issuance and approximately 29.12% after[56] - The total gross proceeds from the second subscription are approximately HKD 35.64 million, with a net amount of about HKD 33.14 million, allocated as HKD 27.14 million for repaying outstanding project payables and HKD 6 million for working capital[56] - The company’s major shareholders include Jiang Zhenhao with 23.57%, China Jianlai with 19.41%, and He Xiumei also with 19.41% of the issued share capital as of December 31, 2024[69] - The company’s total issued shares as of December 31, 2024, was 1,133,298,394 shares[71] Governance and Compliance - The company has complied with the corporate governance code from January 1, 2024, to December 31, 2024, with some deviations noted[91] - The board of directors held regular meetings, typically more than four times a year, to review the company's performance and corporate actions[92] - The audit committee is composed of four independent non-executive directors as of December 31, 2024, ensuring compliance with listing rules[98] - The company faced non-compliance issues due to the resignation of independent non-executive directors but rectified these by appointing qualified replacements[95][96] - The audit committee has been authorized to investigate any activities within its scope and has reviewed the unaudited financial statements for the year ending December 31, 2024[99] - The company has adopted the standard code for securities trading by directors, confirming compliance by all current directors[97] - The company has established arrangements for employees to report concerns regarding financial reporting and internal controls[99] Management Changes - The executive director, Guo Junhao, was appointed on November 15, 2024, indicating a leadership transition[100] - The company has undergone several board member changes, including the resignation of the vice chairman on May 31, 2024, and the CEO on June 26, 2024[100] - The audit committee has a new chairman, Zhu Peiqi, appointed on September 6, 2024[100] - The company has established a compliance committee chaired by Zhu Peiqi, reflecting a focus on regulatory adherence[100] Future Outlook - The company is committed to maintaining transparency and governance through various committees, including remuneration and nomination committees[100] - The group plans to invest in a 51% stake in Hunan Fruit Intelligent Technology Co., Ltd., focusing on AI software development and related services[64] - The group has entered into a joint venture agreement to acquire a 51% stake in a company engaged in consumer goods trading and e-commerce for a total subscription price of HKD 510,000[65] - The group is actively pursuing opportunities in the AI sector and e-commerce to expand its market presence[64][65]

Financial Performance - For the twelve months ending December 31, 2024, the company reported a revenue of HKD 40,340,000, a decrease of 84.6% compared to HKD 262,134,000 for the previous year[4]. - The gross profit for the same period was HKD 2,308,000, down 88.4% from HKD 19,956,000 in the prior year[4]. - The company incurred a loss before tax of HKD 54,005,000, compared to a loss of HKD 33,796,000 in the previous year, representing a 59.6% increase in losses[4]. - The total comprehensive loss for the period was HKD 52,070,000, significantly higher than HKD 23,281,000 in the previous year, marking a 123.5% increase[5]. - The basic and diluted loss per share for the period was HKD 5.55, compared to HKD 4.64 in the previous year[5]. - The group reported a total revenue of HKD 40,340,000 for the twelve months ended December 31, 2024, a significant decrease from HKD 262,134,000 for the same period in 2023, representing a decline of approximately 84.6%[21]. - The group incurred a loss before tax of HKD 54,005,000 for the twelve months ended December 31, 2024, compared to a loss of HKD 33,796,000 for the same period in 2023, indicating a worsening of approximately 59.8%[21]. - The group reported a basic and diluted loss per share of HKD 55.56 for the twelve months ended December 31, 2024, compared to HKD 46.38 for the same period in 2023[28]. - The gross profit margin for the twelve months ending December 31, 2024, was approximately 5.7%, down from 7.6% in 2023[46]. - The loss attributable to shareholders increased to approximately HKD 52.9 million (2023: HKD 31.0 million), mainly due to reduced revenue and gross profit, along with increased financing costs[46]. Assets and Liabilities - The company's current liabilities exceeded current assets by HKD 542,131,000 as of December 31, 2024[7]. - The total assets less current liabilities amounted to HKD 30,163,000, a decrease from HKD 33,290,000 in the previous year[7]. - As of December 31, 2024, total assets were approximately HKD 678.2 million, down from HKD 700.1 million in 2023, while interest-bearing borrowings were approximately HKD 318.0 million[48]. - The current ratio was approximately 0.16 as of December 31, 2024, compared to 0.26 in 2023, indicating a decline in liquidity[48]. - As of December 31, 2024, the group has approximately HKD 296,035,000 in bank borrowings classified as current liabilities, with about HKD 293,037,000 in default[18]. - The company’s other payables increased from HKD 122,621,000 in 2023 to HKD 154,218,000 in 2024, marking a rise of approximately 25.7%[38]. - The aging analysis of trade payables showed a significant increase in amounts overdue by more than 180 days, rising from HKD 20,721,000 in 2023 to HKD 29,076,000 in 2024[40]. - The total trade receivables, net of expected credit loss provisions, decreased from HKD 60,991,000 in 2023 to HKD 53,287,000 in 2024, representing a decline of approximately 12.7%[32]. Revenue Breakdown - The revenue from single-sided PCBs dropped significantly by 99.8%, from HKD 48,431,000 in 2023 to HKD 106,000 in 2024[42]. - The revenue from double-sided PCBs decreased by 84.0%, from HKD 207,350,000 in 2023 to HKD 33,093,000 in 2024[42]. - The company’s revenue from the Chinese market decreased by 89.7%, from HKD 244,879,000 in 2023 to HKD 25,266,000 in 2024[44]. - The group's revenue for the review period was approximately HKD 40.3 million, a decrease of 84.6% compared to HKD 262.1 million in the same period last year, primarily due to a decline in PCB product sales[46]. Cost Management and Operational Focus - The group reported a total employee cost of HKD 17,028,000 for the twelve months ended December 31, 2024, down from HKD 29,230,000 in 2023, reflecting a reduction of approximately 41.6%[25]. - The company is focusing on cost control measures to enhance operational performance and cash flow[13]. - The company is focusing on credit management and optimizing the collection of trade receivables in its LED division, targeting shorter and more profitable projects[61]. - The company emphasizes the importance of increasing R&D efforts to upgrade products, particularly focusing on high-value PCB products for clean environmental applications[61]. Corporate Governance and Management Changes - The company has confirmed compliance with the corporate governance code for the period from January 1, 2024, to December 31, 2024, with some deviations noted[77]. - The audit committee currently consists of four independent non-executive directors as of December 31, 2024[85]. - The company has adopted the standard code for securities trading by directors, confirming compliance by all current directors[84]. - The company has re-complied with listing rules regarding independent non-executive directors after recent appointments[81]. - The board meetings are held regularly, with at least four meetings per year, ensuring high attendance and prompt responses[78]. - The company will continue to monitor and review its corporate governance practices to ensure compliance[79]. - Mr. Wang Bing has been appointed as the executive director effective from November 15, 2024[72]. - Mr. Zhang Weijia has resigned as an independent non-executive director effective from January 13, 2025[72]. - Ms. He Xiumei has been appointed as the executive director and CEO effective from January 16, 2025[72]. - The company's financial year-end date has been changed from December 31 to June 30, effective immediately[75]. Financing and Capital Management - The company completed a share subscription agreement for 133,883,000 shares at HKD 0.10 per share, raising approximately HKD 13.4 million, with plans to use HKD 11.2 million for debt repayment and HKD 2 million for working capital[55]. - The company has conditionally agreed to issue 330,000,000 shares at a subscription price of HKD 0.108 per share, representing approximately 41.08% of the issued share capital before the issuance and about 29.12% after[57]. - The net proceeds from the issuance are approximately HKD 33.14 million, with HKD 27.14 million allocated for repaying outstanding project payables and HKD 6 million for working capital[57]. - The company has entered into a convertible bond agreement for a total principal amount of HKD 16,065,967.80 with an annual interest rate of 8%, which will result in the issuance of 160,659,678 shares upon full conversion[59]. - The net proceeds from the convertible bond issuance are approximately HKD 15.80 million, with HKD 14.00 million used to repay due borrowings and HKD 1.80 million for general working capital[60]. - The capital debt ratio (interest-bearing borrowings to total assets) was approximately 46.89% as of December 31, 2024, compared to 45.92% in 2023[48]. Legal and Operational Challenges - The company is facing several lawsuits related to disputes with suppliers and contractors, with potential claims totaling approximately HKD 1,490,000[63]. - The company has experienced adverse impacts on its operations due to COVID-19 and ongoing geopolitical tensions, affecting its supply chain and overall economic conditions[64]. - The company has not purchased, redeemed, or sold any of its listed securities during the twelve months ending December 31, 2024[68]. Audit and Compliance - The audit committee has been authorized by the board to investigate any activities within its scope, ensuring proper arrangements for independent investigations and follow-up actions[86]. - The unaudited financial statements for the twelve months ending December 31, 2024, have been reviewed by the audit committee, which believes they comply with applicable accounting standards and regulations[86]. - The second interim report for 2024 will be sent to shareholders by March 31, 2025, and will include all information required by listing rules[87].

Financial Performance - For the six months ended June 30, 2024, the company reported a revenue of HKD 25,476,000, a decrease of 77.1% compared to HKD 111,077,000 in the same period of 2023[6] - The gross profit for the same period was HKD 1,328,000, down from HKD 7,780,000, indicating a significant decline in profitability[6] - The company recorded a loss before tax of HKD 15,661,000, compared to a loss of HKD 13,154,000 in the previous year, reflecting a worsening financial position[6] - The total comprehensive loss for the period was HKD 14,612,000, compared to HKD 13,832,000 in the prior year, showing an increase in overall losses[7] - The basic and diluted loss per share was HKD 1.95, compared to HKD 1.85 in the previous year, reflecting continued losses on a per-share basis[7] - The company reported a net loss of approximately HKD 15,584,000 for the six months ended June 30, 2024, with current liabilities exceeding current assets by about HKD 513,012,000[15] - The loss attributable to shareholders increased to approximately HKD 15.0 million, up from HKD 12.4 million in 2023, primarily due to the decline in revenue and gross profit[45] - The gross profit margin for the six months ended June 30, 2024, was approximately 5.2%, down from 7.0% in 2023[45] Assets and Liabilities - The company's total assets decreased to HKD 107,906,000 from HKD 170,235,000 as of December 31, 2023, indicating a reduction in asset base[8] - Current liabilities amounted to HKD 620,918,000, down from HKD 666,805,000, suggesting a slight improvement in short-term financial obligations[8] - The net asset value of the company was HKD 35,260,000, a significant increase from HKD 2,993,000 at the end of 2023, indicating improved equity position[9] - The total equity reported was HKD 79,731,000, with accumulated losses amounting to HKD 924,458,000[11] - The company's cash balance was HKD 8,958,000, down from HKD 40,714,000, indicating a decrease in liquidity[8] - As of June 30, 2024, the company had approximately HKD 137,292,000 in bank loans classified as current liabilities, with repayment dates planned for more than 12 months after the reporting period[17] - Interest-bearing borrowings amounted to approximately HKD 328.3 million, resulting in a debt-to-asset ratio of approximately 47.8%[46] Cash Flow and Investments - Cash outflow from operating activities was HKD 28,331,000 for the six months ended June 30, 2024, compared to HKD 418,000 in the same period last year[13] - The company generated a net cash inflow from investing activities of HKD 40,714,000, while cash outflow was HKD 54,124,000 for property, plant, and equipment purchases[13] - The company plans to use approximately HKD 11.2 million of the net proceeds from a recent share issuance to repay maturing debts and the remaining HKD 2 million for working capital[51] - The company made capital expenditures of HKD 54,124,000 on property, plant, and equipment during the period, significantly higher than HKD 5,543,000 in the same period last year[27] Revenue Breakdown - Single-sided PCB revenue was HKD 82,000, representing only 0.3% of total revenue, down from HKD 11,143,000 (10.0%) in the previous year[43] - Double-sided PCB revenue decreased to HKD 23,731,000 (93.2%) from HKD 96,752,000 (87.1%), a drop of HKD 73,021,000 (75.5%) year-over-year[43] - Multi-layer PCB revenue was HKD 1,663,000 (6.5%), down from HKD 3,182,000 (2.9%), a decrease of HKD 1,519,000 (47.7%) compared to the previous year[43] Operational Strategies - The company has plans for market expansion and new product development, although specific details were not disclosed in the interim report[5] - The company is focusing on cost control measures to improve operational performance and cash flow[16] - The company aims to optimize trade receivables management and focus on short-cycle, profitable projects in its LED division[54] - The company continues to adjust its operations to overcome challenges posed by the pandemic and geopolitical tensions, implementing cost control and quality improvement measures[55] Shareholder and Governance Matters - The company has conditionally agreed to issue 330,000,000 new shares at a subscription price of HKD 0.108 per share, representing a discount of approximately 16.28% to the closing price of HKD 0.129[52] - The total gross proceeds from the second subscription are approximately HKD 35.64 million, with a net amount of approximately HKD 33.14 million allocated for repaying outstanding project payables and operational funding[52] - The company has not declared or proposed any dividends during the interim period, consistent with the previous year[25] - The company has a structured approach to managing share options to ensure compliance with regulatory requirements[66] - The company has complied with the corporate governance code from January 1, 2024, to June 30, 2024, with some deviations noted[75] Legal and Compliance Issues - The company is involved in multiple ongoing legal disputes with suppliers and contractors, with claims totaling approximately RMB 52.8 million still in legal proceedings[58] - The company has a bank account subject to asset preservation orders totaling approximately HKD 1.05 million due to ongoing legal claims[58] Workforce and Management Changes - The workforce decreased to approximately 238 employees as of June 30, 2024, from 328 employees as of December 31, 2023[49] - The company is undergoing leadership changes, with the Executive Director and CEO set to resign in June 2024[79] - Changes in the board included the appointment of Ms. Pu Yanshan as an independent non-executive director effective February 28, 2024[73]

Financial Performance - Revenue for the six months ended June 30, 2024, was HKD 25,476,000, a decrease of 77% compared to HKD 111,077,000 for the same period in 2023[2] - Gross profit for the same period was HKD 1,328,000, down from HKD 7,780,000, indicating a significant decline in profitability[2] - The net loss for the period was HKD 15,584,000, compared to a net loss of HKD 13,134,000 in the previous year, reflecting a worsening financial position[3] - The loss attributable to the owners of the company for the six months ended June 30, 2024, was HKD 14,972,000, compared to a loss of HKD 12,389,000 for the same period in 2023[18] - The basic and diluted loss per share was HKD 1.95, compared to HKD 1.85 in the previous year, reflecting continued losses[3] - The gross profit margin for the six months ended June 30, 2024, was approximately 5.2%, down from 7.0% in 2023[30] - The group reported total revenue of HKD 25,476,000 for the six months ended June 30, 2024, a significant decrease of 77% compared to HKD 111,077,000 for the same period in 2023[13] - The group reported a significant decline in revenue from single-sided PCBs, dropping 99.3% to HKD 82 from HKD 11,143[28] - Revenue from double-sided PCBs decreased by 75.5% to HKD 23,731 from HKD 96,752[28] - Total revenue for the group fell by 77.1% to HKD 25,476 from HKD 111,077[28] Assets and Liabilities - Current liabilities exceeded current assets by HKD 513,012,000 as of June 30, 2024, indicating liquidity challenges[7] - The total assets less current liabilities amounted to HKD 65,641,000, an increase from HKD 33,290,000 in the previous year[4] - Non-current assets increased to HKD 578,653,000 from HKD 529,860,000, indicating investment in long-term assets[4] - As of June 30, 2024, the group classified approximately HKD 137,292,000 of bank borrowings as current liabilities, with repayment planned for more than 12 months after the reporting period[11] - Total assets as of June 30, 2024, were approximately HKD 686.6 million, a decrease from HKD 700.1 million as of December 31, 2023[31] - Interest-bearing borrowings were approximately HKD 328.3 million, resulting in a capital debt ratio of approximately 47.8%[31] - The net current liabilities were approximately HKD 513.0 million, with a current ratio of approximately 0.17[31] - The total amount of other payables increased to HKD 128,938 from HKD 122,621[24] - The group’s total assets pledged as collateral for bank financing amounted to HKD 454,232, up from HKD 441,753[27] Operational Strategies - Management is focusing on cost control measures to improve operational performance and cash flow[7] - The company is negotiating new terms with creditors regarding construction payables to extend repayment dates[9] - The group plans to obtain necessary financing to meet operational and financial needs in the near future[11] - The group is currently in discussions with banks to secure necessary financing to support its operations[11] - The company is in discussions with potential long-term tenants for property leasing in mainland China[8] - The company plans to invest in a 51% stake in Hunan Guoshi Intelligent Technology Co., Ltd., focusing on artificial intelligence software development and related services[38] - The board emphasizes the importance of increasing R&D efforts for product upgrades, particularly in high-value PCB products for clean environmental applications[39] - The company is focusing on optimizing trade receivables and intends to engage in shorter-cycle, profitable projects in its LED division[39] Employee and Cost Management - The group incurred total employee costs of HKD 8,432,000 for the six months ended June 30, 2024, down from HKD 12,008,000 in the same period of 2023[16] - The group employed approximately 238 employees as of June 30, 2024, down from 328 employees as of December 31, 2023[34] Corporate Governance - The company has confirmed compliance with the corporate governance code during the reporting period, with some disclosed deviations[46] - The company has adopted the standard code of conduct for directors trading in securities as per the listing rules, confirming compliance by all current directors for the six months ending June 30, 2024[49] - The audit committee, consisting of four independent non-executive directors, reviewed the unaudited financial statements for the six months ending June 30, 2024, and found them compliant with applicable accounting standards and listing rules[50] - The company ensures that all directors have the opportunity to contact the chairman or management independently for business updates and to address any questions[47] - The company has established arrangements for employees to report concerns regarding financial reporting and internal controls confidentially[50] - The company is committed to ongoing monitoring and review of its corporate governance practices to ensure compliance with the corporate governance code[47] Financing Activities - The company raised approximately HKD 13.4 million from a share subscription agreement, with plans to use HKD 11.2 million for debt repayment and HKD 2 million for working capital[36] - The company has conditionally agreed to issue 330,000,000 new shares at a subscription price of HKD 0.108 per share, representing approximately 41.08% of the issued share capital prior to the issuance[37] - The total gross proceeds from the subscription are approximately HKD 35.64 million, with a net amount of about HKD 33.14 million, of which HKD 27.14 million will be used to partially repay outstanding project payables[37] Dividend Policy - The group did not declare or propose any dividends during the interim period[17] - The company decided not to declare any interim dividend for the six months ended June 30, 2024[33]

Stock Options and Awards - For the fiscal year ending December 31, 2023, the total number of options and awards granted under all plans was 54,300,000 shares, representing approximately 8.11% of the weighted average of 669,415,394 shares issued in the relevant category[3] - There were no cancellations of options and awards during the fiscal year[3]

Business Performance and Economic Conditions - The company faced challenges from COVID-19 affecting human resources, supply chains, and overall economic conditions, leading to adverse business performance[9]. - Despite the lifting of restrictions in December 2022, the economic rebound was slower than expected, influenced by factors such as US interest rate hikes and geopolitical tensions[9]. - The company reported a net loss of approximately HKD 33,394,000 for the fiscal year ending December 31, 2023[52]. - The group’s revenue for the year was approximately HKD 262.1 million, a slight increase of 0.75% compared to HKD 260.2 million in the previous year[102]. - The loss attributable to shareholders was approximately HKD 31.0 million, a decrease of 24.6% from HKD 41.1 million in 2022[102]. Financial Management and Governance - The management team is focused on improving existing business operations and exploring opportunities to create value for shareholders[10]. - The board of directors confirmed compliance with corporate governance codes, ensuring transparency and accountability in operations[14]. - The management provided regular updates to the board regarding the company's performance and financial status, despite not distributing monthly accounts[15]. - The board typically holds at least four meetings annually to review the company's performance and consider corporate actions[15]. - The company has adopted the standard code of conduct for securities trading by directors, confirming compliance for the year ending December 31, 2023[18]. Risk Management and Internal Controls - The board reviewed the effectiveness of the group's risk management and internal control systems, concluding they are effective and adequate as of December 31, 2023[62]. - The group adopted a three-tier risk management approach to identify, assess, and manage significant risks, with operational units responsible for the first line of defense[65]. - The audit committee is responsible for reviewing and supervising the group's financial reporting and compliance procedures[26]. - The internal audit report's recommendations have been accepted by management and incorporated into daily operations[66]. Corporate Culture and Employee Management - The company emphasizes the importance of product and service quality, diversification, and sustainable development in its corporate culture and strategy[17]. - The company has adopted a competitive remuneration scheme for its employees, with promotions and salary increases based on performance evaluations[33]. - The company has established a remuneration committee consisting of three independent non-executive directors to review and determine the remuneration policies for all directors and senior management[30]. - The employee gender ratio as of December 31, 2023, was 1.59:1 (male to female)[40]. Shareholder Engagement and Communication - The company is committed to effective communication with shareholders, providing multiple channels for engagement and feedback[73]. - The company maintains a shareholder communication policy that has been deemed effective during the year[74]. - The company is dedicated to fostering trust and respect through effective communication with stakeholders, enhancing business strategy formulation[174]. Environmental, Social, and Governance (ESG) Initiatives - The company emphasizes its commitment to sustainable development through its environmental, social, and governance initiatives as a core part of its business strategy[149]. - The group has adopted a three-tier risk management approach to identify, assess, and manage significant risks and opportunities, including ESG-related risks[163]. - The company adheres to strict environmental regulations, with no violations reported in air, water, or waste emissions during the year[179]. - The company has established guidelines to ensure compliance with insider information disclosure requirements[66]. Operational Efficiency and Cost Control - The company implemented cost control measures and strategic pricing policies to attract more sales orders from existing and potential customers[9]. - The company aims to reduce costs by up to HKD 2.5 million in the fiscal year ending December 31, 2024, following successful cost control measures implemented last year[55]. - The company is focused on improving cash flow and operational efficiency through various measures, including cost control and potential leasing agreements[55]. Future Financing and Capital Raising - The company plans to raise up to RMB 140 million through debt and/or equity financing in the second half of 2024[57]. - A total of 133,883,000 new shares were issued on February 22, 2024, raising approximately HKD 13.2 million, with plans for further capital raising exceeding HKD 35 million in Q2 to Q3 2024[59]. - The company is negotiating with potential tenants in China for leasing unused factory space, expecting to receive RMB 20-40 million as advance rental payments or deposits[55]. Legal and Compliance Matters - The company is involved in ongoing legal disputes in China, with claims totaling approximately RMB 38,500,000 still in legal proceedings[127]. - The company has established mechanisms to ensure the board receives independent views and opinions, which are reviewed annually[42]. - The company has established an independent email account for whistleblowing to enhance the effectiveness of its reporting procedures[85].

Financial Performance - For the year ended December 31, 2023, the company reported a revenue of HKD 262,134,000, a slight increase of 0.7% compared to HKD 260,179,000 in 2022[2] - The gross profit for the year was HKD 19,956,000, representing a 9.2% increase from HKD 18,276,000 in the previous year[2] - The company incurred a loss before tax of HKD 33,796,000, an improvement of 22.7% compared to a loss of HKD 43,715,000 in 2022[2] - The net loss for the year was HKD 33,394,000, down from HKD 43,715,000 in the prior year, indicating a 23.6% reduction in losses[2] - Total comprehensive income for the year was HKD 10,113,000, compared to HKD 5,663,000 in 2022, marking an increase of 78.1%[3] - The basic and diluted loss per share improved to HKD 4.64 from HKD 6.41, a reduction of 27.5%[3] - The annual loss attributable to the company's owners was HKD 31,043,000 in 2023, an improvement from a loss of HKD 41,053,000 in 2022[34] - The group reported a loss attributable to shareholders of approximately HKD 31.0 million, a reduction of 24.6% from HKD 41.1 million in the previous year[72] Assets and Liabilities - Non-current assets increased to HKD 529,860,000 from HKD 447,053,000, reflecting an 18.5% growth[4] - Current assets decreased to HKD 170,235,000 from HKD 258,327,000, a decline of 34.1%[4] - The company's total liabilities remained stable at HKD 666,805,000, compared to HKD 666,743,000 in the previous year[4] - As of December 31, 2023, the company's current liabilities amounted to approximately HKD 666,805,000, which includes construction costs payable of about HKD 93,501,000 and bank borrowings of approximately HKD 299,282,000[20] - The group's current liabilities net amount was approximately HKD 496.6 million, with a current ratio of about 0.26, indicating a decrease from 0.39 in the previous year[83] - The cash and bank balance, including pledged bank deposits, was approximately HKD 49.7 million as of December 31, 2023, down from HKD 75.2 million in the previous year[83] Revenue Sources - PCB sales accounted for HKD 262,134,000 in 2023, compared to HKD 253,167,000 in 2022, reflecting a growth of approximately 3.8%[26] - Single-sided PCB revenue increased to HKD 48,431,000 from HKD 29,811,000, representing a growth of 62.4%[49] - Double-sided PCB revenue remained stable at HKD 207,350,000, a marginal increase of 0.8% from HKD 205,746,000[49] - Multi-layer PCB revenue decreased significantly to HKD 6,353,000 from HKD 17,610,000, a decline of 64.0%[49] - Revenue from the Chinese market (excluding Hong Kong) rose by 6.7% to HKD 244.9 million, while revenue from Hong Kong decreased by 42.5% to HKD 5.5 million[68] Cost Management and Financial Strategy - Management is focusing on cost control measures to enhance operational performance and cash flow from existing businesses[20] - The group continues to implement cost control measures and strategic pricing policies to attract more sales orders amid ongoing economic challenges[76] - The group is actively negotiating with creditors to extend repayment terms for engineering payments and other borrowings[3] - The company is considering issuing more equity to further raise new funds[5] Legal and Compliance Issues - The company is involved in a legal dispute with former director Mr. Lai, claiming HKD 1,640,000 in unpaid bonuses, while the company countersued for HKD 5,240,000 due to alleged wrongful receipt[93] - The company has ongoing legal claims in China totaling RMB 38,500,000 related to disputes with suppliers, contractors, and former employees, with a bank account frozen for approximately HKD 5,076,000 (RMB 4,568,000) as of December 31, 2023[93] - The company confirmed compliance with the corporate governance code throughout the year, except for certain exceptions regarding the distribution of management accounts to the board[111] Future Plans and Developments - The group plans to enhance R&D efforts to focus on high-value-added PCB products, particularly copper-based PCBs for clean environmental applications[71] - The group is developing a new production facility adjacent to existing factories, with a total construction area of 120,513.22 square meters[69] - Project A involves an investment of RMB 349,320,000 for a new factory with a total construction area of approximately 151,875.44 square meters, expected to generate at least RMB 26.68 million in annual tax revenue[102] - Project B entails an investment of RMB 571,170,000 for a new factory covering approximately 248,333.45 square meters, anticipated to yield at least RMB 40 million in annual tax revenue[103] Shareholder and Capital Management - The group has issued 133,883,000 new shares, raising approximately HKD 13.2 million to support funding needs[5] - The company issued a three-year convertible bond with a principal amount of HKD 15,262,320 at an annual interest rate of 8%, resulting in the issuance of 133,880,000 shares at an initial conversion price of HKD 0.114, which is a premium of approximately 3.64% over the closing price on the agreement date[79] - The anticipated credit loss for trade receivables was HKD 5.8 million, an increase from HKD 4.0 million in 2022[74] Employee and Governance - The group employed a total of 328 employees as of December 31, 2023, a decrease from 372 employees in the previous year[87] - The audit committee consists of four independent non-executive directors, with Dr. Lu resigning on November 30, 2023, leaving three members thereafter[118] - The appointment of a new independent non-executive director on February 28, 2024, restored compliance with the minimum requirement for independent non-executive directors[115]

Financial Performance - Revenue for the six months ended June 30, 2023, was HKD 111,077,000, a decrease of 41.7% compared to HKD 190,243,000 for the same period in 2022[6] - Gross profit for the same period was HKD 7,780,000, down 15.5% from HKD 9,211,000 in 2022[6] - The company reported a loss before tax of HKD 13,154,000, an improvement from a loss of HKD 20,689,000 in the previous year, indicating a 36.2% reduction in losses[6] - Total comprehensive loss for the period was HKD 13,832,000, compared to HKD 22,982,000 in 2022, reflecting a 39.9% decrease[6] - Basic and diluted loss per share improved to HKD 1.85 from HKD 3.05 in the previous year, indicating a 39.3% improvement[7] - The company reported a loss of approximately HKD 13,134,000 for the six months ended June 30, 2023, compared to a loss of HKD 20,689,000 for the same period in 2022[17] - The group reported a loss attributable to shareholders of approximately HKD 12.4 million, reduced from HKD 18.7 million in 2022, mainly due to increased other income and reduced selling and administrative expenses[42] Assets and Liabilities - Non-current assets as of June 30, 2023, amounted to HKD 449,032,000, slightly up from HKD 447,053,000 at the end of 2022[8] - Current assets decreased to HKD 247,937,000 from HKD 258,327,000 at the end of 2022, a decline of 4.0%[8] - Current liabilities were HKD 655,926,000, down from HKD 666,743,000 at the end of 2022, showing a decrease of 1.3%[9] - The company’s net asset value decreased to HKD 6,926,000 from HKD 18,794,000 at the end of 2022, a decline of 63.1%[9] - The company’s total equity as of June 30, 2023, was HKD 33,294,000, a decrease from HKD 59,841,000 at the beginning of the year[13] - The total assets of the group as of June 30, 2023, were approximately HKD 696.9 million, compared to HKD 705.4 million as of December 31, 2022[43] - Interest-bearing borrowings amounted to approximately HKD 356.8 million as of June 30, 2023, up from HKD 315.9 million as of December 31, 2022, resulting in a capital debt ratio of approximately 51.2%[43] - The net current liabilities were approximately HKD 408.0 million as of June 30, 2023, with a current ratio of approximately 0.38[43] Cash Flow and Financing - The net cash outflow from operating activities was HKD 418,000, significantly improved from HKD 16,661,000 in the previous year[15] - The financing activities generated a net cash inflow of HKD 7,102,000, compared to HKD 51,407,000 in the previous year, with a notable issuance of convertible bonds amounting to HKD 15,000,000[15] - The company is in discussions with banks to secure necessary financing to meet operational and financial needs[17] - A shareholder has agreed to provide financial assistance for the next twelve months to support the company's ongoing operations[17] Revenue Breakdown - The revenue from single-sided PCBs was HKD 11,143,000, down 68.3% from HKD 35,184,000 in the previous year[19] - The revenue from the Chinese market was approximately HKD 98,284,000, a decrease of 41.6% compared to HKD 168,387,000 in the previous year[41] - The sales of single-sided PCB decreased by 68.3% to HKD 11,143,000, while double-sided PCB sales decreased by 32.1% to HKD 96,752,000[40] Employee and Operational Costs - Total employee costs decreased to HKD 12,008,000 in the first half of 2023 from HKD 23,401,000 in the same period of 2022, indicating a reduction of 48.7%[5] - The company is adjusting to challenges posed by the COVID-19 pandemic and global economic factors, implementing cost control measures and strategic pricing policies to attract more sales orders[57] Shareholder and Equity Information - The company did not declare any dividends during the interim period, consistent with the previous year[23][24] - The total issued share capital of the company as of June 30, 2023, is 669,415,394 shares[64] - The company aims to attract and retain talent through its share option plans to enhance business development[67] Projects and Future Plans - The company is developing a new production facility in Zhongshan, Guangdong, with a total construction area of 120,513.22 square meters and an estimated total construction cost of RMB 270 million[52] - Project A involves an investment of RMB 349.32 million for a new building with a total construction area of approximately 151,875.44 square meters, expected to generate an annual tax level of at least RMB 26.68 million within one year during the eight-year supervision period[54] - Project B involves an investment of RMB 571.17 million for a new building with a total construction area of approximately 248,333.45 square meters, expected to generate an annual tax level of at least RMB 40 million within one year during the eight-year supervision period[55] - The company is in the early planning stages for a third phase development project in Zhongshan, contingent on the full utilization of existing facilities and sufficient funding[53] Governance and Compliance - The audit committee consists of four independent non-executive directors, with Dr. Lu Hailin serving as the chairman[78] - The audit committee reviewed the unaudited financial statements for the six months ended June 30, 2023, and confirmed compliance with applicable accounting standards and legal requirements[78] - The company confirmed compliance with the corporate governance code during the reporting period, with some deviations noted[75] - All current directors confirmed compliance with the standard code for securities trading during the six months ending June 30, 2023[77]