Core Viewpoint - The magnesium alloy die-casting technology is emerging as a new trend in the industry, with companies like LKK Technology (00558.HK) showcasing innovative solutions such as the TPI semi-solid thixotropic forming technology at the upcoming die-casting annual conference [1] Group 1: Industry Trends - The demand for magnesium alloy materials is increasing due to the industrial manufacturing shift towards lightweight and high-strength materials, positioning magnesium alloys as ideal substitutes in the die-casting industry [1] - The upcoming die-casting annual conference aims to explore whether magnesium alloy die-casting will become the next industry trend, gathering leading experts to discuss technological advancements and market trends [1] Group 2: Company Innovations - LKK Technology will present its TPI magnesium alloy semi-solid die-casting technology, which is a revolutionary process that enhances the company's technological capabilities and provides innovative momentum for the industry [1] - The TPI technology offers significant advantages in cost control, forming speed, product quality, energy efficiency, and safety, making it highly flexible for various production scenarios [1] Group 3: Market Demand and Growth Potential - The automotive industry's push for lightweight materials is expected to significantly increase the demand for magnesium alloys, with projections indicating a need for approximately 175 million tons of magnesium resources by 2030 if China's vehicle sales reach 39 million [2] - Emerging industries such as humanoid robots and drones are also expected to drive demand for magnesium alloys, with the humanoid robot market projected to require substantial quantities of lightweight materials for improved mobility and performance [2] - The eVTOL (electric vertical takeoff and landing) market is anticipated to grow exponentially, further boosting the demand for magnesium alloys, with a projected compound annual growth rate of 178.95% from 2018 to 2026 [3]

Financial Performance - For the six months ended September 30, 2024, the company's revenue was HKD 2,594.4 million, a decrease of 5.8% compared to HKD 2,753.7 million in 2023[8]. - Gross profit increased by 3.3% to HKD 744.6 million, with a gross margin of 28.7%, up 2.5 percentage points from 26.2%[8]. - Operating profit decreased by 20.6% to HKD 216.5 million, resulting in an operating margin of 8.3%, down 1.6 percentage points from the previous year[8]. - Net profit for the period was HKD 165.9 million, a decline of 19.1%, with a net profit margin of 6.4%, down 1.1 percentage points[8]. - The company reported a decrease in earnings per share to HKD 10.9, down 26.8% from HKD 14.9 in the previous year[8]. - Total comprehensive income for the period was HKD 173,742,000, significantly up from HKD 35,800,000 in the previous year, driven by a foreign exchange gain of HKD 7,819,000[79]. - The profit attributable to equity holders of the company was HKD 156,204,000, compared to HKD 35,800,000 in the prior year, indicating a substantial increase[79]. - Operating cash flow for the period was negative at HKD 166,811,000, a decline from a positive cash flow of HKD 175,721,000 in the same period last year[86]. Assets and Liabilities - The company's total assets increased by 2.2% to HKD 11,145.4 million, while net assets rose by 0.8% to HKD 4,049.1 million[8]. - Total liabilities rose to HKD 7,096,298,000, compared to HKD 6,889,724,000, indicating an increase of 3.0%[73]. - The company’s equity totaled HKD 4,049,114,000, up from HKD 4,016,099,000, marking a growth of 0.8%[71]. - The total outstanding borrowings amounted to HKD 1,709.0 million, with approximately 86.8% classified as short-term loans[27]. - The company’s total liabilities include both secured and unsecured bank borrowings, with unsecured borrowings at HKD 1,501,127,000 as of September 30, 2024[175]. Cash Flow and Financing - Cash and cash equivalents decreased by 26.5% to HKD 1,746.7 million, indicating a significant reduction in liquidity[8]. - The company recorded cash and cash equivalents of HKD 1,746.7 million as of September 30, 2024, down from HKD 2,375.2 million on March 31, 2024[27]. - The company raised new bank loans amounting to HKD 572,034,000 during the period, while repaying HKD 656,415,000 in bank loans[86]. - The company incurred capital expenditures of HKD 261,962,000 for the purchase of property, plant, and equipment, compared to HKD 171,066,000 in the previous year[86]. Business Segments - The company’s die-casting business revenue was HKD 1,622.8 million, a decline of 18.7%, while injection molding revenue increased by 30.1% to HKD 881.3 million[16]. - The CNC machining center business generated revenue of HKD 90.4 million, an increase of 13.7% compared to the same period last year[20]. - The group reported segment performance with die-casting machines generating HKD 169,093,000, injection molding machines HKD 51,265,000, and CNC machining centers HKD 5,708,000, totaling HKD 226,066,000[118]. Employee and Shareholder Information - The total employee cost for the review period was HKD 544.4 million, compared to HKD 511.4 million in 2023, reflecting an increase of approximately 6.4%[31]. - As of September 30, 2024, the company had 5,294 full-time employees, indicating a stable workforce size[31]. - The major shareholders include Girgio, holding 849,078,004 shares, representing 62.23% of the total equity[42]. - The company has provided various employee benefits, including mandatory provident funds and stock option plans, to enhance employee retention and performance[31]. Stock Options and Incentive Plans - The company granted a total of 27,540,000 stock options to 390 employees on September 24, 2021, as part of its stock option plan[30]. - The exercise price for the stock options was set at HKD 18.9, with a market price of HKD 19.86[55]. - The stock option plan is effective for 10 years from September 8, 2016, aimed at incentivizing eligible individuals for their contributions to the group's performance[157]. - The total number of stock options held as of September 30, 2023, is 25,520,000, with no options exercised or forfeited during the period[163]. Market Outlook and Strategy - The company anticipates a recovery in market conditions in the second half of the fiscal year 2024/25, supported by easing inflation and lower financing costs[14]. - The company aims to deepen its globalization strategy, having successfully opened production bases in the USA, Japan, Mexico, and Europe, with plans to expand further in Southeast Asia[22]. - The company plans to continue its market expansion strategy, focusing on new product development and technology advancements[54]. - The company has outlined a strategic plan for potential mergers and acquisitions to bolster its market position[54]. Research and Development - The company is focusing on the development of magnesium alloys, aluminum alloys, and high-performance composite materials to lead innovations in the manufacturing of new energy vehicles[25]. - Employee costs for R&D activities amounted to HKD 67,492,000, up from HKD 60,234,000 in 2023, indicating an increase of 20.5%[196]. - The research costs incurred were HKD 55,342, significantly higher than HKD 26,862 in 2023, representing a growth of 105.5%[196]. Compliance and Governance - The company has complied with the corporate governance code as set out in the listing rules during the review period[63]. - The audit committee reviewed the unaudited condensed consolidated interim financial information for the six months ended September 30, 2024[64]. - The board confirmed compliance with the standard code for securities transactions by directors throughout the review period[63].

Financial Performance - Revenue for the six months ended September 30, 2024, was HKD 2,594,448, a decrease of 5.8% compared to HKD 2,753,733 in the same period of 2023[2] - Gross profit increased by 3.3% to HKD 744,623, with a gross margin of 28.7%, up from 26.2%[2] - Operating profit decreased by 20.6% to HKD 216,520, resulting in an operating margin of 8.3%, down from 9.9%[2] - Net profit for the period was HKD 165,923, a decline of 19.1% from HKD 205,202 in the previous year[2] - Basic and diluted earnings per share were HKD 10.9, down 26.8% from HKD 14.9[6] - The total comprehensive income for the period was HKD 173,742, compared to HKD 35,800 in the previous year[11] - The company reported a net profit before tax of HKD 234,394 thousand for the period, reflecting operational efficiency despite revenue decline[39] - The profit attributable to equity holders was HKD 148.4 million, down 27.7% year-on-year[75] Assets and Liabilities - Total assets increased by 2.2% to HKD 11,145,412 from HKD 10,905,823[2] - Total liabilities decreased by 4.7% to HKD 1,709,041 from HKD 1,792,919[2] - Total liabilities increased to HKD 7,096,298 thousand, up from HKD 6,889,724 thousand, representing a growth of approximately 3.0%[16] - The total non-current liabilities reached HKD 2,803,113 thousand, an increase from HKD 2,734,139 thousand, reflecting a growth of approximately 2.5%[16] - The company’s total liabilities as of September 30, 2024, were HKD 2,436,486,000, compared to HKD 2,358,306,000 as of March 31, 2024[64] Cash Flow and Cash Management - Cash and cash equivalents decreased by 26.5% to HKD 1,746,722 from HKD 2,375,176[2] - Cash flow from operating activities showed a net outflow of HKD 166,811 thousand, compared to an inflow of HKD 175,721 thousand in the previous year, indicating a significant decline[18] - Cash and cash equivalents decreased by HKD 630,592 thousand, down from an increase of HKD 84,936 thousand in the previous year[18] - The cash and cash equivalents at the end of the period stood at HKD 1,746,722 thousand, down from HKD 666,635 thousand in the previous year[18] Segment Performance - Revenue from the die-casting segment was HKD 1,622,828 thousand, while injection molding generated HKD 881,269 thousand, contributing to a total revenue of HKD 2,594,448 thousand[29] - The total operating profit for the segments was HKD 226,066 thousand, reflecting a decrease compared to the previous period[29] - The CNC machining center generated revenue of HKD 90,351 thousand, contributing to the overall segment performance[29] - The revenue breakdown includes HKD 1,622,828 thousand from die-casting machines, HKD 881,269 thousand from injection molding machines, and HKD 90,351 thousand from machining centers[37] Costs and Expenses - For the six months ended September 30, 2024, the cost of raw materials and consumables was HKD 1,727,827,000, an increase from HKD 1,576,578,000 in 2023, representing a growth of 9.6%[42] - Employee costs for the same period rose to HKD 544,427,000 from HKD 511,355,000, reflecting an increase of 6.5%[42] - Research costs significantly increased to HKD 55,342,000, compared to HKD 26,862,000 in the previous year, marking a substantial rise of 105.5%[42] - The total sales cost for the period was HKD 1,849,825,000, down from HKD 2,033,245,000, representing a decrease of 9.1%[42] Dividends and Shareholder Information - The company declared an interim dividend of HKD 0.03 per share, totaling HKD 40,932,000, compared to HKD 61,938,000 in the previous year[57] - The interim dividend declared for the six months ending September 30, 2024, is HKD 0.03 per share, down from HKD 0.045 per share in 2023[94] Future Outlook and Strategies - The company plans to enhance its market expansion strategies and invest in new product development to drive future growth[39] - The company is actively engaging with several new energy vehicle manufacturers to establish cooperation, which is expected to drive future revenue growth[76] - The company is developing a dual-pressure die-casting machine and TPI semi-solid magnesium alloy die-casting machine, both of which are industry firsts[77] - The company is actively expanding its global footprint, having established production bases in the US, Japan, Mexico, and Europe, and is enhancing its sales network in Southeast Asia[84] Audit and Compliance - The audit committee, consisting of four independent non-executive directors, is responsible for reviewing and supervising the financial reporting process and internal control systems[99] - The audit committee has reviewed the unaudited condensed consolidated interim financial information for the six months ending September 30, 2024[101] - The interim results announcement will be published on the company's website and the Hong Kong Stock Exchange website[102]

Financial Performance - Revenue for the fiscal year ending March 31, 2024, was HK$5,837,373,000, a 1% decrease year-over-year[7] - Net profit attributable to equity holders was HK$484,118,000, down 9.0% compared to the previous year[7] - Gross profit margin increased slightly to 27.2%, up 0.1% from the previous year[8] - Net profit margin decreased to 8.9%, down 0.1% from the previous year[8] - Revenue for FY2024 reached HKD 5,837,373,000, with a net profit attributable to owners of HKD 484,118,000 and a net profit margin of 8.3%[15] - Revenue for the fiscal year ending March 31, 2024, was HK$5,837.373 million, a slight decrease from HK$5,896.349 million in the previous year[143] - Gross profit for the year was HK$1,588.260 million, down from HK$1,596.687 million in 2023[143] - Operating profit for the year stood at HK$658.751 million, compared to HK$677.474 million in the previous year[143] - Net profit attributable to the company's owners was HK$517.739 million, a decrease from HK$532.235 million in 2023[143] - Basic earnings per share were HK$0.353, down from HK$0.387 in the previous year[143] - Other comprehensive loss for the year was HK$115.482 million, an improvement from HK$269.906 million in 2023[144] - Total comprehensive income attributable to the company's owners was HK$402.257 million, up from HK$262.329 million in the previous year[144] Asset and Liability Changes - Total assets increased by 27.7% to HK$10,905,823,000[9] - Cash and cash equivalents surged by 292.4% to HK$2,375,176,000[9] - Total assets increased to HK$10,905.8 million in 2024 from HK$8,539.9 million in 2023, representing a growth of 27.7%[140] - Non-current assets rose to HK$3,274.9 million in 2024, up from HK$2,994.7 million in 2023, a 9.4% increase[140] - Current assets surged to HK$7,630.9 million in 2024 compared to HK$5,545.2 million in 2023, marking a 37.6% growth[140] - Cash and cash equivalents significantly increased to HK$2,375.2 million in 2024 from HK$605.4 million in 2023, a 292.4% rise[140] - Total liabilities grew to HK$6,889.7 million in 2024 from HK$4,684.2 million in 2023, a 47.1% increase[141] - Non-current liabilities jumped to HK$2,734.1 million in 2024 from HK$414.7 million in 2023, a 559.3% surge[141] - Current liabilities slightly decreased to HK$4,155.6 million in 2024 from HK$4,269.4 million in 2023, a 2.7% decline[141] - Equity attributable to owners of the company dropped to HK$1,919.3 million in 2024 from HK$3,855.7 million in 2023, a 50.2% decrease[140] - Non-controlling interests appeared at HK$2,096.8 million in 2024, compared to none in 2023[140] - Retained earnings increased to HK$2,470.4 million in 2024 from HK$2,204.4 million in 2023, a 12.1% growth[140] Market and Industry Trends - China's new energy vehicle sales reached 9.495 million units in 2023, a 37.9% year-over-year increase[12] - New energy vehicle exports from China grew by 77.6% to 1.203 million units in 2023[12] - The global electric vehicle market is projected to reach 70 million units in sales by 2030, with China leading the growth[12] - China's plastic products industry achieved a production volume of 74.885 million tons in 2023, with a year-on-year growth of 3.0%[13] Business Expansion and Strategy - The company is expanding overseas markets through direct investments and focusing on R&D for advanced technologies[7] - The company's injection molding machine business revenue increased by 19.7% year-on-year to HKD 1,425,401,000 in FY2024[15] - The company's R&D investment in FY2024 increased by 58.3% year-on-year to HKD 214 million, with the R&D team expanding to 678 people, a 23.95% increase[17] - The company launched the world's first 20,000T ultra-large die-casting machine, targeting the integration of entire chassis for B-class and larger vehicles[18] - The company introduced the world's first 10,000T dual-shot die-casting process, addressing limitations in large-scale integrated die-casting[19] - The company's technical testing center, covering 4,239 square meters, is equipped with various testing equipment, including 3000T and 5000T die-casting machines[20] - The company exported a 6000T ultra-large two-platen injection molding machine overseas, marking a significant step in its internationalization strategy[21] - The company's die-casting machine business revenue decreased by 4.2% year-on-year to HKD 4,243,537,000 in FY2024[15] - Overseas market revenue reached HKD 1,335,618,000, a year-on-year increase of 21.9%, with North America contributing HKD 428,078,000 (up 9.5%) and Latin America contributing HKD 250,534,000 (up 97.7%)[23] - The company has over 60 sales offices and service centers across more than 20 countries, with plans to expand production bases and service centers in strategic regions like Mexico, India, and North America[24] - The company has entered new business areas, including Engineering, Procurement, and Construction (EPC) and customized production simulation, aiming to enhance revenue and profitability[25] - The EPC model provides intelligent solutions, including MES systems and robotic arms, improving production efficiency and reducing operational costs[26] - The company is leveraging China's equipment renewal policy to boost demand for injection molding machines and promote green, energy-efficient technologies[27] - A high-end intelligent equipment project in Anhui Province, with a total investment of approximately HKD 1.23 billion, has commenced construction[29] - The company signed a contract for a 16,000T intelligent die-casting unit with Guangdong Hongtu, aiming to establish a large-scale integrated die-casting factory[30] - LK Machinery was ranked among the top 35 plastic machinery manufacturers and top 18 plastic injection molding machine companies in China in 2023[31] - The company won the "2023 Hong Kong ESG Award" for its commitment to sustainable development and green energy technologies[32] - LK Group launched a 16,000-ton super intelligent die-casting unit, optimizing materials, structure, and casting processes, reducing lubrication points and oil usage, and supporting multiple network connections for large-scale automotive integrated die-casting structural parts manufacturing[33] - LK Group's intelligent ultra-large die-casting equipment production base in Hefei, Anhui, with a total investment of 1 billion RMB, covers 221 acres and is expected to produce over 1,000 sets of intelligent die-casting machines annually, creating over 1,000 jobs[34] - LK Group signed a strategic cooperation agreement with NIO for ultra-large integrated die-casting, jointly developing die-casting units over 20,000 tons and establishing a die-casting demonstration base and research institute[35] - LK Group and Chery Automobile unveiled the world's first dual-shot die-casting process, overcoming limitations in filling distance and enabling large-scale integrated die-casting[36] - LK Group's founder, Liu Xiangshang, was awarded the "Hong Kong Outstanding Brand Leader Award" for his contributions to brand development in Hong Kong[37] Corporate Governance - The company's board of directors consists of 3 executive directors and 4 independent non-executive directors, ensuring a balanced structure with deep knowledge and experience in the group's business operations[44] - The board of directors meets at least four times a year, with regular meetings scheduled in advance and notices issued at least 14 days prior[44] - Independent non-executive directors are appointed for a fixed term of three years and can be terminated with at least three months' written notice[44] - The company has applied and complied with the Corporate Governance Code as set out in Appendix C1 of the Hong Kong Stock Exchange Listing Rules[44] - The company secretary ensures compliance with board procedures and provides advice on corporate governance and regulatory compliance matters[44] - Directors receive complete and sufficient information to make informed decisions, with board meeting documents distributed at least three days before the meeting[44] - Board meeting minutes, including detailed records of considerations and concerns raised by directors, are made available to all directors for review and comment[44] - Independent non-executive directors attend board meetings where significant conflicts of interest arise, ensuring impartial decision-making[44] - The board reviews corporate governance policies, director training, legal compliance, and adherence to the Corporate Governance Code[45] - The company has received annual independence confirmations from all independent non-executive directors, confirming their status as independent individuals[44] - The company has arranged appropriate insurance for directors and officers to cover potential legal actions, ensuring sufficient protection[46] - The roles of Chairman and CEO are separated, with Ms. Zhang Qiaoying serving as Chairman and Mr. Liu Zhuoming as CEO[48] - The company awarded a total of 24,936,635 share rewards under the Shenzhen Lijin equity incentive plan, with 1,100,000 rewards granted to directors and their associates[52] - The Remuneration Committee held two meetings during the year, focusing on adopting the equity incentive plan and renewing the consultancy agreement with Mr. Liu Xiangshang[50] - The Nomination Committee, chaired by Mr. Lu Dong, held one meeting to discuss the renewal of the consultancy agreement with Mr. Liu Xiangshang[53] - The company has adopted a Board Diversity Policy to achieve diversity in board composition, considering factors such as gender, age, cultural background, and professional experience[54] - The Chairman held a meeting with all independent non-executive directors on November 29, 2023, without the presence of other directors[49] - The company provided legal and regulatory updates to all directors and recorded their participation in professional development courses[47] - The company's senior management annual remuneration ranges from HKD 0 to HKD 5,500,000[51] - The company's directors attended all 10 board meetings and 1 annual general meeting during the year[49] - The company has 5,377 employees as of March 31, 2024, with 4,591 males (85%) and 786 females (15%)[55] - The audit committee held two meetings with the company's executive directors, management representatives, internal auditors, and external auditors to discuss audit, financial reporting, operational performance, and internal control matters[55] - The company paid HKD 4.85 million for audit services and HKD 1.535 million for non-audit services, totaling HKD 6.385 million[61] - The company has established a robust risk management and internal control system to achieve strategic objectives and protect shareholder investments and company assets[59] - The company has identified key risks that could affect its strategic objectives and has implemented risk management and mitigation measures to control risks at an acceptable level[63] - The internal audit department conducts independent audits to assess the effectiveness of the company's internal control system and reports directly to the audit committee[64] - The board of directors has reviewed and confirmed the effectiveness of the company's risk management and internal control systems, as well as the adequacy of resources, qualifications, and training for accounting, internal audit, and financial reporting functions[66] - The company plans to distribute dividends of no less than 30% of the distributable profits generated during the year, subject to the board's discretion and considering factors such as profitability, financial condition, and cash requirements[68] - The company paid an interim dividend of HK$0.045 per share for the period ended September 30, 2023, and proposed a final dividend of HK$0.05 per share for the year ended March 31, 2024, pending shareholder approval[77] - The company's main business includes the design, manufacture, and sale of hot and cold chamber die-casting machines, injection molding machines, CNC machining centers, and related accessories, as well as casting operations[76] - The company has strengthened investor relations by arranging factory visits and meetings with institutional investors, potential investors, financial analysts, and fund managers to provide a deeper understanding of the group's operations and development[71] - The company has adopted a new memorandum and articles of association to allow for hybrid and virtual general meetings, effective from September 6, 2022[75] - The company confirms compliance with relevant laws and regulations, with no significant violations or non-compliance that materially affected the business and operations during the year[79] - The company is committed to environmental policies and ensures that all factory operations strictly comply with relevant environmental laws and regulations[80] - The company maintains good relationships with employees, customers, and suppliers, with no significant disputes reported during the year[80] - The company's environmental, social, and governance (ESG) report for 2023/2024 is available on the company's website and the Hong Kong Stock Exchange website[81] - The company did not enter into any share-linked agreements during the year that would or might result in the issuance of shares[82] - The company's distributable reserves as of March 31, 2024, amounted to HKD 1,204,308,000, consisting of share premium of HKD 1,123,842,000 and retained earnings of HKD 80,466,000[83] - The company made charitable donations totaling HKD 791,000 during the year[83] - The company's indirect wholly-owned subsidiary, LK Machinery (Shenzhen) Co., Ltd., entered into a cooperation agreement for the sale of property in Shenzhen, Guangdong, China, with a monetary consideration of RMB 350,000,000 (approximately HKD 419,100,000) and a return property valued at RMB 1,249,000,000 (approximately HKD 1,495,600,000)[87] - As of the report date, the company is negotiating follow-up arrangements for the cooperation agreement related to the LK High-Tech Industrial Park urban renewal project[87] - No significant contracts were entered into between the company or its subsidiaries and the company's controlling shareholders during the year ended March 31, 2024[88] - Girgio holds 849,078,004 shares, representing 61.69% of the company's equity[94] - Zhang holds 3,105,000 shares directly, representing 0.22% of the company's equity[91] - Liu Zhuoming holds 1,000,000 shares through stock options, representing 0.07% of the company's equity[91] - Liu Xiangshang holds 5,722,750 shares, representing 0.42% of the company's equity[91] - HSBC International Trustee Limited holds 848,078,004 shares, representing 61.62% of the company's equity[94] - The company granted a total of 27,540,000 stock options to 390 employees on September 24, 2021[97] - Zhang was granted 120,000 stock options with an exercise price of HKD 19.86 per share[98] - Liu Zhuoming was granted 90,000 stock options with an exercise price of HKD 19.86 per share[98] - The stock options granted on September 24, 2021, have a vesting period until September 24, 2025[98] - The total number of shares that may be issued upon the exercise of all options under the share option plan and any other plans of the group shall not exceed 113,326,500 shares, equivalent to 10% of the company's issued share capital as of the approval date of the share option plan[104] - The maximum number of shares that may be issued upon the full exercise of all outstanding options under the share option plan and any other plans of the group shall not exceed 30% of the company's issued shares from time to time[104] - No single person shall be granted options that result in the total number of shares issued and to be issued due to the exercise of granted and to be granted options exceeding 1% of the issued shares in any 12-month period[105] - The share option plan aims to provide eligible individuals with the opportunity to own personal equity in the company, incentivize them to enhance their future performance and efficiency, and reward their past contributions[102] - The share option plan allows the board to grant options to eligible individuals, including full-time or part-time employees and directors of any member company of the group[103] - The options are divided into three tranches: 40% exercisable after the second anniversary of the grant date, 30% after the third anniversary, and 30% after the fourth anniversary, all until September 23, 2031[101] - The options are subject to specific performance indicators for the applicable fiscal year as per the evaluation mechanism[101] - The share option plan is designed to attract, retain, and maintain continuous cooperation with individuals whose contributions are or will be beneficial to the group's performance, development, or success[102] - The company granted a total of 24,936,635 fully vested shares of Shenzhen Lijin to 437 selected employees, representing approximately 4.07% of Shenzhen Lijin's issued shares as of the report date[108] - The fair value of the awarded shares on the grant date was RMB 17.47 per share of Shenzhen Lijin[110] - During the year, 1,100,000 shares with a total fair value of RMB 19,217,000.00 were granted to directors and/or their associates, while 23,836,635 shares with a total fair value of RMB 416,426,013.45 were granted to other employee participants[110] - The share incentive plan aims to reward and recognize suitable individuals who are directors and/or employees of the Shenzhen Lijin Group, enhance employee ownership and sense of belonging, and improve the company's governance structure and incentive mechanism[111] - The

Investment Rating - The report maintains a "Buy" investment rating for LK Tech (00558 HK) with a target price of HK$4.45 [2][3]. Core Insights - The overall performance of LK Tech has declined due to weak domestic demand in the die-casting business, but this has been partially offset by strong revenue growth in overseas markets. The net profit forecasts for FY2025 and FY2026 have been revised down to HK$440 million (-19.6%) and HK$499 million (-16.1%) respectively, with an introduction of a net profit forecast of HK$589 million for FY2027 [2]. - The company’s revenue for FY2024 is reported at HK$5.837 billion, a decrease of 1.0% year-on-year, with an operating profit margin down by 1.1 percentage points to 11.0%. Despite the overall poor performance, there has been an improvement compared to the first half of FY2024 [2]. - The overseas business has shown strong growth, with revenue reaching HK$1.3357 billion in FY2024, a year-on-year increase of 21.9%. Exports to Central and South America have been particularly strong, with revenue increasing by 97.7% to HK$250.5 million [2]. - The injection molding machine business has also seen significant revenue growth, increasing by 19.7% to HK$1.425 billion, driven by cyclical trends in the plastic production industry and domestic demand stimulated by government initiatives [2]. Financial Summary - For FY2023, total revenue was HK$5.896 billion with a net profit of HK$532 million and an EPS of HK$0.387. For FY2024, revenue is projected at HK$5.837 billion with a net profit of HK$484 million and an EPS of HK$0.353 [5][8]. - The forecasted revenues for FY2025, FY2026, and FY2027 are HK$6.215 billion, HK$6.593 billion, and HK$7.033 billion respectively, with corresponding net profits of HK$440 million, HK$499 million, and HK$589 million [5][8]. - The report indicates that the net profit margins for FY2025, FY2026, and FY2027 are expected to be 7.1%, 7.6%, and 8.4% respectively [2].

Financial Performance - Revenue for the year ended March 31, 2024, was HKD 5,837,373, a decrease of 1.0% compared to HKD 5,896,349 in 2023[2] - Gross profit for the same period was HKD 1,588,260, down 0.5% from HKD 1,596,687, with a gross margin of 27.2%[2] - Operating profit decreased by 2.8% to HKD 658,751, resulting in an operating margin of 11.3%[2] - Net profit for the year was HKD 517,739, a decline of 2.7% from HKD 532,235, with a net margin of 8.9%[2] - The company reported a basic and diluted earnings per share of 35.3 HK cents, down 8.8% from 38.7 HK cents[2] - The company reported a net profit attributable to shareholders of HKD 484,118,000 for the fiscal year ending March 31, 2024, compared to HKD 532,235,000 in the previous year, reflecting a decrease of approximately 9.0%[30] - Basic earnings per share decreased to HKD 35.3 from HKD 38.7 year-over-year, indicating a decline of about 8.8%[31] Assets and Liabilities - Total assets increased by 27.7% to HKD 10,905,823 from HKD 8,539,878 in the previous year[2] - Total equity increased to HKD 4,016,099, a rise of 4.2% from HKD 3,855,716[2] - The company reported a total liability of HKD 6,889,724,000 as of March 31, 2024, compared to HKD 4,684,162,000 in 2023, reflecting an increase of approximately 47.2%[18] - The total outstanding borrowings amounted to HKD 1,792,919,000 as of March 31, 2024, up from HKD 1,641,046,000 a year earlier, with approximately 86.9% classified as short-term loans[57] Cash Flow - Net cash generated from operating activities for the year ended March 31, 2024, was HKD 65,939,000, a decrease of 33.8% compared to HKD 99,375,000 in 2023[9] - Net cash used in investing activities was HKD (505,103,000), an improvement from HKD (540,635,000) in the previous year[9] - Net cash generated from financing activities significantly increased to HKD 2,225,304,000 from HKD 502,526,000 in 2023, indicating a strong financing position[9] - The total cash and cash equivalents at the end of the year reached HKD 2,375,176,000, up from HKD 605,365,000 in 2023, reflecting a net increase of HKD 1,786,140,000[9] Segment Performance - Revenue from the die-casting segment was HKD 4,243,537,000, while the injection molding segment generated HKD 1,425,401,000, and the CNC machining center contributed HKD 168,435,000, totaling HKD 5,837,373,000 in external sales[14] - The overall segment performance resulted in a profit of HKD 640,826,000 before tax, with the die-casting segment contributing HKD 541,180,000[14] - The company reported a decrease in external sales from the die-casting segment by 4.2% compared to the previous year, which was HKD 4,427,861,000[14] - Revenue from the injection molding machines segment increased to HKD 1,425,401,000 in 2024, up from HKD 1,191,013,000 in 2023, marking a growth of approximately 19.7%[24] Research and Development - Research costs surged to HKD 89,859,000 in 2024, up from HKD 27,958,000 in 2023, indicating a focus on innovation and development[22] - The company expanded its R&D team to 678 members, a year-on-year increase of 23.95%[44] - Research and development investment increased significantly to HKD 214 million, a year-on-year growth of 58.3%, indicating a strong commitment to innovation and technology development[44] Corporate Governance and Compliance - The company has not adopted several new accounting standards that are expected to have no significant impact on current or future reporting periods[12] - The company has complied with the corporate governance code as of March 31, 2024[67] - The audit committee, consisting of four independent non-executive directors, has reviewed the consolidated financial statements for the year ended March 31, 2024[69] - The company’s financial statements have been verified by its auditors, PricewaterhouseCoopers, but they do not provide an opinion on the preliminary announcement[70] Strategic Initiatives - The company has implemented an EPC model that optimizes production processes, improving efficiency and reducing operational costs, which is expected to enhance market competitiveness[54] - The introduction of a customized production simulation service is anticipated to become a key revenue growth channel for the company, helping clients visualize production outcomes[54] - The company’s strategy includes a focus on expanding domestic demand and consumer promotion policies to improve economic conditions[38] Market Trends - In 2023, China's new energy vehicle sales reached approximately 9.495 million units, a year-on-year increase of 37.9%, with a market penetration rate of 31.6%[39] - The global electric vehicle sales are projected to exceed 70 million units by 2030, with China, Europe, and the United States leading this growth[39] - The Ministry of Industry and Information Technology's policy to promote equipment upgrades is expected to stimulate demand in the industrial manufacturing sector, benefiting the company's injection molding business[56] Shareholder Information - The company plans to propose a final dividend of HKD 0.05 per share, totaling HKD 68,819,000 for the fiscal year ending March 31, 2024[29] - The interim dividend of HKD 0.045 per share was paid on January 9, 2024, and the proposed final dividend is HKD 0.05 per share, subject to shareholder approval on September 6, 2024[65] - The company will hold its annual general meeting on September 6, 2024, to discuss various matters including the proposed final dividend[72]

Financial Performance - For the six months ended September 30, 2023, the company's revenue was HKD 2,753,733,000, a decrease of 3.7% compared to HKD 2,860,238,000 in 2022[4] - Gross profit for the same period was HKD 720,488,000, down 8.4% from HKD 786,158,000, resulting in a gross margin of 26.2%, a decline of 1.3% year-on-year[4] - Operating profit decreased by 20.5% to HKD 272,858,000, with an operating margin of 9.9%, down 2.1% from the previous year[4] - Net profit attributable to shareholders was HKD 205,202,000, reflecting a 24.3% decrease from HKD 271,193,000, with a net profit margin of 7.5%, down 2.0%[4] - Basic and diluted earnings per share for the period were both HKD 14.9, compared to HKD 19.7 in the same period last year[84] - The group reported total revenue of HKD 2,753,733,000 for the six months ended September 30, 2023, compared to HKD 2,860,238,000 for the same period in 2022, reflecting a decrease of 3.7%[120] - The operating profit for the group for the six months ended September 30, 2023, was HKD 234,394,000, down from HKD 324,230,000 in the same period of the previous year, indicating a decline of 27.8%[120] - The group’s segment performance showed a profit of HKD 253,578,000 for the six months ended September 30, 2023, compared to HKD 361,147,000 in the same period of 2022, a decrease of 29.9%[120] Assets and Liabilities - The total assets increased to HKD 8,662,312,000, a growth of 1.4% year-on-year, while total borrowings rose by 8.0% to HKD 1,771,639,000[4] - Total assets as of September 30, 2023, amounted to HKD 8,662,312, an increase from HKD 8,539,878 as of March 31, 2023[81] - Total liabilities increased to HKD 4,831,108 from HKD 4,684,162, reflecting a rise in current liabilities[81] - The group reported trade payables of HKD 1,103,143,000 as of September 30, 2023, down from HKD 1,192,733,000 as of March 31, 2023[164] - The group has a total of HKD 1,771,639,000 in borrowings as of September 30, 2023, compared to HKD 1,641,046,000 as of March 31, 2023[158] Cash Flow and Investments - The company maintained a strong cash flow position, with cash and cash equivalents increasing by 10.1% to HKD 666,635,000[4] - Cash and cash equivalents amounted to HKD 666,635,000, an increase from HKD 605,365,000 as of March 31, 2023[22] - Operating cash flow for the six months was HKD 175,721,000, a significant improvement from a cash outflow of HKD 83,363,000 in the same period last year[94] - The company made significant investments in property, plant, and equipment totaling HKD 171,066,000 during the period[94] - The company plans to utilize the remaining HKD 8,602,000 for purchasing property, plant, and equipment in the next six months[55] Market and Segment Performance - The demand for die-casting machines remained stable, with sales revenue reaching HKD 1,996,628,000, a decrease of 2.6% year-on-year[10] - The injection molding segment showed a significant recovery, achieving sales revenue of HKD 677,626,000, an increase of 27.5% compared to the second half of 2023[12] - CNC segment revenue decreased to HKD 79,479,000, a year-on-year decline of 47.1% due to underperformance in overseas markets[14] - The company anticipates improved performance in the CNC segment as downstream market demand recovers and delivery cycles are realized[16] Strategic Initiatives - The company is actively expanding its overseas market presence and improving internal management to adapt to changing market conditions[9] - The company plans to expand its overseas market presence by establishing new R&D and service centers in the US, Germany, Mexico, and India[18] - A strategic cooperation agreement for the 16,000T super-large intelligent die-casting unit has been signed, marking a significant advancement in integrated die-casting technology[18] - The introduction of high-quality strategic investors is expected to enhance the company's global competitiveness in the die-casting machine market[21] Employee and Shareholder Information - Employee costs increased to HKD 511,355,000, up from HKD 462,309,000 in the previous year[28] - A total of 27,540,000 stock options were granted to 390 employees under the stock option plan as of September 24, 2021[39] - The company adopted a share award plan on October 28, 2015, aimed at rewarding employees and retaining talent[46] - The interim dividend declared is HKD 0.045 per share, an increase from HKD 0.04 per share in the previous year[65] Compliance and Governance - The audit committee has reviewed the interim financial data for the six months ending September 30, 2023, confirming compliance with relevant accounting standards[71] - The company has maintained compliance with the corporate governance code throughout the review period[68] - The company will hold a special general meeting on December 22, 2023, to seek shareholder approval for the equity incentive plan[62] Risk Management - The company has not made any significant changes to its risk management policies since the last reporting period[107] - The financial risk factors include market risk, credit risk, and liquidity risk, which the company continues to monitor closely[106]

Revenue and Profit Performance - Revenue for the six months ended September 30, 2023, decreased by 3.7% to HKD 2,753,733 thousand compared to HKD 2,860,238 thousand in the same period last year[2] - Gross profit declined by 8.4% to HKD 720,488 thousand, with a gross margin of 26.2%, down from 27.5% in the previous year[2] - Operating profit dropped by 20.5% to HKD 272,858 thousand, with an operating profit margin of 9.9%, compared to 12.0% in 2022[2] - Net profit attributable to the company's owners decreased by 24.3% to HKD 205,202 thousand, with a net profit margin of 7.5%, down from 9.5%[2] - Basic and diluted earnings per share were HKD 14.9, a 24.3% decrease from HKD 19.7 in the same period last year[2] - Revenue for the first half of fiscal year 2024 reached HKD 2,753,733,000, a decrease of 3.7% year-over-year, with net profit attributable to owners at HKD 205,202,000, down 24.3% year-over-year[34] - Gross margin was 26.2%, a decrease of 1.3% year-over-year, while operating profit margin was 9.9%, down 2.1% year-over-year[34] - The company's attributable profit decreased to 205,202 thousand HKD in 2023 from 271,193 thousand HKD in 2022[25] - Basic earnings per share decreased to 14.9 HK cents in 2023 from 19.7 HK cents in 2022[25] Segment Performance - The Die Casting Machines segment contributed HKD 2,025.84 million in revenue, representing the largest share among the three main business segments[13] - The Injection Molding Machines segment generated HKD 677.63 million in revenue, while the CNC Machining Centers segment contributed HKD 85.24 million[13] - Segment performance showed a profit of HKD 241.58 million for Die Casting Machines and HKD 19.21 million for Injection Molding Machines, while CNC Machining Centers reported a loss of HKD 7.21 million[13] - Revenue from die-casting machines decreased to 1,996,628 thousand HKD in 2023 from 2,050,390 thousand HKD in 2022[15] - Revenue from injection molding machines increased to 677,626 thousand HKD in 2023 from 659,510 thousand HKD in 2022[15] - Revenue from CNC machining centers significantly dropped to 79,479 thousand HKD in 2023 from 150,338 thousand HKD in 2022[15] - Die-casting machine sales revenue was HKD 1,996,628,000, a decrease of 2.6% year-over-year, with sufficient orders on hand for the full fiscal year[35] - Injection molding machine segment revenue recovered to HKD 677,626,000, a 27.5% increase compared to the second half of fiscal year 2023 and a 2.7% year-over-year growth[37] - CNC machining center revenue decreased to HKD 79,479,000, a 47.1% year-over-year decline, but is expected to improve in the second half of the fiscal year[38] Financial Position and Cash Flow - Total assets increased by 1.4% to HKD 8,662,312 thousand as of September 30, 2023, compared to HKD 8,539,878 thousand as of March 31, 2023[2] - Cash and cash equivalents rose by 10.1% to HKD 666,635 thousand as of September 30, 2023, from HKD 605,365 thousand as of March 31, 2023[2] - Total borrowings increased by 8.0% to HKD 1,771,639 thousand as of September 30, 2023, compared to HKD 1,641,046 thousand as of March 31, 2023[2] - The company's equity attributable to owners decreased by 0.6% to HKD 3,831,204 thousand as of September 30, 2023, from HKD 3,855,716 thousand as of March 31, 2023[2] - Operating activities generated a net cash inflow of HKD 175.72 million, compared to a net cash outflow of HKD 83.36 million in the same period last year[8] - Net cash used in investing activities increased to HKD 268.65 million from HKD 249.65 million year-over-year[8] - Net cash from financing activities decreased significantly to HKD 177.87 million from HKD 425.77 million in the previous year[8] - The company's cash and cash equivalents increased by HKD 84.94 million, reaching HKD 666.64 million at the end of the period[8] - Total assets increased to 8,662,312 thousand HKD as of September 30, 2023, from 8,539,878 thousand HKD as of March 31, 2023[14][15] - Total liabilities increased to 4,831,108 thousand HKD as of September 30, 2023, from 4,684,162 thousand HKD as of March 31, 2023[14][15] - As of September 30, 2023, the company's cash and cash equivalents amounted to HKD 666,635,000, up from HKD 605,365,000 on March 31, 2023[43] - The company's capital gearing ratio was approximately 28.8% as of September 30, 2023, compared to 26.9% on March 31, 2023[43] - The company's total outstanding borrowings were HKD 1,771,639,000 as of September 30, 2023, with 86.7% being short-term loans[43] Other Income and Expenses - Other income, including government subsidies and rental income, increased to 106,376 thousand HKD in 2023 from 77,282 thousand HKD in 2022[15] - The company recognized 38,889 thousand HKD as other income from forfeited deposits related to a city renewal project[16] - The company received government subsidies related to self-developed product sales and R&D in China, totaling 18,637 thousand HKD in 2023[16] - Exchange loss net amount decreased to 6,983 thousand HKD in 2023 from 22,217 thousand HKD in 2022[17] - Investment property fair value decreased by 272 thousand HKD in 2023 compared to an increase of 11,015 thousand HKD in 2022[17] - Employee costs increased to 511,355 thousand HKD in 2023 from 462,309 thousand HKD in 2022[18] - Research costs increased to 26,862 thousand HKD in 2023 from 13,435 thousand HKD in 2022[18] - Bank loan interest increased to 39,120 thousand HKD in 2023 from 26,277 thousand HKD in 2022[19] - Capitalized borrowing costs for property, plant, and equipment were calculated at a capitalization rate of 3.8% in 2023[19] - Current tax expense in China decreased to 32,082 thousand HKD in 2023 from 50,158 thousand HKD in 2022[20] - Deferred tax liabilities for unremitted earnings increased to 34,417 thousand HKD in 2023 from 30,689 thousand HKD in 2022[23] Corporate Governance and Compliance - The company has complied with all the code provisions of the Corporate Governance Code set out in Appendix 14 of the Listing Rules during the review period[56] - The Audit Committee consists of four independent non-executive directors: Mr. Tsang Yiu Keung, Dr. Lui Ming Wah, Dr. Lau Shiu Chai, and Mr. Luk Tung, with Mr. Tsang Yiu Keung serving as the Chairman[57] - The Audit Committee has reviewed the unaudited condensed interim financial information of the group for the six months ended September 30, 2023[58] - The external auditor, PricewaterhouseCoopers, has reviewed the unaudited condensed interim financial information for the six months ended September 30, 2023, in accordance with Hong Kong Standard on Review Engagements 2410[58] - The company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers as set out in Appendix 10 of the Listing Rules, and all directors confirmed full compliance during the review period[57] - The Board of Directors has the discretion to determine the vesting of awards on an overall or individual basis, regardless of the termination of employment or change of control of the company[55] - The 2023/24 interim report containing all information required by the Listing Rules will be dispatched to shareholders and made available on the company's website[60] - The executive directors as of the announcement date are Ms. Zhang Qiaoying, Mr. Liu Zhuoming, and Mr. Xie Xiaosi, while the independent non-executive directors are Dr. Lau Shiu Chai, Dr. Lui Ming Wah, Mr. Tsang Yiu Keung, and Mr. Luk Tung[59] Dividends and Shareholder Information - The company declared an interim dividend of HK$0.045 per share, totaling HK$61,938,000, an increase from HK$55,056,000 in the previous year[27] - Interim dividend declared at HK$0.045 per share for the six months ended September 30, 2023, compared to HK$0.04 per share in 2022[48] - Shareholder registration will be suspended from December 20 to December 22, 2023, for the interim dividend eligibility[54] - No purchase, sale, or redemption of the company's listed securities during the six months ended September 30, 2023[49] - No unvested, vested, canceled, or lapsed awards under the share incentive plan during the 2022/23 fiscal year[54] Market and Strategic Developments - The company's global market share for large die-casting machines remains above 90%, highlighting its leading position in the automotive integrated die-casting industry[36] - The company expanded its customer base in the automotive chassis integrated die-casting field, securing new clients from both domestic and international markets[36] - New product launches in the injection molding machine segment, including the ELETTRICA series and VARIA series, contributed to revenue recovery and market competitiveness[37] - The company anticipates better development opportunities for the CNC segment with the gradual production of new five-axis gantry machining centers[38] - The company plans to expand overseas markets by establishing new R&D centers, service centers, and production bases in the US, Germany, Mexico, and India, building on its existing network of over 60 sales offices and service centers in more than 20 countries[39][40] - Overseas revenue has been gradually increasing, with the company securing equipment orders or意向 agreements from local automotive manufacturers in Europe, the US, Japan, and South Korea[40] - The company achieved a breakthrough in super-large intelligent die-casting units, advancing from 12,000 tons to 16,000 tons, marking a milestone in China's high-end and green development of the casting industry[41] - The company is collaborating with domestic automakers to develop integrated die-casting technology for A00-class vehicle chassis, expanding the application of integrated die-casting in the automotive industry[41] - The company's subsidiary, Shenzhen Lijin Technology, introduced high-quality strategic investors, including the Advanced Manufacturing Industry Fund, to enhance its global competitiveness in die-casting machines[42] - Advanced Manufacturing Industry Investment Fund II agreed to invest between RMB 1.15 billion and RMB 1.5 billion in Shenzhen Likong Technology, acquiring 9.47% to 12% of the expanded registered capital[52] - Post-investment, the company (via Likong Machinery) holds approximately 13.77% of Shenzhen Likong's expanded equity, while Advanced Manufacturing holds approximately 9.89%[53] Trade Receivables and Payables - Trade receivables and bills receivable net amount was HK$2,522,257,000 as of September 30, 2023, compared to HK$2,520,720,000 as of March 31, 2023[28] - Trade receivables impairment provision was HK$125,374,000 as of September 30, 2023, with an additional provision of HK$3,117,000 made during the period[28] - Trade receivables aging analysis showed 90 days or less accounted for HK$1,076,092,000, while over one year accounted for HK$342,898,000 as of September 30, 2023[29] - Trade payables and bills payable amounted to HK$1,794,289,000 as of September 30, 2023, a slight decrease from HK$1,810,562,000 as of March 31, 2023[31] - Contract liabilities increased to HK$492,229,000 as of September 30, 2023, up from HK$432,348,000 as of March 31, 2023[31] - Trade payables aging analysis showed 90 days or less accounted for HK$920,665,000, while over one year accounted for HK$24,947,000 as of September 30, 2023[33] Other Financial Information - Other comprehensive loss for the period was HKD 169,402 thousand, primarily due to exchange differences, compared to HKD 361,630 thousand in the previous year[5] - The company terminated a cooperation agreement related to a city renewal project, resulting in the recognition of 38,889 thousand HKD as other income[16] - The urban renewal project for the Likong High-Tech Industrial Park was terminated on July 26, 2023, due to the buyer's failure to obtain project approval[50] - The company provided guarantees for customer bank loans totaling HKD 4,770,000 as of September 30, 2023, down from HKD 21,991,000 on March 31, 2023[44] - The company had capital commitments of HKD 192,650,000 for the acquisition of property, plant, and equipment as of September 30, 2023, up from HKD 178,850,000 on March 31, 2023[46]

Financial Performance - The company's revenue for the fiscal year ending March 31, 2023, was HKD 5,896,349,000, representing a year-on-year growth of 10%[8]. - The profit attributable to equity holders decreased by 14.9% to HKD 532,235,000, with a net profit margin of 9.0%[10]. - The operating profit decreased by 14.5% to HKD 677,474,000, with an operating profit margin of 11.5%[10]. - The gross profit margin declined to 27.1%, down from 29.2% in the previous year[10]. - The company reported a net income of HKD 99,903,000 for the fiscal year ending March 31, 2023, compared to HKD 375,823,000 in the previous year[90]. - Basic and diluted earnings per share for the year were both HKD 38.7, down from HKD 45.6 in the previous year[109]. - Total comprehensive income for the year was HKD 262,329,000, a decrease of 67.0% from HKD 795,363,000 in the prior year[110]. - The company plans to focus on market expansion and new product development to drive future growth[109]. Assets and Liabilities - The total assets increased by 12.4% to HKD 8,539,878,000, while total borrowings rose by 50.7% to HKD 1,641,046,000[11]. - The net asset value increased by 4.1% to HKD 3,855,716,000, while current assets decreased by 5.0% to HKD 1,275,782,000[11]. - The company's debt-to-equity ratio was approximately 26.9% as of March 31, 2023, up from 13.8% a year earlier[22]. - The total outstanding loans as of March 31, 2023, were HKD 1,641,046,000, with about 84.6% classified as short-term loans[22]. - The total liabilities rose to HKD 4,684,162,000 in 2023, up from HKD 3,896,525,000 in 2022, which is an increase of approximately 20.23%[106]. Market and Industry Trends - The Chinese new energy vehicle industry saw production and sales of 7.058 million and 6.887 million units respectively, marking year-on-year growth of 96.7% and 93.4%[8]. - In 2022, global sales of new energy vehicles reached 10.824 million units, a year-on-year increase of 61.6%, with a market share of 13.6%[18]. - In China, new energy vehicle sales were approximately 6.887 million units, growing by 93.4% year-on-year, achieving a market share of 25.6%, an increase of 12.1 percentage points[18]. Research and Development - The company plans to enhance R&D investments and launch advanced technologies to support the development of integrated die-casting solutions for the new energy vehicle sector[8]. - The company is focusing on the development of integrated die-casting energy storage shells, which are expected to see significant market growth in the future[20]. - The company has over 300 patents and has participated in the formulation of 2 international standards, 18 national standards, and 8 industry standards[21]. Corporate Governance - The company has maintained good corporate governance practices and has complied with the principles of the Corporate Governance Code as per the Hong Kong Stock Exchange rules[34]. - The board of directors includes experienced individuals with extensive backgrounds in various industries, contributing to strategic planning and management[30][31][32][33]. - The company has a commitment to maintaining high standards of corporate governance, as evidenced by its adherence to the Corporate Governance Code[34]. Employee and Management - The company has a total of 5,193 employees as of March 31, 2023, comprising 4,431 males (85%) and 762 females (15%)[42]. - Employee costs for the year amounted to HKD 960,485,000, an increase from HKD 873,032,000 in the previous year, with approximately 5,193 full-time employees as of March 31, 2023[91]. - The management team has over 30 years of experience in asset investment analysis in the Hong Kong and China stock markets, enhancing the company's strategic insights[32]. Risk Management - The company has engaged a professional consulting firm to enhance its risk management system and assist in the annual assessment of significant risks related to its operations[48]. - The audit committee is responsible for reviewing the effectiveness of the group's risk management and internal control systems[47]. - The company has identified several key risks that could impact its strategic objectives, which are prioritized based on their likelihood and significance[49]. Cash Flow and Capital Expenditures - The net cash generated from operating activities in fiscal year 2023 was HKD 99,375,000[14]. - The company incurred capital expenditures of HKD 430,077,000 for the purchase of property, plant, and equipment, down from HKD 461,665,000 in the previous year[114]. - The company plans to gradually utilize the remaining net proceeds of HKD 10,327,000 for the acquisition of properties, plants, and equipment over the next 12 months[90]. Shareholder Information - The company plans to distribute a final dividend of HKD 0.045 per share for the year ending March 31, 2023, subject to shareholder approval, compared to HKD 0.04 per share for the previous year[58]. - The company has adopted a dividend policy to distribute at least 30% of the annual distributable profits as dividends, depending on profitability and financial conditions[53]. - The company’s major shareholder, Girgio Industries Limited, held approximately 64.7% of the total issued share capital as of the approval date[66].

Financial Performance - Revenue for the year ended March 31, 2023, was HKD 5,896,349 thousand, representing a 10.0% increase from HKD 5,362,474 thousand in 2022[2] - Gross profit increased to HKD 1,596,687 thousand, with a gross margin of 27.1%, down from 29.2% in the previous year[2] - Operating profit decreased by 14.5% to HKD 677,474 thousand, with an operating margin of 11.5% compared to 14.8% in 2022[2] - Net profit attributable to shareholders was HKD 532,235 thousand, a decline of 14.9% from HKD 625,509 thousand in the prior year[2] - The company reported a net profit margin of 9.0%, down from 11.7% in the previous year[2] - Basic and diluted earnings per share decreased to HKD 38.7, down 15.1% from HKD 45.6 in 2022[2] - The group reported a total profit attributable to owners of the company of 532,235,000 HKD for the year ending March 31, 2023, down from 625,509,000 HKD, which is a decrease of approximately 14.9%[32] Assets and Liabilities - Total assets increased by 12.4% to HKD 8,539,878 thousand, up from HKD 7,599,524 thousand in 2022[2] - Total liabilities as of March 31, 2023, were HKD 3,896,525,000, with allocated liabilities of HKD 3,840,514,000[19] - Total borrowings rose significantly by 50.7% to HKD 1,641,046 thousand, compared to HKD 1,088,637 thousand in the previous year[2] - The debt-to-equity ratio was approximately 26.9% as of March 31, 2023, compared to 13.8% on March 31, 2022[54] - The total outstanding borrowings were HKD 1,641,046,000 as of March 31, 2023, up from HKD 1,088,637,000 on March 31, 2022, with about 84.6% being short-term loans[54] Segment Performance - Revenue from the die-casting segment was HKD 4,427,861,000, representing a 15.9% increase from HKD 3,816,178,000 in the previous year[15] - Revenue from the injection molding segment was HKD 1,191,013,000, a decrease of 12.7% from HKD 1,365,111,000 in the previous year[15] - CNC machining center revenue was HKD 277,475,000, up from HKD 181,185,000, marking a 53.2% increase year-over-year[15] - Total segment revenue for the year was HKD 6,019,468,000, an increase of 12.2% compared to HKD 5,453,010,000 in the previous year[15] Cash Flow and Financing - Net cash generated from operating activities for the year ended March 31, 2023, was HKD 99,375,000, a decrease of 45.4% from HKD 182,703,000 in 2022[9] - Cash and cash equivalents increased by 5.0% to HKD 605,365 thousand, compared to HKD 576,790 thousand in the previous year[2] - The group’s financing income was HKD 6,760,000, while financing costs totaled HKD 53,936,000, leading to a net financing cost of HKD 47,176,000[15] - The company reported a net financing cost of HKD 53,936,000 for the year ending March 31, 2023, compared to HKD 33,572,000 in the previous year[26] Employee and Operational Costs - Employee costs for the year ending March 31, 2023, were HKD 960,485,000, compared to HKD 873,032,000 in the previous year[25] - Depreciation and amortization expenses for the year ending March 31, 2023, totaled HKD 185,482,000[20] - The company aims to optimize supply chain management to reduce procurement costs and improve logistics efficiency[51] - The company is focusing on digital transformation and automation to enhance production efficiency and reduce labor costs[51] Research and Development - The company plans to enhance its R&D investment and innovation to maintain its leading technological advantage in the industry[52] - The company has over 300 patents and has participated in the formulation of 2 international standards, 18 national standards, 8 industry standards, and 2 group standards[52] - The company is focusing on research and development of large and super-large die-casting machines for automotive chassis, aligning with industry trends[48] Market and Strategic Initiatives - The company is strategically expanding its overseas market presence to enhance competitiveness and solidify its industry leadership[40] - The company plans to expand its overseas market presence by establishing new production bases and service centers in regions like Mexico, India, and Eastern Europe[49] - The company has successfully established strategic partnerships with several new energy vehicle manufacturers, enhancing its customer base in the automotive sector[44] - The demand for energy storage solutions is increasing significantly, with the company positioning itself to capitalize on this growth through integrated die-casting technology[48] Corporate Governance - The company has adhered to the corporate governance code as of March 31, 2023[64] - The Audit Committee, consisting of four independent non-executive directors, has reviewed the audited consolidated financial statements for the year ending March 31, 2023[66] - The financial data for the year ending March 31, 2023, has been verified by the auditor, PricewaterhouseCoopers, but no audit opinion was issued on the preliminary announcement[67] Upcoming Events - The company will hold its Annual General Meeting on September 6, 2023, and will suspend share registration from September 1 to September 6, 2023[62] - To qualify for the final dividend, share registration will be suspended from September 14 to September 18, 2023, with documents due by September 13, 2023[63]