Financial Performance - Revenue for the six months ended September 30, 2022, was HKD 2,860,238,000, an increase of 3.1% compared to HKD 2,773,518,000 in the same period last year[3]. - Gross profit decreased to HKD 786,158,000, down 2.4% from HKD 805,456,000, resulting in a gross margin of 27.5%, a decline of 1.5% year-on-year[3]. - Operating profit fell by 17.3% to HKD 343,164,000, with an operating margin of 12.0%, down from 15.0% in the previous year[3]. - Profit attributable to owners decreased by 16.3% to HKD 271,193,000, with a net profit margin of 9.5%, down from 11.7%[3]. - The company reported a decrease in cash and cash equivalents to HKD 610,977,000 from HKD 576,790,000, representing an increase of 5.9%[39]. - The company reported a net loss of HKD 10,928,000 from foreign exchange, contrasting with a gain of HKD 7,283,000 in the previous year[93]. - The total comprehensive loss for the six months ended September 30, 2022, was HKD 90,437,000, compared to a total comprehensive income of HKD 271,193,000 for the same period in 2021[44]. - Basic earnings per share for the period was HKD 19.7, down from HKD 23.7 in the previous year, a decline of 16.8%[41]. Assets and Liabilities - Total assets increased by 2.0% to HKD 7,747,910,000, while net assets decreased by 3.9% to HKD 3,559,470,000[4]. - Total liabilities increased to HKD 4,188,440,000 from HKD 3,896,525,000, reflecting a rise of 7.5%[40]. - The total value of property, plant, and equipment as of September 30, 2022, was HKD 1,485,228,000[68]. - The fair value of investment properties as of September 30, 2022, is HKD 598,730,000, a decrease from HKD 651,754,000 as of March 31, 2022[75]. - The net amount of trade receivables and notes receivable as of September 30, 2022, is HKD 2,097,316,000, compared to HKD 2,018,270,000 as of March 31, 2022[77]. Cash Flow and Financing - Operating cash flow for the six months ended September 30, 2022, was a net outflow of HKD 83,363,000, a significant decrease from the inflow of HKD 292,227,000 in the previous year[46]. - The company incurred capital expenditures of HKD 167,505,000 for the purchase of property, plant, and equipment during the reporting period[46]. - Financing costs increased by 25.9% to HKD 18,913,000 due to higher bank loan interest expenses[6]. - The company’s financing activities generated a net cash inflow of HKD 425,770,000, compared to HKD 264,300,000 in the prior year[46]. Employee and Compensation - As of September 30, 2022, the group employed approximately 4,900 full-time staff, with employee costs amounting to HKD 462,309,000, an increase of 12.4% from HKD 411,362,000 in the previous year[11]. - The company’s employee compensation policy is determined based on market trends, future plans, and individual performance, including mandatory provident fund contributions and stock option plans[11]. - Total remuneration for directors and key management personnel for the six months ended September 30, 2022, was HKD 12,540,000, a decrease of 28.0% from HKD 17,467,000 in the previous year[111]. Share Options and Incentives - The company has granted a total of 27,540,000 share options to 390 employees as of September 24, 2021[11]. - The exercise price for the stock options is set at HKD 19.86[21]. - The stock options can be exercised in three tranches based on specific performance criteria, with 40% vesting after two years[24]. - The share option plan is valid for ten years from the date of adoption[24]. - The share option plan is designed to attract and retain individuals whose contributions are vital to the company's performance and success[82]. Market and Expansion - The group is focusing on expanding into overseas markets, establishing new teams in Southeast Asia, Europe, and America[7]. - The company plans to continue its focus on the design, manufacturing, and sales of die-casting machines and related equipment, aiming for market expansion and technological advancements[47]. - Revenue from die-casting machines reached HKD 2,050,390,000 for the six months ended September 30, 2022, compared to HKD 1,889,649,000 in the same period last year, representing an increase of 8.5%[92]. Corporate Governance - The audit committee consists of four independent non-executive directors, with the main responsibility of reviewing and supervising the group's financial reporting processes[34]. - The company has complied with all corporate governance code provisions during the review period[33]. - The company has confirmed compliance with the standard code for securities transactions by all directors during the review period[35].

Financial Performance - Revenue for the fiscal year reached HKD 5,362,474,000, a 33.4% year-on-year increase[8][9] - Net profit attributable to shareholders was HKD 625,509,000, up 82% compared to the previous year[8][9] - Gross profit margin improved to 29.2%, a 1.5% increase from the previous year[9] - Operating profit increased by 54.0% to HKD 792,515,000, with an operating profit margin of 14.8%[9] - Revenue for the fiscal year 2022 increased to 5,362,474 thousand HKD, up from 4,021,206 thousand HKD in 2021, representing a growth of approximately 33.4%[94] - Gross profit rose to 1,566,400 thousand HKD in 2022, compared to 1,115,283 thousand HKD in 2021, reflecting a 40.5% increase[94] - Net profit attributable to the company's owners surged to 625,509 thousand HKD in 2022, up from 343,667 thousand HKD in 2021, marking an 82.1% growth[94] - Earnings per share (basic) for 2022 stood at 45.6 HKD cents, up from 26.2 HKD cents in 2021, reflecting a 74.0% increase[94] - Total comprehensive income attributable to the company's owners reached 795,363 thousand HKD in 2022, up from 510,357 thousand HKD in 2021[95] Asset and Liability Growth - Total assets grew by 38.7% to HKD 7,599,524,000, while net assets increased by 50.5% to HKD 3,702,999,000[10] - Total assets expanded to 7,599,524 thousand HKD in 2022, a significant increase from 5,478,376 thousand HKD in 2021, indicating a 38.7% rise[91] - Total equity grew to 3,702,999 thousand HKD in 2022, up from 2,461,272 thousand HKD in 2021, showing a 50.5% increase[91] - Total liabilities increased to 3,896,525 thousand HKD in 2022, compared to 3,017,104 thousand HKD in 2021, showing a 29.1% rise[92] - Total equity increased to 3,702,999 thousand HKD as of March 31, 2022, compared to 2,461,272 thousand HKD in the previous year[97] Market and Revenue Breakdown - Overseas market revenue was HKD 971,171,000, a 6.0% year-on-year increase, driven by recovery in Europe[12] - Revenue from the Chinese market surged by 41.4% to HKD 4,391,303,000, supported by strong demand in the automotive sector[12] - New energy vehicle production and sales in China reached 3.545 million and 3.521 million units respectively, a 1.6-fold increase year-on-year[12] - The penetration rate of new energy passenger vehicles in China rose to 14.8% in 2021, up from 5.8% in 2020[12] - Revenue from external sales for Die Casting Machines was 3,816,178 thousand HKD, Injection Molding Machines was 1,365,111 thousand HKD, and CNC Machining Centers was 181,185 thousand HKD for the year ended March 31, 2022[198] - Total revenue from external sales across all segments was 5,362,474 thousand HKD for the year ended March 31, 2022[198] Cost and Expense Management - Financing costs decreased by 44.7% to HKD 26,851,000 due to reduced bank loans[12] - The company's supply chain system for new energy vehicles has grown significantly, leading to cost reductions and improved product quality[13] - Employee costs amounted to HKD 873,032,000 (2021: HKD 614,622,000)[76] - Administrative expenses were 37,126 thousand HKD for the year ended March 31, 2022[198] - Finance income was 6,721 thousand HKD for the year ended March 31, 2022[198] Corporate Governance and Leadership - The company's CEO, Liu Zhuoming, has extensive experience in business operations and management, holding a Bachelor's degree in Computer Science from Oregon State University[14] - The company's Chairman, Zhang Qiaoying, has over 34 years of management experience and is responsible for strategic planning, administration, and human resources[14] - The company's Executive Director, Xie Xiaosi, has over 32 years of experience in production management, sales, and marketing[14] - The company's Independent Non-Executive Director, Liu Shaoji, has over 30 years of teaching and research experience in mechanical engineering[14] - The company's Independent Non-Executive Director, Lu Dong, has over 30 years of experience in asset investment analysis in Hong Kong and China's stock markets[16] - The Board of Directors consists of 3 executive directors and 4 independent non-executive directors, ensuring a balanced structure and independent judgment[19] - The roles of Chairman and CEO are separated, with Ms. Zhang Qiaoying serving as Chairman and Mr. Liu Zhuoming as CEO[22] Risk Management and Internal Controls - The company has a robust risk management and internal control system in place to achieve strategic objectives and protect shareholder investments[32] - The company's risk management framework includes an annual enterprise risk assessment conducted by the Group Risk Director[34] - The internal audit department plays a crucial role in monitoring the effectiveness of the company's internal control systems[35] - The company's risk management and internal control systems were reviewed and deemed effective and sufficient by the Board of Directors[36] - The company has established an insider information disclosure policy to ensure compliance with securities and futures regulations and listing rules[37] Dividend and Shareholder Returns - The company's dividend policy aims to distribute at least 30% of the annual distributable profits as dividends, subject to the Board's discretion[38] - The company paid an interim dividend of 6 HK cents per share for the period ended September 30, 2021, and proposed a final dividend of 4 HK cents per share for the year ended March 31, 2022[40] - The company issued bonus shares at a ratio of 1 new bonus share for every 10 existing shares held by shareholders as of September 15, 2021[41] - Dividends paid during the year amounted to 120,121 thousand HKD, reflecting the company's commitment to shareholder returns[97] Research and Development - The company is focusing on R&D breakthroughs in die-casting machines, injection molding machines, and CNC machining centers to meet evolving customer needs[13] - The company is contributing to the innovation of new energy vehicle manufacturing processes, leveraging the rapid growth of the global new energy vehicle sector[13] Capital and Financing Activities - The company completed a placement and subscription of 60,000,000 shares at a price of HKD 9.50 per share, representing a discount of approximately 9.00% to the last closing price of HKD 10.44[68] - The net proceeds from the placement and subscription amounted to approximately HKD 562,546,000, with HKD 386,150,000 allocated to enhancing production efficiency and capacity, and HKD 176,396,000 for general working capital[70] - As of March 31, 2022, HKD 358,521,000 of the net proceeds had been utilized for enhancing production efficiency and capacity, with HKD 258,618,000 spent on property, plant, and equipment, and HKD 99,903,000 on land use rights and deposits[71] - The remaining HKD 27,629,000 of the net proceeds is planned to be used for purchasing property, plant, and equipment at Fuxin Jingda Precision Machinery Co., Ltd. over the next 24 months[71] Inventory and Trade Receivables - Inventory held by the company amounted to HKD 1,713,348,000 as of March 31, 2022, up from HKD 1,147,324,000 in 2021[84] - Inventory impairment provisions were HKD 128,467,000 in 2022, a decrease from HKD 147,108,000 in 2021[85] - Accounts receivable totaled HKD 1,672,937,000 as of March 31, 2022, an increase from HKD 1,195,060,000 in 2021[83] - Impairment provisions for accounts receivable were HKD 137,005,000 in 2022, compared to HKD 135,297,000 in 2021[83] - The company's trade receivables are subject to an expected credit loss model, with provisions based on historical credit loss rates adjusted for macroeconomic factors[165] Segment Reporting - The company operates in three main reportable segments: Die Casting Machines, Injection Molding Machines, and CNC Machining Centers[197] - Revenue from external sales for Die Casting Machines was 3,816,178 thousand HKD, Injection Molding Machines was 1,365,111 thousand HKD, and CNC Machining Centers was 181,185 thousand HKD for the year ended March 31, 2022[198] - Segment performance for Die Casting Machines was 660,866 thousand HKD, Injection Molding Machines was 152,148 thousand HKD, and CNC Machining Centers was 16,627 thousand HKD for the year ended March 31, 2022[198] - Total segment performance across all segments was 829,641 thousand HKD for the year ended March 31, 2022[198] Cash Flow and Liquidity - Operating cash flow from business activities decreased to HK$182.7 million in 2022 from HK$771.1 million in 2021[99] - Net cash used in investing activities increased significantly to HK$601.9 million in 2022 from HK$228.5 million in 2021, primarily due to increased purchases of property, plant, and equipment (HK$461.7 million) and land use rights (HK$85.2 million)[99] - Net cash from financing activities improved to HK$396.2 million in 2022 from a net cash outflow of HK$706.0 million in 2021, driven by share placement proceeds of HK$562.5 million[99] - Cash and cash equivalents decreased by HK$22.9 million in 2022, ending the year at HK$576.8 million[99] Accounting and Financial Reporting - The financial statements are prepared in accordance with Hong Kong Financial Reporting Standards (HKFRS) and the Hong Kong Companies Ordinance[102] - The company adopted revised standards related to interest rate benchmark reform and COVID-19-related rent concessions effective April 1, 2021[103] - Several new and amended accounting standards and interpretations have been issued but not yet adopted, with effective dates starting from April 1, 2022, and April 1, 2023[105] - The company is evaluating the impact of adopting new and amended standards and interpretations, but does not expect them to have a significant impact on current or future reporting periods[105] Shareholder and Equity Information - Girgio holds 848,078,004 shares, representing 61.62% of the company's equity[52] - HSBC International Trustee Limited, as trustee of the Liu Family Trust, holds 95% of Full Profit Asset Limited, which owns 95% of Girgio, giving it an indirect 61.62% stake in the company[53] - Cantrust (Far East) Limited holds 132,264,999 shares, representing 9.61% of the company's equity[52] - Zhang Qiaoying holds 3,105,000 shares directly, representing 0.23% of the company's equity[49] - Liu Zhuoming holds 1,000,000 shares directly, representing 0.07% of the company's equity[49] - Liu Xiangshang, Zhang Qiaoying's spouse, holds 5,722,750 shares, representing 0.42% of the company's equity[49] - Xie Xiaosi holds 50,000 shares through his spouse's stock options, representing 0.004% of the company's equity[49] Stock Options and Compensation - The company granted a total of 27,540,000 stock options to 390 eligible individuals on September 24, 2021[55] - The company granted stock options to several directors and employees, with specific numbers and exercise periods detailed for each individual[57][59] - The total number of shares that may be issued upon the exercise of all stock options granted under the plan and any other plans of the group shall not exceed 113,326,500 shares, representing 10% of the company's issued share capital as of the approval date of the stock option plan[64] - The maximum number of shares that may be issued upon the full exercise of all stock options granted but not yet exercised under the stock option plan and any other plans of the group shall not exceed 30% of the company's issued shares from time to time[64] - The exercise price of any specific stock option shall be determined by the board at its absolute discretion at the time of granting the relevant stock option, but shall not be lower than the highest of: (i) the par value of the company's shares; (ii) the closing price of the company's shares on the offer date[64] - The stock options are subject to vesting conditions, with 40% vesting after the second anniversary of the grant date, 30% after the third anniversary, and 30% after the fourth anniversary, provided that specific performance indicators for the applicable fiscal year are met[61] - The company's stock option plan aims to provide eligible individuals with the opportunity to own shares in the company, incentivize them to enhance their future performance and efficiency, and reward their past contributions[63] Environmental and Social Responsibility - The company made charitable donations totaling HKD 683,000 during the year[43] Foreign Exchange and Interest Rate Sensitivity - The company's pre-tax profit would decrease/increase by HKD 8,139,000/HKD 10,886,000 if interest rates increase/decrease by 100 basis points, based on the sensitivity analysis as of March 31, 2022[161] - A 5% depreciation/appreciation of RMB against HKD would result in a decrease/increase of approximately HKD 4,741,000 in pre-tax profit for the year ended March 31, 2022[162] - A 5% depreciation/appreciation of USD against RMB would result in a decrease/increase of approximately HKD 982,000 in pre-tax profit for the year ended March 31, 2022[163] - The company does not have a foreign currency hedging policy but monitors forex risks and may hedge significant exposures if needed[163] Audit and Compliance - The company's auditor, PwC, confirmed that the consolidated financial statements were prepared in accordance with Hong Kong Financial Reporting Standards[79] - Key audit matters identified included the recoverability of trade receivables and inventory write-down provisions[82] - The company's auditor, PwC, confirmed its independence from the company and compliance with professional ethical responsibilities[81] Property, Plant, and Equipment - Property, plant, and equipment increased to 1,476,984 thousand HKD in 2022, up from 1,173,530 thousand HKD in 2021, marking a 25.9% rise[91] - Property, plant, and equipment are recorded at historical cost less depreciation, with subsequent costs capitalized only if future economic benefits are probable and costs can be reliably measured[118] - Depreciation is allocated on a straight-line basis over the estimated useful lives of assets, with buildings having a useful life of up to 50 years[120] Investment Properties - Investment properties are measured at fair value, with changes in fair value recognized in the consolidated income statement as part of "other net income"[119] - Revaluation gains on property, plant, and equipment transferred to investment properties amounted to 84,315 thousand HKD in 2022, a new addition compared to the previous year[95] Goodwill and Intangible Assets - Goodwill is allocated to cash-generating units and tested for impairment annually or when events indicate potential impairment[121] - Trademarks are amortized on a straight-line basis over a useful life of no more than 10 years[122] - Development costs are capitalized as intangible assets only if future economic benefits are probable, with amortization over a useful life of no more than 5 years[123] - Land use rights are amortized on a straight-line basis over the lease term, which ranges from 44 to 50 years[124] Financial Instruments - Financial assets are classified into categories based on their measurement criteria: fair value through profit or loss, fair value through other comprehensive income, and amortized cost[126] - Debt instruments are measured based on the company's business model and cash flow characteristics, with three measurement categories: amortized cost, fair value through other comprehensive income, and fair value through profit or loss[129] - Equity investments are subsequently measured at fair value, with fair value gains and losses recognized in other comprehensive income if elected by management[130] - The company assesses expected credit losses for debt instruments measured at amortized cost using a forward-looking approach[131] - Financial assets and liabilities can be offset if there is a legally enforceable right to set off and the intention to settle on a net basis[132] Inventory and Trade Payables - Inventories are measured at the lower of cost and net realizable value, with cost determined using the FIFO method[133] - Trade receivables are initially recognized at the unconditional amount due, unless there is a significant financing component, in which case they are recognized at fair value[134] - Trade payables and other payables are initially recognized at fair value and subsequently measured at amortized cost using the effective interest method[136] Borrowings and Financial Liabilities - Borrowings are initially recognized at fair value less transaction costs and subsequently measured at amortized cost, with any difference between the proceeds and redemption value recognized in the comprehensive income statement using the effective interest method[139] - Borrowing costs directly attributable to the acquisition, construction, or production of qualifying assets are capitalized as part of the cost of those assets until they are substantially ready for their intended use or sale[140] Taxation - Current tax expense is calculated based on taxable income at the applicable tax rates in each jurisdiction, adjusted for changes in deferred tax assets and liabilities arising from temporary differences and unused tax losses[141] - Deferred tax is recognized for temporary differences between the tax base and the

INTERIM REPORT 2021/22・中 期 報 告 @l K 力勁科技集團有限公司 L.K. Technology Holdings Limited (Incorporated in the Cayman Islands with limited liability) (於開曼群島註冊成立之有限公司) (Stock Code 股份代號 : 558) 1 Interim Report 2021/22 2 財務摘要 3 公司資料 4 管理層討論與分析 19 簡明綜合全面收益表 20 簡明綜合權益變動表 7 其他資料 15 中期財務資料審閱報告 22 簡明綜合現金流量表 23 簡明綜合中期財務資料附註 16 簡明綜合財務狀況表 18 簡明綜合收益表 港仙 港仙 （經重列） 財務摘要 | --- | --- | --- | --- | |----------------------|-----------------------------------------------------------|---------------------|--------| | | （未經審核） 截至九月三十日止六個月 ...

Financial Performance - The group recorded revenue of HKD 1,734,642,000 for the six months ended September 30, 2020, representing a year-on-year increase of 19.2%[4] - Profit attributable to owners of the company surged to HKD 113,151,000, compared to HKD 15,893,000 in the same period last year[4] - Revenue from the Chinese market reached HKD 1,358,927,000, a year-on-year growth of 29.1%[4] - Revenue from overseas markets declined to HKD 375,715,000, a decrease of 6.7% year-on-year due to the ongoing pandemic[4] - Revenue for the six months ended September 30, 2020, was HKD 1,734,642,000, an increase of 19.2% compared to HKD 1,455,201,000 for the same period in 2019[31] - Gross profit for the same period was HKD 460,898,000, representing a gross margin of approximately 26.6%[31] - Operating profit increased significantly to HKD 181,943,000, compared to HKD 78,425,000 in the previous year, reflecting a growth of 132.4%[31] - Net profit attributable to the company's owners for the period was HKD 113,151,000, up from HKD 15,893,000, marking a substantial increase[31] - Basic and diluted earnings per share for the period were both HKD 0.095, compared to HKD 0.013 in the previous year[31] - The total comprehensive income attributable to the company's owners for the period was HKD 168,546,000, a turnaround from a loss of HKD 131,107,000 in the previous year[33] Revenue Breakdown - The group's die-casting machine and related equipment business generated revenue of HKD 1,118,759,000, reflecting a year-on-year increase of 15.3%[5] - Revenue from injection molding machines was HKD 564,091,000, marking a year-on-year rise of 28.9%[5] - CNC machining center revenue amounted to HKD 51,792,000, showing a year-on-year increase of 10.6%[5] - Revenue from die-casting machines reached HKD 1,118,759,000, up 15.3% from HKD 970,670,000 in the previous year[84] Expenses and Costs - Sales and distribution expenses rose to HKD 162,924,000, an increase of 13.5% year-on-year, primarily due to higher employee wages and transportation costs[5] - The cost of raw materials and consumables was HKD 1,012,661,000, representing an increase of 27.3% from HKD 795,959,000 in the previous year[86] - Employee benefits expenses totaled HKD 269,747,000, a slight decrease of 2.0% from HKD 277,809,000 in 2019[87] - The company recognized a tax expense of HKD 41,636,000 for the six months ended September 30, 2020, compared to HKD 21,416,000 in the previous year, indicating an increase of 94.3%[89] Assets and Liabilities - Total assets as of September 30, 2020, amounted to HKD 5,122,835,000, an increase from HKD 4,999,005,000 as of March 31, 2020[30] - Total liabilities decreased to HKD 2,967,637,000 from HKD 3,012,353,000, indicating improved financial stability[30] - Current assets totaled HKD 3,294,680,000, slightly up from HKD 3,229,686,000, showing stable liquidity[28] - The company's total outstanding borrowings amounted to HKD 1,434,528,000, a decrease from HKD 1,765,507,000 as of March 31, 2020, with approximately 99.2% being short-term loans[6] - The debt-to-equity ratio was approximately 39.3% as of September 30, 2020, compared to 52.9% on March 31, 2020[6] Cash Flow and Financing - The cash flow from operating activities was HKD 361,864,000, a substantial increase from HKD 62,286,000 in the prior year[38] - The company reported a net financing cost of HKD 27,492,000, a decrease from HKD 39,190,000, indicating improved financing efficiency[31] - The company reported a decrease in cash and cash equivalents of HKD 135,956,000, compared to a decrease of HKD 47,389,000 in the prior year[38] - The company experienced a foreign exchange gain of HKD 55,226,000, compared to a loss of HKD 147,232,000 in the previous year[33] Investments and Commitments - The company has a capital expenditure commitment of HKD 419,801,000 for the acquisition of properties, plants, and equipment as of September 30, 2020, significantly up from HKD 131,293,000 on March 31, 2020[6] - The company invested HKD 84,544,000 in property, plant, and equipment during the period, up from HKD 14,456,000 in the same period last year[38] - The company plans to continue expanding its market presence and investing in new technologies to enhance its competitive edge in the industry[61] Shareholder Information - The company declared an interim dividend of HKD 0.03 per share for the six months ended September 30, 2020, compared to no dividend in 2019[17] - The board declared an interim dividend of HKD 0.03 per share, totaling HKD 35,737,000, compared to no dividend in the previous year[94] Risk Management and Compliance - The group’s financial risk management policies have remained unchanged since the year-end date, addressing market risk, credit risk, and liquidity risk[46] - The financial data for the six months ending September 30, 2020, was prepared in accordance with Hong Kong Accounting Standards (HKAS) No. 34 "Interim Financial Reporting" and the applicable disclosure requirements of the Listing Rules[41]