Economic Environment - In 2023, the Group faced a challenging macro environment with high inflation and continuous interest rate hikes, leading to a low-growth trend in the economy and affecting order and shipment volumes[9]. - Looking ahead to 2024, the Group anticipates continued uncertainties in the global economy, with weak international trade and cautious customer ordering behavior expected to persist[14]. - The overall economic recovery in 2023 was slower than expected, impacting the Group's trading performance due to high customer inventory levels and weak demand[9]. - The Group's trading and supply chain management services will continue to face challenges due to geopolitical tensions and supply chain disruptions[14]. Business Performance - The Group's revenue decreased by approximately 14.5% to approximately US$44.4 million from approximately US$51.9 million in the previous year[23]. - The trading and supply chain management services segment's revenue fell by approximately 34.1% to approximately US$17.6 million, accounting for approximately 39.7% of the Group's total revenue[24][40]. - Shipment volume for trading and supply chain management services declined by approximately 19.7% to approximately US$130.8 million[24][34]. - Revenue from the online social platforms business increased by approximately 6.3% to approximately US$26.7 million, driven by the relaxation of COVID-related restrictions in the PRC[25][41]. - The gamified social and online entertainment business recorded moderate growth, with revenue increasing to approximately US$23.3 million from approximately US$21.3 million[44]. Profitability and Cost Management - The Group achieved a profit for the year of approximately US$2.0 million, nearly double the profit for the year in 2022[29]. - Operating expenses decreased by approximately 6.5% to approximately US$15.9 million, primarily due to reduced personnel costs[27]. - Gross profit slightly decreased by approximately 0.3% to approximately US$17.1 million, with improved gross margin in the online social platforms business offsetting overall revenue decline[26]. - Total staff costs for the year ended December 31, 2023, were approximately US$11.0 million, down from US$12.2 million in 2022[53]. - The Group aims to improve operational efficiency and focus on profitability enhancement through stringent cost control and quality service improvements[19]. - Cost control measures have been implemented to meet customer demands and provide excellent service, ensuring long-term value creation for stakeholders[65]. Strategic Initiatives - The Group plans to expand its claw crane games into overseas markets to broaden its income base and enhance market share[15]. - The Group will explore more popular products in the pop toys segment and customize exclusive intellectual property products to meet consumer demand for unique items[15]. - The Group aims to expand its claw crane online games into overseas markets to drive business growth and increase overall revenue[61]. - The company plans to enhance user acquisition by collaborating with popular social media influencers on platforms like Douyin, aiming to expand its user base[64]. - Continuous upgrades to the gaming system and online claw machine games are intended to improve user engagement and satisfaction, thereby increasing user loyalty and attracting new users[64]. Corporate Governance - The Company has adopted the Corporate Governance Code (CG Code) and is committed to complying with its provisions to ensure effective governance and accountability to shareholders[93]. - The corporate governance principles emphasize an effective Board, sound internal controls, and transparency to all shareholders[94]. - The Company complied with all applicable code provisions of the CG Code throughout the year ended December 31, 2023, with some deviations discussed in the report[95]. - The Company has established written guidelines for securities transactions by relevant employees, with no incidents of non-compliance noted during the year[97][100]. - The Company aims to achieve gender diversity by appointing one female director on or before December 31, 2024[118]. Board Composition and Diversity - As of December 31, 2023, the Board consisted of five Directors, including two executive Directors and three independent non-executive Directors[102]. - The Board's composition reflects a diverse range of skills, knowledge, and experience, which is essential for effective governance[113]. - The Nomination Committee is responsible for reviewing and assessing the diversity of the Board to maintain an appropriate mix of skills and perspectives[113]. - The Company has committed to developing a pipeline of potential successors to achieve gender diversity in senior management positions[118]. - The workforce gender ratio is 49% male and 51% female, achieving gender diversity in the company[119]. Board Meetings and Responsibilities - The Board met regularly during the year to review and approve financial and operational performance, compliance with the CG Code, and overall strategies[132]. - The Audit Committee is responsible for reviewing the Company's annual reports and accounts, interim reports, and results announcements[181]. - The Audit Committee held three meetings during the year ended December 31, 2023, to review financial statements and reports, ensuring the integrity of the Group's financial reporting system[183]. - The Remuneration Committee met once during the year ended December 31, 2023, to review and determine the remuneration policy for executive Directors and senior management[194]. - The Nomination Committee conducted two meetings during the year ended December 31, 2023, focusing on the structure, size, and composition of the Board[197].

Financial Performance - Revenue decreased by approximately 14.5% from about $51.9 million in the year ended December 31, 2022, to approximately $44.4 million in the year ended December 31, 2023[3] - Profit for the year ended December 31, 2023, was approximately $2 million, representing a growth of about 93.7% compared to approximately $1 million for the year ended December 31, 2022[3] - Gross profit for the year ended December 31, 2023, was approximately $17.1 million, with a gross margin of about 38.5%[4] - For the fiscal year ending December 31, 2023, total revenue from external customers was $44.355 million, a decrease from $51.878 million in the previous year, representing a decline of approximately 14.3%[26] - The adjusted profit before tax for the trade and supply chain management segment was $1.269 million, while the online social platform segment reported an adjusted loss of $1.157 million, leading to a total adjusted profit before tax of $2.161 million[26] - The company reported a net profit of $1.978 million for the fiscal year ending December 31, 2023, compared to $1.021 million in the previous year, reflecting a significant increase[26] - The total tax expense for the year was $183,000, a decrease from $240,000 in 2022, representing a decline of 23.8%[40] - The company's gross profit slightly decreased by about 0.3% to approximately $17.1 million[54] - Operating expenses decreased by approximately 6.5% from about $17 million to approximately $15.9 million, primarily due to reduced employee costs[56] - The company achieved a net profit of approximately $2 million, nearly double the profit from the previous year[56] Assets and Liabilities - Total assets increased from approximately $27.3 million in 2022 to approximately $29.4 million in 2023[8] - Current liabilities rose from approximately $14.1 million in 2022 to approximately $15.2 million in 2023[8] - The net asset value increased from approximately $11.3 million in 2022 to approximately $13.3 million in 2023[10] - The total assets as of December 31, 2023, amounted to $29.416 million, with classified assets contributing $29.297 million and unallocated assets at $119 thousand[26] - The total liabilities were reported at $16.087 million, with classified liabilities at $12.144 million and shareholder loans contributing $3.856 million[26] - The group's non-current assets totaled $2,009,000 in 2023, an increase of 55.5% from $1,291,000 in 2022[31] - The total accounts receivable increased from $3.87 million to $4.6 million, with significant increases in the 30 days and 31-60 days categories[49] - The total accounts payable rose from $885,000 to $1.5 million, with a notable increase in the 31-60 days category[50] - The group has no significant liabilities or guarantees as of December 31, 2023, and has not pledged any assets[69] Dividends - The company does not recommend the payment of a final dividend for the year ended December 31, 2023[3] - The group did not recommend a final dividend for the year ending December 31, 2023, compared to no dividend in 2022[41] Accounting Policies - The group has adopted the revised Hong Kong Accounting Standard No. 1 and the revised Practice Note No. 2, which impacts the disclosure of significant accounting policies[14] - The group has implemented the revised Hong Kong Accounting Standard No. 12, narrowing the scope of initial recognition exemptions related to temporary differences arising from transactions such as leases[16] - The changes in accounting policies due to the revised standards have no significant impact on the group's financial position and performance for the years ended January 1, 2022, December 31, 2022, and December 31, 2023[17] - The company has adjusted its accounting treatment for employer contributions to the long-term service fund in accordance with new guidelines from the Hong Kong Institute of Certified Public Accountants[21] Market Performance - Revenue from the Chinese market was $29.014 million for 2023, an increase from $27.834 million in 2022, indicating a growth of approximately 4.2%[30] - Revenue from customer A, a major client accounting for over 10% of the group's revenue, decreased to $6,552,000 in 2023 from $9,937,000 in 2022, representing a decline of 34.5%[32] - Revenue from trade and supply chain management services fell by approximately 34.1% from about $26.7 million to approximately $17.6 million[53] - Revenue from the online social platform business increased by approximately 6.3% from about $25.1 million to approximately $26.7 million[64] Employee and Operational Insights - The total employee cost for the year was approximately $11 million, down from $12.2 million in 2022, with 261 employees as of December 31, 2023[70] - The group plans to enhance user acquisition through collaborations with popular social media platforms, aiming to expand its user base[74] - The group intends to upgrade its gaming systems and online games to improve user engagement and satisfaction, which is expected to attract new users[74] - The group is focused on cost control and capacity enhancement as primary tasks to improve profitability[73] Governance and Compliance - The audit committee consists of three independent non-executive directors, with Liu Shuren as the chairman[81] - The company has complied with all applicable corporate governance code provisions as of December 31, 2023[83] - The company has adopted the standard code for securities trading by directors and confirmed compliance by all directors for the year ending December 31, 2023[84] - The annual report for 2023 will be sent to shareholders and published on the company's website in due course[85] - The executive directors are Huang Qingnian and Long Liping, with independent non-executive directors Wang Minxiang, Liu Shuren, and Zhang Huijun[87]

Revenue and Profitability - Revenue for the six months ended June 30, 2023, was $19,257,000, a decrease of 36.5% compared to $30,389,000 in the same period of 2022[3]. - Profit for the period attributable to owners of the company was $601,000, compared to $681,000 in the prior year, representing a decline of 11.8%[5]. - Total comprehensive income for the period attributable to owners was $295,000, an increase from $243,000 in the same period last year[5]. - The total comprehensive income for the period was US$243,000, compared to US$681,000 in the same period of 2022, reflecting a decrease of 64.3%[17]. - Profit before tax for the period was US$653,000, a decrease from US$819,000 in the prior year, representing a decline of 20.3%[44]. - The Group's profit for the period was US$601,000, down from US$681,000 in the previous year, indicating a decrease of 11.8%[44]. Assets and Liabilities - Non-current assets increased to $2,587,000 as of June 30, 2023, from $1,458,000 at the end of 2022, primarily due to increases in property, plant, and equipment[7]. - Current assets totaled $25,579,000, up from $24,815,000 at the end of 2022, driven by an increase in bank deposits[7]. - Total liabilities increased to $16,611,000 as of June 30, 2023, compared to $15,013,000 at the end of 2022, mainly due to higher current liabilities[8]. - Net assets as of June 30, 2023, were $11,555,000, an increase from $11,260,000 at the end of 2022[8]. - Segment assets as of June 30, 2023, totaled $27,904,000, an increase of 11.3% from $26,034,000 as of December 31, 2022[50]. Cash Flow and Investments - Net cash generated from operating activities increased to US$1,375,000, up 88.0% from US$732,000 in the prior year[17]. - The company incurred a net cash outflow from investing activities of US$1,245,000, compared to a net inflow of US$78,000 in the same period last year[17]. - Cash and cash equivalents at June 30, 2023, were US$14,040,000, down from US$15,628,000 at the end of June 2022, representing a decrease of 10.1%[17]. - The Group acquired assets totaling US$290,000 during the six months ended 30 June 2023, significantly higher than US$28,000 in the same period of 2022[73][76]. Revenue Breakdown - Revenue from merchandise sales was $5,071,000, down 53.8% from $10,993,000 in the previous year[53]. - Internet value-added services (IVAS) revenue decreased to $9,878,000 from $13,262,000, representing a decline of 25.5%[53]. - Revenue from trading and supply chain management services fell approximately 46.4% from approximately US$15.2 million to approximately US$8.2 million[108]. - Revenue from the operation of online social platforms fell by approximately 26.8% from approximately US$15.2 million to approximately US$11.1 million[124]. - Revenue from gamified social and online entertainment dropped by approximately 25.5% year-on-year from approximately US$13.3 million to approximately US$9.9 million[127]. Expenses and Cost Management - Gross profit for the period was $7,309,000, down from $9,538,000, reflecting a gross margin of 38.0%[3]. - Employee benefit expenses decreased to $5,417,000 from $6,451,000, a reduction of 16.0% year-over-year[62]. - Operating expenses for the six months ended 30 June 2023 amounted to approximately US$7.4 million, representing a drop of approximately 20.0% from approximately US$9.2 million for the corresponding period last year[110]. - Management will continue to enforce strict cost controls and work with suppliers to lower purchase and operating costs to improve profitability[146]. Foreign Exchange and Taxation - The company reported an exchange difference on translation of foreign operations of $(306,000), compared to $(438,000) in the previous year[5]. - The company reported a total tax expense of $52,000 for the period, down from $138,000 in the previous year[66]. VIE Contracts and Compliance - The VIE Contracts enable the financial results and economic benefits of the OPCO Group to flow into the WFOE, ensuring compliance with PRC laws that restrict foreign ownership in certain sectors[165]. - The Exclusive Technology Consulting and Services Agreement allows the WFOE to charge a service fee equal to 100% of the net profit of the OPCO after deducting taxes, costs, and expenses[169]. - The VIE Contracts may not be as effective as direct ownership in providing control over the OPCO, posing potential risks[178]. - The PRC Legal Adviser confirmed that the VIE Contracts would not constitute a violation of GAAP's Notice 13, which prohibits foreign control of online game businesses in China[188]. Future Plans and Strategic Focus - The company plans to focus on expanding its online social platform operations to enhance revenue streams in the future[52]. - The Group plans to expand sales channels through social media and improve game quality to capture potential growth in the online gaming sector[146].

香港交易及結算所有限公司及香港聯合交易所有限公司對本公佈之內容概不 負責，對其準確性或完整性亦不發表任何聲明，並明確表示，概不對因本公佈 全部或任何部份內容而產生或因倚賴該等內容而引致之任何損失承擔任何責 任。 Daohe Global Group Limited 道 和 環 球 集 團 有 限 公 司 （於百慕達註冊成立之有限公司） （股份代號：915） 截 至 二 零 二 三 年 六 月 三 十 日 止 六 個 月 未 經 審 核 中 期 業 績 公 佈 中期業績摘要： • 收益較截至二零二二年六月三十日止六個月約30,400,000美元（相等於約 236,500,000港 元）下 跌 約36.6%至 約19,300,000美 元（相 等 於 約150,200,000港 元）。 • 截至二零二三年六月三十日止六個月錄得溢利約為600,000美元（相等於 約4,700,000港元）（二零二二年：約700,000美元（相等於約5,400,000港元））。 • 董事不就截至二零二三年六月三十日止六個月宣派任何中期股息。 ...

Revenue and Financial Performance - The Group's revenue decreased by approximately 17.2% to approximately US$51.9 million from approximately US$62.6 million in the previous year[21]. - The trading and supply chain management services business experienced a revenue decline of approximately 9.8% to approximately US$26.7 million from approximately US$29.6 million due to a change in sales mix[21]. - Overall revenue decreased by approximately 17.2% to approximately US$51.9 million from approximately US$62.6 million last year[29]. - Revenue from trading and supply chain management services fell by approximately 9.8% to approximately US$26.7 million, accounting for approximately 51.5% of total revenue[43]. - Revenue from online social platforms dropped by approximately 23.8% to approximately US$25.1 million from approximately US$33.0 million[44]. - Gross profit decreased by approximately 18.2% to approximately US$17.1 million, primarily due to the decline in overall revenue[24]. - Operating expenses decreased by approximately 3.0% to approximately US$17.0 million, attributed to reduced personnel and marketing costs[26]. - Profit for the year was approximately US$1.0 million, significantly lower than approximately US$4.1 million for the previous year[28]. Market Outlook and Business Strategy - The Group expects sluggish order demand in the first half of 2023 due to high customer inventories and uncertain global economic outlook[13]. - The overall situation in the trading and supply chain management services business is expected to remain unchanged in the first half of 2023, with gradual recovery anticipated in the second half[13]. - Management expects the first half of 2023 to be challenging due to cautious customer ordering and high inventory levels, impacting turnover and overall performance[65]. - The Group aims to stimulate sales by actively developing more innovative products to consolidate its competitiveness and market position[14]. - The Directors will focus on strengthening the Group's market position by improving sales channels and enhancing offerings in response to macroeconomic developments[67]. Online Social Platforms - The online social platform business is anticipated to see an increase in new users and sales of in-game currency following the relaxation of anti-pandemic measures in late 2022[14]. - The Group's online social platforms faced setbacks due to regulatory tightening and market competition, impacting user acquisition[9]. - The Group anticipates an increase in new users on online platforms and in-game currency sales in 2023, following the relaxation of pandemic restrictions[66]. Financial Position and Assets - The Group had cash and cash equivalents of approximately US$18.2 million as of December 31, 2022, an increase from approximately US$16.1 million in 2021[51]. - The current ratio improved to approximately 1.8 from approximately 1.5 in 2021, while the gearing ratio decreased to approximately 0.04 from approximately 0.11[52]. - Trade receivables amounted to approximately US$3.2 million, with gross trade receivables aged over 90 days at approximately US$1.1 million[53]. - The Group's trade receivables as of December 31, 2022, were approximately US$3.2 million, a decrease from approximately US$8.0 million in 2021[57]. - Other income increased to approximately US$1.4 million from approximately US$0.8 million, mainly due to reversals of provisions and government subsidies[25]. - As of December 31, 2022, the Group's net asset value was approximately US$11.3 million, an increase from approximately US$11.0 million in 2021[54]. - The Group's total staff costs for the year ended December 31, 2022, amounted to approximately US$12.2 million, down from approximately US$12.6 million in 2021[56]. Corporate Governance and Compliance - The Company has adopted the Corporate Governance Code as stated in the Listing Rules on The Stock Exchange of Hong Kong Limited[101]. - The Board is committed to complying with the Code to suit the needs and interests of the Company and its subsidiaries[101]. - During the year ended 31 December 2022, the Company complied with all applicable Code Provisions of the CG Code[102]. - The Company has adopted the Model Code for Securities Transactions by Directors as its code of conduct for dealing in securities[103]. - All Directors confirmed compliance with the required standards set out in the Model Code throughout the year ended 31 December 2022[103]. - The Company established written guidelines for securities transactions by relevant employees likely to possess unpublished inside information[104]. - No incidents of non-compliance with the Employees Written Guidelines were noted during the year ended 31 December 2022[104]. - The Company has complied with all applicable provisions of the corporate governance code as of December 31, 2022[106]. Board Composition and Diversity - As of December 31, 2022, the Board consisted of six Directors, including two executive Directors, one non-executive Director, and three independent non-executive Directors, complying with Listing Rules 3.10 and 3.10A[109]. - The Company achieved a gender diversity ratio in its workforce of 47% male and 53% female as of December 31, 2022, indicating a balanced representation[127]. - The Company aims to appoint one female director on or before December 31, 2024, to enhance gender diversity on the Board[126]. - The Nomination Committee is responsible for reviewing and assessing the diversity of the Board annually to ensure an appropriate mix of skills and perspectives[119]. - The Company has adopted a Board Diversity Policy to maintain an effective Board and enhance corporate governance standards[118]. Director Training and Responsibilities - The Company Secretary received no less than 15 hours of relevant professional training during the year ended December 31, 2022, to refresh her skills and knowledge[172]. - Directors received training on legal and regulatory updates, corporate governance, and their duties, with all Directors participating in relevant seminars and reading materials[169]. - The Company has arrangements for providing continuing briefing and professional development to Directors at the Company's expense whenever necessary[166]. - The Board is satisfied that each Director spends sufficient time performing their responsibilities, based on attendance and training records[149]. Committees and Meetings - The Company has established five board committees to oversee various aspects of governance and operations[142]. - The Audit Committee met three times during the year ended December 31, 2022, to review financial statements and internal control systems[189]. - The Remuneration Committee met once during the year ended December 31, 2022, to discuss remuneration policies for Directors and senior management[200]. - The Company amended the terms of reference of the Remuneration Committee effective December 21, 2022, to align with the CG Code[199]. - The Company has established procedures for employees to raise concerns about financial reporting improprieties since April 1, 2012[188].

香港交易及結算所有限公司及香港聯合交易所有限公司對本公佈的內容概不 負責，對其準確性或完整性亦不發表任何聲明，並明確表示，概不對因本公佈 全部或任何部分內容而產生或因倚賴該等內容而引致的任何損失承擔任何責 任。 Daohe Global Group Limited 道 和 環 球 集 團 有 限 公 司 （於百慕達註冊成立之有限公司） （股份代號：915） 截 至 二 零 二 二 年 十 二 月 三 十 一 日 止 年 度 末 期 業 績 公 佈 末期業績摘要： • 收益由截至二零二一年十二月三十一日止年度約62,600,000美元（相等於 約487,000,000港元）下降約17.2%至截至二零二二年十二月三十一日止年 度約51,900,000美元（相等於約403,800,000港元）。 • 截至二零二二年十二月三十一日止年度之溢利約為1,000,000美元（相等 於約7,800,000港元），較去年約4,100,000美元（相等於約31,900,000港元）下 跌約75.0%。 • 董事不建議就截至二零二二年十二月三十一日止年度派付末期股息。 ...

Financial Performance - Revenue for the six months ended June 30, 2022, was $30,389,000, representing an increase of 8.3% from $28,072,000 in the same period of 2021[4] - Gross profit for the period was $9,538,000, up from $8,883,000 in 2021, indicating a growth of 7.4%[4] - Profit for the period attributable to owners of the company decreased to $681,000, down 18.6% from $836,000 in 2021[4] - Basic and diluted earnings per share attributable to ordinary equity holders were both $0.05, compared to $0.06 in the previous year[4] - The company reported total comprehensive income for the period attributable to owners of the company at $243,000, down from $1,065,000 in 2021[8] - As of June 30, 2022, the total comprehensive income for the period was $243,000, compared to $1,065,000 for the same period in 2021, reflecting a decrease of approximately 77%[21] - The profit for the period for the six months ended June 30, 2022, was $681,000, a decrease from $836,000 in the same period of 2021, representing a decline of about 18.6%[21] - The Group's profit before tax for the first half of 2022 was impacted by a foreign exchange difference of US$187,000, compared to US$134,000 in 2021[66] - Profit for the period decreased from approximately US$0.8 million to approximately US$0.7 million[106] Assets and Liabilities - Total non-current assets increased to $2,325,000 as of June 30, 2022, from $1,758,000 at the end of 2021, reflecting a growth of 32.3%[15] - Total current assets decreased to $27,203,000 from $29,090,000, a decline of 6.5%[15] - Total current liabilities decreased to $17,091,000 from $19,091,000, showing a reduction of 10.5%[15] - Net assets as of June 30, 2022, were $11,202,000, an increase from $10,959,000 at the end of 2021, representing a growth of 2.2%[18] - Total liabilities as of June 30, 2022, were US$19,889,000, an increase from US$18,326,000 as of December 31, 2021[56] - Trade receivables decreased to US$7,287,000 as of June 30, 2022, from US$9,181,000 as of December 31, 2021, reflecting a reduction of approximately 20.6%[80] - Trade payables decreased to US$2,409,000 as of June 30, 2022, from US$4,253,000 as of December 31, 2021, a reduction of approximately 43.3%[85] Cash Flow and Capital Expenditures - Cash and cash equivalents at the end of the period were $15,628,000, an increase from $12,064,000 at the end of June 30, 2021, indicating a growth of approximately 29.5%[30] - Net cash flows from operating activities for the six months ended June 30, 2022, were $732,000, down from $968,000 in the same period of 2021, a decrease of about 24.4%[30] - The company reported a decrease in cash generated from operations to $828,000 in 2022 from $952,000 in 2021, a decline of approximately 13%[30] - Capital expenditures for the trading and supply chain management services segment were $12,000, while total capital expenditures across both segments were $28,000[49] - The Group acquired assets totaling US$28,000 during the six months ended June 30, 2022, a decrease of 41.7% from US$48,000 in 2021[76] Segment Performance - For the six months ended June 30, 2022, segment revenue from trading and supply chain management services was $15,226,000, while revenue from online social platforms was $15,163,000, totaling $30,389,000[49] - The adjusted profit before tax for the trading and supply chain management services segment was $1,625,000, compared to a loss of $469,000 for the online social platforms segment, resulting in a total profit before tax of $819,000[49] - Revenue from trading and supply chain management services grew approximately 22.1% from approximately US$12.5 million to approximately US$15.2 million[106] - Overall revenue from the Group's online social platforms business fell by approximately 2.8% from approximately US$15.6 million to approximately US$15.2 million[106] Economic and Market Conditions - The domestic economy in China was significantly impacted by the rapid spread of COVID-19 variants and strict government control measures, leading to reduced consumer spending and affecting the Group's online business profitability[142] - The new compliance guidelines regulating the "blind box" market released in early 2022 adversely affected sales of blind box products in the first half of 2022[144] - The Group anticipates that the downward trend in the performance of online social platforms will continue into the second half of 2022 due to ongoing economic pressures[144] - Management expects a challenging global business environment in the second half of 2022, with order placements likely to be adversely affected[141] VIE Contracts and Compliance - The VIE Contracts were established to comply with Chinese laws, allowing the WFOE to control the OPCO's financial performance and economic benefits[164] - The agreements are designed to ensure that all economic interests and risks of the OPCO flow to the WFOE, maintaining compliance with the negative list of foreign investment restrictions[163] - The VIE Contracts are legally binding and do not violate PRC laws, ensuring compliance with relevant regulations[186] - The VIE Contracts allow for dispute resolution through arbitration at the South China International Economic and Trade Arbitration Commission[191] - The company consults its PRC legal adviser to monitor legal developments affecting the VIE Contracts, ensuring compliance and risk mitigation[184]

Financial Performance - Daohe Global's revenue increased by approximately 46.9%, from approximately US$42.7 million in 2020 to approximately US$62.6 million for the year ended 31 December 2021[22] - The trading and supply chain management services business revenue grew by approximately 50.5%, rising from approximately US$19.7 million in 2020 to approximately US$29.6 million in 2021[23] - The online social platforms business revenue surged by approximately 43.7%, climbing from approximately US$23.0 million in 2020 to approximately US$33.0 million in 2021[23] - Gross profit increased by approximately 64.2% to approximately US$20.9 million in 2021, up from approximately US$12.7 million in 2020[24] - The Group achieved a profit of approximately US$4.1 million in 2021, a turnaround from a loss of approximately US$3.5 million in 2020[27] - Revenue from trading and supply chain management services rose by approximately 50.5% to approximately US$29.6 million in 2021, accounting for approximately 47.3% of total revenue[42] - Revenue from online social platforms grew by approximately 43.7% year-on-year, rising from approximately US$23.0 million in 2020 to approximately US$33.0 million in 2021[43] - Revenue from gamified social and online entertainment soared by approximately 90.1% year-on-year to approximately US$27.0 million in 2021[44] Operational Insights - The management anticipates steady growth in trading and supply chain management services in the first half of 2022 based on the number of orders received[11] - The management expects demand for trading and supply chain management services to remain high in the first half of 2022, despite challenges from the Omicron variant and global supply chain disruptions[60] - The online social platforms segment showed resilience in 2021, driven by the claw crane mobile online game, although recent COVID-19 surges may impact user spending[61] - The Group plans to continue exploring partnerships with toy designers and IP providers to enhance its pop toy business, which is still in the preliminary development stage[61] - Daohe Global plans to invest more resources in the development of the claw crane mobile online game and expand its unique pop toys product offerings[15] - The trend toy business is still in its early development stage, but management believes it has significant growth potential in the medium to long term, leading the company to allocate more resources to this area[64] Financial Position - The Group's cash and cash equivalents increased to approximately US$16.1 million as of December 31, 2021, up from approximately US$12.2 million in 2020[49] - As of December 31, 2021, the Group's current ratio was approximately 1.5, and the gearing ratio was approximately 0.11, with interest-bearing borrowings of approximately US$1.2 million and total equity of approximately US$11.0 million[50] - The Group's net asset value increased to approximately US$11.0 million as of December 31, 2021, compared to approximately US$6.9 million in 2020[50] - Trade receivables amounted to approximately US$8.0 million as of December 31, 2021, an increase from approximately US$3.7 million in 2020, with gross trade receivables aged over 90 days at approximately US$2.3 million[50] - Other income decreased by approximately US$1.6 million to approximately US$0.8 million in 2021, due to a one-off reversal of provisions in 2020[28] - Operating expenses increased by approximately 4.0% to approximately US$17.7 million in 2021, primarily due to higher personnel and marketing costs[26] Governance and Compliance - The company has a strong governance structure with independent non-executive directors overseeing key committees, ensuring compliance and strategic direction[84] - The Company has complied with all applicable Code Provisions of the Corporate Governance Code for the year ended December 31, 2021, except for certain deviations discussed in the report[105] - The Company has established mechanisms to ensure independent views and input are available to the Board, including strengthening the recruitment process for independent non-executive Directors[110] - The Company has adopted a Board Diversity Policy to achieve diversity on the Board, recognizing its importance in maintaining an effective Board and enhancing corporate governance standards[115] - The Board aims to achieve gender diversity by appointing one female director on or before December 31, 2024[123] - The Company has confirmed compliance with the Model Code for Securities Transactions by Directors throughout the year ended December 31, 2021[106] - The Company has established written guidelines for securities transactions by relevant employees likely to possess unpublished inside information[106] Management and Board Structure - The Board currently has five committees to assist in governance and oversight functions[136] - The roles of Chairman and CEO are segregated, with Mr. Zhou Xijian serving as Chairman and Mr. Wong Hing Lin, Dennis as CEO[182] - The Company has arranged appropriate insurance coverage for directors' and officers' liabilities against legal actions[125] - The Company has issued formal letters of appointment to its independent non-executive directors, outlining key terms of their appointments[186] - Each newly appointed Director receives a comprehensive induction to ensure understanding of the Group's business and operations[192] - The Company provides regular updates and presentations on changes in the business and regulatory environments to the Directors[198] - The Company continues to consider diversity perspectives in hiring for senior management positions[123]

Financial Performance - Revenue for the six months ended June 30, 2021, was $28,072,000, representing a 49.9% increase from $18,734,000 in the same period of 2020[7] - Gross profit for the same period was $8,883,000, up from $5,427,000, indicating a gross margin improvement[7] - Profit attributable to owners of the company for the period was $836,000, a significant recovery from a loss of $3,352,000 in the prior year[11] - Basic and diluted earnings per share for the period were both $0.06, compared to a loss of $0.22 per share in the previous year[8] - For the six months ended June 30, 2021, the total comprehensive income was US$1,065,000, compared to a total comprehensive loss of US$3,472,000 for the same period in 2020[19] - The Group reported a profit before tax of US$911,000 and a profit for the period of US$836,000 for the same period[40] - The Group turned around from a loss of approximately US$3.4 million for the six months ended 30 June 2020 to a profit of approximately US$0.8 million for the review period[108] Assets and Liabilities - Total current assets increased to $21,436,000 as of June 30, 2021, from $21,074,000 at the end of 2020[14] - Net current assets rose to $7,233,000, compared to $6,450,000 at the end of 2020, reflecting improved liquidity[14] - Total assets less current liabilities increased to $9,323,000 from $8,487,000 at the end of 2020, indicating a stronger financial position[14] - Total assets as of June 30, 2021, increased to US$23,526,000 from US$23,111,000 as of December 31, 2020, reflecting a growth of approximately 1.8%[50] - Segment liabilities totaled US$11,588,000 as of June 30, 2021, compared to US$12,255,000 as of December 31, 2020, indicating a decrease of approximately 5.4%[50] Cash Flow and Financing - The operating profit before working capital changes for the first half of 2021 was US$1,412,000, while the cash generated from operations was US$952,000[27] - Cash and cash equivalents at the end of the period were US$12,064,000, an increase from US$10,699,000 at the end of June 2020[27] - The company reported a net cash outflow from financing activities of US$1,482,000 for the first half of 2021[27] - The accumulated losses as of June 30, 2021, were US$170,860,000, a decrease from US$171,649,000 at the end of June 2020[19] Revenue Breakdown - For the six months ended June 30, 2021, the Group's total revenue from external customers was US$28,072,000, with segment revenues of US$12,474,000 from trading and supply chain management services and US$15,598,000 from online social platforms[38] - Sales of merchandise rose to US$10,306,000 in the first half of 2021, up 51.8% from US$6,811,000 in the prior year[53] - Commission income increased by 57.2% to US$4,350,000 in 2021 from US$2,763,000 in 2020[53] - Internet value-added services (IVAS) revenue surged to US$13,414,000, a growth of 132.1% compared to US$5,784,000 in the previous year[53] - Revenue from trading and supply chain management services grew approximately 51.4% from approximately US$8.2 million to approximately US$12.5 million[104] - Overall revenue from the online social platforms business surged by approximately 48.6% from approximately US$10.5 million to approximately US$15.6 million[104] Expenses and Cost Management - The company experienced a decrease in post-employment benefits of US$19,000 during the first half of 2021[27] - The cost of inventories sold for the first half of 2021 was US$7,375,000, an increase of 52.2% from US$4,845,000 in 2020[64] - Cost of services provided rose to US$11,814,000 in 2021, up 39.5% from US$8,462,000 in the previous year[64] - Employee benefit expenses decreased slightly to US$5,736,000 in 2021 from US$6,047,000 in 2020, reflecting a reduction of 5.2%[64] - Operating expenses decreased by approximately 20.1% to approximately US$8.4 million from approximately US$10.5 million for the corresponding period last year[107] Management and Strategy - The management expects a challenging business environment in the second half of 2021 due to various external factors[139] - The management expects the positive trend in the online social platforms business to be sustainable in the second half of 2021, driven by growth in the pop toys market in the PRC[145] - The management plans to enhance sales and promotional strategies through various channels and explore innovative ideas to meet the changing needs of consumers in the PRC[146] - The management will implement effective cost control measures to maintain competitiveness in a challenging business environment[143] - The Group remains cautiously optimistic about its long-term business development despite challenges and uncertainties in the global markets due to the ongoing COVID-19 pandemic[147] VIE Contracts and Regulatory Risks - The Group's business operations are subject to restrictions for foreign investors under the Negative List, necessitating the use of VIE Contracts to gain control over the OPCO Group[157] - The Exclusive Technology Consulting and Services Agreement allows the WFOE to provide consulting services to the OPCO, with service fees equating to 100% of the net profit after deducting taxes, costs, and expenses[160] - The VIE Contracts include a Business Operation Agreement with an initial term of 10 years, allowing WFOE to control OPCO's operations and management[163] - The PRC government may determine that the VIE Contracts do not comply with applicable regulations, posing potential risks[185] - The VIE Contracts are legally binding and do not violate mandatory provisions of laws applicable to the WFOE and OPCO[191]

道和環球 DAOHE GLOBAL DAOHE GLOBAL GROUP LIMITED 道和環球集團有限公司 (Incorporated in Bermuda with limited liability 於百慕達註冊成立之有限公司) (Stock Code 股份代號: 915) ANNUAL REPORT 年報 2020 ● T: . · 0 ● ● . . o . . of 3 5 CONTENTS 目 錄 | --- | --- | --- | |-------|-------|------------------------------------------------------------------------------| | | | | | | | Chairman's Statement 主席報告書 | | | | Management Discussion and Analysis 管理層討論及分析 | | 11 | | Biographical Details of Directors and Senior Management 童事及高級管理層资料 | | 17 | | Corp ...