Company Overview - Qingdao Wangshengyuan Metal Technology Co., Ltd. is located in Jiaozhou, Qingdao, Shandong Province, with a strategic position near major transportation hubs, including Qingdao Liuting International Airport (70 km), Qingdao Port (80 km), and Huangdao Port (60 km) [1] - The company covers an area of 216 acres with a building area of over 30,000 square meters, employing more than 380 staff and having a total investment exceeding 120 million yuan [1] Production Capabilities - The company utilizes advanced international equipment such as dual-station wax injection machines, shell hanging chains, medium-frequency induction furnaces, machining centers, and ultrasonic cleaning machines, specializing in precision casting and CNC machining processes [3] - It produces precision castings made from stainless steel, carbon steel, alloy steel, and heat-resistant steel, with main products including automotive engine components, valve bodies, marine hardware, mechanical parts, and medical equipment [3] - The annual production capacity reaches 1,500 tons, with 95% of products exported to countries and regions such as South Korea, Japan, Europe, and North America [3] Certifications and Technology - The company obtained ISO 9001 quality management system certification in August 2013, followed by safety production standardization level three certification in January 2017, and updated IATF 16949:2016 quality management system certification in April 2018 [5] - It is recognized as a high-tech enterprise in Qingdao and has received certificates for specialized and innovative products (technologies), holding over ten utility model patents [5] Equipment and Standards - The company boasts advanced equipment and strong technical capabilities, with comprehensive testing methods including spectrometric analysis, coordinate measuring machines, X-ray inspection, fluorescent magnetic particle testing, electronic endoscopes, and universal testing machines [7] - It can produce castings according to various international standards, including Chinese (GB), American (ASTM, AISI), German (DIN), British (BS), Japanese (JIS), and Korean (KS) standards [7] Industry Events - The 21st Shanghai International Foundry Exhibition is scheduled to take place from December 2 to 4, 2025, at the Shanghai New International Expo Center, expecting over 1,000 foundry and related enterprises with an exhibition area of 40,000 square meters and more than 30,000 professional visitors [9][11][12][13]

Group 1 - International Precision Group Limited (IPE Group) was established in 1990 and listed on the Hong Kong Stock Exchange on November 1, 2004, with stock code 00929 [2] - IPE Group is a subsidiary of China Baoan Group, which is one of the first batch of listed companies in New China, founded in July 1983 [2] - The company operates in high-end precision manufacturing, providing products for automotive, hydraulic, and humanoid robots, and has become a comprehensive solution provider for Fortune Global 500 clients [2] Group 2 - IPE Group has established production bases in Thailand and various cities in mainland China, including Guangzhou, Dongguan, Changshu, Yangzhou, Shanghai, and Wuhu [2] - The company has accumulated five core competitive advantages over 30 years, including advanced automation manufacturing technology, refined processing techniques, precision testing equipment, international-level heat treatment production lines, and rich material selection experience [2] - IPE Group's automotive products are exported overseas and have received multiple awards for excellence from major automotive manufacturers in Europe and the US, establishing long-term stable partnerships with clients such as General Motors, Bosch, Continental Group, BorgWarner, and Danfoss [2]

Financial Performance - The company reported a significant increase in revenue, achieving a total of $500 million for the fiscal year, representing a 20% growth compared to the previous year[19]. - Revenue for the year ended December 31, 2024, reached HKD 1,010,006 thousand, a 12.4% increase from HKD 898,733 thousand in 2023[23]. - Gross profit margin improved to 28.3% in 2024 from 24.8% in 2023, reflecting better cost management[25]. - Net profit for the year was HKD 30,111 thousand, up from HKD 15,645 thousand in 2023, representing a 92.5% increase[23]. - The total sales revenue for the year 2024 was HK$1,010,006,000, an increase of HK$111,273,000 or 12.4% compared to the previous year[35]. - The gross profit for 2024 was HK$285,705,000, up HK$62,881,000 or 28.2% from HK$222,824,000 in the previous year, with a gross margin increase to 28.3%[38]. - The net profit after tax for the year was HK$30,111,000, a significant increase of 92.5% from HK$15,645,000 in the previous year[39]. Market Expansion - The company provided a positive outlook for the next fiscal year, projecting a revenue growth of 25% and aiming to reach $625 million[19]. - The company is expanding its market presence in Southeast Asia, targeting a 30% market share in the region by 2025[19]. - The company plans to expand its market presence in North America, which accounted for 19% of revenue in 2024[27]. - The company plans to focus on developing new products and expanding into overseas markets, particularly ASEAN and Eastern Europe[41]. Product Development - New product development includes the launch of a precision hydraulic control system, expected to contribute $50 million in revenue in the first year[19]. - The company has filed 88 patent applications and obtained 71 patents, enhancing its competitive edge in new product development[39]. Operational Efficiency - The company has invested $10 million in R&D for advanced manufacturing technologies, aiming to improve efficiency by 15%[19]. - The company plans to enhance its supply chain management, aiming to reduce costs by 10% over the next year[19]. - The company aims to optimize cost structures and enhance operational efficiency through lean projects and improved supply chain collaboration[41]. Corporate Governance - The company emphasizes the importance of good corporate governance for its success and sustainability, adhering to the corporate governance code as per the Hong Kong Stock Exchange regulations[64]. - The board of directors is responsible for overall business management and monitoring, with a focus on enhancing shareholder value through strategic policy approval[65]. - The company has a commitment to regularly review and enhance its corporate governance practices to meet regulatory requirements and shareholder expectations[64]. - The board has delegated certain responsibilities to senior management for implementing decisions and coordinating daily operations[66]. Leadership and Management - The company reported a significant leadership team with extensive experience in finance and management, including the CEO and executive directors with backgrounds in economics and business administration[54][55][56][57][58][59]. - The CEO, Mr. Zeng Guangsheng, has been with the group since 2016 and holds a PhD in economics, indicating strong academic credentials[54]. - The CFO, Mr. Wu Kaiping, has been responsible for overall financial management since joining in 2016, showcasing a focus on financial oversight[54]. - The independent directors bring over 30 years of experience in finance, auditing, and taxation, enhancing the board's governance capabilities[56][57]. Environmental, Social, and Governance (ESG) - The company emphasizes environmental, social, and governance (ESG) factors, with board members involved in ESG committees and initiatives[57][58]. - The company aims to become a leading provider of high-precision manufacturing services and solutions, focusing on technological innovation and market expansion[82]. - The company is committed to integrating ESG principles into its strategic decision-making and operational processes, reflecting its responsibility to society[130]. - The ESG committee, consisting of executive and independent non-executive directors, oversees all ESG topics and reports regularly to the board[130]. Sustainability Initiatives - The company has achieved multiple local and international certifications, including IATF16949:2016 and ISO9001:2015, demonstrating operational excellence[134]. - The company has implemented measures to improve energy efficiency and reduce environmental impact, adhering strictly to environmental laws and regulations[182]. - The company has successfully connected a 1.49 MW distributed photovoltaic project to the grid, with an expected annual generation of 1.5 million kWh, significantly reducing greenhouse gas emissions[167]. - The company aims to further reduce environmental impact through the expansion of renewable energy projects and energy efficiency upgrades[167]. Employee and Workforce Management - The workforce increased to 2,173 employees as of December 31, 2024, up by 108 from 2,065 employees a year earlier, including the addition of two subsidiaries[53]. - The company has implemented appropriate recruitment measures to ensure diversity among candidates for senior management positions[105]. - The gender ratio of the company's workforce, including senior management and other employees, is approximately 1:0.66, indicating a commitment to gender diversity in key positions[105]. Risk Management - The board is responsible for evaluating and determining the nature and extent of risks the group is willing to accept to achieve strategic objectives, ensuring effective risk management and internal control systems are in place[111]. - The group has established an internal audit function to identify and assess risks related to daily operations and report findings to the board[112]. - The board has reviewed the effectiveness of the risk management and internal control systems and considers them to be effective and sufficient[112].

Financial Performance - Revenue for the year increased by 12.4% to HKD 1,010,000,000 compared to HKD 898,700,000 in the previous year[2] - Profit for the year surged by 92.5% to HKD 30,100,000, up from HKD 15,600,000 in the previous year[2] - Basic earnings per share rose to HKD 1.01 from HKD 0.54 in the previous year[2] - Total revenue for the year ended December 31, 2024, was HKD 1,010,006,000, an increase of 12.4% compared to HKD 898,733,000 in 2023[16] - Gross profit for 2024 was HKD 285,705,000, compared to HKD 222,824,000 in 2023, indicating a year-over-year increase of about 28.2%[21] - Net profit after tax for the year was HKD 30,111,000, a significant increase of HKD 14,466,000 or 92.5% compared to HKD 15,645,000 in the previous year[45] - Basic earnings per share for 2024 were HKD 10,597,000, compared to HKD 5,667,000 in 2023, showing a substantial increase of approximately 87.5%[28] Revenue Breakdown - Revenue from hydraulic equipment parts increased significantly to HKD 485,904,000, up 33.3% from HKD 364,444,000 in the previous year[16] - Sales of electronic equipment parts decreased to HKD 27,244,000, down 24.8% from HKD 36,192,000 in 2023[16] - Total customer revenue for 2024 reached HKD 1,010,006,000, an increase from HKD 898,733,000 in 2023, representing a growth of approximately 12.4%[21] - Sales of hydraulic equipment parts amounted to HKD 485,904,000, achieving double-digit growth and becoming the largest revenue segment for the company[40] - Automotive parts sales recorded HKD 444,860,000, remaining roughly flat compared to the previous year despite pressures from declining orders in traditional automotive projects[41] - Sales in the electronic equipment parts segment decreased by HKD 8,948,000 or 24.7%, totaling HKD 27,244,000 due to overall market contraction[41] Cash and Assets - The company reported a net cash position of HKD 223,400,000, equivalent to HKD 21.23 per share, down from HKD 488,800,000 or HKD 46.45 per share in the previous year[2] - Total assets decreased to HKD 1,986,266,000 from HKD 2,119,470,000 in the previous year[6] - The net cash position as of December 31, 2024, is HKD 223,396,000, a decrease of HKD 265,458,000 from HKD 488,854,000 last year[55] - The total cost of investment properties and other properties amounted to HKD 2,788,135 thousand, an increase from HKD 2,671,207 thousand at the beginning of the year, representing a growth of approximately 4.4%[31] - The net book value of intangible assets as of December 31, 2023, was HKD 68,362 thousand, down from HKD 71,972 thousand at the beginning of the year, indicating a decrease of about 5.5%[32] Liabilities and Equity - Current liabilities increased to HKD 484,051,000 from HKD 427,357,000 in the previous year[6] - Non-current liabilities decreased significantly to HKD 38,348,000 from HKD 155,280,000 in the previous year[6] - Total equity decreased to HKD 1,947,918,000 from HKD 1,964,190,000 in the previous year[6] - The total bank borrowings increased to HKD 285,783,000 from HKD 166,355,000 in the previous year, primarily due to acquisition costs and new factory construction[52] Research and Development - Research and development costs rose to HKD 80,641,000 in 2024 from HKD 57,696,000 in 2023, reflecting a significant increase of approximately 39.7%[26] - Research and development expenses increased due to the acquisition of Yutai Hydraulic and Wuhu Yingnuo, with 88 patents applied for and 71 patents obtained[44] Corporate Governance - The company has adopted corporate governance principles and has complied with the corporate governance code for the year ending December 31, 2024, with some exceptions noted[62] - The audit committee consists of three independent non-executive directors, ensuring compliance with accounting principles and discussing risk management and internal controls[63] - The board of directors includes executive and independent non-executive members, ensuring diverse governance[67] Future Outlook - Future outlook includes continued focus on expanding product lines and market presence, particularly in hydraulic equipment[16] - The company plans to enhance its competitive advantage by focusing on new products, technologies, and processes while optimizing cost structures and expanding into new markets[46] - The average forecast sales growth rate for the next five years is projected at 4%, up from 3% in 2023[34]

[Company Information and Structure](index=2&type=section&id=Company%20Information%20and%20Structure) [Company Information](index=2&type=section&id=Company%20Information) This section provides the basic company information for International Precision Group Limited, including the board of directors and committee members, registered office, principal place of business, legal advisors, auditors, and listing information - The Chairman and Chief Executive Officer of the company is Mr. Zeng Guangsheng[9](index=9&type=chunk) - The company is registered in the Cayman Islands and listed on the Main Board of The Stock Exchange of Hong Kong with stock code **929**[41](index=41&type=chunk)[40](index=40&type=chunk) [Company Profile](index=6&type=section&id=Company%20Profile) International Precision Group primarily manufactures and sells precision metal parts for automotive, hydraulic, electronic equipment, and other instruments, serving top-tier multinational corporations and supporting new project development - The Group's principal business involves the manufacturing and sale of precision metal parts for applications in automotive, hydraulic equipment, and electronic devices[41](index=41&type=chunk) - The Group serves top-tier multinational corporations in the IT, hydraulic power, automotive, and electrical appliance industries, providing solutions for new project development[41](index=41&type=chunk) [Company Milestones](index=7&type=section&id=Company%20Milestones) This section reviews the company's key development milestones, from its establishment in Singapore in 1990 to its expansion in Hong Kong, Thailand, and mainland China, culminating in its listing on the Hong Kong Main Board in 2004 - The company was listed on the Main Board of The Stock Exchange of Hong Kong on **November 1, 2004**[42](index=42&type=chunk) - In recent years, several of the company's subsidiaries (e.g., Guangzhou Huitong, Dongguan Keda, Guangzhou Xinhao) have been recognized as high-tech enterprises or 'specialized, refined, unique, and innovative' SMEs, and have received awards in hydraulic technology[42](index=42&type=chunk) [Group Structure](index=8&type=section&id=Group%20Structure) This section presents the organizational chart of International Precision Group Limited as of June 30, 2024, detailing its network of principal subsidiaries and associates across mainland China, Hong Kong, Thailand, and the British Virgin Islands - The Group manages its manufacturing and sales operations in mainland China and Thailand through multiple investment holding companies established in the British Virgin Islands and Hong Kong[43](index=43&type=chunk) - The Group has a deep presence in the hydraulic business sector, owning several related subsidiaries such as Guangzhou Huitong Precision Hydraulic and Jiangsu Kaimai Hydraulic Control System[43](index=43&type=chunk) [Financial and Operational Analysis](index=10&type=section&id=Financial%20and%20Operational%20Analysis) [Financial Highlights](index=10&type=section&id=Financial%20Highlights) This section provides an overview of the Group's key financial ratios, business segments, and geographical revenue composition, highlighting a gross profit margin recovery to 27.4% and hydraulic business becoming the largest revenue source Key Financial Ratios Analysis | Metric | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Current Ratio | 4.12 | 3.43 | | Gearing Ratio | 15.6% | 9.4% | | Gross Profit Margin | 27.4% | 24.8% | | Net Profit Margin | 2.5% | 1.7% | | Earnings Per Share | 0.2 HK cents | 0.54 HK cents | - By business segment, hydraulic business revenue of **HK$252 million** in H1 2024 surpassed automotive business revenue of **HK$227 million** for the first time, becoming the Group's largest revenue source[47](index=47&type=chunk)[54](index=54&type=chunk) - By geographical region, revenue from mainland China, Macau, and Hong Kong markets increased from **45%** in the prior period to **55%** in H1 2024[48](index=48&type=chunk)[49](index=49&type=chunk) [Management Discussion and Analysis](index=13&type=section&id=Management%20Discussion%20and%20Analysis) Management reviews H1 2024 performance, noting a 19.6% increase in total sales to HK$502 million and a 54.1% rise in net profit to HK$12.69 million, driven by hydraulic business acquisitions and automotive order recovery [Business Review](index=13&type=section&id=Business%20Review) In H1 2024, the Group's total sales increased by 19.6% to HK$502 million, with hydraulic equipment parts sales surging by 39.8% due to acquisitions and organic growth, while electronic equipment parts sales continued to decline H1 2024 Sales by Business Segment | Business Segment | H1 2024 (HK$ '000) | Proportion (%) | H1 2023 (HK$ '000) | Proportion (%) | Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | Automotive Parts | 226,890 | 45.2 | 207,303 | 49.4 | +9.4 | | Hydraulic Equipment Parts | 251,685 | 50.1 | 180,051 | 42.9 | +39.8 | | Electronic Equipment Parts | 14,327 | 2.9 | 22,130 | 5.3 | -35.3 | | Others | 9,247 | 1.8 | 10,277 | 2.4 | -10.0 | | **Total** | **502,149** | **100** | **419,761** | **100** | **+19.6** | - The Group's net profit increased by **54.1%** year-on-year to **HK$12.69 million**, primarily due to increased sales and a gross profit margin improvement from **23.0%** to **27.4%**[54](index=54&type=chunk)[58](index=58&type=chunk) [Financial Review](index=14&type=section&id=Financial%20Review) The Group's gross profit increased by 42.5% to HK$137 million, with a 4.4 percentage point rise in gross profit margin to 27.4%, while sales, administrative, R&D, and finance costs all increased due to acquisitions and business expansion - Sales and distribution expenses increased by **HK$5.5 million** year-on-year, mainly due to expanded scale post-acquisition and increased marketing activities[56](index=56&type=chunk) - Administrative expenses increased by **HK$7.88 million** year-on-year, primarily due to patent amortization and increased salaries and benefits from acquisitions[56](index=56&type=chunk) - Finance costs increased by **HK$4.41 million** year-on-year to **HK$8.78 million**, mainly due to increased bank borrowings for acquisitions[58](index=58&type=chunk) [Liquidity, Financial Resources, and Financial Ratios](index=17&type=section&id=Liquidity%2C%20Financial%20Resources%2C%20and%20Financial%20Ratios) As of June 30, 2024, the Group's net cash decreased significantly to HK$254 million from HK$489 million at year-end, primarily due to acquisition payments and capital expenditures, necessitating new bank borrowings Condensed Cash Flow Statement (Six Months Ended June 30) | Item (HK$ '000) | H1 2024 | H1 2023 | | :--- | :--- | :--- | | Net cash inflow from operating activities | 23,174 | 39,818 | | Net cash outflow from investing activities | (254,278) | (35,474) | | Net cash inflow/(outflow) from financing activities | 110,065 | (24,312) | - The Group's net cash decreased from **HK$489 million** at the end of 2023 to **HK$254 million** at the end of June 2024, a reduction of **HK$233 million**[60](index=60&type=chunk) [Human Resources](index=18&type=section&id=Human%20Resources) As of June 30, 2024, the Group employed 2,257 staff, an increase of 86 year-on-year, with total staff costs for the first half of the year amounting to approximately HK$120 million, up 9.5% - As of June 30, 2024, the Group's total number of employees was **2,257**, compared to **2,171** in the prior period[63](index=63&type=chunk) - Total staff costs for H1 2024 were approximately **HK$119.663 million**, compared to **HK$109.302 million** in the prior period[63](index=63&type=chunk) [Outlook](index=18&type=section&id=Outlook) Management anticipates future challenges including new energy vehicle impact on traditional fuel cars, unstable Sino-US relations, and intensified price competition in the domestic hydraulic industry, driving a strategic focus on sales breakthroughs, R&D, cost reduction, and transformation - External risks faced by the company include the impact of new energy vehicles on the traditional automotive market, unstable Sino-US relations, and intensified price competition in the domestic hydraulic industry[64](index=64&type=chunk) - Response strategies include developing new products and clients, increasing recruitment of key talent to enhance R&D, and promoting automation and lean production to improve efficiency[64](index=64&type=chunk) [Condensed Consolidated Financial Statements](index=19&type=section&id=Condensed%20Consolidated%20Financial%20Statements) [Condensed Consolidated Statement of Profit or Loss](index=19&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss) This statement presents the income, costs, expenses, and profit for the six months ended June 30, 2024, with profit for the period increasing by 54.1% to HK$12.69 million from HK$8.23 million in the prior year Condensed Consolidated Statement of Profit or Loss (Six Months Ended June 30) | Item (HK$ '000) | 2024 (Unaudited) | 2023 (Unaudited) | | :--- | :--- | :--- | | Revenue | 502,149 | 419,761 | | Gross Profit | 137,394 | 96,418 | | Operating Profit | 26,364 | 12,282 | | Profit Before Tax | 16,904 | 7,306 | | **Profit for the Period** | **12,688** | **8,231** | | Profit/(Loss) attributable to equity holders of the Company | 2,378 | (1,249) | | Basic earnings per share | 0.2 HK cents | -0.1 HK cents | [Condensed Consolidated Statement of Comprehensive Income](index=20&type=section&id=Condensed%20Consolidated%20Statement%20of%20Comprehensive%20Income) This statement shows that after accounting for a foreign exchange loss of HK$35.58 million, the total comprehensive loss for the six months ended June 30, 2024, amounted to HK$22.89 million Condensed Consolidated Statement of Comprehensive Income (Six Months Ended June 30) | Item (HK$ '000) | 2024 (Unaudited) | 2023 (Unaudited) | | :--- | :--- | :--- | | Profit for the period | 12,688 | 8,231 | | Exchange differences on translation of foreign operations | (35,578) | (51,844) | | **Total comprehensive (loss)/income for the period** | **(22,890)** | **(43,613)** | [Condensed Consolidated Statement of Financial Position](index=21&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) This statement outlines the assets, liabilities, and equity as of June 30, 2024, showing net assets of HK$1.941 billion, a slight decrease from HK$1.964 billion at the end of 2023, with an increase in total bank and other borrowings Condensed Consolidated Statement of Financial Position Summary | Item (HK$ '000) | June 30, 2024 (Unaudited) | December 31, 2023 (Audited) | | :--- | :--- | :--- | | Non-current assets | 1,112,483 | 1,082,453 | | Current assets | 1,359,194 | 1,464,374 | | Current liabilities | 330,237 | 427,357 | | Non-current liabilities | 200,140 | 155,280 | | **Net Assets** | **1,941,300** | **1,964,190** | | Cash and bank balances | 556,885 | 674,400 | | Bank and other borrowings (current + non-current) | 302,467 | 185,546 | [Condensed Consolidated Statement of Cash Flows](index=23&type=section&id=Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) This statement indicates a net decrease of HK$121 million in cash and cash equivalents for the six months ended June 30, 2024, with net cash generated from operating activities offset by significant outflows from investing activities and inflows from financing activities Condensed Consolidated Statement of Cash Flows (Six Months Ended June 30) | Item (HK$ '000) | 2024 (Unaudited) | 2023 (Unaudited) | | :--- | :--- | :--- | | Net cash generated from operating activities | 23,174 | 39,818 | | Net cash used in investing activities | (254,278) | (35,474) | | Net cash generated from/(used in) financing activities | 110,065 | (24,539) | | **Net decrease in cash and cash equivalents** | **(121,039)** | **(20,195)** | | Cash and cash equivalents at beginning of period | 674,400 | 729,058 | | **Cash and cash equivalents at end of period** | **556,885** | **705,552** | [Condensed Consolidated Statement of Changes in Equity](index=24&type=section&id=Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity) This statement shows a decrease in total equity from HK$1.964 billion at the beginning of the year to HK$1.941 billion at period-end, primarily due to a total comprehensive loss of HK$22.89 million for the period - As of January 1, 2024, total equity was **HK$1,964,190 thousand**[73](index=73&type=chunk) - Total comprehensive income for the period was negative **HK$22,890 thousand**, primarily comprising exchange difference losses of **HK$35,578 thousand** and profit for the period of **HK$12,688 thousand**[73](index=73&type=chunk) - As of June 30, 2024, total equity was **HK$1,941,300 thousand**[73](index=73&type=chunk) [Notes to the Condensed Financial Statements](index=25&type=section&id=Notes%20to%20the%20Condensed%20Financial%20Statements) [Operating Segment Information (Note 4)](index=26&type=section&id=Operating%20Segment%20Information) This note discloses the Group's revenue and gross profit by customer location, with mainland China, Macau, and Hong Kong contributing the largest portion in H1 2024, followed by North America and Europe Revenue and Gross Profit by Geographical Region (H1 2024, HK$ '000) | Region | Revenue | Gross Profit | | :--- | :--- | :--- | | Mainland China, Macau, and Hong Kong | 275,248 | 75,311 | | North America | 102,037 | 27,919 | | Europe | 86,503 | 23,668 | | Malaysia | 14,068 | 3,849 | | Thailand | 9,562 | 2,616 | | Other Countries | 14,731 | 4,031 | | **Total** | **502,149** | **137,394** | [Revenue and Other Income and Gains (Note 5)](index=28&type=section&id=Revenue%20and%20Other%20Income%20and%20Gains) This note details revenue by product and other income sources, with hydraulic equipment parts sales being the highest at HK$252 million in H1 2024, and total other income amounting to HK$28.78 million Revenue by Product Category (Six Months Ended June 30, HK$ '000) | Product Category | 2024 | 2023 | | :--- | :--- | :--- | | Sales of automotive parts | 226,890 | 207,303 | | Sales of hydraulic equipment parts | 251,685 | 180,051 | | Sales of electronic parts | 14,327 | 22,130 | | Others | 9,247 | 10,277 | | **Total** | **502,149** | **419,761** | - Total other income and gains amounted to **HK$28.78 million**, including net exchange differences of **HK$7.23 million** and government grants of **HK$6.28 million**; the prior period included **HK$7.8 million** in fire insurance compensation, which is absent this period[84](index=84&type=chunk) [Bank and Other Borrowings (Note 17)](index=35&type=section&id=Bank%20and%20Other%20Borrowings) As of June 30, 2024, the Group's total bank borrowings significantly increased to HK$297 million from HK$166 million at the end of 2023, primarily secured by deposits, corporate guarantees, equity, and real estate, with interest rates ranging from 3.20% to 6.01% Bank and Other Borrowings (HK$ '000) | Item | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Bank loans - secured | 296,641 | 150,000 | | Bank loans - unsecured | – | 16,355 | | Other borrowings - unsecured | 5,826 | 19,191 | | **Total** | **302,467** | **185,546** | - Collateral for secured bank loans includes **HK$20 million** in deposits, corporate guarantees, equity interests in subsidiaries, and real estate[102](index=102&type=chunk) [Other Information](index=38&type=section&id=Other%20Information) [Major Shareholders' Interests](index=40&type=section&id=Major%20Shareholders%27%20Interests) This section discloses major shareholders holding over 5% interest in the company, with China Baoan Group Co., Ltd. holding 54.22% through Baoan Technology Co., Ltd. as the controlling shareholder, and Mr. Cui Shaoan and his spouse collectively holding 11.72% Major Shareholders' Shareholding (June 30, 2024) | Name of Major Shareholder | Capacity | Number of Shares Held | Percentage of Issued Share Capital | | :--- | :--- | :--- | :--- | | Baoan Technology Co., Ltd. | Directly Beneficially Owned | 570,546,250 | 54.22% | | China Baoan Group Co., Ltd. | Through Controlled Corporation | 570,546,250 | 54.22% | | Tottenhill Limited | Directly Beneficially Owned | 109,206,975 | 10.38% | | Mr. Cui Shaoan | Through Controlled Corporation and Individually | 123,295,725 | 11.72% | [Share Option Schemes](index=41&type=section&id=Share%20Option%20Schemes) The company maintains share option schemes to incentivize contributors, with details provided for the expired 2011 scheme and the current 2022 scheme, including terms, eligibility, limits, and changes in granted options, noting no new options were granted during the period - The '2011 Share Option Scheme' expired on **May 17, 2021**; as of June 30, 2024, **54,700,000** unexercised share options remain under this scheme[117](index=117&type=chunk)[124](index=124&type=chunk)[125](index=125&type=chunk) - The company adopted a new '2022 Share Option Scheme' on **January 14, 2022**; as of June 30, 2024, **50,700,000** unexercised share options remain under this scheme, with **54,225,413** shares available for future grants[117](index=117&type=chunk)[128](index=128&type=chunk)[138](index=138&type=chunk) - During the reporting period, the company did not grant, exercise, cancel, or cause any share options to lapse under any share option scheme[142](index=142&type=chunk)[125](index=125&type=chunk)[138](index=138&type=chunk) [Interim Dividend](index=48&type=section&id=Interim%20Dividend) The Board of Directors does not recommend the payment of any interim dividend for the six months ended June 30, 2024 - The Board of Directors does not recommend the payment of an interim dividend for the six months ended June 30, 2024 (2023: nil)[144](index=144&type=chunk)[92](index=92&type=chunk) [Corporate Governance](index=49&type=section&id=Corporate%20Governance) The company is committed to high corporate governance standards, largely complying with the HKEX Corporate Governance Code, with the only deviation being the Chairman and CEO roles held by Mr. Zeng Guangsheng, which the Board believes provides strong leadership - The company complied with the principles and code provisions of the Corporate Governance Code, with the only deviation being the non-segregation of the roles of Chairman and Chief Executive Officer as per Code Provision C.2.1[148](index=148&type=chunk) - Mr. Zeng Guangsheng holds both the Chairman and Chief Executive Officer positions; the Board believes this structure provides strong and consistent leadership for the Group, benefiting shareholders as a whole[148](index=148&type=chunk)

Financial Statements [Condensed Consolidated Statement of Profit or Loss](index=1&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss) The Group's H1 2024 revenue increased **19.6%** to **HKD 502.1 million**, with operating profit up **114.6%** to **HKD 26.36 million** and profit for the period rising **54.1%** to **HKD 12.69 million**, turning basic EPS positive to **HKD 0.2 cents** | Metric (HKD Thousands) | H1 2024 (Unaudited) | H1 2023 (Unaudited) | Y-o-Y Change | | :--- | :--- | :--- | :--- | | **Revenue** | **502,149** | **419,761** | **+19.6%** | | Gross Profit | 137,394 | 96,418 | +42.5% | | Operating Profit | 26,364 | 12,282 | +114.6% | | Profit Before Tax | 16,904 | 7,306 | +131.4% | | **Profit for the Period** | **12,688** | **8,231** | **+54.1%** | | Profit/(Loss) Attributable to Equity Holders of the Company | 2,378 | (1,249) | Turned Profitable | | **Basic Earnings Per Share** | **0.2 HK Cents** | **-0.1 HK Cents** | **Turned Profitable** | [Condensed Consolidated Statement of Comprehensive Income](index=2&type=section&id=Condensed%20Consolidated%20Statement%20of%20Comprehensive%20Income) Despite a **HKD 12.69 million** profit for the period, total comprehensive income resulted in a net loss of **HKD 22.89 million** due to **HKD 35.58 million** in foreign currency translation losses, a narrower loss than **HKD 43.61 million** in the prior year | Metric (HKD Thousands) | H1 2024 (Unaudited) | H1 2023 (Unaudited) | | :--- | :--- | :--- | | Profit for the Period | 12,688 | 8,231 | | Exchange Differences on Translation of Foreign Operations | (35,578) | (51,844) | | **Total Comprehensive Income for the Period** | **(22,890)** | **(43,613)** | [Condensed Consolidated Statement of Financial Position](index=3&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2024, total assets were **HKD 2.47 billion** and net assets **HKD 1.94 billion**, largely stable from year-end 2023, with non-current assets rising due to property, plant, and equipment investments, while non-current liabilities increased to support M&A and expansion | Metric (HKD Thousands) | June 30, 2024 (Unaudited) | December 31, 2023 (Unaudited) | | :--- | :--- | :--- | | Non-current Assets | 1,112,483 | 1,082,453 | | Current Assets | 1,359,194 | 1,464,374 | | **Total Assets** | **2,471,677** | **2,546,827** | | Current Liabilities | 330,237 | 427,357 | | Non-current Liabilities | 200,140 | 155,280 | | **Total Liabilities** | **530,377** | **582,637** | | **Net Assets** | **1,941,300** | **1,964,190** | [Condensed Consolidated Statement of Cash Flows](index=5&type=section&id=Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) H1 2024 net cash from operating activities decreased to **HKD 23.17 million**, while investing activities saw a **HKD 254.28 million** net outflow due to M&A and fixed asset investments, leading to a **HKD 110.07 million** net financing inflow and a **HKD 121.04 million** net decrease in cash to **HKD 556.89 million** | Activity (HKD Thousands) | H1 2024 (Unaudited) | H1 2023 (Unaudited) | | :--- | :--- | :--- | | Net Cash Generated from Operating Activities | 23,174 | 39,818 | | Net Cash Used in Investing Activities | (254,278) | (35,474) | | Net Cash Generated From/(Used In) Financing Activities | 110,065 | (24,539) | | **Net Decrease in Cash and Cash Equivalents** | **(121,039)** | **(20,195)** | | Cash and Cash Equivalents at End of Period | 556,885 | 705,552 | [Condensed Consolidated Statement of Changes in Equity](index=6&type=section&id=Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity) As of June 30, 2024, total equity slightly decreased from **HKD 1.964 billion** to **HKD 1.941 billion**, with profit for the period contributing **HKD 2.38 million** to shareholders' equity, offset by **HKD 37.84 million** in exchange differences, resulting in a **HKD 35.46 million** reduction in equity attributable to owners of the Company - Total comprehensive income for the period was **HKD -22.89 million**, with **HKD -35.46 million** attributable to equity holders of the Company and **HKD 12.57 million** to non-controlling interests[6](index=6&type=chunk) Notes to the Financial Statements [Company Information, Basis of Preparation and Principal Accounting Policies](index=7&type=section&id=Company%20Information%2C%20Basis%20of%20Preparation%20and%20Principal%20Accounting%20Policies) The report is prepared in accordance with HKAS 34 'Interim Financial Reporting', with accounting policies consistent with the 2023 annual financial statements, focusing on manufacturing and selling precision metal parts for automotive, hydraulic, and electronic equipment - The Group's principal business involves manufacturing and selling precision metal parts for automotive components, hydraulic equipment, and electronic devices[8](index=8&type=chunk) - The interim financial statements are prepared in accordance with HKAS 34 and the Listing Rules, with accounting policies consistent with the prior year[9](index=9&type=chunk)[10](index=10&type=chunk) [Segment Information](index=8&type=section&id=Segment%20Information) The Group segments business by customer geography, with Mainland China, Macau, and Hong Kong as the largest market, generating **HKD 275.25 million** in H1 2024 revenue, a **45.7%** increase, while North America grew **18.2%** to **HKD 102.04 million**, and Europe saw a decline | Region (HKD Thousands) | H1 2024 Revenue | H1 2023 Revenue | Y-o-Y Change | | :--- | :--- | :--- | :--- | | Mainland China, Macau & Hong Kong | 275,248 | 188,887 | +45.7% | | North America | 102,037 | 86,326 | +18.2% | | Europe | 86,503 | 102,497 | -15.6% | | Malaysia | 14,068 | 21,384 | -34.2% | | Thailand | 9,562 | 6,321 | +51.3% | | Other Countries | 14,731 | 14,346 | +2.7% | | **Total** | **502,149** | **419,761** | **+19.6%** | [Revenue and Other Income](index=10&type=section&id=Revenue%20and%20Other%20Income) In H1 2024, hydraulic equipment parts sales grew **39.8%** to **HKD 251.69 million**, becoming the largest revenue source, while auto parts sales increased **9.4%** to **HKD 226.89 million**, and electronic parts business continued to decline by **35.3%** | Business Segment (HKD Thousands) | H1 2024 Revenue | H1 2023 Revenue | Y-o-Y Change | | :--- | :--- | :--- | :--- | | Sales of Hydraulic Equipment Parts | 251,685 | 180,051 | +39.8% | | Sales of Automotive Parts | 226,890 | 207,303 | +9.4% | | Sales of Electronic Parts | 14,327 | 22,130 | -35.3% | | Others | 9,247 | 10,277 | -10.0% | | **Total** | **502,149** | **419,761** | **+19.6%** | [Finance and Taxation](index=11&type=section&id=Finance%20and%20Taxation) H1 2024 finance costs doubled year-on-year from **HKD 4.37 million** to **HKD 8.78 million** due to increased bank loans for M&A, while income tax expense was **HKD 4.22 million**, compared to a **HKD 0.925 million** tax credit in the prior period - Finance costs were **HKD 8.78 million**, doubling from **HKD 4.37 million** in the prior year, primarily due to increased interest on bank and other borrowings[14](index=14&type=chunk)[31](index=31&type=chunk) - Income tax expense for the period was **HKD 4.22 million**, compared to a tax credit of **HKD 0.925 million** in the prior period[17](index=17&type=chunk) [Earnings Per Share](index=12&type=section&id=Earnings%20Per%20Share) Basic and diluted earnings per share both turned profitable at **HKD 0.2 cents**, up from **HKD -0.1 cents** in the prior year, primarily due to profit attributable to equity holders of the Company improving from a **HKD 1.25 million** loss to a **HKD 2.38 million** profit | Metric | H1 2024 (Unaudited) | H1 2023 (Unaudited) | | :--- | :--- | :--- | | Profit/(Loss) Attributable to Equity Holders of the Company (HKD Thousands) | 2,378 | (1,249) | | Weighted Average Number of Ordinary Shares in Issue (Thousands) | 1,052,254 | 1,052,254 | | **Basic and Diluted Earnings Per Share** | **0.2 HK Cents** | **-0.1 HK Cents** | [Dividends](index=13&type=section&id=Dividends) The Board does not recommend an interim dividend for the six months ended June 30, 2024, consistent with the prior period's policy - The Board does not recommend paying any interim dividend for the six months ended June 30, 2024 (2023: Nil)[20](index=20&type=chunk)[39](index=39&type=chunk) [Key Balance Sheet Items](index=13&type=section&id=Key%20Balance%20Sheet%20Items) As of June 30, 2024, key balance sheet items remained largely stable, with property, plant, and equipment net book value slightly increasing due to construction in progress, inventory decreasing from **HKD 330.5 million** to **HKD 315.1 million**, and trade receivables rising from approximately **HKD 324 million** to **HKD 361 million**, with most within three months - Net book value of property, plant and equipment increased from **HKD 924 million** to **HKD 948 million**, primarily due to construction in progress rising from **HKD 35.34 million** to **HKD 103 million**[21](index=21&type=chunk) Inventories (HKD Thousands) | Inventories (HKD Thousands) | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Raw Materials | 78,709 | 99,655 | | Work-in-progress | 80,439 | 88,445 | | Finished Goods | 135,768 | 125,787 | | **Total** | **315,136** | **330,503** | - Total trade receivables amounted to **HKD 361 million**, with approximately **84%** (**HKD 308 million**) aged within three months[23](index=23&type=chunk) Management Discussion and Analysis [Business Review](index=16&type=section&id=Business%20Review) In H1 2024, the Group's total sales grew **19.6%**, primarily driven by hydraulic equipment parts, which saw a **39.8%** sales increase due to last year's acquisition and synergies, accounting for over **50%** of total sales, while auto parts sales rose **9.4%** due to deferred European ICE bans, and electronic parts continued to decline - Hydraulic equipment parts business sales increased by **HKD 71.63 million** year-on-year due to last year's successful acquisition, accounting for over half of total sales[28](index=28&type=chunk) - Automotive parts business orders rebounded due to Europe's delayed ban on internal combustion engine vehicles, with sales increasing **9.4%** year-on-year[28](index=28&type=chunk) Business Segment Sales | Business Segment | H1 2024 Sales (HKD Thousands) | Proportion | Y-o-Y Change | | :--- | :--- | :--- | :--- | | Automotive Parts | 226,890 | 45.2% | +9.4% | | Hydraulic Equipment Parts | 251,685 | 50.1% | +39.8% | | Electronic Equipment Parts | 14,327 | 2.9% | -35.3% | | **Total** | **502,149** | **100%** | **+19.6%** | [Financial Review](index=18&type=section&id=Financial%20Review) Gross profit increased **42.5%** and gross margin improved from **23.0%** to **27.4%** due to sales growth and M&A synergies, despite increased selling, administrative, and R&D expenses, and doubled finance costs from acquisition-related loans, ultimately driving a **54.1%** rise in net profit to **HKD 12.69 million** - Gross margin increased by **4.4 percentage points** from **23.0%** to **27.4%** year-on-year, primarily due to lean manufacturing, cost control, and M&A synergies[29](index=29&type=chunk)[30](index=30&type=chunk) - Due to the acquisition, patent amortization expenses within administrative expenses increased by **HKD 4.39 million**, and R&D expenses increased by **HKD 4.72 million**[31](index=31&type=chunk) - Finance costs increased by **HKD 4.41 million** year-on-year due to the larger scale of acquisition-related loans[31](index=31&type=chunk) [Liquidity, Financial Strategy and Financial Ratios](index=19&type=section&id=Liquidity%2C%20Financial%20Strategy%20and%20Financial%20Ratios) The Group relies on internal cash flow and bank financing, with total bank loans increasing to **HKD 297 million** for M&A and new plant construction; H1 operating cash inflow decreased, while investing cash outflow significantly rose due to **HKD 168 million** M&A payments and **HKD 95.43 million** fixed asset investments, resulting in net cash decreasing from **HKD 489 million** to **HKD 254 million** - Total bank loans increased from **HKD 166 million** to **HKD 297 million**, primarily used for M&A payments and new plant construction costs[32](index=32&type=chunk) - Net cash outflow from investing activities was **HKD 254 million**, mainly comprising **HKD 168 million** for prior year M&A outstanding payments and **HKD 95.43 million** for property, plant, and equipment purchases[5](index=5&type=chunk)[34](index=34&type=chunk) - Net cash (cash and bank balances less total bank borrowings) decreased from **HKD 489 million** to **HKD 254 million**[34](index=34&type=chunk) [Human Resources](index=21&type=section&id=Human%20Resources) As of June 30, 2024, the Group had **2,257** employees, an increase of **86** year-on-year, with total remuneration of approximately **HKD 120 million** in H1, focusing on talent development, safety, and employee incentives through share option schemes Employee and Remuneration Data | Metric | June 30, 2024 | June 30, 2023 | | :--- | :--- | :--- | | Number of Employees | 2,257 | 2,171 | | Total Remuneration (HKD Thousands) | 119,663 | 109,302 | [Outlook](index=22&type=section&id=Outlook) The Group anticipates challenges from new energy vehicles, potential global construction machinery demand decline, and domestic hydraulic industry price competition, thus focusing on 'sales breakthroughs, R&D-driven innovation, cost reduction and efficiency improvement, and transformation and upgrading' to strengthen its market position - Challenges include new energy vehicles displacing traditional internal combustion engine vehicle markets, anticipated decline in global construction machinery sales, and intensifying price competition in the domestic hydraulic industry[37](index=37&type=chunk) - Strategies include focusing on 'sales breakthroughs, R&D-driven innovation, cost reduction and efficiency improvement, and transformation and upgrading', increasing investment in new product development, new customer acquisition, talent recruitment, and automation projects[37](index=37&type=chunk) Supplementary Information and Corporate Governance [Dividends and Securities Transactions](index=23&type=section&id=Dividends%20and%20Securities%20Transactions) The Board decided not to declare an interim dividend for 2024, and neither the Company nor its subsidiaries purchased, sold, or redeemed any listed securities during the period, while adhering to adopted codes of conduct for directors' and employees' securities transactions - The Board does not recommend paying any interim dividend for the six months ended June 30, 2024[39](index=39&type=chunk) - Neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities during the period[38](index=38&type=chunk) [Corporate Governance](index=24&type=section&id=Corporate%20Governance) The Company maintains high corporate governance standards, complying with most code provisions, with the only deviation being the combined roles of Chairman and Chief Executive Officer held by Mr. Zeng Guangsheng, which the Board believes provides strong unified leadership, and the Audit Committee has reviewed these interim results - The Company complies with the Corporate Governance Code, with the only deviation from Code Provision C.2.1 being the combined roles of Chairman and Chief Executive Officer held by Mr. Zeng Guangsheng[42](index=42&type=chunk) - The Audit Committee, comprising three independent non-executive directors, has reviewed the Group's interim results for the six months ended June 30, 2024[43](index=43&type=chunk)

Environmental, Social, and Governance (ESG) Initiatives - The company established an Environmental, Social, and Governance (ESG) Committee to enhance risk management and fulfill social responsibilities, consisting of four members including one executive director and three independent non-executive directors[13]. - The company aims to achieve 3% of its total energy consumption from self-generated solar energy by 2024 as part of its commitment to reduce greenhouse gas emissions[18]. - The company has begun disclosing climate-related information, aligning with the four core elements recommended by the Task Force on Climate-related Financial Disclosures: governance, strategy, risk management, and metrics and targets[17]. - The company is committed to long-term sustainable development and has implemented various strategies to manage environmental, social, and governance responsibilities[13]. - The company has conducted a review of its ESG responsibilities, strategies, and policies to ensure ongoing effectiveness[14]. - The company is aligned with the Chinese government's goals of "carbon peak and carbon neutrality" in its operational strategies[18]. - The company has implemented strict waste management procedures in compliance with national laws and ISO14001 standards, including waste selection, storage, transfer, disposal, and recycling[19]. - The company has established a waste record-keeping system to manage and track the quantity and types of waste generated in daily operations[19]. - The company encourages the use of reusable tableware instead of disposable items to reduce solid waste generated in restaurants[19]. - The company has designated personnel to maintain cleanliness at waste reception facilities and provides necessary documentation for hazardous waste disposal to authorized handlers[19]. - The company has made significant efforts over the years to enhance waste management across its operations[19]. - The company aims to reduce waste and utilize resources more effectively by reusing cutting oil and transferring waste oil to licensed processors for disposal[19]. - The board is responsible for overseeing the group's environmental, social, and governance (ESG) strategies and reporting, including assessing related risks[77]. - The group has established an ESG committee to manage all ESG-related matters and report to the board, ensuring effective implementation of relevant policies and performance indicators[77]. Corporate Governance - The board has maintained compliance with listing rules, ensuring at least three independent non-executive directors, representing at least one-third of the board[7]. - The nomination committee has reviewed the contributions and performance of retiring directors and recommended their re-election at the upcoming annual general meeting[2]. - The board believes that the dual role of the chairman and CEO enhances leadership effectiveness and business decision-making efficiency[8]. - The board of directors emphasizes the importance of good corporate governance for the company's success and sustainability[25]. - The company has committed to regularly reviewing and improving its corporate governance practices to meet regulatory requirements and stakeholder expectations[25]. - The company has established a policy for timely and accurate disclosure of inside information to the public and regulatory bodies[37]. - The board conducts annual evaluations of its performance, including the effectiveness of its committees and succession planning[53]. - The company has implemented a shareholder communication policy to address shareholder concerns and ensure transparency[50]. Financial Performance - Revenue for the year ended December 31, 2023, was HKD 898,733,000, a decrease of 6.6% from HKD 962,566,000 in 2022[143]. - Gross profit margin decreased to 25% in 2023 from 28% in 2022, with gross profit of HKD 222,824,000[143]. - The company reported a net profit of HKD 15,645,000 for 2023, down from HKD 27,741,000 in 2022, reflecting a net profit margin of 2%[143]. - Total non-current assets increased to HKD 1,082,453,000 in 2023 from HKD 874,540,000 in 2022[145]. - Current assets remained stable at HKD 1,464,374,000, slightly up from HKD 1,461,945,000 in 2022[145]. - The current ratio decreased to 3.43 in 2023 from 5.87 in 2022, indicating a decline in liquidity[146]. - The company’s leverage ratio improved to 9.4% in 2023 from 10.2% in 2022, suggesting a reduction in debt relative to equity[146]. - Basic earnings per share decreased to HKD 0.54 in 2023 from HKD 0.83 in 2022[146]. - The average collection period for accounts receivable increased to 127 days in 2023 from 115 days in 2022, indicating slower collection[146]. - The total revenue for the year was HKD 898,733,000, a decrease of 6.6% or HKD 63,833,000 compared to the previous year[157]. - The automotive parts business generated sales of HKD 445,241,000, down 2.9% year-on-year, remaining the largest segment of the company[159]. - Gross profit for the year was HKD 222,824,000, a decline of HKD 51,363,000 compared to the previous year[159]. - Net profit after tax was HKD 15,645,000, representing a decrease of 43.6% compared to the previous year[159]. - The company completed the acquisition of Yutai Hydraulic Technology (Shanghai) Co., Ltd. for RMB 228,428,000, aiming to expand its product portfolio and customer base[163]. - The company recorded a significant decline in sales of traditional hard disk drives (HDD), dropping from HKD 91,151,000 to HKD 36,192,000, accounting for only 4.0% of total sales[157]. - The company implemented cost-saving measures, resulting in a reduction of administrative expenses by HKD 34,506,000 compared to the previous year[160]. - The company is constructing a new factory of 28,977 square meters at a cost of RMB 66,660,000 to prepare for market recovery[162]. - The company achieved a gross margin decline due to decreased sales revenue and increased borrowing costs[159]. - The company aims to diversify its sales channels and enhance its core competitiveness through strategic acquisitions and new product development[163]. Awards and Recognitions - The group has been recognized for its high-tech enterprises, including Guangzhou Huitong and Dongguan Keda, which were acknowledged as high-tech enterprises in 2023[92][93]. - Jiangsu Kema received the Machinery Industry Science and Technology Award from the China Machinery Industry Federation[94]. - Guangzhou Xinhao was recognized as a specialized and innovative small and medium-sized enterprise in 2023[96]. - The company has received various awards, including the Mechanical Industry Science and Technology Award from the China Machinery Industry Federation[123]. Operational Improvements and Innovations - The group has achieved ISO 9001 certification for quality management systems, enhancing its operational standards[100]. - The group has established engineering technology research centers to foster innovation in precision manufacturing[103]. - The group has been nominated as a quality supplier by major clients, including Schaeffler and Continental[114]. - The group signed a strategic cooperation agreement with South China University of Technology to enhance research and development capabilities[115]. - The company established a joint training base with Tsinghua University Shenzhen Graduate School to enhance research capabilities[117]. - Jiangsu Keda completed the first phase of construction on a 40,000 square meter production area in Changshu[119]. - The company has achieved multiple international certifications, including IATF16949:2016 and ISO9001:2015, to improve operational efficiency[122]. - The company has implemented management measures to improve energy efficiency and regulate electricity usage[126]. - The company aims to strengthen its quality management system across subsidiaries to ensure high-quality products and enhance customer confidence[184].

Financial Performance - Revenue for the year 2023 was HKD 898,733,000, a decrease of 6.6% compared to HKD 962,566,000 in 2022[2] - Gross profit for 2023 was HKD 222,824,000, down from HKD 274,187,000 in 2022, reflecting a decline in gross margin[2] - Operating profit decreased to HKD 41,770,000 in 2023 from HKD 45,012,000 in 2022, indicating a reduction of 5.5%[2] - Net profit for the year was HKD 15,645,000, a significant drop of 43.7% from HKD 27,741,000 in the previous year[3] - Basic and diluted earnings per share for 2023 were HKD 0.54, down from HKD 0.83 in 2022, representing a decline of 34.9%[2] - The gross profit margin for the year was 24.8% (2022: 28.5%) [85] - Profit for the year decreased by 43.6% to HKD 15,600,000 (2022: HKD 27,700,000) [85] - Basic earnings per share for the year were HKD 0.54 (2022: HKD 0.83) [85] - The total sales revenue for the year was HKD 898,733,000, a decrease of HKD 63,833,000 or 6.6% compared to the previous year[162] Assets and Liabilities - Total non-current assets amounted to HKD 1,082,453,000 in 2023, an increase from HKD 874,540,000 in 2022[4] - The total assets less current liabilities stood at HKD 2,119,470,000 in 2023, slightly up from HKD 2,087,401,000 in 2022[4] - The company’s non-current liabilities decreased to HKD 155,280,000 in 2023 from HKD 175,315,000 in 2022, showing a reduction in long-term debt obligations[5] - The company’s total borrowings decreased to HKD 185,546,000 in 2023 from HKD 195,849,000 in 2022, a reduction of 5.2%[47] Cash Flow and Liquidity - The company’s cash and cash equivalents decreased to HKD 674,400,000 in 2023 from HKD 729,058,000 in 2022, reflecting a liquidity challenge[4] - The company reported a net cash inflow from operating activities for the year of HKD 147,606,000, a substantial increase of HKD 143,196,000 compared to last year's net cash inflow of HKD 4,410,000[63] - The company's net cash position as of December 31, 2023, was HKD 488,854,000, a decrease of HKD 44,355,000 from HKD 533,209,000 on December 31, 2022[64] - The company’s cash per share was HKD 0.66, down from HKD 0.71 last year, while the net asset value per share increased to HKD 1.87, up 2.7% from HKD 1.82[171] Expenses and Cost Management - The company reported a decrease in financing costs to HKD 11,239,000 in 2023 from HKD 6,832,000 in 2022, indicating increased financial pressure[2] - The total bank loan interest increased to HKD 10,112,000 in 2023 from HKD 5,379,000 in 2022, reflecting a rise of 87.5%[30] - Sales and distribution expenses increased to HKD 28,947,000 in 2023 from HKD 26,178,000 in 2022, an increase of 10.7%[45] - Administrative expenses were reduced by HKD 34,506,000 or 18.8% to HKD 149,368,000 compared to the previous year[169] - The interest expense for the year increased to HKD 9,985,000 from HKD 4,688,000 due to rising bank loan interest rates[172] Business Operations and Strategy - The company completed the acquisition of Yutai Hydraulic Technology (Shanghai) Co., Ltd. for a total consideration of RMB 228,428,000, supported by bank loans[40] - Capital expenditures for maintaining production capacity and upgrading technology amounted to HKD 102,929,000 in 2023, similar to the previous year[48] - The company plans to expand its production capacity with a new factory of 28,977 square meters at a cost of RMB 66,660,000, to prepare for market recovery[39] - The company plans to diversify its business, focusing on expanding hydraulic operations and new energy vehicle parts, as well as developing new products and customers through acquisitions[166] Workforce and Human Resources - The company has reduced its workforce to 2,065 employees, down by 139 from 2,204 employees at the end of the previous year[66] - The company is actively enhancing its automated production model and adopting advanced multifunctional production equipment to reduce the need for basic personnel[66] - The company has implemented a talent incentive program to retain key technical personnel, with 24 employees receiving lean talent certification in 2023[65] Market Performance - Revenue from the mainland China market reached HKD 984,862,000 in 2023, up from HKD 761,773,000 in 2022, representing a growth of 29.3%[28] - Sales of traditional mechanical hard drives (HDD) significantly declined, dropping from HKD 91,151,000 last year to HKD 36,192,000 this year, representing only 4.0% of total sales[60] - The automotive parts business generated sales of HKD 445,241,000 for the year, down 2.9% year-on-year[160] - The hydraulic parts business recorded sales of HKD 364,444,000, a decline of HKD 29,852,000 or 7.6% compared to last year[160] Other Income and Grants - Other income for the year was recorded at HKD 62,015,000, with rental income from investment properties rebounding to HKD 9,753,000, an increase of HKD 7,540,000 year-on-year[61] - Government grants received amounted to HKD 10,872,000 (2022: HKD 8,204,000) [113] - The company reported a total of HKD 62,015,000 in other income (2022: HKD 45,606,000) [113] Risk Management - The company continues to assess foreign exchange risks, particularly the impact of RMB appreciation on profitability, and takes necessary measures to mitigate these risks[74]

Financial Performance - The company reported a significant increase in revenue, achieving a total of $150 million for the first half of 2023, representing a 20% growth compared to the same period last year[1]. - For the first half of 2023, total revenue decreased by 16.5% to HKD 419,761,000 compared to HKD 502,857,000 in the same period of 2022[24]. - The gross profit margin improved to 35%, up from 30% in the previous year, reflecting better cost management and pricing strategies[1]. - The gross profit for the first half of 2023 was HKD 96,418,000, with a gross margin of 23.0%, down from a gross profit of HKD 135,756,000 and a margin of 27.0% in the previous year, representing a decline of HKD 39,338,000 and 4.0% respectively[31]. - The net profit for the six months ended June 30, 2023, was HKD 8,231,000, a decrease of HKD 11,413,000 from HKD 19,644,000 in the same period last year[32]. - The company reported a total comprehensive loss of HKD 43,613,000 for the period, compared to a loss of HKD 66,519,000 in 2022[49]. - The company anticipates challenges in its three main business segments due to slow global economic recovery and declining customer demand in the HDD market[42]. Market Expansion and Strategy - The company has provided an optimistic outlook for the second half of 2023, projecting a revenue growth of 25% driven by new product launches and market expansion efforts[1]. - The company is expanding its market presence in Southeast Asia, with plans to establish a new manufacturing facility in Thailand by Q4 2023[1]. - A strategic acquisition of a local competitor is expected to enhance the company's production capabilities and market share, with an estimated cost of $20 million[1]. - The company plans to introduce two new product lines in Q3 2023, targeting the growing demand in the electric vehicle market[1]. - The company is actively pursuing strategic transformation and exploring new customer markets to mitigate the impact of industry fluctuations[24]. Research and Development - Investment in R&D has increased by 30%, focusing on the development of advanced precision metal components for the automotive and electronics sectors[1]. - Research and development costs for the first half of 2023 totaled HKD 32,076,000, an increase of HKD 11,109,000 compared to the same period last year, reflecting the company's investment in new product development[32]. - Research and development costs increased to HKD 32,076,000, up 53.5% from HKD 20,967,000 in 2022[48]. Operational Efficiency - The company has received ISO 9001 certification for its quality management systems, which is expected to improve operational efficiency and customer satisfaction[1]. - The company has implemented cost control measures, including negotiating price reductions with key suppliers[26]. - The company reduced administrative and other expenses by HKD 17,006,000 or 17.9% to HKD 77,798,000 in the first half of 2023 compared to the previous year[31]. Financial Position - The cash and cash equivalents as of June 2023 were HKD 175,643,000, with total liabilities of HKD 729,058,000 and equity of HKD 847,093,000[20]. - The current ratio improved to 7.71 in June 2023, compared to 5.87 in June 2022[13]. - Cash and cash equivalents at the end of the period were HKD 705,552,000, down from HKD 854,301,000 at the end of 2022[54]. - Total bank borrowings as of June 30, 2023, amounted to HKD 170,000,000, down from HKD 190,000,000 as of December 31, 2022[35]. - Trade receivables as of June 30, 2023, amounted to HKD 260,214,000, a decrease of 13.7% from HKD 301,357,000 as of December 31, 2022[84]. Shareholder Information - Major shareholder Baoan Technology Limited holds 567,856,250 shares, representing 53.97% of the company's issued share capital as of June 30, 2023[102]. - Major shareholder Tottenhill Limited owns 109,206,975 shares, accounting for 10.38% of the company's issued share capital as of June 30, 2023[102]. - The company has a maximum credit limit for each customer and implements strict controls over overdue receivables[83]. - The company’s management regularly reviews overdue balances to mitigate credit risk[83]. Corporate Governance - The company has adopted a corporate governance code and believes it has complied with the code during the review period[149]. - The audit committee consists of three independent non-executive directors who reviewed the group's accounting principles and financial reporting procedures[150]. - The company has confirmed that all directors have complied with the securities trading standards set forth in the listing rules[151].

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 或任何部份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。 IPE GROUP LIMITED 國 際 精 密 集 團 有 限 公 司 （於開曼群島註冊成立之有限公司） （股份代號：929） 截至二零二三年六月三十日止六個月之 中期業績 國際精密集團有限公司（「本公司」）董事會（「董事會」）謹此宣佈本公司及其附屬公 司（「本集團」）截至二零二三年六月三十日止六個月之未經審核簡明綜合業績，連 同去年同期之比較數字如下： 簡明綜合損益表 截至六月三十日止六個月 二零二三年 二零二二年 （未經審核） （未經審核） 附註 千港元 千港元 收入 4及5 419,761 502,857 銷售成本 (323,343) (367,101) 毛利 96,418 135,756 其他收入 5 37,683 24,580 分銷成本 (11,945) (12,014) 行政開支及其他開支 (77,798) (94,804) 研發成本 (32,076) (20,967) 經營溢利 12, ...