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, ...

Manufacturing and Operations - The company reported a significant increase in precision metal parts manufacturing, focusing on automotive, hydraulic, and electronic equipment sectors [9]. - The company has a robust engineering team capable of providing solutions for global partners, emphasizing its expertise in precision parts assembly and testing [9]. - The company is actively expanding its market presence in China and Southeast Asia, with significant operations in Guangdong and Thailand [6]. - The company is actively pursuing automation projects to improve production efficiency and reduce costs, despite facing challenges from rising raw material prices and transportation costs [35]. - The company has implemented a "zero carbon factory" initiative at its Guangzhou production base to promote energy savings and cost reduction [38]. - The company aims to enhance operational efficiency and risk management by improving safety regulations and environmental compliance measures [41]. - The company has established a Guangdong Provincial Precision Manufacturing Engineering Technology Research Center in 2022, indicating a commitment to innovation and R&D [10]. - The company established a research institute in June 2022 to enhance product quality and technology, focusing on long-term strategic investments in R&D [37]. Financial Performance - Revenue for the year ended December 31, 2022, was HKD 962,566,000, a decrease of 6.6% from HKD 1,030,808,000 in 2021 [18]. - The company reported a net profit of HKD 27,741,000 for 2022, down from HKD 90,746,000 in 2021, reflecting a net profit margin of 2.9% [18]. - Gross profit margin improved to 28.5% in 2022 from 25.9% in 2021, with gross profit amounting to HKD 274,187,000 [18]. - The company's financial summary indicates a strong revenue growth trajectory, although specific figures were not disclosed in the provided content [3]. - The group's profit attributable to shareholders for the year ended December 31, 2022, was HKD 27,741,000, a decrease of HKD 63,005,000 or 69.4% compared to last year [46]. - The group's total other income for the year was HKD 45,606,000, a decrease of HKD 17,684,000 or 27.9% compared to last year, primarily due to the absence of gains from the sale of interests in associates and stock trading profits [44]. - The company has no dividend payout for 2022, maintaining a focus on reinvestment [20]. Strategic Partnerships and Market Expansion - The company is focused on long-term strategic partnerships with top multinational corporations in the IT, hydraulic, automotive, and electrical industries [9]. - Future outlook indicates a projected revenue growth of 15% for the next fiscal year, driven by new product launches and market expansion strategies [60]. - Market expansion plans include entering three new international markets by the end of the fiscal year, targeting a 10% increase in market share [60]. - The company has completed a strategic acquisition valued at $200 million, expected to enhance operational capabilities and product portfolio [60]. - The company has established a partnership with a leading tech firm to co-develop innovative solutions, expected to enhance competitive positioning [60]. 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 [69]. - The board of directors is responsible for overall business management and monitoring, with a focus on enhancing shareholder value through strategic policy approval [70]. - The company appointed independent non-executive directors, maintaining over one-third representation on the board, ensuring compliance with listing rules regarding independence [77]. - The board consists of experienced members with extensive business and financial expertise, contributing to effective governance and decision-making [76]. - The company has committed to regularly reviewing and improving its corporate governance practices to meet regulatory requirements and stakeholder expectations [69]. - The executive committee and various sub-committees, including audit and remuneration committees, are in place to oversee specific areas of governance and operational management [75]. - The company has a clear structure for decision-making, ensuring that all major matters are approved by the board, including financial data and risk management systems [70]. Environmental, Social, and Governance (ESG) Initiatives - The company has established an Environmental, Social, and Governance (ESG) Committee to oversee all ESG-related matters and report to the board [154]. - The environmental, social, and governance (ESG) report highlights the company's commitment to climate-related disclosures, aligning with four core elements recommended by the Task Force on Climate-related Financial Disclosures [139]. - The company aims to achieve a 3% contribution from self-generated solar energy to its total energy consumption by the end of 2024 [158]. - The company has set a target to reduce electricity consumption intensity by 4% from air conditioning systems by the end of 2024 [158]. - The company has successfully reduced water consumption intensity by 2% and sludge generation intensity by 5% compared to the baseline year of 2021 [158]. - The company has implemented various waste management procedures in compliance with national laws and ISO 14001 standards [184]. - The company encourages employees to use public transportation and has prioritized the purchase of energy-efficient vehicles for future replacements [183]. Employee and Talent Management - The company is focusing on talent acquisition and training to support its development strategy and improve organizational capabilities [41]. - The total number of employees decreased slightly to 2,204 from 2,207 the previous year, reflecting a focus on automation and efficiency improvements [56]. - As of December 31, 2022, the annual salary distribution for senior management was as follows: 6 individuals earned between HKD 0 to 1,000,000, 5 individuals earned between HKD 1,000,001 to 2,000,000, and 1 individual earned between HKD 2,000,001 to 3,000,000 [106]. - All directors participated in anti-corruption training, and training programs are implemented for all employees to enhance their capabilities [87]. Risk Management and Compliance - The board has confirmed the effectiveness of the risk management and internal control systems, which are reviewed at least annually [121]. - The board conducts annual evaluations to ensure effectiveness and independence in decision-making [135]. - The company has appointed external auditors to assess the financial statements and ensure compliance with relevant regulations [120]. - The company has made strategic adjustments to enhance investment in hydraulic business, significantly contributing to overall revenue during the reporting period [140].

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） (1)截至二零二二年十二月三十一日止年度 之全年業績公佈 (2)建議修訂章程大綱及章程細則 (3)建議採納中文名稱 財務摘要 1. 本年度收入減少6.6%至962,600,000港元（二零二一年：1,030,800,000港元）。 2. 本年度毛利率為28.5%（二零二一年：25.9%）。 3. 本年度溢利減少69.5%至27,700,000港元（二零二一年：90,700,000港元）。 ...

Financial Performance - The company reported a significant increase in revenue, achieving a total of 500 million in the first half of 2022, representing a 20% growth compared to the same period last year[38]. - Revenue for the six months ended June 30, 2022, was HKD 502,857,000, a decrease of 2% from HKD 518,272,000 in 2021[89]. - Gross profit for the first half of 2022 was HKD 135,756,000, an increase of HKD 6,081,000, resulting in a gross margin of 27.0%, up from 25.0% in the previous year[75]. - Operating profit decreased to HKD 32,551,000, down 31% from HKD 47,060,000 in 2021[89]. - Net profit for the period was HKD 19,644,000, a decline of 39% compared to HKD 32,038,000 in the same period last year[91]. - The company reported a total comprehensive loss of HKD 66,519,000, compared to a comprehensive income of HKD 40,533,000 in 2021[91]. - Other income increased by HKD 2,832,000 or 13.0% to HKD 24,580,000, primarily due to foreign exchange gains of HKD 9,836,000 from USD assets[75]. - The company recorded a profit of HKD 11,482 thousand during the period, a decrease from HKD 30,201 thousand in the previous year[100]. Market Expansion and Product Development - User data indicates that the company has expanded its customer base, now serving over 200 multinational corporations in the automotive and electronics sectors[38]. - The company is actively pursuing market expansion in Southeast Asia, with plans to establish a new manufacturing facility in Thailand by the end of 2022[38]. - New product development includes the launch of a proprietary robotic arm, which is expected to enhance production efficiency by 30%[38]. - The company has secured strategic partnerships with leading universities for research and development, aiming to innovate in precision engineering technologies[38]. - The company is focusing on lean production to reduce waste and achieve cost savings amid declining automotive parts orders[74]. Operational Efficiency and Cost Management - The company has implemented new strategies to improve operational efficiency, targeting a 5% reduction in production costs by optimizing supply chain management[38]. - The company aims to enhance supply chain management to reduce inventory backlog and improve production cycles[86]. - The average days for accounts receivable turnover increased to 103 days, compared to 97 days in the previous year[55]. - The company is expanding its automation applications in precision parts inspection, achieving a leading position in domestic standards[74]. Financial Position and Assets - The company reported total assets of HKD 1,010,942 thousand and total liabilities of HKD 1,922,107 thousand as of June 30, 2022[101]. - Total current assets increased to HKD 1,578,338,000 from HKD 1,525,820,000 at the end of 2021[95]. - Cash and cash equivalents stood at HKD 854,301,000 as of June 30, 2022, compared to HKD 840,383,000 on December 31, 2021, representing a slight increase of 1.7%[137]. - The company’s cash net equity ratio was 0.31, slightly down from 0.34 in the previous year[55]. - The total borrowings as of June 30, 2022, amounted to HKD 220,000,000, an increase from HKD 150,795,000 as of December 31, 2021[79]. Employee and Management Compensation - The company employed 2,405 staff as of June 30, 2022, an increase of 211 employees compared to 2,194 in the same period last year[84]. - Short-term employee benefits increased significantly to HKD 9,382,000 for the six months ended June 30, 2022, up from HKD 3,374,000 in the previous year, representing a growth of 178.5%[145]. - The total remuneration paid to key management personnel rose to HKD 16,008,000, a substantial increase from HKD 5,180,000, reflecting a growth of 208.5%[145]. - The company’s key management personnel received stock-based compensation expenses totaling HKD 6,537,000, compared to HKD 1,520,000 in the previous year, reflecting an increase of 329.5%[145]. Corporate Governance and Compliance - The company has maintained compliance with the corporate governance code as per the Hong Kong Stock Exchange[169]. - The audit committee consists of three independent non-executive directors who reviewed the accounting principles and financial reporting procedures[170]. - The company has established written guidelines for employees regarding securities trading to ensure compliance with regulations[173]. Shareholder Information - The company’s major shareholder, Baoan Technology Co., Ltd., holds 565,871,250 shares, representing 53.77% of the issued share capital as of June 30, 2022[152]. - The company did not declare an interim dividend for the six months ended June 30, 2022, consistent with the previous year[129]. - The company’s directors and key executives collectively hold 12.07% of the issued share capital, with Mr. Zeng Guangsheng owning 127,000,000 shares[148].

Manufacturing and Operations - The company reported a significant increase in precision metal parts manufacturing, focusing on automotive, hydraulic, and electronic equipment sectors [29]. - The group achieved recognition as one of the top 500 manufacturing enterprises in Guangdong in 2020 [31]. - The company established a research and development center in Guangdong Province, enhancing its technological capabilities [31]. - The group has maintained a 100% ownership in several subsidiaries, ensuring full control over its operations [33]. - The company has received multiple quality awards from major clients, indicating strong performance in product quality and service [31]. - The group is actively involved in strategic partnerships with universities for talent development and technological innovation [31]. - The company has expanded its manufacturing footprint with a new facility providing 40,000 square meters of production space [31]. - The group has been recognized as a high-tech enterprise, reflecting its commitment to innovation and technology [31]. - The company is focused on developing new products and technologies to meet the high precision requirements of its multinational clients [29]. - The group has achieved IATF16949 certification, underscoring its commitment to quality in the automotive sector [31]. Financial Performance - The company's revenue for the year 2021 was HKD 1,030,808, representing a 30% increase from HKD 793,731 in 2020 [38]. - Gross profit margin improved to 26% in 2021, up from 23% in 2020, with gross profit amounting to HKD 266,813 [38]. - Other income increased to HKD 63,290, accounting for 6% of total revenue, compared to 4% in the previous year [38]. - The net profit for the year was HKD 90,746, a significant increase from HKD 29,039 in 2020, resulting in a net profit margin of 9% [38]. - The total assets increased to HKD 2,455,972 in 2021, up from HKD 2,278,757 in 2020 [40]. - Current ratio decreased to 4.21 in 2021 from 6.42 in 2020, indicating a decline in liquidity [41]. - The company reported a return on equity of 8.8% in 2021, compared to 4.0% in 2020, reflecting improved profitability [41]. - Research and development costs rose to HKD 47,153, representing 5% of total revenue, up from 4% in 2020 [38]. - The earnings per share for 2021 was HKD 0.077, significantly higher than HKD 0.026 in 2020 [41]. - The total sales revenue for the year 2021 reached HKD 1,030,808,000, representing a 29.9% increase compared to HKD 793,731,000 in 2020 [53]. Sales and Market Expansion - Automotive parts sales amounted to HKD 510,900,000, an increase of HKD 54,647,000 or 12.0% year-over-year, accounting for approximately 50% of total sales [55]. - Hydraulic equipment parts sales surged to HKD 361,669,000, reflecting a significant increase of HKD 169,191,000 or 87.9% compared to the previous year [55]. - The electronic equipment parts segment recorded sales of HKD 113,009,000, maintaining a stable growth rate of 1.6% compared to the previous year [53]. - The company plans to expand its market presence and invest in new technologies to drive future growth [38]. - The company is focused on expanding into new markets and projects while maintaining high customer satisfaction and exploring potential new clients [59]. 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 [89]. - The board of directors is responsible for overall business management and monitoring, with a focus on enhancing shareholder value through strategic policy approval [90]. - The board composition reflects a balance of skills and experience necessary for independent judgment, with at least three independent non-executive directors as required by listing rules [94]. - The chairman and CEO roles are held by the same individual, which the board believes provides strong and consistent leadership for effective business planning and decision-making [96]. - The company has a diverse management team with extensive experience in various sectors, including over 39 years in computer-aided design and manufacturing [85]. Risk Management and Compliance - The company has established a risk management and internal control system, which is reviewed at least annually for effectiveness [129]. - The company has a dedicated internal audit function to identify and assess operational risks and internal controls [131]. - The company has committed to continuous improvement and monitoring of its risk management and internal control systems [130]. - The board confirmed that there are no significant uncertainties that may cast doubt on the company's ability to continue as a going concern [127]. - The company has established five board committees, including the Executive Committee, Remuneration Committee, Audit Committee, Nomination Committee, and Environmental, Social and Governance Committee [109]. Environmental, Social, and Governance (ESG) Initiatives - The group invested over HKD 5,000,000 in upgrading emission control facilities to enhance environmental protection measures [156]. - The group established the Guangdong Precision Manufacturing (Xinhao) Engineering Technology Research Center during the reporting period, recognizing its commitment to R&D and advanced technology [161]. - The group has identified six major environmental, social, and governance issues of concern to stakeholders, including emissions, environmental protection measures, and product/service quality [156]. - The group has implemented a sustainability policy to balance profit, corporate sustainability, and stakeholder satisfaction [159]. - The group’s environmental, social, and governance committee is responsible for overseeing all related matters and reporting to the board [160]. Waste Management and Emissions - The company generated a total of 1,360 tons of hazardous waste during the reporting period, with a density of 0.60 tons per employee, an increase from 0.23 tons per employee in the previous year [184]. - The main component of hazardous waste was sludge, accounting for approximately 94% of the total [184]. - The company aims to reduce sludge generation intensity by 5% by 2024 [184]. - The total greenhouse gas emissions for the reporting period amounted to 40,899 tons of CO2 equivalent, with a per-employee emission density of 18.10 tons, a 15% reduction from the previous period [173]. - The group strictly adheres to environmental protection laws and regulations, with no significant violations reported during the period [164].

Company Information [Company Information Overview](index=4&type=section&id=Company%20Information%20Overview) This section outlines the company's board composition, committee structures, registered office, key operating locations, principal bankers, auditor, and stock exchange listing details - The Board of Directors comprises executive, non-executive, and independent non-executive directors, supported by audit, remuneration, nomination, and environmental, social, and governance committees[7](index=7&type=chunk) - The company's registered office is in the Cayman Islands, with primary operating locations in Hong Kong, Guangzhou, China, and Thailand[9](index=9&type=chunk)[10](index=10&type=chunk)[11](index=11&type=chunk) - Principal bankers include Nanyang Commercial Bank Limited and The Hongkong and Shanghai Banking Corporation Limited, with KPMG as the auditor[12](index=12&type=chunk) - The company's shares, stock code **929**, are listed on the Main Board of The Stock Exchange of Hong Kong Limited[12](index=12&type=chunk) Company Profile [Company Profile and Business Overview](index=6&type=section&id=Company%20Profile%20and%20Business%20Overview) International Precision Group Limited, established in 2002 as an investment holding company, primarily manufactures and sells high-precision metal and assembly parts for top-tier multinational corporations in the IT, hydraulic power, automotive, and electrical industries - International Precision Group Limited was incorporated in the Cayman Islands on July 10, 2002, as an investment holding company[14](index=14&type=chunk) - The Group primarily engages in the manufacturing and sale of precision metal parts for automotive, hydraulic, electronic, and other equipment[14](index=14&type=chunk) - Its clientele includes top-tier multinational corporations in the IT, hydraulic power, automotive, and electrical industries, demanding extremely high precision for metal parts[14](index=14&type=chunk) - The Group supplies precision parts according to customer specifications and offers solutions involving various metals, plastic parts, and electronic circuit development for global partners, possessing expertise in final assembly and testing equipment[14](index=14&type=chunk) Company Milestones [Company Development History](index=7&type=section&id=Company%20Development%20History) This section outlines the company's significant milestones since 1990, including subsidiary establishments, public listing, various industry certifications, university collaborations, proprietary robotic arm development, and numerous industry awards, demonstrating continuous growth in precision manufacturing and technological innovation - Commenced precision parts business in Singapore in 1990, subsequently establishing subsidiaries in Hong Kong, Guangdong Province, China (Dongguan Keda, Guangzhou Xinhao), and Thailand[30](index=30&type=chunk)[31](index=31&type=chunk)[32](index=32&type=chunk)[33](index=33&type=chunk) - Listed on the Main Board of The Stock Exchange of Hong Kong Limited on November 1, 2004[29](index=29&type=chunk) - Successfully developed proprietary robotic arms in 2015, and in 2017-2018, signed strategic cooperation agreements with Tsinghua University Shenzhen Graduate School and Zhejiang University South China Institute of Industrial Technology to establish joint postgraduate training bases[23](index=23&type=chunk)[24](index=24&type=chunk)[25](index=25&type=chunk) - Multiple subsidiaries obtained IATF16949 and TS16949 automotive certifications, with Guangzhou Xinhao recognized as a high-tech enterprise and one of Guangdong's Top 500 Manufacturing Enterprises[17](index=17&type=chunk)[23](index=23&type=chunk)[24](index=24&type=chunk)[28](index=28&type=chunk) - Appointed as a council member of the China Robot Industry Alliance in 2019 and nominated as a quality supplier by Schaeffler and Continental; in 2020, Guangzhou Xinhao received a long-service award from Bosch Rexroth (China) Co, Ltd[19](index=19&type=chunk)[20](index=20&type=chunk)[21](index=21&type=chunk)[22](index=22&type=chunk) Group Structure [Principal Subsidiaries and Associates](index=8&type=section&id=Principal%20Subsidiaries%20and%20Associates) This section illustrates the Group's principal subsidiary and associate structure as of June 30, 2021, encompassing investment holding, manufacturing, sales offices, and technology development across the Cayman Islands, British Virgin Islands, Hong Kong, Thailand, China, and Macau - The Group holds numerous investment holding companies, such as Anglo Dynamic Limited, Tai Situpa Group Limited, Keda Precision Engineering Limited, primarily located in the British Virgin Islands and Hong Kong[35](index=35&type=chunk)[38](index=38&type=chunk)[39](index=39&type=chunk) - Manufacturing and sales offices are spread across Thailand (Integrated Precision Engineering (Thailand) Company Limited), China (Guangzhou Xinhao Precision Technology Co, Ltd, Dongguan Keda Hardware Products Co, Ltd, Jiangsu Keda Precision Machinery Equipment Co, Ltd, etc), and Macau (IPE Macau Offshore Commercial Services Limited)[35](index=35&type=chunk)[38](index=38&type=chunk) - The Group also maintains technology development offices, such as Shenzhen Xuetai Technology Co, Ltd, to support technological innovation[35](index=35&type=chunk) Financial Highlights [Ratio Analysis](index=10&type=section&id=Ratio%20Analysis) This section presents key financial ratios as of June 30, 2021, and prior years, including current ratio, net cash to equity ratio, gross profit margin, net profit margin, and average days of receivables and inventory turnover, reflecting changes in liquidity, profitability, and operational efficiency Key Financial Ratios (As of June 30, 2021) | Indicator | June 30, 2021 | December 31, 2020 | | :--- | :--- | :--- | | Current Ratio | 3.84 | 6.42 | | Net Cash to Equity Ratio | 0.34 | 0.38 | | Dividend Payout Ratio | Not Applicable | Not Applicable | | Gross Profit Margin | 25.0% | 23.0% | | Net Profit Margin | 6.2% | 4.0% | | Average Days of Receivables | 97 Days | 115 Days | | Average Days of Inventory Turnover | 116 Days | 138 Days | Per Share Data (HKD, As of June 30, 2021) | Indicator | June 30, 2021 | December 31, 2020 | | :--- | :--- | :--- | | Net Asset Value Per Share | 1.84 | 1.79 | | Cash Per Share | 0.79 | 0.88 | [Business Segment and Geographical Classification Ratios](index=10&type=section&id=Business%20Segment%20and%20Geographical%20Classification%20Ratios) This section presents the company's sales breakdown by business segment and geography, along with the trend of net cash to equity ratio, reflecting contributions from different markets and product lines and changes in the company's financial leverage Sales by Business Segment (HKD thousands, First Half) | Business Segment | First Half 2021 | First Half 2020 | | :--- | :--- | :--- | | Automotive | 279,552 | 180,773 | | Hydraulic | 164,142 | 88,833 | | Electronic Equipment | 52,151 | 49,439 | | Other | 22,427 | 19,241 | | **Total** | **518,272** | **338,286** | Geographical Classification Ratios (First Half) | Region | First Half 2021 | First Half 2020 | | :--- | :--- | :--- | | China, Macau & Hong Kong | 44% | 49% | | Europe | 24% | 20% | | North America | 19% | 14% | | Malaysia | 9% | 12% | | Thailand | 3% | 3% | | Other | 1% | 2% | - The net cash to equity ratio was **0.34** as of June 30, 2021, consistent with December 2019, but lower than **0.38** in December 2020[40](index=40&type=chunk)[43](index=43&type=chunk) [Cash and Cash Equivalents, Total Debt, and Equity](index=12&type=section&id=Cash%20and%20Cash%20Equivalents,%20Total%20Debt,%20and%20Equity) This section graphically illustrates the trends in cash and cash equivalents, total debt, and equity as of June 30, 2021, and prior years, reflecting changes in the company's asset structure and financial health Cash and Cash Equivalents, Total Debt, and Equity (HKD thousands) | Indicator | June 30, 2021 | December 31, 2020 | December 31, 2019 | December 31, 2018 | December 31, 2017 | | :--- | :--- | :--- | :--- | :--- | :--- | | Cash and Cash Equivalents | 833,781 | 924,246 | 840,181 | 924,246 | 833,781 | | Total Debt | 177,613 | 204,631 | 436,775 | 504,504 | 258,466 | | Equity | 1,939,318 | 1,880,294 | 1,701,275 | 1,692,865 | 1,715,997 | - As of June 2021, cash and cash equivalents amounted to **HKD 833,781 thousand**, total debt was **HKD 177,613 thousand**, and equity stood at **HKD 1,939,318 thousand**[46](index=46&type=chunk) Management Discussion and Analysis [Business Review](index=13&type=section&id=Business%20Review) In the first half of 2021, with global pandemic control and manufacturing recovery, the company's sales orders significantly rebounded, particularly in automotive and hydraulic businesses, which returned to pre-pandemic levels, while the company actively developed domestic hydraulic clients, strengthened its hydraulic business through acquisition, optimized operations, and introduced carbon neutrality solutions - In the first half of 2021, global manufacturing recovered, and overseas customer orders gradually resumed, with automotive and hydraulic customer order volumes returning to pre-pandemic levels[48](index=48&type=chunk) Sales and Changes by Business Type (HKD thousands, First Half 2021) | Business | First Half 2021 | First Half 2020 | Change % | | :--- | :--- | :--- | :--- | | Automotive Parts | 279,552 | 180,773 | +54.7 | | Hydraulic Equipment Parts | 164,142 | 88,833 | +84.8 | | Electronic Equipment Parts | 52,151 | 49,439 | +5.5 | | Other | 22,427 | 19,241 | +16.6 | | **Total** | **518,272** | **338,286** | **+53.2** | - The company actively developed domestic hydraulic clients and completed the acquisition of Jiangsu Komei Hydraulic Control System Co, Ltd in May, a company engaged in load-sensing proportional multi-way directional valve business, highly synergistic with the company's hydraulic operations[48](index=48&type=chunk)[52](index=52&type=chunk) - Continued to explore operational management potential, enhance management efficiency with a focus on lean production, and responded to government calls by introducing comprehensive carbon neutrality solutions and investing in photovoltaic new energy projects[49](index=49&type=chunk)[52](index=52&type=chunk) [Financial Review](index=14&type=section&id=Financial%20Review) In the first half of 2021, the Group's sales significantly grew by **53.2%** to **HKD 518,272 thousand**, with gross profit margin increasing to **25.0%**, while other income rose due to government grants, and administrative and selling expenses increased due to environmental investments, employee incentives, talent acquisition, domestic surcharges, and exchange losses from RMB appreciation, leading to a decrease in finance costs and a significant increase in net profit to **HKD 32,038 thousand** - For the six months ended June 30, 2021, sales recorded **HKD 518,272 thousand**, a year-on-year increase of **53.2%**[53](index=53&type=chunk) - Gross profit recorded **HKD 129,675 thousand**, with a gross profit margin of **25.0%**, up **4.3%** year-on-year[53](index=53&type=chunk) - Other income amounted to **HKD 21,748 thousand**, primarily due to increased government grants[54](index=54&type=chunk) - Administrative and other expenses increased by **HKD 26,417 thousand**, mainly due to domestic environmental investments, increased employee salaries and allowances, recruitment of professional talent, higher domestic surcharges, and exchange losses from RMB appreciation[54](index=54&type=chunk) - Finance costs decreased by **HKD 1,449 thousand** to **HKD 2,938 thousand**, primarily due to a reduction in overall loan amounts[56](index=56&type=chunk) - Unaudited net profit for the period was **HKD 32,038 thousand**, a year-on-year increase of **HKD 29,852 thousand**[56](index=56&type=chunk) [Liquidity, Financial Resources, and Financial Ratios](index=15&type=section&id=Liquidity,%20Financial%20Resources,%20and%20Financial%20Ratios) The Group's working capital primarily stems from its own cash flow and bank financing; despite increased sales, net cash inflow from operating activities decreased due to raw material purchases and credit sales, while net cash outflow from investing activities significantly rose, mainly for automated machinery and the acquisition of Jiangsu Komei, and net cash outflow from financing activities was primarily for bank loan repayments, resulting in an overall decrease in net cash - Cash attributable per share was **HKD 0.79** (December 31, 2020: HKD 0.88), and net asset value per share was **HKD 1.84** (December 31, 2020: HKD 1.79), representing a **2.8%** increase[58](index=58&type=chunk) - Net cash inflow from operating activities was **HKD 72,168 thousand**, a year-on-year decrease of **HKD 39,254 thousand**, mainly due to raw material purchases and credit sales where some sales proceeds were not yet collected amidst increased sales orders[58](index=58&type=chunk) - Net cash outflow from investing activities was **HKD 132,240 thousand**, a year-on-year increase of **HKD 115,228 thousand**, primarily for purchasing automated machinery and equipment (**HKD 51,822 thousand**) and the acquisition of Jiangsu Komei (**HKD 80,989 thousand**)[59](index=59&type=chunk) - Net cash outflow from financing activities was **HKD 14,631 thousand**, including investor capital injection of **HKD 13,183 thousand** and bank loan repayments of **HKD 27,018 thousand**[61](index=61&type=chunk) - As of June 30, 2021, total bank borrowings were **HKD 177,613 thousand**, a year-on-year decrease of **HKD 27,018 thousand**[61](index=61&type=chunk) - Overall net cash (cash and bank balances less total bank borrowings) was **HKD 658,687 thousand**, a year-on-year decrease of **HKD 64,600 thousand**[61](index=61&type=chunk) [Currency Risk and Management](index=16&type=section&id=Currency%20Risk%20and%20Management) The Group faces foreign currency exchange rate fluctuation risks, particularly the impact of RMB volatility on profitability, as revenue is primarily settled in USD while most expenses are settled in JPY, RMB, THB, and HKD, which the company mitigates through forward foreign exchange contracts - The Group is exposed to foreign currency exchange rate fluctuation risks, with RMB volatility having a negative impact on profitability[62](index=62&type=chunk) - Revenue is primarily settled in USD, while most expenses are settled in JPY, RMB, THB, and HKD[62](index=62&type=chunk) - The company has entered into forward foreign exchange contracts to mitigate potential risks from currency exchange rate fluctuations[62](index=62&type=chunk) [Human Resources](index=16&type=section&id=Human%20Resources) The company actively recruits mid-to-high-end talent through various channels, establishes industry-academia partnerships, and implements measures to retain existing employees, including optimizing accommodation, increasing meal subsidies, and offering share option and retirement benefit schemes, with a total of **2,194** employees as of June 30, 2021 - Actively participates in campus recruitment, internal referrals, headhunting, and other channels to attract mid-to-high-end talent, and establishes industry-academia cooperation with relevant professional institutions[63](index=63&type=chunk) - Implements measures such as optimizing accommodation and comprehensively increasing employee meal subsidies to enhance employee loyalty and stabilize the talent pipeline[63](index=63&type=chunk) - Maintains a share option scheme to reward employees for their contributions and provides a Mandatory Provident Fund Scheme and local retirement benefit schemes for employees[63](index=63&type=chunk) - As of June 30, 2021, the Group had a total of **2,194** employees, an increase of **13** from the same period last year[63](index=63&type=chunk) [Outlook](index=17&type=section&id=Outlook) The company will continue to implement its "increase revenue, reduce costs, improve quality, and upgrade" strategy, guided by "technological leadership, product innovation, and quality enhancement," to actively respond to market changes, focusing on new customer development, especially domestic hydraulic clients, improving order delivery rates, accelerating sample progress, and optimizing the procurement supply chain to achieve lean production and maintain industry leadership and sustained profitability - The company continues to implement its "increase revenue, reduce costs, improve quality, and upgrade" strategy, guided by the principles of "technological leadership, product innovation, and quality enhancement"[65](index=65&type=chunk) - Actively develops new customers, particularly domestic hydraulic clients, aiming to become a core supplier to leading domestic hydraulic enterprises[65](index=65&type=chunk) - Enhances order delivery rates through multiple channels, maintains relationships with existing customers, secures new projects, accelerates sample progress, and resolves technical challenges[65](index=65&type=chunk) - Continuously optimizes the procurement supply chain, develops new material suppliers, strengthens procurement bargaining power to achieve cost reduction targets, and improves responsiveness to market changes[65](index=65&type=chunk) Condensed Consolidated Statement of Profit or Loss [Condensed Consolidated Statement of Profit or Loss: Performance Review](index=18&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss:%20Performance%20Review) For the six months ended June 30, 2021, the Group's revenue significantly increased by **53.2%** to **HKD 518,272 thousand**, gross profit grew by **85.2%** to **HKD 129,675 thousand**, and gross profit margin improved, with operating profit and profit before tax both showing substantial growth, resulting in a profit for the period of **HKD 32,038 thousand** and basic earnings per share of **2.9 HK cents**, with no interim dividend recommended by the Board Condensed Consolidated Statement of Profit or Loss (For the six months ended June 30, HKD thousands) | Indicator | 2021 (Unaudited) | 2020 (Unaudited) | | :--- | :--- | :--- | | Revenue | 518,272 | 338,286 | | Cost of sales | (388,597) | (268,257) | | Gross profit | 129,675 | 70,029 | | Other income | 21,748 | 16,434 | | Distribution costs | (10,925) | (9,727) | | Administrative and other expenses | (93,438) | (67,021) | | Operating profit | 47,060 | 9,715 | | Finance costs | (2,938) | (4,387) | | Share of loss of an associate | (896) | (1,806) | | Profit before tax | 43,226 | 3,522 | | Income tax expense | (11,188) | (1,336) | | **Profit for the period** | **32,038** | **2,186** | | Attributable to equity holders of the Company | 30,201 | 2,645 | | Attributable to non-controlling interests | 1,837 | (459) | - Basic earnings per share was **2.9 HK cents**, and diluted earnings per share was **2.9 HK cents**, a significant increase from **0.3 HK cents** in the same period last year[68](index=68&type=chunk) - The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2021 (2020: nil)[68](index=68&type=chunk) Condensed Consolidated Statement of Comprehensive Income [Condensed Consolidated Statement of Comprehensive Income: Comprehensive Income Analysis](index=19&type=section&id=Condensed%20Consolidated%20Statement%20of%20Comprehensive%20Income:%20Comprehensive%20Income%20Analysis) For the six months ended June 30, 2021, the Group recorded a profit for the period of **HKD 32,038 thousand**, which, combined with exchange differences on translation of foreign operations of **HKD 8,495 thousand**, resulted in a total comprehensive income of **HKD 40,533 thousand**, a stark contrast to the negative comprehensive income in the prior year due to exchange differences Condensed Consolidated Statement of Comprehensive Income (For the six months ended June 30, HKD thousands) | Indicator | 2021 (Unaudited) | 2020 (Unaudited) | | :--- | :--- | :--- | | Profit for the period | 32,038 | 2,186 | | Other comprehensive income: | | | | Exchange differences on translation of foreign operations | 8,495 | (61,889) | | **Total comprehensive income for the period** | **40,533** | **(59,703)** | | Attributable to: | | | | Equity holders of the Company | 38,996 | (59,241) | | Non-controlling interests | 1,537 | (462) | - In the first half of 2021, exchange differences on translation of foreign operations were a positive **HKD 8,495 thousand**, compared to a negative **HKD 61,889 thousand** in the prior year, positively impacting comprehensive income[70](index=70&type=chunk) Condensed Consolidated Statement of Financial Position [Condensed Consolidated Statement of Financial Position: Asset and Liability Analysis](index=20&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position:%20Asset%20and%20Liability%20Analysis) As of June 30, 2021, the Group's total non-current assets increased to **HKD 886,336 thousand**, primarily influenced by investment properties, property, plant and equipment, and newly recognized goodwill and intangible assets, while total current assets remained stable, but total current liabilities significantly rose due to increased bank loans and trade payables, with net assets growing to **HKD 1,939,318 thousand** Condensed Consolidated Statement of Financial Position (As of June 30, 2021, HKD thousands) | Indicator | June 30, 2021 (Unaudited) | December 31, 2020 (Audited) | | :--- | :--- | :--- | | **Non-current assets** | | | | Investment properties and other property, plant and equipment | 844,842 | 792,729 | | Goodwill | 9,072 | – | | Intangible assets | 9,738 | – | | **Current assets** | | | | Inventories | 272,899 | 219,173 | | Trade receivables | 280,962 | 272,461 | | Cash and bank balances | 833,781 | 924,246 | | **Current liabilities** | | | | Trade payables | 120,566 | 91,495 | | Bank loans (current portion) | 177,613 | 53,769 | | **Non-current liabilities** | | | | Bank loans (non-current portion) | – | 150,862 | | **Net assets** | **1,939,318** | **1,880,294** | | Total equity | 1,939,318 | 1,880,294 | - Goodwill and intangible assets in non-current assets appeared for the first time in the first half of 2021, likely related to acquisition activities[74](index=74&type=chunk) - Total current liabilities increased from **HKD 227,565 thousand** to **HKD 381,255 thousand**, primarily due to bank loans reclassified from non-current to current, and an increase in trade payables[74](index=74&type=chunk) Condensed Consolidated Statement of Cash Flows [Condensed Consolidated Statement of Cash Flows: Cash Flow Analysis](index=22&type=section&id=Condensed%20Consolidated%20Statement%20of%20Cash%20Flows:%20Cash%20Flow%20Analysis) For the six months ended June 30, 2021, the Group generated net cash from operating activities of **HKD 72,168 thousand**, but net cash outflow from investing activities significantly increased to **HKD 132,240 thousand**, mainly for purchasing subsidiaries and property, plant and equipment, while net cash outflow from financing activities was **HKD 14,631 thousand**, resulting in a net decrease in cash and cash equivalents of **HKD 74,703 thousand** for the period Condensed Consolidated Statement of Cash Flows (For the six months ended June 30, HKD thousands) | Indicator | 2021 (Unaudited) | 2020 (Unaudited) | | :--- | :--- | :--- | | Net cash generated from operating activities | 72,168 | 111,422 | | Net cash used in investing activities | (132,240) | (17,012) | | Net cash used in financing activities | (14,631) | (27,565) | | **Net (decrease) / increase in cash and cash equivalents** | **(74,703)** | **66,845** | | Cash and cash equivalents at beginning of period | 924,246 | 847,093 | | Effect of foreign exchange rate changes | (15,762) | (58,369) | | **Cash and cash equivalents at end of period** | **833,781** | **855,569** | - Net cash outflow from investing activities significantly increased, primarily including the purchase of subsidiaries (**HKD 80,989 thousand**) and the purchase of property, plant and equipment (**HKD 51,822 thousand**)[77](index=77&type=chunk) - Net cash outflow from financing activities was mainly affected by repayment of bank loans (**HKD 27,018 thousand**) and capital injection from non-controlling interests (**HKD 13,183 thousand**)[77](index=77&type=chunk) Condensed Consolidated Statement of Changes in Equity [Condensed Consolidated Statement of Changes in Equity: Equity Movement Analysis](index=23&type=section&id=Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity:%20Equity%20Movement%20Analysis) For the six months ended June 30, 2021, the Group's total equity increased to **HKD 1,939,318 thousand**, with profit for the period of **HKD 32,038 thousand** and exchange differences on translation of foreign operations of **HKD 8,495 thousand** being key contributors, alongside capital injection from non-controlling interests of **HKD 13,183 thousand** and share-based payment arrangements of **HKD 2,166 thousand** also impacting the equity structure Condensed Consolidated Statement of Changes in Equity (For the six months ended June 30, HKD thousands) | Indicator | June 30, 2021 (Unaudited) | January 1, 2020 (Audited) | | :--- | :--- | :--- | | Total equity at beginning of period | 1,880,294 | 1,715,997 | | Profit for the period | 32,038 | 2,186 | | Exchange differences on translation of foreign operations | 8,495 | (61,889) | | Capital injection from non-controlling interests | 13,183 | – | | Share-based payment arrangements | 2,166 | 3,109 | | **Total equity at end of period** | **1,939,318** | **1,654,142** | - Equity attributable to owners of the Company increased from **HKD 1,880,945 thousand** at the beginning of the period to **HKD 1,922,107 thousand**, while non-controlling interests increased from **(HKD 651 thousand)** to **HKD 17,211 thousand**[79](index=79&type=chunk) Notes to the Condensed Financial Statements [1. Company Information](index=24&type=section&id=1.%20Company%20Information) This note reiterates that International Precision Group Limited was incorporated in the Cayman Islands in 2002 and listed on the Main Board of the Hong Kong Stock Exchange in 2004, with its principal business being the manufacturing and sale of precision metal parts for automotive, hydraulic, and electronic equipment - The company was incorporated in the Cayman Islands on July 10, 2002, and listed on the Main Board of the Hong Kong Stock Exchange on November 1, 2004[81](index=81&type=chunk) - Its principal business involves the manufacturing and sale of precision metal parts for automotive components, hydraulic equipment, and electronic devices[81](index=81&type=chunk) [2. Basis of Preparation](index=24&type=section&id=2.%20Basis%20of%20Preparation) This note explains that the condensed consolidated financial statements are prepared in accordance with Hong Kong Accounting Standard 34 and Appendix 16 of the Listing Rules, using the historical cost convention, presented in HKD, with all values rounded to the nearest thousand - The financial statements are prepared in accordance with Hong Kong Accounting Standard 34 and Appendix 16 of the Listing Rules[82](index=82&type=chunk) - Prepared under the historical cost convention, except for derivative financial instruments measured at fair value[82](index=82&type=chunk) - The financial statements are presented in HKD, with all values rounded to the nearest thousand[82](index=82&type=chunk) [3. Principal Accounting Policies](index=24&type=section&id=3.%20Principal%20Accounting%20Policies) This note states that the accounting policies adopted for this interim period are consistent with those used for the annual financial statements for the year ended December 31, 2020, and that the newly adopted amendments to Hong Kong Financial Reporting Standards had no significant impact on the Group's financial position or performance - Accounting policies are consistent with those adopted for the 2020 annual financial statements[83](index=83&type=chunk) - The newly adopted amendments to the Conceptual Framework for Financial Reporting and Hong Kong Financial Reporting Standards had no significant impact on financial position or performance[83](index=83&type=chunk) [4. Operating Segment Information](index=25&type=section&id=4.%20Operating%20Segment%20Information) This note details the Group's six reportable segments based on customer location, with segment results assessed based on gross profit and external customer revenue data provided for each segment - The Group manages its business by customer location, divided into six reportable segments: Thailand, Malaysia, Mainland China, Macau and Hong Kong, North America, Europe, and other countries[85](index=85&type=chunk)[86](index=86&type=chunk) - Segment results are assessed based on gross profit, with revenue and expenses allocated based on sales generated by each segment and expenses from depreciation or amortization of attributable assets[87](index=87&type=chunk) External Customer Revenue and Reportable Segment Gross Profit (For the six months ended June 30, HKD thousands) | Region | 2021 External Customer Revenue | 2021 Gross Profit | 2020 External Customer Revenue | 2020 Gross Profit | | :--- | :--- | :--- | :--- | :--- | | Thailand | 6,035 | 1,510 | 8,970 | 1,857 | | Malaysia | 45,260 | 11,324 | 40,469 | 8,378 | | Mainland China, Macau & Hong Kong | 250,916 | 62,781 | 149,497 | 30,947 | | North America | 74,264 | 18,581 | 63,963 | 13,241 | | Europe | 125,324 | 31,357 | 67,484 | 13,970 | | Other Countries | 16,473 | 4,122 | 7,903 | 1,636 | | **Total** | **518,272** | **129,675** | **338,286** | **70,029** | [5. Revenue and Other Income and Gains](index=27&type=section&id=5.%20Revenue%20and%20Other%20Income%20and%20Gains) This note provides a detailed analysis of the Group's revenue and other income and gains, with revenue primarily derived from the sale of automotive and hydraulic equipment parts, and other income significantly boosted by increased government grants - Revenue represents the net invoiced value of goods sold during the period, after deducting returns and trade discounts[92](index=92&type=chunk) Revenue by Product Type (For the six months ended June 30, HKD thousands) | Product Type | 2021 (Unaudited) | 2020 (Unaudited) | | :--- | :--- | :--- | | Sale of automotive parts | 279,552 | 180,773 | | Sale of hydraulic equipment parts | 164,142 | 88,833 | | Sale of electronic equipment parts | 52,151 | 49,439 | | Other | 22,427 | 19,241 | | **Total** | **518,272** | **338,286** | Other Income (For the six months ended June 30, HKD thousands) | Item | 2021 (Unaudited) | 2020 (Unaudited) | | :--- | :--- | :--- | | Bank interest income | 7,017 | 6,935 | | Government grants | 9,219 | 120 | | Dividend income | 1,176 | – | | Other | 2,635 | 1,715 | | **Total** | **20,047** | **9,027** | [6. Finance Costs](index=28&type=section&id=6.%20Finance%20Costs) This note analyzes the Group's finance costs, showing a total of **HKD 2,938 thousand** for the six months ended June 30, 2021, a decrease from the prior year, primarily due to reduced bank loan interest Finance Costs Analysis (For the six months ended June 30, HKD thousands) | Item | 2021 (Unaudited) | 2020 (Unaudited) | | :--- | :--- | :--- | | Interest on bank loans | 2,054 | 3,496 | | Finance arrangement fees | 853 | 853 | | Interest on lease liabilities | 31 | 38 | | **Total** | **2,938** | **4,387** | - Interest on bank loans decreased from **HKD 3,496 thousand** in 2020 to **HKD 2,054 thousand** in 2021, which is the main reason for the reduction in finance costs[95](index=95&type=chunk) [7. Profit Before Tax](index=28&type=section&id=7.%20Profit%20Before%20Tax) This note lists the major expenses and income deducted from or credited to the Group's profit before tax, including cost of inventories sold, depreciation, share-based payment expenses, auditor's remuneration, and net exchange differences Items Deducted From / (Credited To) Profit Before Tax (For the six months ended June 30, HKD thousands) | Item | 2021 (Unaudited) | 2020 (Unaudited) | | :--- | :--- | :--- | | Cost of inventories sold | 388,597 | 268,257 | | Depreciation of property, plant and equipment | 41,675 | 56,799 | | Equity-settled share option expense | 2,166 | 3,109 | | Auditor's remuneration | 1,292 | 1,266 | | Net exchange differences | 2,637 | (5,516) | | Gain on disposal of items of property, plant and equipment | (131) | (522) | | Reversal of impairment loss on other receivables | – | 257 | - A net exchange difference loss of **HKD 2,637 thousand** was recorded in the first half of 2021, compared to a gain of **HKD 5,516 thousand** in the same period last year[96](index=96&type=chunk) [8. Income Tax](index=29&type=section&id=8.%20Income%20Tax) This note explains that Hong Kong profits tax is provided at a rate of **16.5%**, with other regions calculated at their respective prevailing tax rates, and the total income tax expense for the six months ended June 30, 2021, significantly increased to **HKD 11,188 thousand** - Hong Kong profits tax is provided at a rate of **16.5%**, with other regions calculated at their respective prevailing tax rates[98](index=98&type=chunk) Total Income Tax Expense for the Period (For the six months ended June 30, HKD thousands) | Item | 2021 (Unaudited) | 2020 (Unaudited) | | :--- | :--- | :--- | | Current | 11,188 | 1,336 | | Deferred | – | – | | **Total** | **11,188** | **1,336** | [9. Earnings Per Share](index=29&type=section&id=9.%20Earnings%20Per%20Share) This note explains the calculation methods for basic and diluted earnings per share and provides the data for the six months ended June 30, 2021, showing both basic and diluted earnings per share at **2.9 HK cents**, a substantial increase from the prior year - Basic earnings per share is calculated based on the profit for the period attributable to equity holders of the Company and the weighted average number of ordinary shares outstanding during the period[100](index=100&type=chunk) - Diluted earnings per share is calculated by assuming the conversion of all potential dilutive ordinary shares into ordinary shares issued without consideration[100](index=100&type=chunk) Earnings Per Share (For the six months ended June 30) | Indicator | 2021 (Unaudited) | 2020 (Unaudited) | | :--- | :--- | :--- | | Basic earnings per share | 2.9 HK cents | 0.3 HK cents | | Diluted earnings per share | 2.9 HK cents | 0.3 HK cents | - The weighted average number of ordinary shares outstanding used to calculate basic earnings per share was **1,052,254 thousand** shares[102](index=102&type=chunk) [10. Dividends](index=30&type=section&id=10.%20Dividends) This note explicitly states that the Board does not recommend the payment of an interim dividend for the six months ended June 30, 2021, consistent with the same period in 2020 - The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2021 (2020: nil)[103](index=103&type=chunk) [11. Investment Properties and Other Property, Plant and Equipment](index=31&type=section&id=11.%20Investment%20Properties%20and%20Other%20Property,%20Plant%20and%20Equipment) This note provides a detailed analysis of the cost, accumulated depreciation, and net book value of investment properties and other property, plant and equipment, showing a total net book value of **HKD 844,842 thousand** as of June 30, 2021, with new additions and assets from subsidiary acquisitions during the period Net Book Value of Investment Properties and Other Property, Plant and Equipment (As of June 30, 2021, HKD thousands) | Item | Amount | | :--- | :--- | | Ownership interests in leasehold land held for own use at cost | 73,313 | | Other properties held for own use at cost | 1,616 | | Freehold land and buildings | 375,581 | | Leasehold improvements | 1,884 | | Plant and machinery | 221,881 | | Furniture and fixtures | 22,951 | | Motor vehicles | 4,747 | | Construction in progress | 13,598 | | Investment properties | 129,271 | | **Total** | **844,842** | - Additions to property, plant and equipment during the period amounted to **HKD 51,822 thousand**, and assets from the acquisition of a subsidiary contributed **HKD 38,729 thousand** of related assets[105](index=105&type=chunk) - Depreciation provision for the period was **HKD 41,675 thousand**[105](index=105&type=chunk) [12. Inventories](index=32&type=section&id=12.%20Inventories) This note provides a breakdown of inventories, including raw materials, consumables, work-in-progress, and finished goods, net of provision for obsolete inventories, with total inventories amounting to **HKD 272,899 thousand** as of June 30, 2021, an increase from the end of 2020 Inventory Composition (As of June 30, 2021, HKD thousands) | Item | June 30, 2021 (Unaudited) | December 31, 2020 (Audited) | | :--- | :--- | :--- | | Raw materials | 72,113 | 65,649 | | Consumables | 43,777 | 45,866 | | Work-in-progress | 129,540 | 84,659 | | Finished goods | 122,168 | 101,266 | | Less: Provision for obsolete inventories | (94,699) | (78,267) | | **Total** | **272,899** | **219,173** | - Total inventories increased from **HKD 219,173 thousand** as of December 31, 2020, to **HKD 272,899 thousand** as of June 30, 2021, primarily due to an increase in work-in-progress and finished goods[107](index=107&type=chunk) [13. Trade Receivables](index=32&type=section&id=13.%20Trade%20Receivables) This note describes the Group's trade terms and credit policy, with credit periods generally ranging from **60 to 120 days**, and strict controls implemented for uncollected receivables, while also providing an aging analysis of total trade receivables of **HKD 280,962 thousand** as of June 30, 2021, based on invoice date - The Group grants credit periods to customers generally ranging from **60 to 120 days**, implements strict controls over uncollected receivables, and has no significant concentration of credit risk[108](index=108&type=chunk) Aging Analysis of Trade Receivables (As of June 30, 2021, HKD thousands) | Aging | June 30, 2021 (Unaudited) | December 31, 2020 (Audited) | | :--- | :--- | :--- | | Within 1 month | 99,076 | 114,421 | | 1 to 2 months | 84,110 | 75,882 | | 2 to 3 months | 72,341 | 54,619 | | 3 to 4 months | 14,424 | 24,851 | | 4 to 12 months | 7,691 | 2,997 | | Over 1 year | 3,887 | 258 | | **Total (net of impairment)** | **280,962** | **272,461** | [14. Cash and Bank Balances](index=33&type=section&id=14.%20Cash%20and%20Bank%20Balances) This note presents the Group's cash and bank balances, net of pledged and restricted deposits, with total cash and cash equivalents amounting to **HKD 833,781 thousand** as of June 30, 2021, a decrease from the end of 2020 Cash and Bank Balances (As of June 30, 2021, HKD thousands) | Item | June 30, 2021 (Unaudited) | December 31, 2020 (Audited) | | :--- | :--- | :--- | | Bank deposits and cash | 836,300 | 927,918 | | Less: Pledged and restricted deposits | (2,519) | (3,672) | | **Cash and cash equivalents** | **833,781** | **924,246** | - Pledged and restricted deposits decreased from **HKD 3,672 thousand** at the end of 2020 to **HKD 2,519 thousand** as of June 30, 2021[111](index=111&type=chunk) [15. Trade Payables](index=33&type=section&id=15.%20Trade%20Payables) This note provides an aging analysis of trade payables, showing a total of **HKD 120,566 thousand** as of June 30, 2021, an increase from the end of 2020, with growth observed across all aging categories Aging Analysis of Trade Payables (As of June 30, 2021, HKD thousands) | Aging | June 30, 2021 (Unaudited) | December 31, 2020 (Audited) | | :--- | :--- | :--- | | Within 1 month | 43,689 | 41,127 | | 1 to 2 months | 40,965 | 28,645 | | 2 to 3 months | 25,258 | 15,452 | | Over 3 months | 10,654 | 6,271 | | **Total** | **120,566** | **91,495** | - Total trade payables increased from **HKD 91,495 thousand** as of December 31, 2020, to **HKD 120,566 thousand** as of June 30, 2021[112](index=112&type=chunk) [16. Share Capital](index=34&type=section&id=16.%20Share%20Capital) This note confirms that there were no changes in the issued and fully paid share capital for the six months ended June 30, 2021, and for the year ended December 31, 2020, remaining at **1,052,254,135** shares totaling **HKD 105,225 thousand** - There were no changes in the issued and fully paid share capital for the six months ended June 30, 2021, and for the year ended December 31, 2020[114](index=114&type=chunk) - The issued share capital comprises **1,052,254,135** shares, totaling **HKD 105,225 thousand**[114](index=114&type=chunk) [17. Bank Loans](index=34&type=section&id=17.%20Bank%20Loans) This note discloses the Group's total unsecured bank loans and their repayment terms, showing a total of **HKD 177,613 thousand** as of June 30, 2021, a decrease from the end of 2020, with all loans guaranteed by the Company and its subsidiaries and repayable within one year or on demand - As of June 30, 2021, total unsecured bank loans amounted to **HKD 177,613 thousand**, a decrease from **HKD 204,631 thousand** as of December 31, 2020[115](index=115&type=chunk) - All bank loans are unsecured and guaranteed by the Company and certain of its subsidiaries[115](index=115&type=chunk) - As of June 30, 2021, all bank loans are repayable within one year or on demand[115](index=115&type=chunk) - The Group had no breaches of any covenants relating to drawing down financing as of June 30, 2021[115](index=115&type=chunk) [18. Capital Commitments](index=35&type=section&id=18.%20Capital%20Commitments) This note lists the Group's capital commitments at the end of the reporting period, primarily related to buildings, plant, and machinery, with total contracted but unprovided capital commitments amounting to **HKD 9,210 thousand** as of June 30, 2021, a significant decrease from the end of 2020 Capital Commitments (As of June 30, 2021, HKD thousands) | Item | June 30, 2021 (Unaudited) | December 31, 2020 (Audited) | | :--- | :--- | :--- | | Buildings | 41 | 2,656 | | Plant and machinery | 9,169 | 20,932 | | **Total** | **9,210** | **23,588** | - Total capital commitments significantly decreased from **HKD 23,588 thousand** as of December 31, 2020, to **HKD 9,210 thousand** as of June 30, 2021[117](index=117&type=chunk) [19. Related Party Transactions](index=35&type=section&id=19.%20Related%20Party%20Transactions) This note discloses the total remuneration paid to key management personnel for the six months ended June 30, 2021, including short-term employee benefits, equity-settled share option expenses, and post-employment benefits, totaling **HKD 5,180 thousand** Total Remuneration Paid to Key Management Personnel (For the six months ended June 30, HKD thousands) | Item | 2021 (Unaudited) | 2020 (Unaudited) | | :--- | :--- | :--- | | Short-term employee benefits | 3,374 | 4,180 | | Equity-settled share option expense | 1,520 | 2,519 | | Post-employment benefits | 286 | 36 | | **Total** | **5,180** | **6,735** | - Total remuneration paid to key management personnel decreased from **HKD 6,735 thousand** in the same period of 2020 to **HKD 5,180 thousand** in the same period of 2021[118](index=118&type=chunk) [20. Approval of Financial Statements](index=35&type=section&id=20.%20Approval%20of%20Financial%20Statements) This note confirms that the condensed financial statements were approved and authorized for issue by the Board of Directors on August 23, 2021 - The condensed financial statements were approved and authorized for issue by the Board of Directors on August 23, 2021[119](index=119&type=chunk) Other Information [Directors' and Chief Executive's Interests and Short Positions in Shares and Underlying Shares](index=36&type=section&id=Directors'%20and%20Chief%20Executive's%20Interests%20and%20Short%20Positions%20in%20Shares%20and%20Underlying%20Shares) This section discloses the long positions of directors and the chief executive in the company's underlying shares (through share options) and ordinary shares of the controlling company, China Baoan Group Co, Ltd, as of June 30, 2021 Directors' Long Positions in Underlying Shares of the Company — Physically Settled Unlisted Equity Derivatives (As of June 30, 2021) | Director's Name | Number of Underlying Shares Involved in Share Options Granted | Percentage of Company's Issued Share Capital | | :--- | :--- | :--- | | Mr. Zeng Guang Sheng | 42,000,000 | 3.99% | | Mr. Wu Kai Ping | 20,000,000 | 1.90% | | Ms. Zeng Jing | 13,000,000 | 1.24% | | Mr. Chan Kuong Kok | 5,000,000 | 0.48% | - Directors also hold long positions in the ordinary shares of China Baoan Group Co, Ltd, the Company's controlling company[122](index=122&type=chunk) [Substantial Shareholders' Interests and Short Positions in Shares and Underlying Shares](index=37&type=section&id=Substantial%20Shareholders'%20Interests%20and%20Short%20Positions%20in%20Shares%20and%20Underlying%20Shares) This section lists the long positions of substantial shareholders, other than directors or chief executives, holding over **5%** interest in the company's shares and underlying shares as of June 30, 2021, including Baoan Technology Co, Ltd (wholly owned by China Baoan Group) and Tottenhill Limited (wholly owned by Mr. Cui Shaoan) Substantial Shareholders' Long Positions in Ordinary Shares of the Company (As of June 30, 2021) | Name of Substantial Shareholder | Number of Ordinary Shares of the Company | Percentage of Company's Issued Share Capital | | :--- | :--- | :--- | | Baoan Technology Co, Ltd | 565,606,250 | 53.75% | | China Baoan Group Co, Ltd | 565,606,250 | 53.75% | | Tottenhill Limited | 167,966,975 | 15.96% | | Mr. Cui Shaoan (Total) | 182,668,225 | 17.36% | | Ms. Leung Wing Yee (Total) | 182,668,225 | 17.36% | - China Baoan Group Co, Ltd is deemed to have an interest in the shares held by Baoan Technology Co, Ltd[126](index=126&type=chunk) - Mr. Cui Shaoan is deemed to have an interest in the shares held by Tottenhill Limited and those held by his wife, Ms. Leung Wing Yee[126](index=126&type=chunk) [Share Option Scheme](index=39&type=section&id=Share%20Option%20Scheme) This section describes the company's share option scheme, adopted in 2011 to reward eligible participants for their contributions to the Group's business, detailing changes in unexercised share options for the six months ended June 30, 2021, including quantities, grant dates, exercise periods, and exercise prices for directors, employees, and a supplier - The share option scheme was adopted by shareholders on May 17, 2011, to provide incentives and rewards to eligible participants who have contributed to the Group's business[129](index=129&type=chunk) Movements in Unexercised Share Options (As of June 30, 2021) | Category of Participant | As at January 1, 2021 | Granted during the period | Exercised during the period | Lapsed/Forfeited during the period | As at June 30, 2021 | | :--- | :--- | :--- | :--- | :--- | :--- | | Directors | 80,000,000 | – | – | – | 80,000,000 | | Employees | 12,300,000 | 2,700,000 | – | (1,300,000) | 11,000,000 | | A supplier | 2,000,000 | – | – | – | 2,000,000 | | **Total** | **94,300,000** | **2,700,000** | **–** | **(1,300,000)** | **95,700,000** | - Share option exercise prices are primarily **HKD 2.0200** or **HKD 0.9000** per share, with exercise periods typically spanning several years[130](index=130&type=chunk) - The fair value of share options granted on May 10, 2021, was approximately **HKD 400,000**, with a vesting period until February 28, 2026[130](index=130&type=chunk)[131](index=131&type=chunk) - **2,000,000** share options were granted to a supplier as a reward for providing public relations services to local authorities, with terms identical to those granted to directors and employees[134](index=134&type=chunk) [Purchase, Redemption or Sale of the Company's Listed Securities](index=40&type=section&id=Purchase,%20Redemption%20or%20Sale%20of%20the%20Company's%20Listed%20Securities) This section states that neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities for the six months ended June 30, 2021 - Neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities for the six months ended June 30, 2021[135](index=135&type=chunk) [Interim Dividend](index=40&type=section&id=Interim%20Dividend) This section reiterates that the Board does not recommend the payment of any interim dividend for the six months ended June 30, 2021, consistent with the same period in 2020 - The Board does not recommend the payment of any interim dividend for the six months ended June 30, 2021 (June 30, 2020: nil)[136](index=136&type=chunk) [Corporate Governance](index=40&type=section&id=Corporate%20Governance) The company is committed to maintaining high standards of corporate governance and has complied with the Corporate Governance Code provisions in Appendix 14 of the Hong Kong Stock Exchange Listing Rules, except for the combined roles of Chairman and Chief Executive Officer held by Mr. Zeng Guang Sheng, which the Board believes provides strong and consistent leadership for the Group - The company is committed to maintaining high standards of corporate governance and has complied with the code provisions of the Corporate Governance Code set out in Appendix 14 of the Hong Kong Stock Exchange Listing Rules[137](index=137&type=chunk) - The roles of Chairman and Chief Executive Officer are combined and held by Mr. Zeng Guang Sheng, which the Board believes provides strong and consistent leadership for the Group, benefiting the overall interests of shareholders[137](index=137&type=chunk) [Audit Committee](index=41&type=section&id=Audit%20Committee) This section describes the composition and responsibilities of the Audit Committee, which comprises three independent non-executive directors and is responsible for reviewing the Group's accounting principles, risk management, internal controls, and financial reporting procedures, including the interim results for the six months ended June 30, 2021 - The Audit Committee comprises three independent non-executive directors: Mr. Yeung Yu Sang (Chairman), Mr. Cheung Chun Yu, and Mr. Mui Wai Yi[139](index=139&type=chunk) - The Committee has reviewed the accounting principles and practices adopted by the Group and discussed matters related to risk management, internal controls, and financial reporting procedures, including the review of the Company's interim results for the six months ended June 30, 2021[139](index=139&type=chunk) [Standard Code for Securities Transactions](index=41&type=section&id=Standard%20Code%20for%20Securities%20Transactions) This section states that the company has adopted its own code of conduct for directors' dealings in the company's securities, which is no less stringent than the Model Code set out in Appendix 10 of the Listing Rules, and all directors have confirmed compliance with this code - The company has adopted its own code of conduct to regulate directors' dealings in the company's securities, which is no less stringent than the Model Code set out in Appendix 10 of the Listing Rules[140](index=140&type=chunk) - Following specific inquiries to all directors, they all confirmed compliance with the Model Code[140](index=140&type=chunk) [Compliance with Written Guidelines for Securities Transactions by Relevant Employees](index=41&type=section&id=Compliance%20with%20Written%20Guidelines%20for%20Securities%20Transactions%20by%20Relevant%20Employees) This section indicates that the company has established written guidelines for employees who may possess inside information regarding the company or its securities, which are no less stringent than the Model Code, and no non-compliance by relevant employees was identified during the six months ended June 30, 2021 - The company has established written guidelines for employees who may possess inside information regarding the company or its securities, which are no less stringent than the Model Code[141](index=141&type=chunk) - During the six months ended June 30, 2021, the company was not aware of any non-compliance by relevant employees with the written guidelines[141](index=141&type=chunk) [Update on Directors' Information under Listing Rule 13.51B(1)](index=41&type=section&id=Update%20on%20Directors'%20Information%20under%20Listing%20Rule%2013.51B(1)) This section updates the information for independent non-executive director Mr. Cheung Chun Yu under Listing Rule 13.51B(1), noting his appointment as Managing Director of ESG at Pegasus Capital Management (Hong Kong) Limited in June 2021 - Independent non-executive director Mr. Cheung Chun Yu joined Pegasus Capital Management (Hong Kong) Limited as Managing Director of ESG in June 2021[143](index=143&type=chunk) [General Disclosure under Listing Rule 13.21](index=42&type=section&id=General%20Disclosure%20under%20Listing%20Rule%2013.21) This section discloses a loan agreement containing specific performance covenants related to the company's controlling shareholder, China Baoan Group Co, Ltd, requiring it to remain the single largest ultimate beneficial owner, directly or indirectly beneficially holding no less than **50.1%** equity interest or control over the company, with any breach potentially leading to cancellation or immediate repayment of the loan facility - The Group entered into a **HKD 275,000,000** term loan facility agreement containing specific performance covenants involving China Baoan Group Co, Ltd, the Company's controlling shareholder[145](index=145&type=chunk)[146](index=146&type=chunk) - The covenants require China Baoan Group Co, Ltd to remain the single largest ultimate beneficial owner of the Company, directly or indirectly beneficially holding no less than **50.1%** equity interest in or control over the Company[146](index=146&type=chunk) - Failure by the Company to ensure China Baoan Group Co, Ltd's compliance with these covenants may constitute an event of default under the facility agreement, leading to cancellation or immediate repayment of the loan facility[146](index=146&type=chunk) [Acknowledgements](index=42&type=section&id=Acknowledgements) The Board takes this opportunity to express gratitude to shareholders for their support and to all directors and employees for their contributions to the Group - The Board thanks shareholders for their support of the Group, and all directors and employees for their contributions to the Group[147](index=147&type=chunk)

際精密集團 EX IPE Group Limited (於開曼群島註冊成立之有限公司) (股份代號 : 929) 年 報 202 1 - i il = l = o | = i | = 0 l I (0 0 IIIIIII ● 00 o- o- 0) 0) 0) O 00 N (6) O (0) (0) ll( O 000 0000000000000 000 � 目錄 | --- | --- | |--------------------------|-------| | | | | | | | | | | 公司資料 | 2 | | 公司簡介 | 4 | | 公司里程 | 5 | | 集團架構 | 6 | | 財務摘要 | 8 | | 主席報告 | 12 | | 管理層討論及分析 | 17 | | 董事及高級管理人員 | 20 | | 企業管治報告 | 24 | | 環境、社會及管治報告 | 37 | | 董事會報告 | 78 | | 獨立核數師報告 | 91 | | 綜合損益表 | 98 | | 綜合損益及其他全面收益表 | 99 | | 綜合財務狀況表 | 100 | | 綜合權益變動報表 | 102 | ...