Revenue and Profit Performance - Revenue increased by 38.9% to RMB359.0 million compared to the first half of 2021, while net profit decreased by 44.8% to RMB6.3 million[14]. - For the six months ended June 30, 2022, the company reported revenue of RMB 359,002,000, an increase of 39% compared to RMB 258,542,000 for the same period in 2021[96]. - The profit for the period was RMB 6,343,000, down from RMB 11,486,000 in the previous year, representing a decline of approximately 44%[195]. - Basic and diluted earnings per share for the period were RMB 0.90, compared to RMB 1.69 in the previous year, a decline of approximately 47%[96]. - Total comprehensive income for the period increased to RMB 12,585,000 from RMB 8,193,000, marking a growth of approximately 53.5%[98]. Segment Performance - Segment revenue for the industrial solutions business increased by 17.3% to RMB196.1 million, while segment profit fell by 25.9% to RMB17.1 million compared to the first half of 2021[27][29]. - The smart office business saw revenue and profit growth of 98.6% and 97.7% respectively, reaching RMB156.9 million and RMB2.3 million during the reporting period compared to the same period in 2021[30][31]. - The BLSC business experienced a significant revenue increase of 124.0% year-on-year, attributed to low comparative figures from the previous year due to a shortage of key electronic components[36]. - The new retail business segment's revenue and profit decreased by 50.7% and 22.1% to RMB6.1 million and RMB1.2 million respectively, impacted by the pandemic in Taiwan[34][37]. Financial Position - Total assets were RMB656.0 million as of June 30, 2022, financed by total liabilities of RMB230.8 million and shareholders' equity of RMB425.2 million[20]. - Cash and cash equivalents were RMB148.8 million as of June 30, 2022, down from RMB189.1 million as of December 31, 2021[20]. - The company maintained a current ratio of 2.4 as of June 30, 2022, consistent with December 31, 2021[20]. - Total liabilities slightly increased to RMB 230,813,000 from RMB 229,445,000, reflecting a marginal growth of approximately 0.6%[104]. Cash Flow and Investments - For the six months ended June 30, 2022, the net cash used in operating activities was RMB 16,824,000, a decrease from RMB 31,117,000 in the same period of 2021, representing a 46.0% improvement[114]. - Cash flows from investing activities resulted in a net cash outflow of RMB 20,452,000, significantly higher than RMB 1,119,000 in the prior year, indicating increased investment activity[114]. - The investment in SigmaSense, LLC is valued at approximately $5.5 million, representing about 5.5% of the company's total assets as of June 30, 2022[42]. - The company reported an unrealized loss of approximately RMB0.6 million on the SigmaSense investment during the reporting period[42]. Employee and Management - The total number of full-time employees increased to 582 as of June 30, 2022, from 543 as of December 31, 2021, reflecting a growth of 7.2%[90]. - The company has established a remuneration committee to ensure competitive employee compensation and performance-related rewards[90]. - The company has adopted a Share Option Scheme approved on August 30, 2013, allowing options to be granted to eligible participants[72]. Risk Management and Compliance - The company has not made any changes to its risk management policies since the last year end, maintaining consistency in its financial risk management approach[131]. - The interim financial information was approved for issue by the Board on August 26, 2022, ensuring timely reporting to stakeholders[115]. - The company has adopted the Model Code for directors' securities transactions, with no reported non-compliance during the six months ended June 30, 2022[87]. Market and Strategic Outlook - The company plans to deliver several large projects in the industrial solutions segment in the second half of 2022, maintaining a cautiously optimistic outlook for the full year[39][43]. - The company plans to continue expanding its market presence and investing in new technologies to enhance operational efficiency and service offerings[172].

Financial Performance - In 2021, the company's overall revenue increased by 14% to RMB 596.3 million, up from RMB 523.4 million in 2020, while net profit surged by 134% to RMB 34.3 million, compared to RMB 14.6 million in 2020[26]. - Core net profit, excluding fair value changes of financial assets and share-based payment expenses, rose by 34% to RMB 26.3 million[26]. - Revenue increased by 14% to RMB596.3 million, and net profit surged by 134% to RMB34.3 million compared to 2020[30]. - Smart manufacturing solutions revenue increased by 33% to RMB333.3 million, with segment profit rising by 40% to RMB44.4 million[41]. - Smart office business revenue rose by 1% to RMB236.0 million, but segment profit fell by 63% to RMB3.2 million[42]. - Personify business revenue grew by over 20% compared to 2020, driven by increased demand for software applications during the pandemic[44]. - New Retail Business segment revenue and profit decreased by 32% to RMB 27.1 million and RMB 3.7 million respectively due to pandemic disruptions in Taiwan[46][49]. - Personify business revenue increased by over 20% on a pro-rata basis compared to 2020, driven by a doubling of B2B revenue despite a halving of B2C revenue[47]. Business Expansion and Acquisitions - The company completed the acquisition of a basket of Personify-related intellectual properties from Hon Hai Precision Industry Company Limited on March 22, 2021[21]. - The BLSC business expanded from North America to Asian and European markets, resulting in a more balanced revenue mix from major regions[21]. - The company plans to launch new products in 2022 for both Personify and BLSC businesses, which are currently in an expansion phase[22]. - The acquisition of intellectual properties from Hon Hai Group for HKD 23.34 million was completed, enhancing the company's ability to develop new applications and products[61][62]. - The company completed the acquisition of Target Assets for HK$23.34 million, issuing 46.68 million new shares at HK$0.5 per share, representing 6.65% of the enlarged shareholding[64]. Inventory and Receivables Management - Inventory as of December 31, 2021, was approximately RMB110.1 million, up from RMB23.2 million in 2020, with inventory turnover increasing from 23 days to 50 days[31]. - Trade and lease receivables amounted to RMB195.1 million, a slight decrease from RMB202.0 million in 2020, with turnover improving from 149 days to 122 days[32]. Financial Position and Assets - Total assets grew to RMB641.9 million from RMB536.4 million in 2020, financed by total liabilities of RMB229.4 million and shareholders' equity of RMB412.5 million[33]. - The company maintained a healthy liquidity position with a current ratio of 2.4, down from 2.7 in 2020[33]. - The company had no bank borrowings and did not utilize available banking facilities of RMB30.6 million during the year[33]. - The investment in GRC Fund amounted to RMB30 million, with RMB9 million contributed in 2021, expected to generate long-term capital appreciation[69]. - The investment in SigmaSense increased in valuation to approximately US$5.6 million, representing about 5.5% of the total asset value of the group as of December 31, 2021[70]. - The unrealized gain from the SigmaSense investment was approximately RMB19.8 million during the reporting year[70]. - As of December 31, 2021, there were no charges on the group's assets and contingent liabilities[78]. - The total capital commitment as of December 31, 2021, was RMB26 million[73]. Governance and Board Structure - The board of directors consists of four executive directors, one non-executive director, and three independent non-executive directors[105]. - The board meets at least four times a year to approve annual and interim results and review business operations[105]. - The company has maintained compliance with the Corporate Governance Code, ensuring transparency and integrity in its operations[98]. - The company reported a significant increase in board diversity, with independent non-executive directors comprising 50% of the board as of December 2021, up from 38% in December 2020[140]. - The board's age distribution shows a balanced representation, with the majority of members aged between 50-64 years, indicating a mix of experience and fresh perspectives[141]. - The company has established a governance framework that encourages integrity and high standards of corporate governance, reflecting its commitment to stakeholder interests[152]. - The company has implemented a meritocratic approach to board appointments, considering various factors such as gender, age, and professional experience to enhance board diversity[136]. - The company has established three board committees: the Audit Committee, the Remuneration Committee, and the Nomination Committee to oversee specific aspects of the group's affairs[170]. Risk Management and Compliance - The group has established an effective risk management and internal control system in compliance with corporate governance code D.2[200]. - The risk management framework is designed to assist the audit committee and board in fulfilling their risk management responsibilities[200]. - The internal control system is based on guidelines, procedures, and frameworks established for the group[200]. - The risk assessment process is ongoing and aims to identify and analyze risks that may affect the achievement of the group's objectives[200]. - Monitoring activities are established based on policies and procedures to ensure the execution of management's directives to mitigate risks[200]. Employee and Training Initiatives - The company employed 543 staff as of December 31, 2021, an increase from 498 in 2020[84]. - The company is committed to providing more resources for internal and external training, including live broadcasting and online programs covering a variety of topics[87]. - The company has implemented a mentorship program where senior and middle management provide regular coaching to new employees[87]. - The remuneration policy aligns with market practices, with sales personnel receiving salaries and incentives based on sales targets and account receivables collection[86]. - Year-end discretionary bonuses for general staff are based on divisional performance and individual appraisals[86]. Future Outlook and Strategic Initiatives - The backlog orders from overseas clients for industrial solutions are promising and expected to contribute to performance in 2022[22]. - The company aims to explore opportunities in both the PRC and overseas markets due to manufacturers diversifying production capacities from China[22]. - The company is closely monitoring the impact of the Russia-Ukraine war on new product launches and is taking measures to mitigate potential adverse effects[56]. - The company aims to diversify production capacity overseas to mitigate risks associated with geopolitical tensions and pandemic-related disruptions[51][55]. - The company is experiencing increased foreign exchange risk exposure due to overseas business expansion and currency volatility[54][58]. - The company is actively working with suppliers to launch new product models to meet customer demands and enhance competitiveness[56].

Financial Performance - Revenue for the reporting period was RMB258.5 million, consistent with the first half of the previous year[11] - Net profit increased by 18% to RMB11.5 million compared to the same period in 2020, driven by strong performance in the industrial solutions business[11] - Profit for the period increased to RMB 11,486,000, up from RMB 9,713,000, representing a year-over-year growth of about 18.2%[102] - Basic and diluted earnings per share rose to 1.69 RMB cents, compared to 1.48 RMB cents in the prior year, indicating an increase of approximately 14.2%[100] - The company reported a total comprehensive income for the period of RMB 8,193,000, down from RMB 12,826,000 in the previous year, primarily due to currency translation differences[102] Revenue Breakdown - The Group's total revenue for the six months ended June 30, 2021, was RMB 258,542,000, with the Smart Office Business contributing RMB 79,001,000, Industrial Solutions Business contributing RMB 167,204,000, and New Retail Business contributing RMB 12,337,000[160] - The smart office business segment revenue fell by 41% to RMB 79.0 million, and profit decreased by 81% to RMB 1.1 million compared to the first half of 2020[30] - Industrial solution business revenue rose by 46% to RMB167.2 million and profit increased by 94% to RMB23.1 million during the reporting period compared to the same period in 2020[41] - New retail business segment revenue and profit increased by 37% and 16% to RMB12.3 million and RMB1.5 million respectively during the reporting period compared to the same period last year[43] Assets and Liabilities - Total assets increased to RMB574.4 million from RMB536.4 million at the end of 2020, financed by total liabilities of RMB191.6 million and shareholders' equity of RMB382.8 million[18] - Total current liabilities increased to RMB 179,611,000 from RMB 164,527,000, representing a growth of approximately 9.5% year-over-year[109] - Total non-current liabilities remained stable at RMB 11,973,000 compared to RMB 17,108,000, indicating a decrease of about 30.3%[109] - Total liabilities as of June 30, 2021, were RMB 191,584,000, compared to RMB 181,365,000 as of December 31, 2020, indicating an increase of about 5.5%[192] Cash Flow and Liquidity - Cash and cash equivalents were RMB173.1 million as of June 30, 2021, down from RMB212.4 million at the end of 2020[18] - Cash flows from operating activities showed a net cash outflow of RMB 31,117,000, a significant decline compared to a net inflow of RMB 57,153,000 in the previous year[119] - The company maintained a healthy liquidity position throughout the reporting period, financing operations primarily with internally generated resources[20] Research and Development - The increase in research and development expenses was attributed to product development in the Personify business[11] - Significant investments were made in research and development, leading to increased expenses that impacted the profitability of the Personify segment[36] Market and Business Development - The company is expanding its marketing and research efforts in the Personify business following the acquisition of target assets from Hon Hai Group in March 2021[36] - The company plans to launch "streaming services" and image beautification products by late 2021 or early 2022, following beta testing in the second half of 2021[43] - The company is exploring new opportunities in Taiwan's retail sector with digital signage solutions, having completed installations in 600 stores and secured a phase II project for over 400 additional stores[43] Shareholder Information - FSK Holdings Limited holds a beneficial interest of 239,504,122 shares, representing approximately 34.14% of the company's issued share capital[64] - FDG Fund, L.P. has a beneficial interest of 72,267,562 shares, accounting for approximately 10.30% of the company's issued share capital[65] - Foxconn (Far East) Limited holds a beneficial interest of 46,680,000 shares, which is about 6.65% of the company's issued share capital[66] Employee Information - The company had approximately 507 full-time employees as of June 30, 2021, compared to 498 employees as of December 31, 2020[91] - The company has established a competitive compensation structure linked to performance, including employee benefits such as provident fund, insurance, and medical coverage[91] - The company has implemented a mentoring program where senior and mid-level managers provide regular guidance and experience sharing to new employees[91] Financial Risks and Management - The Group's activities expose it to various financial risks, including market risk, credit risk, and liquidity risk[128] - The company has adopted a prudent treasury management approach to reduce credit risk exposure through periodic credit evaluations of external customers[20] - The company is exposed to foreign exchange risk primarily with respect to US dollars, managing this risk through regular reviews and potential use of foreign exchange contracts[20]

| --- | --- | |------------------------------------------|-----------------------------------------------------------------------------------------| | | | | | | | | | | | | | Industrial ANNUAL REPORT 2020年報 ● ● ● | Smart 智慧瓣公 Office Solution ɪ 業 解決方案 新零售 New Retail | | | | | | MAXNERVA TECHNOLOGY SERVICES LIMITED 雲智匯科技服務有限公司 (Stock Code 股份代號: 1037) | 公司資料 CORPORATE INFORMATION 公司資料 CORPORATE INFORMATION 董事會 執行董事 簡宜彬先生（主席） 蔡力挺先生（執行長） 高照洋先生 鄭宜斌先生 非執行董事 PARK Ho Jin先生1 JEON Eui Jong先生2 謝迪洋先生3 獨立非執行董事 鄧天樂先生 簡己然先 ...

| --- | --- | |-----------------------------------------------------------------------------------------|-------| | | | | | | | | | | | | | 想智能 | | | MAXNERVA TECHNOLOGY SERVICES LIMITED 婴智匯科技服務有限公司 (Stock Code 找留代號: 1037) | | 公司資料 CORPORATE INFORMATION 公司資料 CORPORATE INFORMATION BOARD OF DIRECTORS Executive Directors Mr. CHIEN Yi-Pin (Chairman) Mr. CAI Liting (Chief Executive Officer) Mr. KAO Chao Yang Mr. CHENG Yee Pun Non-Executive Directors Mr. JEON Eui Jong Mr. TSE Tik Yang Denis Independent Non-Execut ...

Financial Performance - The company significantly improved its revenue and net profit during the reporting year compared to the previous year, driven by accelerated product and platform development and stringent cost control measures[11][15]. - Revenue increased by 32% to RMB431.0 million in 2019, up from RMB326.2 million in 2018[31]. - Net profit surged by 704% to RMB11.6 million in 2019, compared to RMB1.4 million in 2018[36]. - As of December 31, 2019, the company had a net cash position of RMB183.8 million, an increase from RMB141.5 million in 2018[39]. - Total assets increased to RMB527.4 million in 2019 from RMB457.4 million in 2018, while total liabilities rose to RMB184.2 million from RMB127.8 million[39]. Business Strategy and Development - The company reduced its reliance on Hon Hai Precision Industry Company Limited and its subsidiaries by broadening its external customer base[15]. - The company appointed Mr. Liting Cai as the new CEO in late 2019 to prepare for balanced and sustainable business development[13][17]. - Starting in 2020, the company plans to reposition its business portfolio into industrial solutions, smart office, and new retail to diversify revenue sources and reduce concentration risk in manufacturing[19]. - The strategic reshuffle aims to increase overseas exposure and reduce concentration risk in the manufacturing sector[21]. - The company plans to establish a joint venture in the US alcohol retail advertising market, aiming to address the lack of resources for informed purchase decisions in liquor stores[62]. Inventory and Receivables Management - Inventory as of December 31, 2019, was approximately RMB30.7 million, an increase from RMB24.8 million in 2018[37]. - Inventory turnover improved to 29 days in 2019, down from 45 days in 2018, due to accelerated project delivery[37]. - Trade and lease receivables stood at approximately RMB226.4 million as of December 31, 2019, compared to RMB231.1 million in 2018[38]. - Trade and lease receivable turnover decreased to 194 days in 2019 from 264 days in 2018, primarily due to significant sales made near the end of 2018[38]. Segment Performance - The smart manufacturing segment revenue dropped 27% year-on-year to RMB97.1 million, with segment profit declining 87% to RMB7.2 million due to the absence of highly profitable mega projects[44]. - The IoT and system integration segment revenue surged 120% to RMB232.6 million, with a segment profit of RMB4.2 million compared to a loss of RMB49.4 million in 2018[45]. - The I.T. service segment revenue increased by 16% to RMB101.3 million, but segment profit fell 22% to RMB25.1 million due to a decrease in profit margin from 37% to 25%[52]. COVID-19 Impact - The COVID-19 pandemic has led to a significant increase in the usage of video conferencing and smart office equipment, partially offsetting adverse impacts on business in China[22]. - The COVID-19 outbreak has negatively impacted the company's business, with over 81,000 reported infections and over 3,300 fatalities in China as of the reporting date[97]. - The company's office in Wuhan was closed until late March 2020, while operations in Shenzhen and Chongqing resumed in mid-February 2020[97]. - The performance of the company's overseas business has been satisfactory, partially offsetting the adverse impact of COVID-19 on its business in China[103]. Corporate Governance - The company is committed to maintaining good corporate governance standards to enhance shareholder value[122]. - The board comprises four executive directors, two non-executive directors, and three independent non-executive directors, ensuring a balanced skill set appropriate for the company's business needs[130]. - The company has complied with the Corporate Governance Code, maintaining at least three independent non-executive directors, with one possessing appropriate professional qualifications in accounting or related financial management expertise[132]. - The board will continuously review and improve corporate governance practices to ensure proper regulation of business activities and decision-making processes[123]. - The company has established three board committees: audit committee, remuneration committee, and nomination committee to oversee specific aspects of the group's affairs[193]. Employee Management and Development - The company employed a total of 469 employees as of December 31, 2019, down from 488 employees in 2018[113]. - The company is committed to enhancing employee training and development to improve professional knowledge and management systems[115]. - The company plans to invest more resources in providing internal and external training for employees to enhance their professional knowledge and career development[117]. Marketing and Sales Strategy - Sales from regions outside of China are expected to increase from 25% of total revenue in 2019 to approximately 40% in 2020, achieving a more balanced sales mix[94]. - The marketing platform collects data to provide targeted marketing based on customer preferences and drinking habits[62]. - The joint venture will install over 1,000 interactive screens in US liquor stores by the end of 2020, sharing advertising revenue generated from the marketing platform[90].

Financial Performance - For the six months ended June 30, 2019, revenue increased by 45% to RMB 152.9 million, with a net profit of RMB 6.0 million compared to a net loss of RMB 20.0 million in the first half of 2018[7]. - The improvement in financial performance was attributed to higher revenue, increased staff utilization, reduced selling and distribution expenses, and no impairment provision for trade receivables during the reporting period[7]. - Revenue for the six months ended June 30, 2019, was RMB 152,924,000, representing a 45.5% increase from RMB 105,140,000 in the same period of 2018[66]. - Gross profit for the same period was RMB 27,935,000, up from RMB 14,954,000, indicating an increase of 86.5%[66]. - Operating profit for the six months ended June 30, 2019, was RMB 6,649,000, compared to an operating loss of RMB 20,947,000 in the prior year[66]. - Profit for the period was RMB 6,030,000, a significant recovery from a loss of RMB 20,038,000 in the same period of 2018[70]. - Total comprehensive income for the period was RMB 5,096,000, compared to a total comprehensive loss of RMB 20,021,000 in the previous year[70]. Assets and Liabilities - Total assets were approximately RMB 474.9 million, financed by current liabilities of approximately RMB 108.5 million, non-current liabilities of approximately RMB 33.7 million, and shareholders' equity of approximately RMB 332.7 million[9]. - Total assets increased to RMB 474,925,000 as of June 30, 2019, up from RMB 457,425,000 at December 31, 2018, representing a growth of 3.3%[74]. - Total liabilities increased to RMB 142,239,000 from RMB 127,771,000, indicating a rise of 11.3%[77]. - Total equity attributable to owners of the Company reached RMB 332,686,000, up from RMB 329,654,000, reflecting a growth of 0.7%[81]. - The current ratio was approximately 3.5 times, indicating a strong liquidity position[9]. Cash Flow - For the six months ended June 30, 2019, the net cash generated from operating activities was RMB 40,232,000, an increase from RMB 4,888,000 in the same period of 2018[90]. - The net increase in cash and cash equivalents for the period was RMB 28,119,000, compared to a decrease of RMB (12,975,000) in the same period last year[90]. - Cash and cash equivalents increased to RMB 168,110,000 from RMB 140,138,000, a growth of 19.9%[74]. - The company reported a net cash used in investing activities of RMB (3,801,000), a significant improvement compared to RMB (16,379,000) in the previous year[90]. Segment Performance - Revenue from the smart manufacturing segment grew by 29% to RMB43.4 million during the reporting period, with a segment profit of RMB2.3 million compared to a segment loss of RMB6.6 million in the prior period[13]. - Segment revenue for Other IoT and system integration business increased by 111% to RMB 63.1 million, with a segment profit of RMB 0.3 million compared to a loss of RMB 16.6 million in the previous period[17]. - I.T. service business segment revenue rose by 11% to RMB 46.4 million, but segment profit dropped by 31% to RMB 10.6 million due to a decrease in profit margin from 37% to 23%[17]. - The company achieved a segment result of RMB 13,203,000, compared to a loss of RMB (7,975,000) in the prior year[172]. Shareholder Information - As of June 30, 2019, Asia-IO Acquisition Fund, L.P. holds 72,656,586 shares, representing approximately 11.09% of the company's total shares[38]. - FSK Holdings Limited holds 239,893,146 shares, accounting for approximately 36.63% of the company's total shares[38]. - Mr. Kao holds 1,104,350 shares and has an interest in 1,000,000 share options[30]. - The company has a Share Option Scheme approved on August 30, 2013, allowing the grant of options to eligible participants[41]. Corporate Governance - The company has complied with the Corporate Governance Code during the six months ended June 30, 2019, with no known deviations[53]. - There were no non-compliance issues regarding directors' securities transactions throughout the reporting period[58]. - Mr. Lee Eung Sang resigned as a non-executive director effective March 28, 2019, and Mr. Jeon Eui Jong was appointed as a non-executive director on the same date[59]. Accounting Policies - The company adopted HKFRS 16, which required changes in accounting policies, but other new standards did not have a material impact on the financial results[96]. - The Group adopted HKFRS 16 "Leases" on January 1, 2019, resulting in adjustments to the financial statements without restating comparative figures[106]. - The cumulative effect of the initial application of HKFRS 16 was recognized as an adjustment to retained earnings as of January 1, 2019[106]. Market Conditions - The geopolitical and macroeconomic uncertainties have led some customers to reduce their I.T. spending and investments in Mainland China[20]. - The company is closely monitoring the situation regarding customer spending in light of geopolitical tensions and will adopt measures to maintain stable performance[20].

Financial Performance - Revenue for the nine months ended 31 December 2017 was approximately RMB326.2 million, a slight decrease from RMB335.4 million in the comparable period[28]. - Gross profit for the same period was RMB125.8 million, an increase from RMB104.9 million year-over-year[28]. - Profit from continuing operations decreased to RMB1.4 million from RMB42.7 million, primarily due to an impairment provision of RMB57.1 million on trade receivables from a US customer[28]. - As of 31 December 2018, inventories were RMB24.8 million, up from RMB24.2 million a year earlier[30]. - Trade and lease receivables were RMB231.1 million, down from RMB240.3 million as of 31 December 2017[30]. - The total assets as of 31 December 2018 were RMB457.4 million, financed by total liabilities of RMB127.8 million and shareholders' equity of RMB329.7 million[34]. - The current ratio as of 31 December 2018 was 3.5, indicating a strong liquidity position[34]. - Segment revenue for smart manufacturing solutions increased to RMB133.2 million from RMB82.1 million year-over-year[41]. - Segment profit for smart manufacturing solutions rose to RMB54.7 million from RMB43.5 million in the previous period[41]. - The segment margin decreased to 41% from 53% due to lower utilization rates and increased competition[41]. - Segment revenue for IoT and system integration solutions was RMB105.5 million, down from RMB179.4 million in the previous nine months[47]. - Profit for the IoT segment was RMB7.7 million, compared to RMB12.0 million in the previous nine months[47]. - The Information Technology Services segment reported revenue of RMB87.5 million and profit of RMB32.0 million, with a margin decrease from 43% to 37% due to rising labor costs and price pressure from customers[55][57]. Strategic Initiatives - The company plans to strengthen alliances with key suppliers and has engaged a former senior business consultant from Accenture China to formulate a strategic business growth plan[18]. - The company aims to shift focus from highly price competitive segments to niche and scalable areas, enhancing product and platform development to fortify core competence[18]. - A strategic decision was made to spin off the VPanel product line, transferring related trademarks and IPs to a newly founded company in exchange for a strategic interest[19]. - The company is focused on reducing reliance on business from Hon Hai Precision Industry Company Limited and its subsidiaries[18]. - The company is committed to broadening its external customer base to enhance business sustainability[18]. - The company is currently bidding on multiple green field and brown field projects to establish a sustainable income stream[46]. - The company anticipates further growth in smart manufacturing solutions as a response to rising wages and labor shortages in China[60][61]. - There is a growing demand for advanced facility management control systems in China, driven by stricter environmental regulations and competitive pressures[62][64]. Shareholder Engagement - In 2018, the company repurchased approximately 7.4 million shares from the open market and returned over HK$5 million to shareholders[21]. - The largest shareholder, Hon Hai Group, remains supportive and has not disposed of any interest in the company since its investment in late 2015[20]. - Proceeds from a share subscription totaling HK$257.4 million were allocated to enhance engineering and managerial teams, increase working capital, and explore new business opportunities[65][66]. - As of December 31, 2018, HK$150 million was fully utilized to build a dedicated team for sales, software development, and system implementation[66][67]. - The remaining proceeds from the share subscription were used as general working capital following the disposal of the electronic products manufacturing business[66]. - The board does not recommend any payment of a final dividend for the reporting year, consistent with the previous year[76]. - Shareholders are encouraged to maintain direct communication with the company for any inquiries[198]. - Shareholders are encouraged to participate in general meetings or appoint proxies to vote if unable to attend[200]. Corporate Governance - The company is dedicated to maintaining high standards of corporate governance to enhance shareholder value and ensure transparency in its operations[89][90]. - The board consists of four executive directors, two non-executive directors, and three independent non-executive directors, with independent directors representing at least one-third of the board[95][97]. - The board has utilized telephone conferencing to ensure participation from directors unable to attend meetings in person[119]. - The company has established three board committees: Audit Committee, Remuneration Committee, and Nomination Committee to oversee specific aspects of the group's affairs[136]. - The Audit Committee, comprising three independent non-executive directors, met three times during the reporting year to review the financial reporting process and internal control system[153]. - All directors and the company secretary confirmed compliance with the Corporate Governance Code during the reporting year[140]. - The company provides a comprehensive induction package to newly appointed directors to ensure awareness of their responsibilities under the Listing Rules[139]. - The board's commitment to corporate governance is reflected in its regular meetings and thorough oversight of significant corporate matters[118]. - The company promotes the highest standards of integrity and corporate governance within the group[132]. Risk Management - The company has established effective risk management and internal control systems, with no significant risks identified during the reporting year[177]. - The internal control system is aligned with the 2013 framework of the Committee of Sponsoring Organizations of the Treadway Commission, focusing on operational efficiency and compliance[175]. - The company has implemented a dynamic risk assessment process to identify and analyze risks affecting its objectives[178]. - The internal audit function is responsible for evaluating the effectiveness of the internal control and risk management systems on an annual basis[172]. - The board reviews the effectiveness of risk management and internal control systems annually, considering changes in significant risks and management's monitoring quality[191]. - The directors confirmed that they are not aware of any material uncertainties that may affect the company's ability to continue as a going concern[161]. - No significant control deficiencies were identified during the internal control reviews conducted for the reporting year[180]. Employee Development - The group employed a total of 488 employees as of December 31, 2018, an increase from 483 employees the previous year[80]. - The company is committed to enhancing employee training and development, recommending qualified staff to participate in professional courses to improve their skills and the management system of the group[83]. - The company aims to expand its project design, development, and implementation team to 300 members by the end of 2017[67]. - The company encourages continuous professional development for directors to keep them updated on statutory and regulatory developments[134]. Projects and Innovations - Completed a facial recognition project in Shenzhen, enhancing security for approximately 200,000 staff and visitors[48]. - Developed a smart construction site solution that improves worker productivity and safety through real-time monitoring[51]. - Entered a joint venture with Haier Group to commercialize the smart construction solution nationwide[51]. - Implemented a video conferencing system for a local government, significantly reducing travel time for officials[52]. - Planned to promote the video conferencing system to third and fourth tier county governments in China[52].