Company Overview - The report covers an 18-month period ending on June 30, 2022[1]. - The company is incorporated in the Cayman Islands and listed on the Hong Kong Stock Exchange with stock code 1116[1]. - The company operates through its core subsidiary, Guangzhou Mayer Corporation Limited, located in Mainland China[5]. - The financial year end date was changed from December 31 to June 30, with the current reporting period covering 18 months from January 1, 2021, to June 30, 2022[10]. Financial Performance - For the reporting period, the Group reported consolidated revenue of approximately RMB 902,652,000, representing an increase of 55.3% compared to RMB 581,112,000 for Year 2020[10]. - The gross profit margin decreased to 13.2% from 20.7% in Year 2020[10]. - The Group recorded a loss for the reporting period of approximately RMB 8,819,000, compared to a profit of RMB 20,680,000 for Year 2020[10]. - Loss attributable to owners of the Company for the reporting period was approximately RMB 14,304,000, compared with Year 2020's profit attributable to owners of RMB 15,854,000[10]. - Loss per share for the reporting period was RMB 0.66 cent versus Year 2020's earnings per share of RMB 0.73 cent[10]. - Revenue from the sale of steel products increased primarily due to higher domestic sales of lower profit margin steel pipes and sheets[10]. - Revenue from urban renewal project planning and consulting, which has a much higher profit margin, decreased significantly, resulting in a gross loss for this segment[10]. - Operating expenses increased substantially, leading to a lower profit margin[10]. - Guangzhou Mayer, the core 81.4%-owned subsidiary, recorded profit before tax of approximately RMB 36,464,000, a decrease of 6.7% compared to Year 2020's approximately RMB 39,078,000[10]. - Sales revenue for the Reporting Period was approximately RMB 901,176,000, representing an increase of 67.9% compared to RMB 536,646,000 for Year 2020[11]. - The Group recorded a revenue of RMB 1,476,000 from urban renewal projects planning and consulting services, a significant decrease from RMB 44,466,000 in Year 2020[20]. Corporate Governance - The report outlines corporate governance practices in accordance with the Corporate Governance Code[3]. - The company emphasizes compliance with the Hong Kong Financial Reporting Standards in its financial reporting[5]. - An independent board committee has been established to advise shareholders regarding the terms of the supplemental agreement[26]. - The company has complied with the corporate governance code provisions during the reporting period, with minor deviations addressed[114]. - The Board believes that the resignations of Mr. Xu and Mr. Wang will not have a significant impact on the Company's operations and financial condition[64]. Legal Matters - The company is involved in legal disputes, including claims amounting to HK$ 90,000,000 and HK$ 300,000,000 related to convertible notes and promissory notes issued in May 2011[42]. - The company believes that the claims against it will not have a material impact on its financial position[43]. - Guangzhou Mayer has initiated legal actions to recover RMB 50 million in investments deemed deceitful by former management, with a court ruling requiring two defendants to repay RMB 30 million plus interest[44]. - The Company is considering initiating legal proceedings in the PRC and/or Singapore against former directors Mr. Xu and Mr. Wang to safeguard its legitimate rights and interests[51]. Employee and Management Information - As of June 30, 2022, the Group had a total of 345 employees, a decrease from 355 employees as of December 31, 2020[67]. - Total staff costs for the reporting period were approximately RMB 80,039,000, up from RMB 44,265,000 in 2020, including retirement benefits costs of approximately RMB 9,026,000 compared to RMB 2,035,000 in 2020[67]. - The Group believes that employees are critical to its success and competitiveness, providing continuous learning and training programs to enhance their skills[176]. - The Group's employee compensation policy is determined by a remuneration committee based on merit, qualifications, and capabilities[179]. Market and Economic Conditions - In the first half of 2022, China's GDP growth was only 2.5%, lower than expected, due to COVID-19 outbreaks in cities like Shanghai, which adversely affected the economy[86]. - The company anticipates a gradual economic recovery in China, driven by proactive government policies, which may present opportunities for the steel industry[86]. - The ongoing COVID-19 pandemic has caused delays in property development projects in Zhuhai, affecting the overall operating environment in the region[93]. Strategic Initiatives - The Group plans to expand its business in the Greater Bay Area by identifying more projects with a demand for consulting services[20]. - The Group will focus on urban renewal project planning and consulting to identify strategic land lots and foster business growth in the Greater Bay Area[82]. - The Group aims to improve production yield rates and reduce production costs for carbon steel products while expanding market share and consolidating existing markets[75]. Financial Management - The Group's financing activities resulted in a net cash outflow of approximately RMB 40,621,000 during the Reporting Period, primarily due to the repayment of bank loans[36]. - The Group continues to adhere to prudent treasury policies, including insuring major receivables to mitigate credit risks[35]. - The company has adopted a dividend policy to maintain adequate cash reserves for working capital and future growth, with no pre-determined dividend distribution ratio[144]. Environmental and Social Responsibility - The Group has invested in energy-efficient lighting and equipment to minimize environmental impact and promote better environmental practices[174]. - The Group's commitment to environmental awareness includes enhancing paper recycling to reduce consumption and waste[174]. - The Group maintains strong relationships with strategic suppliers and contractors to achieve higher efficiency and competitive advantage[178]. Share Option Scheme - The Group's share option scheme aims to reward participants who contribute to the Group and enhance the value of the Company for shareholders[189]. - The total number of shares issuable under the Share Option Scheme is 174,800,000 shares, unless shareholders approve a refresh of the 10% limit, with a maximum of 30% of the issued share capital being exercisable[191][197]. - Each participant's maximum entitlement under the Share Option Scheme is limited to 1% of the shares in issue in any 12-month period, or 0.1% and a value of HK$5 million for substantial shareholders or independent non-executive directors[192][198].

Financial Performance - Revenue for the twelve months ended December 31, 2021, was RMB 691,756,000, an increase of 19.1% from RMB 581,112,000 in 2020[7]. - Gross profit for the same period was RMB 94,620,000, down 21.4% from RMB 120,317,000 in 2020[7]. - The company reported a loss for the period of RMB 2,558,000, compared to a profit of RMB 20,680,000 in 2020[8]. - Total comprehensive loss for the period was RMB 1,233,000, a significant decrease from a total comprehensive income of RMB 21,852,000 in 2020[8]. - Total revenue for the reportable segments reached RMB 691,756,000 for the twelve months ended 31 December 2021, an increase from RMB 581,112,000 in 2020, representing a growth of approximately 19.1%[19]. - The Group's consolidated loss for the period was RMB 2,558,000, compared to a profit of RMB 20,680,000 in the previous year[19]. - The gross profit margin decreased to 13.7% from 20.7% in the same period last year, resulting in a loss of approximately RMB 2,558,000 compared to a profit of RMB 20,680,000 in the previous year[58]. - The core subsidiary, Guangzhou Mayer, recorded a profit before tax of approximately RMB 32,086,000, a decrease of 17.9% compared to RMB 39,078,000 in the same period last year[58]. Assets and Liabilities - Non-current assets increased to RMB 271,658,000 as of December 31, 2021, compared to RMB 264,637,000 in 2020[9]. - Current assets rose to RMB 559,330,000, up from RMB 509,950,000 in the previous year[9]. - Total equity attributable to owners of the company decreased to RMB 430,100,000 from RMB 435,030,000 in 2020[10]. - The company’s net current assets increased to RMB 338,885,000, compared to RMB 278,603,000 in 2020[9]. - Total assets of reportable segments increased to RMB 802,334,000 in 2021 from RMB 755,803,000 in 2020, representing a growth of approximately 6.8%[20]. - Consolidated total assets rose to RMB 830,988,000 in 2021, up from RMB 774,587,000 in 2020, indicating an increase of about 7.3%[20]. - Total liabilities of reportable segments increased to RMB 182,941,000 in 2021 compared to RMB 133,075,000 in 2020, reflecting a rise of approximately 37.6%[20]. - Consolidated total liabilities grew to RMB 338,982,000 in 2021, up from RMB 279,488,000 in 2020, marking an increase of around 21.3%[20]. Cash Flow and Financing - For the twelve months ended December 31, 2021, the net cash used in operating activities was RMB (25,392,000), an improvement from RMB (44,585,000) in 2020[12]. - The net cash generated from financing activities was RMB 39,852,000, contrasting with a net cash used of RMB (42,165,000) in 2020[12]. - The company’s cash and cash equivalents were RMB 34,948,000, down from RMB 37,575,000 in 2020[9]. - The Group recorded a net cash outflow of approximately RMB 25,392,000 from operating activities, primarily due to finance costs and depreciation, offset by changes in inventories and receivables[75]. - The net cash outflow from investment activities was approximately RMB 14,026,000, mainly due to the purchase of property, plant, and equipment[79]. Strategic Initiatives - The company is focused on expanding its market presence and exploring potential mergers and acquisitions to drive growth[4]. - New product development and technological advancements are emphasized as part of the company's strategy for future growth[4]. - The Group submitted applications for 9 patents and upgraded production equipment to enhance efficiency and capacity, collaborating with Guangdong University of Technology[60]. - The Group is actively participating in the "Three olds" redevelopment projects in Zhuhai, aiming to expand its consulting services and project coordination efforts in the Greater Bay Area[65]. Governance and Management - The report outlines the company's governance structure and the composition of its various committees[5]. - The company experienced significant changes in its board of directors, including the appointment of Mr. Xiao Libo as CEO on November 9, 2021[4]. - The Company has complied with all code provisions as set out in the Corporate Governance Code during the period, except for temporary deviations related to the Nomination Committee's leadership[121]. - The Audit Committee reviewed the Group's unaudited condensed consolidated interim results for the twelve months ended December 31, 2021, confirming compliance with applicable accounting standards and adequate disclosures[122]. Legal Matters - The Company is contesting a claim of HK$15,500,000 plus legal costs, asserting that the ultimate liability will not materially impact the Group's financial position[83]. - Guangzhou Mayer has filed legal actions to recover RMB50 million from three investment companies, considering these investments as deceitful acts by former management[84]. - The Company is considering civil lawsuits against the ultimate beneficial owner of the defendants due to lack of executable assets for enforcement[84]. - The Company filed an interlocutory injunction application against Mr. Xu and Mr. Wang for breaching their undertaking letters[85]. - The High Court of Hong Kong dismissed the application for interim injunctive relief, stating that the proper forum for the dispute is in the PRC[86]. Shareholder Information - As of December 31, 2021, Harbour Prestige International Limited held 410,000,000 shares, representing approximately 19% of the issued share capital of the Company[114]. - Cheung Ngan is a substantial shareholder with 518,680,000 shares, accounting for 24.04% of the issued share capital[116]. - The Company has a diverse shareholder base with significant holdings concentrated among a few key shareholders[116]. - The interests of substantial shareholders are recorded in the register required under section 336 of the SFO[115].