BoardWare Intelligence Technology Limited 博維智慧科技有限公司 BoardWare Intelligence Technology Limited （於開曼群島註冊成立的有限公司） (incorporated in the Cayman Islands with limited liability) Stock code 股份代號 : 1204 | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | |-------|-------|-------|-------|-------|-------|-------|-------|--------------------------------|---------------------------------------------|-----------|-------| | | | | | | | | | | CONTENTS CONTENTS | 目錄 目錄 | | | | | | | | 2–4 | | | Corpor ...

Financial Performance - Revenue for the six months ended June 30, 2024, decreased to approximately HKD 318.1 million, a decline of about HKD 76.0 million or 19.3% compared to the same period in 2023[1] - Gross profit increased to approximately HKD 65.8 million, an increase of about HKD 14.6 million or 28.5% compared to the same period in 2023[1] - Profit before tax decreased to approximately HKD 1.7 million, a decline of about HKD 1.0 million or 37.0% compared to the same period in 2023[1] - Basic earnings per share attributable to shareholders decreased to approximately HKD 0.21, a decrease of about HKD 0.04 or 16.0% compared to the same period in 2023[1] - The group reported a profit of 1,038,000 HKD for the six months ended June 30, 2024, compared to 1,238,000 HKD for the same period in 2023, indicating a decrease of approximately 16.2%[20] - Profit for the period decreased by approximately HKD 0.2 million or 16.7% from about HKD 1.2 million in the fiscal year 2023 to about HKD 1.0 million in the fiscal year 2024[50] Revenue Breakdown - Total revenue for the six months ended June 30, 2024, was HKD 316,485,000, a decrease of 20.0% compared to HKD 388,937,000 for the same period in 2023[8] - Revenue from professional IT services decreased to HKD 127,966,000, down 43.7% from HKD 227,217,000 in the previous year[9] - Revenue from managed services increased to HKD 20,612,000, up 72.8% from HKD 11,936,000 in the previous year[9] - Revenue recognized at a point in time was HKD 151,898,000, an increase of 15.6% from HKD 131,471,000 in the previous year[10] - Revenue from Macau was HKD 225,177,000, an increase of 6.5% from HKD 211,781,000 in the previous year[11] Expenses and Costs - The cost of goods sold and services provided was 233,444,000 HKD for the six months ended June 30, 2024, down from 332,604,000 HKD in 2023, representing a reduction of about 29.8%[19] - Employee benefits expenses increased to 66,364,000 HKD for the six months ended June 30, 2024, up from 50,571,000 HKD in 2023, marking an increase of approximately 31.3%[19] - Distribution and selling expenses increased by approximately HKD 8.4 million or 67.7% from about HKD 12.4 million in the fiscal year 2023 to about HKD 20.8 million in the fiscal year 2024, mainly due to the expansion of the sales and marketing team in Hong Kong[45] - Administrative expenses increased by approximately HKD 7.6 million or 22.5% from about HKD 33.8 million in the fiscal year 2023 to about HKD 41.4 million in the fiscal year 2024, driven by increased employee benefits and other costs[46] - R&D expenses increased by approximately HKD 2.4 million or 55.8% from about HKD 4.3 million in the fiscal year 2023 to about HKD 6.7 million in the fiscal year 2024, attributed to the latest product developments[47] Assets and Liabilities - Cash and cash equivalents as of June 30, 2024, were approximately HKD 20.9 million, down from HKD 28.7 million as of December 31, 2023[1] - Total assets increased to approximately HKD 629.6 million as of June 30, 2024, compared to HKD 583.4 million as of December 31, 2023[3] - Total equity increased slightly to approximately HKD 336.3 million as of June 30, 2024, from HKD 336.0 million as of December 31, 2023[4] - Trade receivables decreased to approximately HKD 143.9 million as of June 30, 2024, down from HKD 179.9 million as of December 31, 2023[3] - The group’s total liabilities decreased from 190,942,000 HKD as of December 31, 2023, to 180,232,000 HKD as of June 30, 2024, reflecting a reduction of approximately 5.0%[27] Research and Development - Research and development expenses increased to approximately HKD 6.7 million, compared to HKD 4.3 million in the same period in 2023[2] - The company has made breakthroughs in brain-computer interface (BCI) technology, achieving market-leading results in wearable devices during the 2024 fiscal period[33] - The company plans to continue its R&D on BCI technology, integrating it with AI to develop a new generation of intelligent systems[33] - The group registered 25 software copyrights and 49 patents as of the announcement date, with significant R&D support from the Macao Science and Technology Development Fund for BCI and AI technology projects[34] Market and Strategic Developments - The company has expanded its footprint to the Greater Bay Area since 2021, responding to the rapid economic recovery in Hong Kong and Macau, which has increased demand for IT solutions[30] - The local enterprises in the Greater Bay Area, Hong Kong, and Macau are planning to increase investments in IT infrastructure innovation and upgrades due to economic transformation and digitization[30] - The Macau government is promoting diversification strategies, which will enhance the demand for IT solutions in various emerging industries, including health, finance, and high technology[31] - The government has invested significant resources in developing the Internet of Things (IoT) network, which is expected to drive demand for IT solutions in the coming years[32] - The group aims to leverage its competitive advantages to expand its business in the Greater Bay Area, particularly in Hengqin and Nansha, which offer favorable tax incentives[36] Governance and Compliance - The company did not recommend any interim dividends for the fiscal year 2024, consistent with the previous year[62] - The company maintained a public float of not less than 25% of issued shares as required by listing rules[63] - The audit committee was established on June 20, 2022, consisting of three independent non-executive directors, with Mr. Wen Yongbang serving as the chairman[70] - The interim results for the fiscal year 2024 have not been audited but have been reviewed by the audit committee, confirming that the financial statements fairly reflect the group's financial position and performance[71]

Financial Performance - For FY2023, the Group's revenue increased by approximately HK$136.8 million, or 23.6%, from approximately HK$580.8 million in FY2022 to approximately HK$717.6 million[35]. - Revenue from the PRC increased significantly from approximately HK$41.1 million in FY2022 to approximately HK$122.0 million in FY2023[35]. - Revenue from Enterprise IT Solutions rose from approximately HK$356.8 million in FY2022 to approximately HK$456.2 million in FY2023, driven by an increase in Professional IT Services contracts[35]. - Gross profit rose by approximately HK$15.2 million or 15.1% to approximately HK$115.6 million for FY2023, compared to approximately HK$100.4 million for FY2022[69]. - Gross profit margin decreased from 17.3% in FY2022 to 16.1% in FY2023, primarily due to an increase in revenue from lower-margin contracts in the PRC[69]. - Distribution and resale revenue increased from approximately HK$223.3 million in FY2022 to approximately HK$251.0 million in FY2023, reflecting a recovery in the economy post-COVID-19[66]. - Cost of sales and services increased by approximately HK$121.4 million, or 25.3%, to approximately HK$601.9 million in FY2023, outpacing revenue growth due to lower gross profit margins on significant contracts in the PRC[38]. - Administrative expenses rose by approximately HK$13.2 million, or 22.5%, to approximately HK$71.8 million in FY2023, attributed to higher business development costs and increased depreciation[43]. - The Group's profit for FY2023 increased by approximately HK$1.3 million or 40.6% to approximately HK$4.5 million from approximately HK$3.2 million in FY2022[1]. Use of Proceeds - The actual net proceeds received by the company were approximately HK$93.0 million, which is a revision from the previously estimated HK$104.8 million[5]. - The company plans to allocate the net proceeds according to the original funding application proportions, adjusting for a difference of approximately HK$1.1 million[6]. - The upfront costs for two enterprise IT solution projects accounted for 30.4% of the total net proceeds allocation[4]. - General working capital usage was reported at 10.0% of the total net proceeds allocation[4]. - As of December 31, 2023, the unutilized net proceeds amount to approximately HK$37.7 million[153]. - The expected utilization timeline for the unutilized net proceeds includes HK$6.5 million for upfront costs of two Enterprise IT solution projects in Q1 2024 and HK$28.3 million for strengthening product development capabilities in Q2 2024[153]. - The total expected utilization in Q1 and Q2 2024 sums up to HK$37.7 million[154]. - The company plans to use the unutilized net proceeds in accordance with the disclosed purposes in the prospectus, subject to market conditions[155]. - The Group has no other updates on the use of net proceeds as of the date of the annual report[156]. Strategic Initiatives - The group expects improved profitability of contracts in the Greater Bay Area due to the increasing popularity of its high-quality IT solutions[11]. - The R&D team achieved a breakthrough in AIoT and BCI technologies during FY2023, integrating BCI headbands into their offerings[15]. - The Group plans to enhance existing IT solutions with AI elements and digital content to meet the expected demand from non-IT industries[35]. - The government of Macau SAR is promoting the integration of IT with traditional industries, which is anticipated to drive demand for IT solutions in the coming years[35]. - The Group has established a new wholly-owned subsidiary in China focused on developing brain-computer interaction and related technologies for the Web 3.0 era[28]. - A joint laboratory was established with Beihang University in FY2023 to advance AIoT, BCI, and AI technologies, enhancing the Group's innovation capabilities[61]. - The Group signed a contract with a gaming operator to develop a SaaS platform and related mobile applications, aimed at fostering the digital economy among SMEs in Macau[19]. - The Group is investing in strategic hiring and business expansion in the PRC, leading to a slight increase in the usage of net proceeds[2]. Governance and Management - The Board consists of eight Directors, including four executive Directors, one non-executive Director, and three independent non-executive Directors[162]. - The company has a diverse board with members possessing extensive experience in various fields, enhancing its strategic decision-making capabilities[175]. - The board includes independent directors who provide oversight and independent advice, ensuring compliance and governance standards are met[174]. - Ms. Lei has over 21 years of experience in the IT industry, contributing to the overall development of product solutions and marketing strategies[166]. - Mr. Ng, with over 10 years of experience in the IT industry, is responsible for overall business development and consultation[167]. - Mr. Li Haodong was appointed as a Director on April 1, 2021, and re-designated as a non-executive Director on April 20, 2021, providing strategic and development advice to the Board[170]. - Mr. Man Wing Pong has over 20 years of experience in investment banking, asset management, and corporate management, currently serving as the chief risk officer of Silverstone Investments Limited[174]. - Mr. Suen Chi Wai has over 20 years of experience in corporate finance, focusing on IPOs, mergers, and compliance with listing rules[178]. - Mr. U has been a member of the Economic Development Council since August 2021 and has held various committee positions related to technology and talent development in Macau[176]. - Mr. U has received multiple awards for his contributions to academic research and industry development, highlighting his influence in the sector[177]. Financial Position - As of December 31, 2023, the Group had cash and cash equivalents of approximately HK$28.7 million, a decrease from approximately HK$105.5 million as of December 31, 2022[1]. - The Group's gearing ratio as of December 31, 2023, was approximately 3.3%, with total borrowings in RMB of approximately HK$11.1 million[1]. - The Group had capital commitments of approximately HK$1,252,000 as of December 31, 2023, related to capital expenditure for property, plant, and equipment[1]. - The Group's liquidity position remained healthy throughout FY2023, with a conservative treasury policy in place[1]. - The Group's bank deposit of approximately HK$53.3 million was restricted for securing banking facilities and a bank guarantee requested by a supplier[1]. - The Group's total lease liabilities as of December 31, 2023, were approximately HK$11.2 million, down from approximately HK$12.2 million in the previous year[1]. - The Group's financing costs decreased by approximately HK$1.5 million or 65.2% to approximately HK$0.8 million in FY2023, due to the expiration of certain redeemable financial liabilities[77]. - The foreign exchange risk is considered minimal as the majority of monetary assets and liabilities are denominated in HK$, MOP, and US$[80]. - The Group's sales and service costs increased by approximately HK$121.4 million or 25.3% from about HK$480.5 million in FY2022 to approximately HK$601.9 million in FY2023[99]. - Total staff costs incurred by the Group for FY2023 were approximately HK$112.1 million compared to approximately HK$90.2 million for FY2022[114]. - The Group employed a total of 287 employees as of December 31, 2023, up from 249 employees as of December 31, 2022[114]. Dividend Policy - The Board has resolved not to recommend the declaration of a final dividend for FY2023, consistent with FY2022[122].

Revenue Growth - The group's revenue increased by approximately HKD 136.8 million or 23.6% from about HKD 580.8 million in FY2022 to about HKD 717.6 million in FY2023, driven by an increase in revenue from enterprise IT solutions and distribution and resale businesses[1]. - The group's revenue increased from approximately HKD 580.8 million in FY2022 to approximately HKD 717.6 million in FY2023, representing a growth of about 23.6%[40]. - Revenue from customer contracts for 2023 reached HKD 707,172 thousand, an increase from HKD 580,833 thousand in 2022[80]. - The group reported a total income of HKD 717,595 thousand for 2023, compared to HKD 580,833 thousand in 2022, reflecting a significant growth[80]. - Revenue contributions from Macau, Hong Kong, and China were HKD 439.6 million, HKD 145.6 million, and HKD 122.0 million respectively in 2023[53]. - The company's revenue from China increased from approximately HKD 41.1 million in FY2022 to approximately HKD 122.0 million in FY2023, showing significant growth[104]. - Distribution and resale revenue rose from approximately HKD 223.3 million in FY2022 to approximately HKD 251.0 million in FY2023, attributed to an increase in resale order volume in Macau, Hong Kong, and China[106]. Profitability - Gross profit increased by approximately HKD 15.2 million or 15.1% from about HKD 100.4 million in FY2022 to about HKD 115.6 million in FY2023, while the gross profit margin decreased from 17.3% to 16.1% due to a higher weight of lower-margin contracts from China[3]. - The group's net profit increased by approximately HKD 1.3 million or 40.6% from about HKD 3.2 million in FY2022 to about HKD 4.5 million in FY2023[11]. - Net profit for the year increased from approximately HKD 3.2 million in FY2022 to approximately HKD 4.5 million in FY2023, reflecting a growth of about 40.6%[40]. - Total comprehensive income for the year amounted to HKD 5,005,000, significantly up from HKD 806,000 in 2022[152]. - Basic earnings per share attributable to shareholders rose from approximately HKD 0.78 to approximately HKD 0.90, an increase of about 15.4%[40]. - Net profit attributable to shareholders for 2023 was HKD 4,502,000, compared to HKD 3,252,000 in 2022, reflecting a significant increase[166]. Expenses and Costs - The cost of sales and services rose by approximately HKD 121.4 million or 25.3% from about HKD 480.5 million in FY2022 to about HKD 601.9 million in FY2023, with the increase outpacing revenue growth due to lower gross margins from significant contracts in China[2]. - Distribution and selling expenses increased by approximately HKD 7.7 million or 31.3% from about HKD 24.6 million in FY2022 to about HKD 32.3 million in FY2023, mainly due to increased revenue and an expanded marketing team in Hong Kong[6]. - Administrative expenses rose by approximately HKD 13.2 million or 22.5% from about HKD 58.6 million in FY2022 to about HKD 71.8 million in FY2023, driven by business development and expansion in Macau, Hong Kong, and China[7]. - The company's total operating expenses for employee benefits increased to HKD 112,149 thousand in 2023 from HKD 90,221 thousand in 2022[85]. - The company incurred research and development expenses of HKD 10,037,000, which is a 50.5% increase from HKD 6,688,000 in the previous year[142]. Financial Position - As of December 31, 2023, the group's cash and cash equivalents were approximately HKD 28.7 million, a decrease from about HKD 105.5 million as of December 31, 2022, primarily due to increased contract assets and other receivables[13]. - The group's capital debt ratio was approximately 3.3% as of December 31, 2023, with total borrowings of about HKD 11.1 million, including secured bank borrowings and financial liabilities related to discounted notes[14]. - Total equity and liabilities amounted to approximately HKD 583.4 million as of December 31, 2023, compared to HKD 573.1 million in the previous year[44]. - The company's total assets as of December 31, 2023, were HKD 583,403,000, a slight increase from HKD 573,060,000 in 2022[145]. - Cash and cash equivalents decreased to HKD 28,733,000 from HKD 105,519,000 in the previous year, indicating a liquidity contraction[145]. - Trade receivables increased from HKD 147.4 million in 2022 to HKD 179.9 million in 2023, after accounting for credit loss allowances[90]. - Trade receivables totaled HKD 181,513,000 in 2023, up from HKD 149,253,000 in 2022[168]. - Trade payables increased to HKD 174,165,000 in 2023 from HKD 116,385,000 in 2022[172]. Strategic Initiatives - The company plans to allocate approximately 43.8% of the net proceeds, or HKD 40.7 million, towards two IT solution projects in the Greater Bay Area[34]. - The company aims to leverage opportunities in the Greater Bay Area through IT solutions projects, with an estimated cost of HKD 28.3 million for the second quarter of 2024[70]. - The company is focusing on expanding its market share in Macau, Hong Kong, and China, leveraging post-pandemic recovery demand[125]. - The company plans to diversify and expand its existing business in China through a proposed investment in an internet data center in Beijing[102]. - The company aims to enhance its IT solutions by incorporating AI elements and digital content, responding to the anticipated demand for IT solutions in the coming years[105]. - The company has established a new subsidiary, Xiao Zhou Technology Limited, focusing on AIoT and BCI technology development[178]. - The company signed a contract in Guilin for a project related to virtual scenery using BCI technology, enhancing immersive travel experiences[179]. Market and Industry Trends - The demand for IT solutions in the Greater Bay Area is expected to continue growing due to government support and the end of COVID-19 impacts[174]. - The company anticipates increased demand for IT solutions driven by the development of smart cities and IoT networks in Macau[176]. - The Macau government has introduced a five-year development plan (2024-2028) focusing on high-tech industry and traditional industry transformation, which is expected to benefit local IT companies[69]. Corporate Governance - The audit committee has reviewed the annual performance for FY2023 and confirmed that the financial statements fairly reflect the company's financial position and performance[132]. - The company did not recommend the declaration of a final dividend for the fiscal year 2023, compared to no dividend declared for the fiscal year 2022[26]. - The company has not engaged in any buybacks, redemptions, or sales of its listed securities since the start of the fiscal year 2023[25]. - The company maintained a public float of at least 25% of issued shares as required by the Hong Kong Stock Exchange[28]. - There were no significant events after the reporting period that required adjustments to the financial statements[24].

Financial Performance - Revenue for the six months ended 30 June 2023 was HK$394,144 thousand, a significant increase from HK$247,015 thousand in the same period in 2022[191] - Gross profit for the six months ended 30 June 2023 was HK$51,153 thousand, compared to HK$49,112 thousand in the same period in 2022[191] - Operating profit for the six months ended 30 June 2023 was HK$2,010 thousand, a decrease from HK$11,005 thousand in the same period in 2022[191] - Net finance income for the six months ended 30 June 2023 was HK$727 thousand, compared to a net finance cost of HK$1,258 thousand in the same period in 2022[191] - Profit before income tax for the six months ended 30 June 2023 was HK$2,737 thousand, down from HK$9,747 thousand in the same period in 2022[191] - Profit for the period ended 30 June 2023 was HK$1,238 thousand, a decrease from HK$7,136 thousand in the same period in 2022[191] - Basic earnings per share for the six months ended 30 June 2023 were HK$0.25, down from HK$2.06 in the same period in 2022[191] - Diluted earnings per share for the six months ended 30 June 2023 were HK$0.25, down from HK$2.03 in the same period in 2022[191] Bank Deposits and Facilities - Bank deposits restricted for securing banking facilities increased to HK$53.9 million as of 30 June 2023, up from HK$53.3 million as of 31 December 2022[189]

Financial Performance - The company reported a profit of HKD 1,238,000 for the six months ended June 30, 2023, compared to HKD 7,136,000 for the same period in 2022, representing a decrease of approximately 82.7%[9]. - The company’s total comprehensive income for the period was HKD 1,342,000, down from HKD 6,865,000 in the previous year, a decrease of approximately 80.5%[13]. - Profit before tax decreased from approximately HKD 9.7 million to approximately HKD 2.7 million, a decline of about HKD 7.0 million or 72.2% compared to the previous fiscal period[32]. - Basic earnings per share dropped from approximately HKD 2.06 to approximately HKD 0.25, a decrease of about HKD 1.81 or 87.9% year-on-year[32]. - The group reported a basic earnings per share of HKD 0.25 for the six months ended June 30, 2023, down from HKD 2.06 in the same period of 2022, reflecting a decrease of approximately 87.9%[78]. - The total profit attributable to shareholders for the six months ended June 30, 2023, was HKD 1,238,000, compared to HKD 7,136,000 for the same period in 2022, indicating a decline of about 82.7%[78]. Revenue and Growth - The company's revenue increased from approximately HKD 247.0 million to approximately HKD 394.1 million, representing a growth of about HKD 147.1 million or 59.6% compared to the previous fiscal period[32]. - Total revenue for the six months ended June 30, 2023, was HKD 394,144,000, a 59.7% increase from HKD 247,015,000 in the same period of 2022[68]. - Total revenue from customer contracts was HKD 388.9 million, compared to HKD 246.3 million in the previous period[30]. - Revenue from professional IT services significantly increased to HKD 227.2 million from HKD 91.9 million, marking a growth of 147.0%[28]. - Revenue from distribution and resale totaled HKD 127.4 million, up from HKD 96.3 million, reflecting a growth of 32.3%[28]. - Revenue from enterprise IT solutions rose from approximately HKD 150.7 million to approximately HKD 266.8 million, primarily due to an increase of approximately HKD 135.2 million in professional IT services[125]. - Revenue from China increased from approximately HKD 18.7 million to approximately HKD 94.7 million, marking a significant growth of approximately HKD 76.0 million or 406.4%[123]. Assets and Liabilities - Total assets decreased from HKD 573,060,000 as of December 31, 2022, to HKD 512,764,000 as of June 30, 2023, a decline of about 10.5%[14]. - Total liabilities decreased from HKD 242,037,000 to HKD 180,399,000, reflecting a reduction of approximately 25.5%[3]. - The company’s cash and cash equivalents significantly decreased from HKD 105,519,000 to HKD 28,696,000, a decline of approximately 72.8%[14]. - The company’s trade receivables decreased from HKD 147,447,000 to HKD 132,501,000, a decline of about 10.1%[14]. - The company’s liabilities related to contracts decreased from HKD 84,735,000 to HKD 28,791,000, a reduction of about 66.1%[23]. - The company reported a decrease in trade payables to HKD 109,723,000 as of June 30, 2023, compared to HKD 116,385,000 at the end of 2022[57]. Expenses - The company reported a total cost of sales of HKD 342.99 million, compared to HKD 197.90 million in the previous period[39]. - Cost of goods sold and services provided for the six months ended June 30, 2023, was HKD 322,604,000, up 79.5% from HKD 179,620,000 in the prior year[47]. - Employee benefits expenses increased to HKD 50,571,000, representing a 25.7% rise from HKD 40,235,000 in 2022[47]. - Research and development expenses were HKD 4.3 million, indicating investment in new technologies and product development[39]. - Sales costs increased by approximately HKD 145.1 million or 73.3% to about HKD 343.0 million, consistent with the revenue growth during the same period[102]. - Sales and distribution expenses increased by approximately HKD 1.6 million or 14.8% to about HKD 12.4 million, mainly due to increased sales personnel costs[104]. - Income tax expenses decreased by approximately HKD 1.1 million or 42.3% to about HKD 1.5 million, attributed to a reduction in pre-tax profits[108]. Strategic Plans and Developments - The company plans to expand its service offerings in Hong Kong and the Greater Bay Area, leveraging its technology expertise and existing distribution business[64]. - The first batch of commercialized BCI headsets is expected to launch in the second half of 2024, integrating with various AI application scenarios[67]. - The group plans to accelerate investment in IT infrastructure upgrades and new project investments as the market recovers post-COVID-19[87]. - The group plans to leverage its competitive advantages to maintain its leading position in Macau and explore opportunities in Hong Kong and China, particularly in the Greater Bay Area[93]. - The group anticipates strong demand for IT solutions in the near future, driven by the recovery of the economy in Macau, Hong Kong, and China[98]. - The group has established a new wholly-owned subsidiary, Xiao Zhou Technology Limited, focusing on the development of brain-computer interaction and related technologies[90]. - A joint laboratory has been established with Guangdong Intelligent Technology Research Institute to focus on brain-computer interface technology[92]. - The group anticipates that AIoT and BCI technologies will become new development trends in the IT industry, with broad applications across various sectors[92]. Human Resources - The total number of full-time employees increased from 228 as of June 30, 2022, to 337 as of June 30, 2023, representing a growth of approximately 47.8%[142]. - Employee costs for the fiscal period 2023 amounted to approximately HKD 50.6 million, compared to HKD 40.2 million in the fiscal period 2022, indicating an increase of about 25.9%[142]. - The company has established an annual review system to assess employee performance, which influences salary adjustments, bonuses, and promotions[142]. Governance and Compliance - The audit committee consists of three independent non-executive directors, ensuring oversight of the group's financial reporting and internal control systems[153]. - The company has adhered to corporate governance practices, with a noted deviation regarding the roles of the Chairman and CEO being held by the same individual[168]. - The corporate tax rate applicable to the group remains at 25% for both the fiscal periods of 2023 and 2022[74]. Cash Management and Funding - The group maintained a conservative approach to cash management, ensuring a healthy liquidity position throughout the fiscal period of 2023[136]. - The net proceeds from the IPO were approximately HKD 93.0 million, with an adjustment of about HKD 1.1 million planned for business strategy applications[152]. - The group plans to continue seeking potential fundraising activities to support its R&D efforts in the second half of 2023[120]. - The allocation of net proceeds includes 43.8% (HKD 40.7 million) for capturing opportunities in the Greater Bay Area[171]. - 30.4% (HKD 28.3 million) of the proceeds is allocated for the preliminary costs of two IT solutions projects[171]. - 15.8% (HKD 14.7 million) is designated to enhance product development capabilities, with HKD 6.9 million already utilized[171]. - 10.0% (HKD 9.3 million) is allocated for general working capital, with HKD 4.2 million already utilized[171]. Risks and Contingencies - The company believes that the foreign exchange risk is minimal due to most monetary assets and liabilities being denominated in HKD, MOP, and USD[163]. - The company reported no significant contingent liabilities as of June 30, 2023, consistent with the previous year[164].

Revenue Performance - Revenue from distribution and resale increased from HK$139.3 million in FY2021 to HK$223.3 million in FY2022, driven by large resale orders in China and fulfillment of outstanding wireless LAN product orders in Hong Kong[4] - Enterprise IT solutions revenue decreased from HK$395.0 million in FY2021 to HK$357.5 million in FY2022, primarily due to reduced professional IT services and IT equipment leasing revenues, partially offset by a HK$5.6 million increase in managed services[2] - Total revenue increased by approximately HK$46.5 million or 8.7% to HK$580.8 million in FY2022, driven by an HK$84.0 million increase in distribution and resale business revenue, offset by an HK$37.5 million decrease in Enterprise IT solutions revenue[36] - Revenue from the PRC surged from HK$0.2 million in FY2021 to HK$41.1 million in FY2022, reflecting the company's successful expansion in the region[33] - Revenue increased by 8.7% from HKD 534.3 million in FY2021 to HKD 580.8 million in FY2022[54] - Revenue increased from approximately HK$534.3 million in FY2021 to approximately HK$580.8 million in FY2022, representing an 8.7% increase[127] - Revenue from the PRC increased significantly from approximately HK$0.2 million in FY2021 to approximately HK$41.1 million in FY2022, demonstrating the company's successful expansion in the Greater Bay Area[135] - Revenue from Enterprise IT solutions decreased from HK$395.0 million in FY2021 to HK$357.5 million in FY2022, driven by a decrease in Professional IT services and IT equipment leasing revenues[181] - Distribution and resale revenue increased from HK$139.3 million in FY2021 to HK$223.3 million in FY2022, due to larger resale orders in China and fulfillment of outstanding orders in Hong Kong[185] - Revenue from China increased significantly from HK$0.2 million in FY2021 to HK$41.1 million in FY2022, reflecting the company's expansion in the Chinese market[183] R&D and Innovation - R&D expenses increased by HK$6.7 million in FY2022, mainly for new AIoT and BCI teams in China focusing on metaverse-related technologies like 3D reconstruction, haptic feedback, and iris recognition[8] - The company established AIoT and BCI teams in China in 2022, with 57 R&D employees as of December 2022, and expects further growth in R&D headcount in FY2023[21] - BCI technology is being developed for applications in healthcare, smart automobiles, smart homes, and wearable devices, with potential integration into the company's existing IT solutions[21] - The non-invasive BCI headband, a closed-loop control system, is being applied in medical rehabilitation, AIoT, and the metaverse industry, enhancing user interaction experiences[46] - The company tested metaverse-related technologies in various scenarios, including exhibitions, education, entertainment, and cultural tours, leveraging its "Metaverse Public Cloud Platform Space"[23] - R&D expenses increased by HKD 6.7 million, primarily due to the establishment of new AIoT and BCI teams in China[51] - The company developed an experimental BCI headset, aiming to commercialize it when the technology and operational environment mature[47] - The company developed an experimental BCI headband, a non-invasive brain-computer interface product, with plans to commercialize it once the technology and operating environment mature[149] - The company made progress in R&D for BCI technology, which is expected to become a future profit driver, particularly in the metaverse industry[150] - The company established an AIoT and BCI team in FY2022, focusing on brain-computer interaction and sensory-induced EEG signal acquisition technologies, with 57 R&D employees in China as of December 2022[162] - The company is developing a "Metaverse Public Cloud Platform Space" using self-developed 3D reconstruction and AI rendering algorithms, aiming to enhance user interaction in the metaverse[172] - The company's non-invasive BCI headband, a closed-loop control system, is being developed for applications in medical rehabilitation, AIoT, and the metaverse industry[173] Financial Position and Expenses - Other income and net gains increased by HK$3.6 million (289.5%) to HK$4.8 million in FY2022, primarily due to COVID-19 related subsidies in Hong Kong and rental subventions in China[6] - Cash and cash equivalents increased significantly to HK$105.5 million as of December 31, 2022, compared to HK$14.5 million in the previous year[14] - The company's gearing ratio decreased to 0% as of December 31, 2022, from 18.6% in the previous year[14] - Profit for the year decreased by HK$20.8 million (86.7%) to HK$3.2 million in FY2022, primarily due to reduced pre-tax profit[13] - Sales and distribution expenses increased by HK$5.5 million (8.9%) to HK$67.2 million in FY2022, mainly due to increased entertainment, travel, and depreciation costs[10] - Income tax expense decreased by HK$2.6 million (43.3%) to HK$3.4 million in FY2022, with an effective tax rate of 51.3%[13] - The company maintained a conservative treasury policy, focusing on credit risk assessment and maintaining adequate cash levels for operations[13] - Gross profit decreased by HK$11.7 million or 10.4% to HK$100.4 million in FY2022, primarily due to lower gross profit margin projects and increased contribution from lower-margin distribution and resale business[36] - Selling and distribution expenses increased by HK$5.9 million or 31.5% to HK$24.6 million in FY2022, driven by expanded sales and marketing teams and increased sponsorship activities[38] - Net financing costs decreased by 41.2% from HKD 1.7 million in FY2021 to HKD 1.0 million in FY2022[57] - Total staff costs increased from HKD 72.7 million in FY2021 to HKD 90.2 million in FY2022, with the number of employees rising from 189 to 249[63] - General and administrative expenses increased by HK$5.5 million (8.9%) to HK$67.2 million in FY2022, primarily due to higher entertainment, travel, and legal expenses related to the company's listing[188] - Sales and distribution expenses increased by HK$5.9 million or 31.5% to HK$24.6 million in FY2022, driven by expanded sales and marketing teams and increased sponsorship activities in Hong Kong and China[190] - Net finance costs decreased by HK$0.7 million or 41.2% to HK$1.0 million in FY2022, primarily due to increased finance income from bank deposits[193] - The Group had no borrowings as of 31 December 2022, compared to HK$31.5 million in 2021, with total lease liabilities of HK$12.2 million (2021: HK$10.1 million)[195] - The Group did not engage in any hedging activities using financial instruments for foreign exchange risk management during FY2022 and FY2021[197] Market Expansion and Strategic Initiatives - The company expects strong demand for Enterprise IT services in 2023, supported by cybersecurity awareness and supportive policies in Macau, Hong Kong, and the Greater Bay Area[33] - The company successfully listed on the Main Board of the Stock Exchange on 15 July 2022, issuing 125,000,000 ordinary shares at HKD 1.08 per share[49][59] - The company plans to leverage its competitive advantages to maintain its leading position in Macau and explore opportunities in Hong Kong and the Greater Bay Area[52] - The company successfully listed on the Main Board of the Stock Exchange on July 15, 2022, marking a significant milestone in its development[136] - The company expects to benefit from the increasing demand for IT solutions in Macau due to the new 10-year gaming operator license finalized in December 2022, which requires operators to invest in non-gaming industries[140] - The company's subsidiary in Hengqin is well-positioned to explore market opportunities due to the city's focus on developing tourism, leisure, healthcare, and high-tech industries, along with preferential tax treatments[153] - The company's distribution and resale business segment saw an increase in orders, contributing to revenue growth in FY2022 despite the ongoing impact of the COVID-19 pandemic[154] - The company plans to extend its service scope by leveraging its technical expertise in Macau and expanding its enterprise IT solution business in Hong Kong and the Greater Bay Area[143] - The development of 5G networks and IoT in Macau, supported by government policies, is expected to drive demand for IT solutions in the coming years[146] - The company's revenue growth in the PRC reflects a strategic shift to reduce reliance on the Macau market, with significant progress achieved in FY2022[135] - The company expects increased demand for IT solutions in Macau's "Big Health" industry, modern financial services, high technology, and conferences/exhibitions sectors due to the government's "1+4" diversification strategy[167] - The company plans to expand its service scope in Hong Kong and the Greater Bay Area, leveraging its existing distribution business and IT maintenance services[167] - The company is exploring fundraising opportunities from market investors and financial institutions in China to support its R&D efforts[162] Use of Proceeds and Capital Allocation - Net proceeds from the listing amounted to HKD 93.0 million, with no material changes to the planned use of proceeds as disclosed in the prospectus[67][70] - The Group allocated 43.8% of the net proceeds to capturing business opportunities in the Greater Bay Area, with HK$33.2 million utilized out of the planned HK$40.7 million[93] - 30.4% of the net proceeds were allocated to upfront costs of two Enterprise IT solution projects, with HK$28.3 million fully utilized[93] - 15.8% of the net proceeds were allocated to strengthening product development capabilities, with HK$10.2 million utilized out of the planned HK$14.7 million[93] - 10.0% of the net proceeds were allocated to general working capital, with HK$7.0 million utilized out of the planned HK$9.3 million[93] - The Group had no capital commitments as of 31 December 2022, compared to approximately HK$0.9 million as of 31 December 2021[87] - The Group has no other updates on the use of net proceeds beyond the disclosed allocations as of the date of the annual report[94] Leadership and Governance - Mr. Chao Ka Chon, Chairman and CEO, has over 18 years of experience in the IT industry, including roles at HKBN JOS (Macau) Limited and Noveland Textiles Limited[81][82] - Ms. Chiu Koon Chi, Executive Director, has over 15 years of experience in marketing, including roles at IDT Telecom Asia Pacific Limited and Noveland Textiles Limited[84] Risk Management and Contingencies - No significant contingent liabilities were reported as of 31 December 2022 and 31 December 2021[64] - The company did not pledge any non-financial assets as of 31 December 2022, with restricted bank deposits of HKD 53,317,000[67] - The majority of the Group's monetary assets and liabilities are denominated in HK$, MOP, and US$, with minimal foreign exchange risk due to currency pegs[86] COVID-19 Impact - The company faced adverse economic impacts due to the COVID-19 pandemic in Macau, Hong Kong, and the PRC, yet still achieved revenue growth[127] - The company's distribution and resale business segment saw an increase in orders, contributing to revenue growth in FY2022 despite the ongoing impact of the COVID-19 pandemic[154]

Company Overview - The company successfully listed on the Hong Kong Stock Exchange on July 15, 2022, marking a significant milestone with the stock code 1204.HK[22]. - The company has adhered to corporate governance practices since its listing, with the chairman also serving as the CEO, which the board believes enhances leadership continuity[89]. - The company is currently evaluating new accounting standards and their impact on existing standards after initial application[161]. Financial Performance - Total revenue increased from approximately HKD 534.3 million in FY2021 to approximately HKD 580.8 million in FY2022, representing an increase of about HKD 46.5 million or 8.7%[28]. - Net profit for FY2022 decreased by approximately HKD 20.8 million or 86.7% to approximately HKD 3.2 million from approximately HKD 24.0 million in FY2021[34]. - Basic earnings per share for FY2022 were calculated based on the profit attributable to shareholders divided by the weighted average number of ordinary shares issued[114]. - Basic earnings per share dropped to HKD 0.78 in 2022 from HKD 6.97 in 2021, indicating a decrease of about 88.8%[177]. - The net profit margin declined from approximately 4.5% in the fiscal year 2021 to approximately 0.6% in the fiscal year 2022, a decrease of about 3.9 percentage points[150]. - The effective tax rate for FY2022 was approximately 51.3%, down from 20.0% in FY2021, due to a decrease in pre-tax profits[125]. - The group reported a profit attributable to shareholders of HKD 3,252,000 in 2022, a significant decrease from HKD 24,003,000 in 2021, representing a decline of approximately 86.5%[177]. Revenue Breakdown - Revenue from customer contracts was HKD 580.1 million, compared to HKD 517.6 million in the previous year[111]. - Revenue from enterprise IT solutions decreased by approximately HKD 37.5 million, while revenue from distribution and resale increased by approximately HKD 84.0 million[28]. - Distribution and resale revenue increased from approximately HKD 139.3 million in FY2021 to approximately HKD 223.3 million in FY2022, driven by a higher volume of resale orders in China[121]. - Revenue from China increased significantly from approximately HKD 0.2 million in FY2021 to approximately HKD 41.1 million in FY2022, reflecting successful business expansion efforts[123]. - Revenue from Macau was HKD 371,777,000, accounting for 64% of total revenue, while Hong Kong contributed HKD 167,944,000 (29%) and China contributed HKD 41,112,000 (7%) in 2022[167]. Research and Development - The company established an AIoT team and a BCI team in China, focusing on developing brain-computer interaction technologies and related scenarios, with 57 employees in the R&D department as of December 31, 2022[19]. - The company anticipates continued growth in its R&D team in fiscal year 2023 and is considering fundraising from market investors and financial institutions in China for R&D purposes[19]. - R&D expenses rose by approximately HKD 6.7 million in FY2022, primarily due to the establishment of AIoT and BCI teams in China[132]. - The company is actively developing BCI technology and metaverse applications, which are expected to become significant profit drivers in the future[122]. Operational Highlights - The company continued to maintain its leading position in the IT solutions market in Macau while expanding its distribution and resale business in Hong Kong and China[51]. - The group has not made significant investments or acquisitions during FY2022, maintaining a conservative approach to capital expenditure[40]. - The company is developing a new technology platform with BCI functionality, which can synergize with existing IT solutions and be integrated into various sectors including healthcare and smart devices[46]. - The company plans to commercialize the BCI headset when the technology and operational environment mature[47]. Cost and Expenses - In the fiscal year 2022, the company's sales cost increased by approximately HKD 58.3 million or 13.8% to about HKD 480.5 million, which was higher than the revenue growth due to a reduction in high-margin projects and delays in contract signings caused by COVID-19 in Macau[56]. - Gross profit decreased by approximately HKD 11.7 million or 10.4% to about HKD 100.4 million, attributed to fewer high-margin projects and delays in signing contracts for high-margin projects[56]. - Sales and distribution expenses rose by approximately HKD 5.9 million or 31.5% to about HKD 24.6 million, driven by increased revenue and expansion of sales and marketing teams in Macau and China[58]. - General and administrative expenses increased by approximately HKD 5.5 million or 8.9% to about HKD 67.2 million, primarily due to higher salaries, travel expenses, and professional fees[59]. Cash Flow and Assets - Cash and cash equivalents as of December 31, 2022, were approximately HKD 105.5 million, up from HKD 14.5 million as of December 31, 2021[35]. - Total assets increased from HKD 436.1 million in the fiscal year 2021 to HKD 573.1 million in the fiscal year 2022[143]. - The group’s total liabilities decreased to HKD 242,037,000 in 2022 from HKD 267,234,000 in 2021, a reduction of approximately 9.4%[182]. - The group’s total equity and liabilities increased to HKD 573,060,000 in 2022 from HKD 436,117,000 in 2021, representing an increase of about 31.5%[182]. Future Outlook - The Macau government is promoting a diversification strategy, which is expected to increase demand for IT solutions in various emerging industries, including healthcare and modern financial services[15]. - The company expects to benefit from the investment needs of operators in the gaming industry, following the issuance of a new 10-year gaming license in December 2022[14]. - The development of 5G networks and advancements in data analytics are expected to drive ongoing demand for IT solutions in Macau[15]. - The company aims to diversify revenue sources from different geographical locations by exploring new business opportunities in the Greater Bay Area[123].

IT Solutions Demand and Market Trends - The Group expects steady demand for IT system upgrades, replacements, and maintenance in Macau, with ongoing IT solutions projects unlikely to be affected by the COVID-19 pandemic [12]. - Demand for remote working tools and online teaching platforms, particularly video conferencing software, has significantly increased due to COVID-19, accelerating digitalization in enterprises [12]. - The Macau Government's promotion of smart city development is expected to boost demand for IT solutions services, integrating smart technologies into various sectors [14]. - The advancement of 5G networks and data analytics is driving continuous demand for IT solutions in Macau [14]. - The Group provides IT solutions covering procurement, integration, managed services, and maintenance services to end users in Macau [12]. - The Group distributes IT products to IT solutions providers and resellers, enhancing its market presence [12]. - The overall growth of the information industry in Macau is anticipated to remain positive in the long run [12]. - Market participants in the gaming and hospitality industry are seeking new service features and value-added services due to intensifying competition [12]. - The Group's business expansion opportunities are supported by governmental policies in the Greater Bay Area [14]. - The Group's financial performance is underpinned by a comprehensive strategy to leverage emerging technologies and market trends [14]. Financial Performance - The Group's revenue for the first half of 2022 increased from approximately HK$221.2 million to approximately HK$247.0 million, representing an increase of 11.7% compared to the same period in 2021 [26]. - Revenue from enterprise IT solutions slightly decreased from approximately HK$153.6 million to approximately HK$150.7 million, primarily due to a decrease in Professional IT services revenue by approximately HK$6.0 million [27]. - Revenue from distribution and resale increased from approximately HK$67.5 million to approximately HK$96.3 million, attributed to an increase in resale orders in the PRC and fulfillment of outstanding orders in Hong Kong [35]. - The Group expects an increase in demand for enterprise IT services in the second half of 2022, focusing on expanding Managed services and IT maintenance and consultancy services [32]. - Total revenue increased by approximately HK$25.8 million or 11.7% to approximately HK$247.0 million for FP2022 from approximately HK$221.2 million for FP2021 [41]. - Gross profit increased by approximately HK$5.2 million or 11.9% to approximately HK$49.1 million for FP2022, with a stable gross profit margin of approximately 19.9% [43]. - Other income and net gains increased by approximately HK$0.6 million or 75.8% to approximately HK$1.5 million for FP2022, mainly due to one-off subsidies related to COVID-19 [44]. - Selling and distribution expenses increased by approximately HK$2.0 million or 22.7% to approximately HK$10.8 million for FP2022, attributed to higher salaries and commission expenses [45]. - General and administrative expenses decreased by approximately HK$1.6 million or 5.1% to approximately HK$29.2 million for FP2022, primarily due to reduced listing expenses [52]. - Profit and total comprehensive income for the period increased by approximately HK$3.5 million or 103.3% to approximately HK$6.9 million for FP2022, driven by revenue and gross profit growth [54]. Strategic Initiatives and Investments - The establishment of the AIoT team and BCI team aims to develop core technologies for metaverse experiences, including artificial intelligence and IoT [36]. - The Macau Government has invested extensive resources in IoT network development, which is expected to drive demand for IT solutions in the coming years [19]. - The Group maintains its leading position in the Macau IT solutions market by providing comprehensive end-to-end enterprise IT solutions [25]. - The Group plans to leverage its competitive strengths in Macau to capture business opportunities in the Greater Bay Area, particularly in Hengqin [24]. - The increase in demand for Managed services is driven by governmental bodies in Macau [30]. - The Group's strategy includes exploring new business opportunities in e-commerce and digital payment systems supported by the Macau Government [20]. Share Capital and Corporate Actions - On July 15, 2022, the Company issued a total of 125,000,000 ordinary shares at a price of HK$1.08 per share, increasing the total issued shares to 500,000,000 [73]. - The Company increased its authorized share capital from HK$380,000 to HK$100,000,000 by creating an additional 9,962,000,000 shares [196]. - The Company issued 374,988,858 shares at par value of HK$0.01 each as part of a capitalization issue on July 15, 2022 [196]. - The company was listed on the Stock Exchange on July 15, 2022, enhancing its market presence [101]. Cash Flow and Financial Position - As of June 30, 2022, the Group had cash and cash equivalents of approximately HK$15.8 million, an increase from HK$14.5 million as of December 31, 2021 [57]. - The Group's gearing ratio as of June 30, 2022, was approximately 17.7%, down from 18.6% as of December 31, 2021 [58]. - Total borrowings as of June 30, 2022, were approximately HK$31.1 million, slightly down from HK$31.5 million as of December 31, 2021 [60]. - Short-term borrowings increased to approximately HK$31.1 million as of June 30, 2022, compared to HK$25.5 million as of December 31, 2021 [60]. - The weighted average effective interest rate of the Group's borrowings was approximately 4.63% as of June 30, 2022, up from 4.15% as of December 31, 2021 [60]. - The total staff costs incurred by the Group for FP2022 were approximately HK$40.2 million, compared to approximately HK$33.3 million for FP2021 [68]. - As of June 30, 2022, the Group had capital commitments of approximately HK$0.4 million, down from HK$0.9 million as of December 31, 2021 [68]. - The Group did not have any significant contingent liabilities as of June 30, 2022 [68]. Earnings and Shareholder Returns - Basic earnings per share rose to 2.06 HK cents, up from 0.95 HK cents, reflecting a 117.9% increase [80]. - Profits attributable to shareholders for FP2022 were HK$7,136,000, a 120% increase from HK$3,238,000 in FP2021 [142]. - No interim dividend was paid or declared during FP2022 and FP2021 [141]. - The company did not recommend any interim dividend for FP2022, consistent with FP2021 [77]. Assets and Liabilities - Total assets as of June 30, 2022, amounted to HK$454,420,000, compared to HK$436,117,000 at the end of 2021, showing a growth of 4.9% [87]. - Total equity increased to HK$175,748,000 from HK$168,883,000, indicating a rise of 4.9% [87]. - Current assets totaled HK$403,635,000, up from HK$379,109,000, representing a 6.5% increase [87]. - Trade receivables as of June 30, 2022, totaled HK$178,318,000, down from HK$188,803,000 at December 31, 2021, indicating a decline of 5.4% [170]. - The Group's trade payables increased slightly to HK$109,052,000 as of June 30, 2022, compared to HK$108,753,000 at December 31, 2021, representing a growth of 0.3% [172]. - Current borrowings rose to HK$31,059,000 as of June 30, 2022, from HK$25,522,000 at December 31, 2021, marking an increase of 21.1% [175]. - The Group's total trade payables aged over 3 months increased significantly to HK$30,516,000 as of June 30, 2022, compared to HK$6,916,000 at December 31, 2021, indicating a substantial rise [173].