Financial Performance - The total revenue for the fiscal year ending March 31, 2024, was RMB 3,119,674,000, a decrease of 23% compared to RMB 4,046,902,000 in the previous year[2] - Gross profit for the same period was RMB 895,539,000, down from RMB 1,036,121,000, reflecting a gross margin decline[2] - The net profit for the year was RMB 479,970,000, a decrease of 17% from RMB 579,188,000 in the previous year[2] - Basic and diluted earnings per share for the year were RMB 1.26, compared to RMB 1.52 in the previous year[2] - The group's profit before tax for the year ended March 31, 2024, was RMB 702,734,000, a decrease of 16.5% compared to RMB 841,019,000 in 2023[31] - The total income tax expense for the year was RMB 222,764,000, down 15% from RMB 261,831,000 in 2023[30] - The company’s other income and gains increased by approximately 24.7% to about RMB 85,268 thousand, mainly due to a significant increase in bank interest income[51] - The company reported a net foreign exchange gain of RMB 5,909,000, compared to a loss of RMB 1,703,000 in the previous year[6] Assets and Liabilities - Total assets as of March 31, 2024, amounted to RMB 3,495,244,000, an increase from RMB 3,275,365,000 in the previous year[3] - Current assets totaled RMB 2,963,018,000, up from RMB 2,870,410,000, indicating improved liquidity[3] - The company’s non-current liabilities increased to RMB 124,438,000 from RMB 108,063,000, indicating a rise in long-term obligations[4] - Non-current assets in mainland China increased to RMB 644,510 thousand as of March 31, 2024, from RMB 612,841 thousand in the previous year[19] Revenue Breakdown - Revenue from mainland China was RMB 2,632,420 thousand, down from RMB 3,105,711 thousand, indicating a decrease of about 15.2%[21] - Revenue from overseas markets decreased to RMB 487,254 thousand from RMB 941,191 thousand, reflecting a decline of approximately 48.3%[21] - The company recognized RMB 78,795 thousand in revenue from contract liabilities for the year ended March 31, 2024, compared to RMB 180,783 thousand in the previous year[22] Expenses and Costs - The cost of sales inventory decreased to RMB 2,221,681,000 from RMB 3,008,160,000, reflecting a reduction of 26.1%[6] - Research and development expenses increased to RMB 41,858,000, up 21.5% from RMB 34,427,000 in the previous year[6] - Selling and distribution expenses rose by approximately 5.1% to about RMB 155,851 thousand, accounting for about 5.0% of total revenue[52] - Administrative expenses increased by approximately 7.9% to about RMB 113,856 thousand, primarily due to higher development and administrative costs[53] Cash Flow and Liquidity - The company reported a net cash flow from operating activities of RMB 505,814,000, down from RMB 763,403,000 in the previous year[6] - The current ratio improved to approximately 3.7, compared to 3.3 in the previous fiscal year, due to a decrease in current liabilities by 7.6%[62] Shareholder Information - The company declared a final dividend of HKD 0.40 per share for the year ended March 31, 2024, totaling RMB 140,122 thousand, an increase of 6.3% from RMB 131,633 thousand in 2023[45] - The board has proposed a final dividend of HKD 0.40 per share for the fiscal year ending March 31, 2024, subject to shareholder approval[69] - The annual general meeting is scheduled for August 19, 2024, in Hong Kong, with a suspension of share transfer registration from August 14 to August 19, 2024[79] Corporate Governance - The company is committed to enhancing corporate governance and has adopted a standard code for securities trading by directors[73] - The company’s audit committee has reviewed the audited consolidated financial statements for the fiscal year, ensuring compliance with accounting standards[74] Future Outlook - The company expects its performance in 2024 to be significantly higher than in 2023 due to the robust growth potential of the CNC machine tool market in China[68] - The CNC machine tool demand in China has been sluggish throughout 2023 but is showing signs of recovery, indicating a potential new growth cycle starting in March and April 2024[67] - The company plans to optimize production processes and implement energy-saving measures to improve resource utilization and promote sustainable development[68] Investments and Expansion - The expansion of the Pinghu new factory is expected to be completed and operational by July 2024, positioning the company for future growth opportunities[47] - A new factory is under construction with an investment of approximately RMB 130 million, expected to increase production capacity by 3,000 to 4,000 CNC precision machine tools by July 2024[65] Share Repurchase - The company repurchased a total of 250,000 shares during the review year, which were canceled on June 18, 2024, aiming to enhance earnings per share[77] - In December 2023, the company repurchased 195,000 shares at a price range of HKD 8.99 to HKD 7.91, totaling HKD 1,684,720[78] - In January 2024, the company repurchased 55,000 shares at a price range of HKD 9.00 to HKD 8.84, totaling HKD 491,930[78]

Financial Performance - Revenue for the six months ended 30 September 2023 was RMB 1,494,386,000, a decrease of 32.1% compared to the same period in 2022[9] - Gross profit for the period was RMB 414,077,000, down 22.5% year-over-year[9] - Net profit attributable to shareholders was RMB 221,258,000, a 26.4% decrease compared to the previous year[9] - Basic earnings per share decreased by 26.6% to RMB 0.58[9] - Gross profit margin improved to 27.7%, up 3.4 percentage points from the previous year[9] - Net profit margin increased to 14.8%, up 1.1 percentage points year-over-year[9] - Group's sales revenue decreased by 32.1% year-on-year to approximately RMB1,494,386,000, and net profit decreased by 26.4% to approximately RMB221,258,000[14] - Gross profit margin increased by 3.4 percentage points to 27.7%, and net profit margin increased by 1.1 percentage points to 14.8%[14] - Basic earnings per share decreased by 26.6% to approximately RMB0.58 compared to the same period last year[14] - Total revenue for the six months ended 30 September 2023 was RMB1,494,386,000, a year-on-year decrease of 32.1% compared to RMB2,200,360,000 in the same period last year[22] - Gross profit for the period was RMB414,077,000, a 22.5% decrease year-on-year, but gross profit margin increased by 3.4 percentage points to 27.7%[24][27] - Profit for the period decreased by 26.4% to approximately RMB221,258,000 compared to the same period last year[31] - Revenue for the six months ended 30 September 2023 was RMB 1,494,386 thousand, a decrease from RMB 2,200,360 thousand in the same period in 2022[77] - Gross profit for the six months ended 30 September 2023 was RMB 414,077 thousand, down from RMB 534,098 thousand in 2022[77] - Profit before tax for the six months ended 30 September 2023 was RMB 326,039 thousand, compared to RMB 442,776 thousand in 2022[77] - Net profit for the six months ended 30 September 2023 was RMB 221,258 thousand, a decrease from RMB 300,693 thousand in 2022[77] - Basic and diluted earnings per share for the six months ended 30 September 2023 were RMB 0.58, down from RMB 0.79 in 2022[77] - Profit before tax for the six months ended 30 September 2023 was RMB 326,039 thousand, a decrease from RMB 442,776 thousand in the same period last year[85] - Profit before tax from continuing operations for the six months ended 30 September 2023 was RMB 221,258 thousand, compared to RMB 300,693 thousand in the same period in 2022[111] Market and Industry Trends - The company is the largest foreign-branded CNC machine tool manufacturer in China's machine tools market[4] - Products are primarily sold in China, with additional sales to Japan, Europe, the US, and Southeast Asia[5] - The company manufactures high-end CNC machine tools including precision lathes, machining centers, and grinding machines[5] - Key industries served include automotive parts, IT communications, electronics, and industrial automation[5] - Sales of precision lathes decreased by 32.8% to approximately RMB616,164,000, significantly impacting the company's revenue[19] - Sales of precision machining centers decreased by 51.4% due to the downturn in the 3C and automobile industries[19] - Precision grinding machines recorded revenue similar to the same period last year[19] - The demand for CNC machine tools in Mainland China is still lower than the same period last year, but may bottom out in Q3 2023 and start to pick up within the year or the first half of next year[35] - The new energy automobile industry experienced a contraction in capital expenditure demand this year, while industrial automation, healthcare, and mold industries outperformed year-on-year[35] - The domestic market for medium and high-end CNC machine tools is still in the expansion stage, with strong potential demand driven by China's transformation to high value-added, technology-intensive manufacturing[36] Operational and Strategic Initiatives - The company continued to invest in expanding production capacity, with the new Pinghu factory expected to be completed and operational by July 2024[17] - The company actively participated in local trade fairs to strengthen connections with end customers and explore potential market segments[16] - The Group plans to launch new products and optimize its product portfolio to meet customer needs and maintain competitive edge by reducing costs and enhancing cost-effectiveness[36] - The Group will continue to optimize manufacturing processes and implement energy-saving and emission-reduction measures to enhance resource utilization efficiency and promote sustainable development[37] - The Board approved a share award scheme on 10 November 2023 to recognize contributions, retain talents, and attract suitable personnel for further development[40] - The company adopted a share incentive plan on November 10, 2023, to retain and attract talent by purchasing shares from the secondary market[44] - New company Precision Nakatsu (China) Corporation has a planned production capacity of 4,000-4,500 units of CNC precision machine tools with an annual production value of RMB1,000,000,000[32] - Construction of a new plant building with an investment of approximately RMB130,000,000 began during the period, with RMB46,071,000 already utilized[32] Financial Position and Cash Flow - Net operating cash inflows increased to approximately RMB277,677,000 from RMB163,679,000 in the same period last year[31] - Total cash and bank balances increased to approximately RMB1,071,934,000 as of 30 September 2023[31] - Current ratio improved to 4.1 times from 3.3 times as of 31 March 2023[31] - Capital expenditures for the period amounted to approximately RMB54,704,000, primarily for factory buildings and mechanical equipment[31] - Gearing ratio increased slightly to 0.18% from 0.12% as of 31 March 2023[31] - Capital commitments contracted but not provided for amounted to approximately RMB56,272,000 as of 30 September 2023[32] - Investment in fixed assets during the period included approximately RMB50,218,000 in buildings and RMB3,418,000 in machinery and equipment[32] - Total non-current assets as of 30 September 2023 were RMB 670,530 thousand, an increase from RMB 638,955 thousand as of 31 March 2023[79] - Total current assets as of 30 September 2023 were RMB 2,713,100 thousand, a decrease from RMB 2,870,410 thousand as of 31 March 2023[79] - Total current liabilities as of 30 September 2023 were RMB 657,585 thousand, down from RMB 872,409 thousand as of 31 March 2023[79] - Net current assets as of 30 September 2023 were RMB 2,055,515 thousand, an increase from RMB 1,998,001 thousand as of 31 March 2023[79] - Total equity as of 30 September 2023 was RMB 2,610,029 thousand, up from RMB 2,528,893 thousand as of 31 March 2023[79] - Total comprehensive income for the period was RMB 221,258 thousand, compared to RMB 300,693 thousand in the same period last year[81][82] - Dividend distribution for the period was RMB 140,122 thousand, compared to RMB 131,633 thousand in the same period last year[81][82] - Cash generated from operations for the six months ended 30 September 2023 was RMB 378,663 thousand, an increase from RMB 286,233 thousand in the same period last year[85] - Income taxes paid for the six months ended 30 September 2023 were RMB 100,986 thousand, a decrease from RMB 122,554 thousand in the same period last year[85] - Decrease in trade and notes receivables was RMB 81,110 thousand, compared to RMB 66,447 thousand in the same period last year[85] - Decrease in inventories was RMB 171,969 thousand, compared to an increase of RMB 35,204 thousand in the same period last year[85] - Increase in other payables and accruals was RMB 12,903 thousand, compared to a decrease of RMB 6,434 thousand in the same period last year[85] - Increase in contract liabilities was RMB 8,262 thousand, compared to a decrease of RMB 91,654 thousand in the same period last year[85] - Decrease in deferred income was RMB 424 thousand, consistent with the same period last year[85] - Net cash flows from operating activities increased to RMB 277,677 thousand in 2023, up from RMB 163,679 thousand in 2022[87] - Interest received rose significantly to RMB 15,841 thousand in 2023, compared to RMB 5,875 thousand in 2022[87] - Purchases of property, plant, and equipment increased to RMB 54,704 thousand in 2023, up from RMB 16,798 thousand in 2022[87] - Net cash flows used in investing activities increased to RMB 122,920 thousand in 2023, compared to RMB 13,418 thousand in 2022[87] - Dividends paid decreased to RMB 140,122 thousand in 2023, down from RMB 131,633 thousand in 2022[87] - Net cash flows used in financing activities decreased to RMB 142,895 thousand in 2023, compared to RMB 155,118 thousand in 2022[87] - Cash and cash equivalents at the end of the period increased to RMB 650,434 thousand in 2023, up from RMB 550,576 thousand in 2022[87] Expenses and Costs - Selling and distribution expenses increased by 0.5% to RMB76,062,000, accounting for 5.1% of total revenue[26][29] - Administrative expenses remained stable at RMB54,207,000 compared to RMB54,660,000 in the same period last year[30] - Other expenses increased by RMB3,239,000 to RMB7,545,000, mainly due to a RMB1,719,000 increase in exchange losses and RMB2,048,000 in compensation expenses[30] - Impairment gains on financial assets increased to RMB1,326,000 from RMB571,000 due to the reversal of impairment provision[30] - Finance costs increased to RMB606,000 from RMB70,000 due to higher interest from bank bill discounting[30] - Income tax expenses decreased by 26.3% to RMB104,781,000 due to lower revenue and pre-tax profit[30] - Cost of inventories sold decreased to RMB 1,079,349 thousand in 2023 from RMB 1,665,155 thousand in 2022[102] - Research and development costs decreased to RMB 16,848 thousand in 2023 from RMB 18,224 thousand in 2022[102] - Employee benefit expenses, including wages and salaries, decreased to RMB 147,732 thousand in 2023 from RMB 157,042 thousand in 2022[102] - Government grants received decreased to RMB 32,381 thousand in 2023 from RMB 36,792 thousand in 2022[102] - Total tax charge for the period decreased to RMB 104,781 thousand in 2023 from RMB 142,083 thousand in 2022[107] - Depreciation of property, plant, and equipment decreased to RMB 26,909 thousand in 2023 from RMB 28,867 thousand in 2022[102] - Bank interest income increased to RMB (15,841) thousand in 2023 from RMB (5,875) thousand in 2022[102] - Reversal of impairment loss on inventories was RMB (304) thousand in 2023 compared to RMB (216) thousand in 2022[102] Dividends and Shareholder Information - The Board declared an interim dividend of HK$0.4 per share for the six months ended 30 September 2023, payable on 12 January 2024[43] - The company announced an interim dividend of HKD 0.4 per share for the six months ended September 30, 2023, unchanged from the previous year[46] - The company declared an interim dividend of HK$0.4 per share, totaling HK$152,321,600, for the six months ended 30 September 2023[108] - The register of members will be closed from December 8, 2023, to December 12, 2023, for the interim dividend eligibility[47][49] - Dr. Tang Donglei, Chairman and CEO, holds 150,000 shares, representing 0.039% of the issued shares[54] - Tang Donglei holds 13,000 shares, representing 0.026% of the associated corporation's shareholding[57] - Takao Nishijima holds 414,000 shares, representing 0.828% of the associated corporation's shareholding[57] - Mami Matsushita holds 18,200 shares, representing 0.0364% of the associated corporation's shareholding[57] - Kenji Yoneyama holds 14,700 shares, representing 0.0294% of the associated corporation's shareholding[57] - Tsugami Japan holds 270,000,000 shares, representing 70.90% of the issued shares[60] - FIL Limited holds 23,399,000 shares, representing 6.14% of the issued shares[60] - FMR LLC holds 19,049,425 shares, representing 5.00% of the issued shares[60] - Pandanus Associates Inc. and Pandanus Partners L.P. each hold 23,399,000 shares, representing 6.14% of the issued shares[60] - FIAM LLC directly holds 4,295,972 shares and Fidelity Management & Research Company LLC directly holds 14,753,453 shares, totaling 19,049,425 shares[61] Corporate Governance and Compliance - The company's public float requirement is maintained at not less than 25% as per the Hong Kong Stock Exchange Listing Rules[51][53] - No significant changes in the company's financial or business conditions were reported for the six months ended September 30, 2023[45] - The company did not purchase, sell, or redeem any of its listed securities during the review period[48][50] - No subsisting share option scheme during the review period[63] - Dr. Tang Donglei ceased roles as president and legal representative of Precision Tsugami (China) Corporation and related entities from October 1, 2023[63] - Mr. Kenji Yoneyama appointed as representative director and chairman of Tsugami General Service Co., Ltd and director of Precision Tsugami (China) Corporation in 2023[63] - Company deviated from Corporate Governance Code provisions C.1.8 and C.2.1 due to reasonable grounds[65] - Dr. Tang Donglei serves as both Chairman and CEO since April 1, 2022, deviating from Corporate Governance Code provision C.2.1[65] - All Directors complied with the Model Code for Securities Transactions during the review period[66] - Audit committee reviewed unaudited condensed consolidated interim financial results for six months ended September 30, 2023[67] - External auditor Ernst & Young reviewed interim financial results in accordance with Hong Kong Standard on Review Engagement 2410[67] - Interim financial information prepared in compliance with IAS 34 and Hong Kong Listing Rules[70] - Review conducted in accordance with Hong Kong Standard on Review Engagements 2410[71] Revenue and Sales Breakdown - Revenue from the sale of high precision CNC machine tools decreased to RMB 1,491,153 thousand in 2023 from RMB 2,197,130 thousand in 2022[98] - Total revenue from contracts with customers dropped to RMB 1,494,386 thousand in 2023 compared to RMB 2,200,360 thousand in 2022[98] - Revenue from Mainland China decreased to RMB 1,248,770 thousand in 2023 from RMB 1,650,339 thousand in 2022[99] - Overseas revenue declined to RMB 245,616 thousand in 2023 from RMB 550,021 thousand in 2022[99] - Revenue from rendering of services remained stable at RMB 3,233 thousand in 2023 compared to RMB 3,230 thousand in 2022[98] - Sales of goods to Tsugami Corporation amounted to RMB 226,372 thousand, a decrease of 56.4% compared to RMB 519,843 thousand in the same period last year[132] - Purchases of materials from Tsugami Corporation totaled RMB 61,861 thousand, down 51.9% from RMB 128,581 thousand in the previous year[132] - Licence fee paid to Tsugami Corporation was RMB 67,965 thousand, a decrease of 32.8% from RMB 101,150 thousand in the same period last year[132] Assets and Liabilities - Trade and notes receivables decreased to RMB738,106,000 as of 30 September 2023 from RMB817,892,000 as of 31 March 2023, with trade receivables dropping to RMB131,228,000 from RMB219,414,000[117] - Trade and notes payables decreased to RMB393,577,000 as of 30 September 2023 from RMB626,673,000 as of 31 March 2023, with trade payables dropping to RMB342,354,000 from RMB545,268,000[122] - The Group's capital commitments decreased to RMB56,272,000 as of 30 September 2023 from RMB112,602,000 as of 31 March 2023, primarily due to a reduction in machinery commitments[128] - The credit period for trade receivables is generally one to six months, with the majority (RMB126,445,000) being within 3 months as of 30 September 2023[121] - The Group maintains strict control over outstanding receivables, with senior management actively monitoring overdue balances, and does not hold any collateral for trade receivables[118] - Trade payables are non-interest-bearing and are typically settled within 90 days, with the majority (RMB342,

Financial Performance - Revenue for the six months ended September 30, 2023, was RMB 1,494,386, a decrease of 32% compared to RMB 2,200,360 for the same period in 2022[2] - Gross profit for the period was RMB 414,077, down 22.5% from RMB 534,098 in the previous year[2] - Profit before tax decreased to RMB 326,039, representing a decline of 26.4% from RMB 442,776 in the same period last year[2] - Net profit for the period was RMB 221,258, a decrease of 26.4% compared to RMB 300,693 in the prior year[2] - Basic and diluted earnings per share for the period were RMB 0.58, down from RMB 0.79 in the previous year[2] - For the six months ended September 30, 2023, total revenue was approximately RMB 1,494,386 thousand, a decrease of about RMB 705,974 thousand or 32.1% compared to the same period last year[28] - The net profit for the same period was approximately RMB 221,258 thousand, representing a decline of about 26.4% year-on-year[26] - Gross profit for the same period was approximately RMB 414,077 thousand, a decrease of 22.5%, while the overall gross margin increased by 3.4 percentage points to approximately 27.7%[30] Assets and Equity - Non-current assets increased to RMB 670,530 as of September 30, 2023, compared to RMB 638,955 as of March 31, 2023[3] - Current assets decreased to RMB 2,713,100 from RMB 2,870,410 as of March 31, 2023[3] - Total equity increased to RMB 2,610,029 as of September 30, 2023, from RMB 2,528,893 as of March 31, 2023[4] - Trade receivables as of September 30, 2023, amounted to RMB 738,106 thousand, a decrease from RMB 817,892 thousand as of March 31, 2023[22] - Cash and bank balances increased to approximately RMB 1,071,934 thousand as of September 30, 2023, up from RMB 977,572 thousand as of March 31, 2023, driven by increased operating cash flow[37] Revenue Breakdown - Revenue from the sale of high-precision CNC machine tools was RMB 1,491,153 thousand, while service revenue was RMB 3,233 thousand for the six months ended September 30, 2023[15] - Revenue from the domestic market in mainland China was RMB 1,248,770 thousand, down from RMB 1,650,339 thousand in the previous year, indicating a decrease of about 24%[15] - Revenue from overseas markets was RMB 245,616 thousand, compared to RMB 550,021 thousand in the same period of 2022, reflecting a decline of approximately 55%[15] Expenses and Other Income - Other income and gains amounted to approximately RMB 49,056 thousand, an increase of RMB 6,241 thousand, primarily due to increased bank interest income from higher cash and bank balances[31] - Selling and distribution expenses were approximately RMB 76,062 thousand, an increase of 0.5% compared to the previous year, accounting for about 5.1% of total revenue[32] - Capital expenditures for the period were approximately RMB 54,704 thousand, primarily for the construction of factory buildings and machinery[39] Dividends and Shareholder Returns - The company declared a final dividend of HKD 0.40 per share, totaling HKD 152,321,600, which was approved by shareholders and paid in September 2023[18] - The company announced an interim dividend of HKD 0.4 per share for the six months ending September 30, 2023, consistent with the previous year[43] - The company maintains a stable dividend policy to create investment returns for shareholders[41] Business Operations and Strategy - The company continues to focus on the manufacturing and sales of high-precision CNC machine tools[6] - The company plans to complete the expansion of the Pinghu new factory by July 2024, which will prepare for the introduction of new technologies and product updates[27] - The company continues to actively participate in local exhibitions to strengthen connections with end customers and explore potential niche markets[26] - The company is closely monitoring industry trends and will adjust strategies flexibly to seize market opportunities[41] - The company is committed to improving product competitiveness and increasing market share for long-term growth[41] - The company will continue to optimize production processes and implement energy-saving measures to enhance resource efficiency and promote sustainable development[41] Compliance and Accounting Standards - The financial data is prepared in accordance with International Accounting Standard 34, indicating compliance with international financial reporting standards[7] - The group does not have any contracts within the scope of IFRS 17, thus the standard has no impact on its financial position or performance[10] - The implementation of IAS 1 (Revised) is expected to affect the accounting policy disclosures in the annual consolidated financial statements but has no impact on the interim condensed consolidated financial information[11] - The group has applied the amendments to IAS 12 (Revised) regarding deferred tax assets and liabilities without any impact on its financial position or performance[12] - The group has not been affected by the OECD's Pillar Two legislation template, and thus the related amendments have no impact on its financial position[12] Employment and Workforce - The company employed 2,177 employees as of September 30, 2023, with total employee costs amounting to approximately RMB 182,115 thousand, representing 12.19% of total revenue[40] Market Conditions - The demand for CNC machine tools in mainland China remains lower than the same period last year, but feedback indicates a potential bottoming out in Q3 2023, with possible recovery in the latter half of the year or early next year[41] - The company believes that the domestic mid-to-high-end CNC machine tool market is still in an expansion phase, driven by the transition to high value-added, technology-intensive manufacturing[41] Miscellaneous - No significant changes in the company's financial condition or business performance have occurred since the latest annual report[42] - The company has not purchased, sold, or redeemed any of its listed securities during the six months ending September 30, 2023[45] - The company will issue its interim report to shareholders and make it available on relevant websites[50]

Company Overview and Market Position - Precision Tsugami (China) Corporation Limited is the largest foreign-branded CNC machine tool manufacturer in the Chinese market, with 20 years of rapid development since its establishment in 2003[2] - The company manufactures and sells high-end CNC machine tools, including precision lathes, machining centers, and grinding machines, primarily for the Chinese market, with additional sales to Japan, Europe, the United States, and Southeast Asia[2] - The company's products are widely recognized in industries such as automobile parts, IT communications, electronics, and industrial automation, with a focus on high speed, high precision, and high rigidity[2] - The company's products are sold under the TSUGAMI brand, with or without customizations, through overseas sales channels managed by Tsugami Japan[2] - The company's market position as the largest foreign-branded CNC machine tool manufacturer in China is supported by an industry report from Frost & Sullivan (Beijing) Inc., Shanghai Branch Co., dated December 2018[2] - The company has grown into the largest foreign-branded CNC machine tool manufacturer in the Chinese market since its establishment in 2003[189][190] Financial Performance - Sales revenue for the fiscal year 2023 was approximately RMB 4,046,902,000, representing an 8.4% decrease compared to the previous fiscal year[10] - Gross profit margin decreased from 26.5% in the previous fiscal year to 25.6% for the fiscal year 2023[10] - Net profit for the fiscal year 2023 was approximately RMB 579,188,000, with a net profit margin of 14.3%, a year-on-year decrease of 0.8 percentage points[10] - Basic earnings per share for the fiscal year 2023 amounted to approximately RMB 1.62[10] - The Group's sales revenue for the year was approximately RMB4,046,902,000, a decrease of 8.4% compared to the previous financial year[22] - The gross profit margin decreased from 26.5% to 25.6%, and the net profit margin decreased by 0.8 percentage points to 14.3%[22] - The net profit for the year was approximately RMB579,188,000[22] - Total revenue decreased by 8.4% to approximately RMB4,046,902,000, down from RMB4,419,887,000 last year[25] - Precision lathes sales decreased by 10.4% to approximately RMB3,467,575,000[25] - Precision machining centres sales increased by 5.9% to approximately RMB247,817,000 due to higher demand from the new energy vehicle industry[25] - Precision grinding machines sales decreased by 4.0% to approximately RMB162,858,000[25] - Other sales, including ancillary parts and components, increased by 15.3% to approximately RMB168,652,000[25] - Gross profit decreased by 11.7% to approximately RMB1,036,121,000, with gross profit margin dropping from 26.5% to 25.6%[29] - Other income and gains decreased by 62.1% to approximately RMB68,357,000, primarily due to a one-off insurance compensation of RMB110,530,000 in the previous year[31] - Administrative expenses increased by 10.1% to approximately RMB105,559,000, driven by higher development and depreciation expenses[32] - Other expenses decreased significantly by approximately RMB106,379,000 to RMB11,470,000, mainly due to the absence of fire-related losses from the previous year[33] - Finance costs decreased to approximately RMB674,000 from RMB2,141,000, due to lower interest from bank bill discounting[35] - Income tax expenses decreased by 14.6% to approximately RMB261,831,000 due to lower revenue and profit before tax[40] - Profit for the year decreased by 13.2% from RMB667,404,000 in 2022 to RMB579,188,000 in 2023[40] - Cash and cash equivalents increased to approximately RMB638,572,000 as of 31 March 2023, up from RMB555,433,000 in 2022, driven by higher net cash flows from operating activities and reduced capital expenditures[40] - Net current assets rose to approximately RMB1,998,001,000 as of 31 March 2023, compared to RMB1,655,353,000 in 2022[40] - Capital expenditures for the year ended 31 March 2023 amounted to approximately RMB57,909,000, primarily for processing equipment and software[40] - The Group's gearing ratio decreased to 0.12% as of 31 March 2023, down from 1.1% in 2022[40] - Average inventory turnover days increased to 127 days in 2023, up by 31 days compared to 2022, due to a 22.2% increase in average inventory balance and an 8.4% decrease in sales[47][48] - Current ratio improved to 3.3 as of 31 March 2023, compared to 2.4 in 2022[45] - The Group's average turnover days of trade and notes receivables for the year ended 31 March 2023 were approximately 92 days, representing an increase of approximately 1 day compared to last year[49] - The Group's average turnover days of trade and notes payables for the year ended 31 March 2023 were approximately 88 days, representing an increase of approximately 12 days compared to last year, mainly due to a 5.3% increase in the average balance of trade and bills payables[49] - As at 31 March 2023, the Group's current ratio was approximately 3.3 times, compared to 2.4 times in the previous year, with trade payables decreasing by approximately 24% and overall current liabilities decreasing by approximately 28%[49] - The Group's capital commitments as at 31 March 2023 included RMB105,902,000 for property, plant, and equipment, and RMB6,700,000 for equity investments designated at fair value through other comprehensive income[51] - Precision Nakatsu's new plant investment increased by approximately RMB100 million, with a planned investment of approximately RMB130 million for another plant[51] - The total fees paid or payable to the independent auditor, Ernst & Young, for audit and non-audit services during the year amounted to RMB 1,370 thousand, with audit fees for the year ended 31 March 2023 being RMB 870 thousand and interim review fees for the six months ended 30 September 2022 being RMB 500 thousand[146] COVID-19 Impact and Market Challenges - The COVID-19 pandemic and strict prevention measures significantly impacted logistics, production, and demand for CNC machine tools, particularly in Eastern China[13] - The COVID-19 pandemic and strict control measures significantly impacted logistics and production in Eastern China, particularly in Shanghai, leading to a decline in demand for CNC machine tools[21][24] - The CNC machine tool industry entered a downward adjustment phase due to declining market demand and reduced confidence in the macroeconomic situation[21][24] - COVID-19 pandemic and international geopolitics significantly impacted China's manufacturing industry and overall economy, leading to a decline in demand for high-end CNC machine tools[149] Strategic Initiatives and Future Plans - The company focused on improving product performance, service quality, and cost reduction to enhance competitiveness in a shrinking market[14] - The company continued to invest in new technologies, upgrade existing models, and expand sales of key products to explore potential market demand[14] - The company is preparing for future market demand recovery by investing in the equipment of Tsugami Anhui and constructing a fifth new factory in Pinghu[14] - The company focused on improving product performance, service quality, and reducing costs to enhance competitiveness in a shrinking market[23][24] - The company continued its medium and long-term expansion strategy, including investments in equipment at Tsugami Anhui and the construction of a new factory in Pinghu[23][24] - The company invested in new technologies and models to upgrade existing products and explored potential market demand[23][24] - The company remains confident in the long-term demand for high-end CNC machine tools due to the transformation and upgrading of the Chinese manufacturing industry[17][19] - The company plans to expand product lines, increase production capacity, and strengthen marketing and after-sales service systems to achieve medium and long-term development goals[59] - The company aims to improve product performance, service quality, and reduce costs to provide competitive and cost-effective products, aiming to overtake competitors and increase market share[59] - The company emphasizes the importance of upgrading and transforming China's manufacturing industry from labor-intensive to technology-intensive and further to intelligent manufacturing[58] Corporate Governance and Board Structure - The company has adopted the Corporate Governance Code (CG Code) as its own code of corporate governance and ensures continuous compliance through periodic reviews[89][90] - The roles of Chairman and Chief Executive Officer are performed by the same individual, Dr. Tang Donglei, which deviates from the CG Code[91] - The Board consists of at least three independent non-executive Directors, with at least one-third representation at all times during the year[95] - The Board is responsible for determining the Group's business and investment plans, preparing annual financial budgets, and supervising management[94] - The company has not made insurance arrangements for Directors as it considers no additional risk exists[91] - The company has adopted the Model Code for Securities Transactions by Directors and confirms compliance by all Directors during the year[92][93] - The management provides monthly updates to all Board members in accordance with the CG Code[95] - The Board is collectively responsible for directing and supervising the Company's affairs, including strategy implementation, operational and financial performance monitoring, and ensuring sound internal control and risk management systems[98] - The Board reserves decision-making authority on major matters such as policy, strategies, budgets, internal control, risk management, material transactions, financial information, and significant operational matters[99] - The Chairman and CEO roles are combined under Dr. Tang Donglei, which the Board believes provides consistent leadership and facilitates prompt execution of business strategies, despite deviating from the CG Code[101] - Non-executive Directors, including independent non-executive Directors, provide strategic advice, ensure high standards of financial reporting, and safeguard the interests of the Company and shareholders[102] - The Board Independence Evaluation Mechanism was established to ensure a strong independent element on the Board, with annual reviews conducted to improve effectiveness and identify areas for improvement[105] - Independent non-executive Directors constitute more than one-third of the Board, providing diversified expertise and independent judgment on strategies, prospects, and internal control[106] - The independence assessment for all Directors was completed individually during the year ended 31 March 2023, with satisfactory results[106] - The Board reviewed the implementation and effectiveness of the Board Independence Evaluation Mechanism during the year ended 31 March 2023, with satisfactory results[107] - Directors receive induction upon appointment and are encouraged to participate in continuous professional development to refresh their knowledge and skills[109] - All Directors participated in continuous professional development during the year and provided records of their training to the Company[110] - All directors participated in appropriate continuous professional development and provided training records for the year[111] - The Board convened a total of four meetings during the year to update directors on business developments[114] - Directors received meeting agendas and relevant documents prior to each Board meeting, ensuring timely and accurate information[115] - The Chairman held a separate meeting with all independent non-executive directors without the presence of other directors[116] - Executive and non-executive directors attended both in-house/external training (Type A) and self-study (Type B) for professional development[113] - Independent non-executive directors Dr. Satoshi Iwabuchi and Dr. Eiichi Koda did not participate in any training during the year[113] - Mr. Motoi Yamada was appointed on 29 April 2022 and resigned on 28 June 2023[113] - Mr. Kenji Yoneyama resigned on 29 April 2022 and was re-appointed on 28 June 2023[113] - Dr. Satoshi Iwabuchi was appointed as an independent non-executive director on 28 June 2023[113] - Dr. Eiichi Koda resigned as an independent non-executive director on 28 June 2023[113] Remuneration and Audit Committees - The Audit Committee reviewed the audited consolidated financial statements for the year ended 31 March 2022 and unaudited consolidated financial statements for the six months ended 30 September 2022[117] - The Audit Committee held two meetings during the year to review financial statements and assess the effectiveness of risk management and internal control systems[117] - The Remuneration Committee determined the remuneration for newly appointed Director Mr. Motoi Yamada and Senior Management Member Dr. Wang Xiaokun[123] - The Remuneration Committee reviewed and approved remuneration packages for Directors and senior management, aligning with industry market standards[123] - The Group's audited consolidated annual results were reviewed by the Audit Committee, confirming compliance with applicable accounting standards and adequate disclosure[118] - The Remuneration Committee's policy links discretionary bonuses and merit payments to the Group's profit performance and individual performance of Directors and senior management[120] - The Audit Committee recommended the re-appointment of the external auditor and approved their remuneration and terms of engagement[117] - The Remuneration Committee held two meetings during the year to address remuneration matters for Directors and senior management[123] - The Audit Committee reviewed the external auditor's independence, objectivity, and the effectiveness of the audit process[118] - The Remuneration Committee's remuneration policy is based on experience, level of responsibility, and general market conditions[120] - The company's senior management remuneration ranges from HK$1,000,001 to HK$2,500,000, with 1 individual in the HK$1,000,001 to HK$1,500,000 band and 2 individuals in the HK$1,500,001 to HK$2,500,000 band[125] Nomination and Diversity Policies - The Nomination Committee held 2 meetings during the year, recommending changes to the Board committee and reviewing the Board's structure, size, composition, and diversity[126] - The company has adopted a Diversity Policy aiming to maintain a balanced and diverse Board profile, considering aspects such as professional experience, skills, gender, age, and cultural background[126] - The Nomination Committee will set measurable objectives for achieving gender diversity on the Board, including numerical targets and timelines[127] - The Nomination Committee will monitor and report annually on the implementation of the Diversity Policy, including progress towards achieving gender diversity on the Board[128] - The Board currently has 1 female member, achieving gender diversity at the Board level, and aims to maintain at least 1 female Director in compliance with Listing Rules[130] - The Nomination Committee reviewed the Board's structure, size, and diversity to ensure compliance with Listing Rules and alignment with the company's strategy and governance[130] - The company currently has one female board member and aims to maintain at least one female board member to comply with gender diversity requirements[131] - As of 31 March 2023, the company's workforce consists of 2,238 employees, with 68.45% male and 31.55% female employees[132] - The company has adopted a nomination policy on 28 December 2018, outlining criteria for director nomination and appointment, including character, integrity, qualifications, and diversity factors[132] - The nomination committee and/or board may recruit director candidates from various sources, including internal promotion, re-designation, and external recruitment agencies[135] - The nomination committee and/or board assesses candidates based on criteria such as professional qualifications, skills, experience, independence, and gender diversity[134] - The nomination committee makes recommendations to the board for the appointment of suitable candidates as directors[136] - The nomination committee reviews the overall contribution and service of retiring directors and determines if they still conform to the criteria for re-election[136] Risk Management and Internal Control - The Board has established a risk management and internal control system to manage the risk of failure to achieve business objectives, including ESG risks, and to enhance operational efficiency. However, the system provides reasonable, not absolute, assurance against material misstatement or loss[176][178] - The Group has commissioned an independent professional risk advisor to develop a risk management framework, conduct risk assessments, and identify major risks, including ESG risks, ranked by likelihood and severity of impact[177][179] - The internal audit department is responsible for independently reviewing the adequacy and effectiveness of the risk management and internal control systems[180] - The Group has established clear internal control policies, a code of conduct, a comprehensive financial accounting system, and anti-corruption policies to ensure compliance and prevent unethical activities[180] - Management and the internal audit department report findings and the effectiveness of risk management and internal control systems to the Audit Committee and the Board[181][182] - The Board conducts an annual review of financial, operational, and compliance monitoring systems, assessing their effectiveness based on reports from the Audit Committee, management, and internal auditors[183][184] - The company has established an effective risk management and internal control system, covering financial, operational, and compliance monitoring, ensuring accurate financial data and asset protection[185] - The company has implemented an Inside Information Policy to handle and disseminate inside information, ensuring compliance and preventing unauthorized disclosure[186][187] ESG and Sustainability - The company integrates ESG (Environmental, Social, and Governance) concepts into its risk management system and daily operations, emphasizing sustainable development[191] - The company was awarded the "Most Valuable Industrial Manufacturing Company" at the 7th Golden Hong Kong Stocks Awards in December 2022[191] - The company received the title of "Meritorious Enterprise in 2022" from the Pinghu Municipal People's Government in January 2023[191] - The company established an ESG governance structure, with the Board and Audit Committee overseeing ESG matters, holding at least one annual meeting to align ESG strategy with business goals[192] - The ESG working group, composed of core members from various departments, collaborates with third parties to collect and analyze ESG data, monitor performance, and ensure compliance with regulations[192] - The reporting scope covers major operating locations in China, including Precision Tsugami (China) Corporation, Shinagawa Precision Machinery (Zhejiang), and Precision Tsugami (Anhui)[194] - The company conducted a materiality assessment to identify key ESG issues, reviewed and confirmed by the Board, Audit Committee, and working group[196] - The ESG report follows the ESG Reporting Guide of the Hong Kong Stock Exchange, ensuring consistency with the previous year's report unless stated otherwise[196][199] - The company maintains close communication with stakeholders to address core concerns and improve ESG performance through constructive dialogue[200] Shareholder Communication and Engagement - The company maintains an open-door and effective policy for investor communication, providing timely updates through its website and other channels[164][167] - The company has established multiple channels for ongoing dialogue with shareholders, including corporate communications, announcements, and shareholder meetings[168][

Financial Performance - Total revenue for the year ended March 31, 2023, was RMB 4,046,902 thousand, a decrease of 8.4% compared to RMB 4,419,887 thousand in 2022[2] - Gross profit for the year was RMB 1,036,121 thousand, down from RMB 1,173,029 thousand in the previous year, reflecting a gross margin of approximately 25.6%[2] - Profit before tax decreased to RMB 841,019 thousand from RMB 973,834 thousand, representing a decline of 13.6%[2] - Net profit for the year was RMB 579,188 thousand, a decrease of 13.2% compared to RMB 667,404 thousand in 2022[2] - Basic and diluted earnings per share for the year were RMB 1.52, down from RMB 1.75 in the previous year[3] - Revenue from sales of goods was RMB 4,040,837 thousand, down from RMB 4,413,862 thousand in the previous year, representing a decline of 8.4%[20] - Other income and gains totaled RMB 68,357 thousand, down from RMB 180,334 thousand in the previous year[24] - The total income tax expense for the year ended March 31, 2023, was RMB 261,831,000, a decrease of 14.6% from RMB 306,430,000 in 2022[29] - The current tax expense for the year was RMB 241,653,000, down from RMB 284,411,000 in the previous year, reflecting a reduction of 15.0%[29] - The group reported a financing cost of RMB 674 thousand, a decrease from RMB 2,141 thousand in 2022[25] Assets and Liabilities - Total current assets increased slightly to RMB 2,870,410 thousand from RMB 2,868,088 thousand in 2022[4] - Cash and cash equivalents at the end of the year rose to RMB 638,572 thousand, compared to RMB 555,433 thousand at the end of 2022[9] - Total liabilities decreased significantly, with current liabilities dropping to RMB 872,409 thousand from RMB 1,212,735 thousand in the previous year[4] - The company's total equity increased to RMB 2,528,893 thousand from RMB 2,221,342 thousand in 2022, reflecting a growth of 13.8%[6] - The accounts receivable as of March 31, 2023, amounted to RMB 217,953,000, significantly lower than RMB 401,917,000 in 2022, representing a decrease of 45.8%[32] - The provision for impairment losses on accounts receivable decreased to RMB 1,461,000 from RMB 2,400,000 in the previous year, a reduction of 39.1%[35] - The total amount of receivables discounted was RMB 110,514,000, an increase from RMB 82,707,000 in 2022, reflecting a growth of 33.6%[33] - The aging analysis of accounts receivable showed that RMB 214,469,000 was within 3 months, down from RMB 286,091,000 in the previous year, a decrease of 25.0%[35] Operational Highlights - Operating cash flow for the year was RMB 763,403 thousand, significantly higher than RMB 429,514 thousand in the previous year[7] - The average inventory turnover days increased to approximately 127 days, up 31 days from the previous year, due to a decline in orders and sales[54] - The current ratio improved to approximately 3.3 from 2.4 in the previous year, attributed to a reduction in current liabilities by about 28%[57] - The total employee cost for the group is approximately RMB 328,315,000, accounting for a significant portion of the group's expenses[62] Investments and Future Plans - The company has invested approximately RMB 78,308,000 in fixed assets, including RMB 48,061,000 for factory buildings and RMB 30,247,000 for land use rights, with a planned production capacity of 4,000-4,500 units and an expected annual output value of RMB 1 billion[61] - The company plans to invest approximately RMB 130 million to construct an additional factory to ensure future production capacity[61] - The company is committed to expanding its product line and production capacity while strengthening marketing and after-sales service systems[63] - The company aims to enhance product performance and service quality while reducing costs to address potential market fluctuations and intensified competition[64] Corporate Governance - The company was established in the Cayman Islands on July 2, 2013, and its shares have been listed on the Hong Kong Stock Exchange since September 25, 2017[10] - The company's ultimate holding company is Tsugami Corporation, which is registered in Japan and listed on the Tokyo Stock Exchange[10] - The board of directors includes both executive and independent non-executive members, with Dr. Tang Donglei serving as the chairman and CEO[75] - The audit committee has reviewed the group's audited consolidated financial statements for the year, ensuring compliance with accounting principles and internal controls[69] Shareholder Information - The company declared a final dividend of HKD 0.40 per share, totaling HKD 152,321,600, subject to shareholder approval[40] - The board has proposed a final dividend of HKD 0.40 per share, totaling HKD 152,321,600, subject to shareholder approval[65] - The annual general meeting is scheduled for August 18, 2023, in Hong Kong[72] - Share transfer registration will be suspended from August 15 to August 18, 2023, to determine shareholder eligibility for the annual general meeting[73] - Share transfer registration will also be suspended from August 24 to August 25, 2023, to determine eligibility for the proposed final dividend[73] Compliance and Reporting - The financial statements are prepared in accordance with International Financial Reporting Standards (IFRS) and presented in Renminbi, with all values rounded to the nearest thousand[13] - The consolidated financial statements include the financial results of the company and its subsidiaries for the year ended March 31, 2023[14] - The company assesses control over subsidiaries based on voting rights and contractual arrangements, ensuring compliance with IFRS guidelines[15] - The company has adopted revised IFRS standards, which have no impact on its financial position or performance during the reporting period[16] - The preliminary performance announcement has been verified by Ernst & Young, ensuring consistency with the audited financial statements[74] - The annual report for the year ending March 31, 2023, will be sent to shareholders and published on the company's website at an appropriate time[75]

Financial Performance - For the six months ended September 30, 2022, the Group's revenue was approximately RMB 2,200,360,000, representing a decrease of approximately 7.2% compared to the same period in 2021[11]. - The Group's gross profit for the same period was approximately RMB 534,098,000, reflecting a decrease of approximately 18.9% year-on-year[12]. - The net profit attributable to shareholders of the Company was approximately RMB 300,693,000, a decrease of approximately 20.4% compared to the previous year[12]. - Basic earnings per share for the period were approximately RMB 0.79, down approximately 20.2% from RMB 0.99 in the same period last year[12]. - The gross profit margin decreased to 24.3% from 27.8% year-on-year, a decline of 3.5 percentage points[11]. - The profit before tax was approximately RMB 442,776,000, representing a decrease of approximately 20.9% compared to the same period in 2021[11]. - The net profit margin decreased to 13.7% from 15.9% year-on-year, a decline of 2.2 percentage points[11]. - Other income and gains decreased by approximately RMB 96,891,000 to approximately RMB 42,815,000, primarily due to a one-off insurance compensation of RMB 107,403,000 from a factory fire in the previous year[25][28]. - Profit for the period was RMB 300,693,000, representing a decrease of approximately 20.4% or RMB 76,964,000 compared to the same period last year[39][43]. - Total comprehensive income for the period was RMB 300,693, consistent with the profit for the period[86]. Revenue Breakdown - Sales of precision lathes decreased by approximately RMB 203,047,000 or approximately 9.8%, significantly impacting the Group's revenue[19]. - Sales of precision grinding machines also decreased by approximately 9.2% compared to the same period last year[19]. - The sales of precision machining centers recorded a growth of approximately 26.8%, driven by increased demand in the new energy vehicle parts and components industry[19]. - Revenue from the sale of CNC high precision machine tools was RMB 2,197,130, down from RMB 2,367,259, reflecting a decline of 7.2% year-over-year[100]. - The Group's revenue from Mainland China was RMB 1,650,339, down from RMB 2,017,233, indicating a decline of 18.1%[100]. - Overseas revenue increased to RMB 550,021, up from RMB 353,106, marking a growth of 55.8%[100]. Expenses and Costs - Selling and distribution expenses were approximately RMB 75,672,000, accounting for 3.4% of the Group's revenue, representing a decrease of approximately 4.7% compared to the same period last year[26][29]. - Administrative expenses increased by approximately 18.4% to approximately RMB 54,660,000, mainly due to increased customization and development expenses[31][32]. - Employee benefit expenses increased to RMB 157,042 from RMB 131,452, representing a rise of 19.4% year-over-year[101]. - The total tax charge for the period was RMB 142,083,000, down 22.1% from RMB 182,179,000 in the previous year[105]. Assets and Liabilities - As of September 30, 2022, total cash and cash equivalents amounted to approximately RMB 550,576,000, a slight decline from RMB 555,433,000 as of March 31, 2022[40]. - The Group recorded net current assets of approximately RMB 1,847,968,000, with a current ratio of approximately 2.9 times[41]. - Total non-current liabilities rose to RMB 2,489,640,000, compared to RMB 2,300,336,000, indicating an increase of 8.2%[87]. - The total equity attributable to owners of the parent reached RMB 2,390,402,000, up from RMB 2,221,342,000, representing a growth of 7.6%[89]. - Trade receivables as of September 30, 2022 amounted to RMB 298,976,000, down from RMB 404,317,000 as of March 31, 2022[110]. - Trade payables as of September 30, 2022, totaled RMB 703,214,000, down from RMB 820,172,000 as of March 31, 2022, indicating a reduction of about 14.3%[116]. Investments and Future Plans - The Group plans to continue investing in the equipment of Precision Tsugami (Anhui) Corporation and the construction of a new factory in Pinghu[17]. - The Group plans to expand production capacity by constructing two new factory buildings with a total investment of approximately RMB 150 million, expected to increase machine tool production capacity by approximately 2,000 units per year starting January 2024[47]. - The Group will strengthen sales expansion of key products and explore potential market demand[17]. Corporate Governance and Compliance - The Company has adopted the Corporate Governance Code and has complied with its provisions during the review period, despite Dr. Tang Donglei serving as both Chairman and Chief Executive Officer since April 1, 2022[76]. - The audit committee reviewed the Group's unaudited condensed consolidated interim financial results for the six months ended September 30, 2022, with external auditor Ernst & Young conducting a review in accordance with relevant standards[81]. - The Group's financial reporting remains aligned with the revised International Financial Reporting Standards adopted for the first time during this period[95]. Shareholder Information - An interim dividend of HK$0.4 per share has been declared for the six months ended September 30, 2022, consistent with the previous year[56]. - The register of members will be closed from December 6 to December 8, 2022, for the purpose of the interim dividend[58]. - As of September 30, 2022, Tsugami Japan holds 270,000,000 shares, representing 70.90% of the issued shares[70]. - The total number of shares held by substantial shareholders indicates a strong control over the company’s equity structure[70].

Company Overview - The Group has become the largest foreign-branded CNC machine tool manufacturer in the Chinese market, achieving significant growth since its establishment in 2003[5]. - The Group's main products include precision lathes, precision machining centers, and precision grinding machines, primarily serving the automobile parts, IT electronics, and industrial automation sectors[19]. - The Group's products are mainly sold in Mainland China and Taiwan, with exports to Japan, South Korea, Europe, and the United States through Tsugami Japan's overseas sales channels[19]. - The Group emphasizes high precision, high speed, and high rigidity in its manufacturing processes, aligning with the globally leading technology of Tsugami Japan[18]. - The Group aims to provide cost-effective products and services to its customers while contributing positively to society[18]. - The Group's customer base includes renowned auto manufacturers, home appliance manufacturers, and smartphone manufacturers globally[19]. Financial Performance - The financial results for the fiscal year ended March 31, 2022, reflect the Group's commitment to quality and customer satisfaction, although specific financial figures are not detailed in the provided content[18]. - The Group recorded sales revenue of approximately RMB4,419,887,000, representing an increase of approximately 41.8% compared to the same period last year[20]. - The gross profit margin increased from approximately 24.6% in the previous year to approximately 26.5% for the Year under Review[20]. - The net profit for the Year under Review amounted to approximately RMB667,404,000, representing a year-on-year increase of approximately 70.3%[20]. - Basic earnings per share amounted to approximately RMB1.75, representing an increase of approximately 70% compared with the same period last year[20]. - The demand for CNC machine tools from various downstream sub-sectors was exceptionally strong, particularly in the new energy vehicle parts manufacturing sector[23]. - The overseas CNC machine tool market has fully recovered, with demand significantly increasing compared to the previous year, reaching the highest level in history[24]. Operational Strategy - The Group continues to focus on professional customization and development of CNC high precision machine tools to meet diverse industry needs[19]. - The Group's strategic direction includes enhancing its market presence and expanding its product offerings to cater to evolving customer demands[18]. - The Group aims to clarify its development goals, expand production capacity, and improve operational efficiency to increase market share of key products[28]. - The Group has committed to enhancing its marketing, product lines, and cost control to achieve solid operational results[24]. - The Group plans to strengthen production capacity expansion and improve product cost-effectiveness to enhance core competitiveness[37]. - The company has increased its production capacity and is expanding its operations to meet the growing demand for CNC machine tools in the Chinese market[76]. Corporate Governance - The company has adopted the Corporate Governance Code to strengthen management accountability and investor confidence[104]. - The company has complied with all code provisions of the Corporate Governance Code during the year[105]. - The board is responsible for determining the business and investment plans of the group and preparing annual financial budgets[107]. - The company has a structured approach to risk management and control, covering potential legal actions faced by directors[105]. - The company has a diverse board with no material relationships among members[107]. - The company periodically reviews its corporate governance practices to ensure compliance with the CG Code[104]. Risk Management and Internal Control - The Group has established a risk management and internal control system to manage risks, including ESG risks, and continuously reviews its effectiveness[164]. - The Audit Committee assists the Board in overseeing the risk management and internal control systems, ensuring an annual review of their effectiveness[167]. - The Board has determined that the Company's risk management and internal control systems are effective and adequate based on reports from the internal audit department and ESG working group[170]. - Procedures have been established to safeguard assets, control capital expenditure, and ensure the reliability of financial information used for business[169]. Environmental, Social, and Governance (ESG) Initiatives - The Group emphasizes the integration of ESG concepts into its risk management system, which is crucial for its daily operations and governance structure[177]. - The Group aims to minimize its potential adverse impact on the environment and preserve natural resources as part of its commitment to sustainability[177]. - The Group treats its stakeholders with mutual respect and care, valuing their contributions and maintaining strong relationships[177]. - The Group's mission is to facilitate human creativity and innovation through the provision of high precision machine tools[177]. - The Group has received the ISO 14001:2015 Environmental Management System certificate, indicating its commitment to minimizing environmental impact[193]. - The Group has implemented various emission reduction measures, including encouraging staff to use public transport and electronic communication to reduce travel[195]. Leadership and Management - Dr. Tang was appointed as the CEO and Chairman of the Company on April 1, 2022, and has been responsible for overall management and strategic planning since joining the Group in November 2005[83]. - The management team has extensive backgrounds in engineering and business strategy, contributing to the Group's competitive edge in the industry[87]. - The leadership structure is designed to support the company's growth strategy and operational effectiveness in a competitive market[88]. - The company has a strong management team with diverse backgrounds in engineering, finance, and wireless communications technology[90][93][95]. Shareholder Engagement and Communication - The Company maintains a proactive investor relations policy, conducting analysts' briefings and participating in investor conferences[161]. - The Group's website provides timely access to press releases, financial reports, and announcements for investors[161]. - The Company encourages shareholders to submit proposals and enquiries in writing to facilitate effective communication[160][162]. Future Outlook - The management is confident in achieving outstanding results in the upcoming financial year, potentially exceeding the previous year's performance due to positive market demand and a substantial order backlog[79]. - The company has been operational for 19 years, gaining a deeper understanding of the market environment and its business model, which supports its confidence in achieving medium and long-term development goals[80].