Revenue and Profitability - The revenue for the six months ended June 30, 2024, was approximately RMB 41.4 million, an increase of about 18.1% compared to RMB 35.1 million for the same period in 2023[1]. - The revenue from the automatic meter reading and other business segments increased by approximately 130.4% to about RMB 18.3 million compared to the same period in 2023[1]. - The revenue from the smart manufacturing and industrial automation segment decreased by approximately 46.9% to about RMB 14.4 million compared to the same period in 2023[1]. - The gross profit increased by approximately 86.6% to about RMB 15.3 million, with the gross profit margin rising from approximately 23.4% in 2023 to 37.0% in the current period[1]. - The company reported a net loss of RMB 24,700,000 for the six months ended June 30, 2024, compared to a net loss of RMB 32,928,000 for the same period in 2023, showing an improvement in loss by approximately 25%[25]. - Basic and diluted loss per share for the six months ended June 30, 2024, was RMB (0.097) based on a weighted average of 255,729,000 shares, compared to RMB (0.173) based on 189,554,000 shares in 2023[25]. Financial Position - The total assets as of June 30, 2024, amounted to RMB 294.6 million, compared to RMB 250.5 million as of December 31, 2023[4]. - The total liabilities as of June 30, 2024, were RMB 169.9 million for non-current liabilities and RMB 184.4 million for current liabilities[6]. - As of June 30, 2024, the group's net liabilities amounted to approximately RMB 59.7 million, indicating significant uncertainty regarding the group's ability to continue as a going concern[8]. - The company's cash and cash equivalents amounted to RMB 4,497,000 as of the reporting date[14]. - As of June 30, 2024, the group's current assets were approximately RMB 154.1 million, with cash and cash equivalents totaling approximately RMB 32.5 million[53]. - As of June 30, 2024, the total interest-bearing liabilities of the group amounted to approximately RMB 261.2 million, an increase from RMB 193.9 million as of December 31, 2023[54]. Acquisition and Business Development - The group completed the acquisition of Zhongyi (BVI) International Limited on March 27, 2024, establishing a new business segment to provide wind farm management and operation services in China[8]. - The company agreed to acquire all shares of Zhongyi (BVI) for a total consideration of RMB 110,000,000, with potential adjustments based on the sale agreement[66]. - The acquisition of Zhongyi constitutes a major transaction as the applicable percentage exceeds 25% but is below 100%, requiring compliance with listing rules[67]. - The identifiable assets of Zhongyi (BVI) primarily consist of wind farm maintenance contracts[13]. - The wind farm maintenance service market in China has experienced a compound annual growth rate of 16.42% from 2016 to 2023[39]. Operational Performance - The company reported other comprehensive losses of RMB 469,000 due to foreign exchange differences for the period[3]. - The company reported a foreign exchange loss of RMB (1,067,000) in 2024, compared to a gain of RMB 967,000 in 2023, indicating a significant shift in foreign exchange impact[20]. - The company has implemented operational plans to control costs and generate sufficient cash flow to meet current and future obligations[8]. - The company has three reporting segments: Automatic Meter Reading, Smart Manufacturing and Industrial Automation, and Wind Farm Maintenance[15]. - The company’s operating loss before tax for the six months ended June 30, 2024, was RMB 24,195,000[16]. Research and Development - The R&D team consists of 53 employees, representing about 34% of the total workforce, focusing on the design and development of power line carrier chips and software for the oil and petrochemical industry[45]. - The group has established a substantial intellectual property portfolio, including 20 patents, 129 software copyrights, and 10 registered integrated circuit layout designs[45]. - Research and development for electric line communication technology received approximately HKD 95.7 million from the initial public offering[69]. Market Trends and Future Outlook - The rapid development of the smart manufacturing industry is expected to create significant opportunities for the company, with goals set for 70% of large-scale manufacturing enterprises to achieve digital transformation by 2025[38]. - The group anticipates continued growth in the electric line carrier communication technology market, driven by government support for smart grids and smart city construction, as well as the expansion of the overseas smart meter market under the Belt and Road Initiative[61]. - The group is focusing on the development of broadband dual-mode communication products to enhance competitiveness in the domestic market[59]. - The demand for broadband dual-mode communication modules from the State Grid is expected to exceed 8 million units in 2024[37]. Corporate Governance - The company adheres to corporate governance standards and continuously reviews their effectiveness[65]. - The company has implemented a set of standards for directors' securities trading, confirming compliance during the reporting period[65]. - The Audit Committee has reviewed the interim financial performance and found no disagreements regarding accounting practices[74].

Business Development and Strategy - The company has developed a broadband dual-mode chip and module, which is expected to contribute positively to sales starting January 2024[8]. - The acquisition of Zhongyi (BVI) International Limited and its subsidiaries, which focus on wind farm operation and maintenance services, was completed on March 27, 2024, anticipated to bring new profits and business opportunities starting in 2024[8]. - The company is actively restructuring its business framework and expanding sales channels to improve operational efficiency amid a challenging business environment[8]. - The company has been continuously investing in research and development of broadband carrier technology, streetlight series products, and photovoltaic series products to seize market opportunities[8]. - The company is focusing on broadband dual-mode communication technology applications in low-voltage distribution networks and measurement switches, enhancing competitiveness in domestic markets[72]. - The company aims to strengthen its expertise in integrated solutions for smart factories in oil refining and pipeline construction, leveraging its R&D resources and external collaborations[74]. - The company is actively promoting its broadband dual-mode communication products in various provincial markets to expand its market presence[72]. Financial Performance - In 2023, the group recorded a revenue of approximately RMB 94.9 million, a decrease of about 36.7% compared to RMB 149.9 million in 2022[18]. - The automatic meter reading and other business segment generated revenue of approximately RMB 42.3 million, down 52.0% from RMB 88.1 million in 2022, accounting for about 44.6% of total revenue[18]. - The smart manufacturing and industrial automation segment recorded revenue of approximately RMB 52.5 million, a decrease of about 14.9% from RMB 61.7 million in 2022, contributing approximately 55.4% to total revenue[21]. - The group’s loss attributable to equity shareholders increased from approximately RMB 118.6 million in 2022 to approximately RMB 138.5 million in the current year[22]. - Revenue decreased from approximately RMB 149.9 million in the same period of 2022 to approximately RMB 94.9 million, a decline of about 36.7%[24]. - Gross profit fell from approximately RMB 39.1 million in 2022 to approximately RMB 15.6 million, a decrease of about 60.1%, with the gross margin dropping from 26.1% to 16.4%[27]. - The company confirmed a financial asset and contract asset impairment loss provision of approximately RMB 22.0 million, up from RMB 7.4 million in the same period of 2022[31]. - Other income for the review year was approximately RMB 4.5 million, compared to a loss of RMB 0.6 million in the same period of 2022, primarily due to the absence of a one-time loss from the cancellation of a subsidiary[28]. - Research and development expenses decreased by approximately 8.3% to about RMB 20.4 million, mainly due to reduced costs associated with the new broadband dual-mode product[34]. - Selling and marketing expenses decreased by approximately 31.6% to about RMB 11.8 million, attributed to better control over marketing costs[32]. - Financing costs increased by approximately 60.7% to about RMB 11.8 million, mainly due to increased interest expenses from refinancing and bank borrowings[35]. - The company recorded an income tax expense of approximately RMB 23.2 million, compared to a tax credit of RMB 17.9 million in the same period of 2022, primarily due to deferred tax expenses[36]. Market Trends and Opportunities - The demand for broadband dual-mode communication modules from the State Grid is expected to exceed 80 million units in 2024, indicating significant market growth potential[13]. - The smart manufacturing industry is projected to expand rapidly, driven by government policies and the push for digital transformation, presenting opportunities for the group[16]. - The market for power line carrier communication technology is expected to maintain a positive development trend in the coming years, driven by government support for smart grid and smart city initiatives[73]. - The industrial automation market in China is projected to continue healthy growth due to low current penetration rates and rising labor costs[73]. Corporate Governance and Management - The company is committed to enhancing corporate governance to maintain shareholder value[9]. - The company has a strong management team with Zhang Baojun serving as president, responsible for product research and development in automatic meter reading[90]. - The board includes independent directors with significant experience in law and finance, contributing to corporate governance[84]. - The company is actively involved in compliance and risk management, leveraging the expertise of its legal advisors[85]. - The board is committed to maintaining high levels of corporate governance, which is crucial for protecting shareholder interests and enhancing corporate value[195]. Shareholder and Capital Management - The company successfully issued a total of 274,000,000 new shares at a subscription price of HKD 0.064 per share, representing an 11.1% discount to the closing price of HKD 0.072 on May 22, 2023[51]. - The net proceeds from the May 2023 subscription amounted to approximately HKD 17,516,000, which will be used to reduce the group's debt without increasing financing costs[52][53]. - The company raised approximately HKD 17.5 million from the issuance of 274 million shares in May 2023, which was fully utilized to repay outstanding debts, thereby reducing the group's debt-to-equity ratio[179]. - In June 2023, the company raised approximately HKD 23.8 million from the issuance of 42.62 million shares, with the funds allocated for debt repayment and general operational expenses[180]. - The company reported zero distributable reserves as of December 31, 2023, compared to zero in 2022[124]. - The board does not recommend the distribution of a final dividend for the review year[123]. Environmental and Compliance - The company’s two main operating subsidiaries have obtained ISO 14001:2015 environmental management system certification, valid until May 2024 and December 2024 respectively[107]. - There were no pollution-related notifications or warnings received during the review period, and the company was not fined or subjected to legal actions for violations of environmental laws in China[107]. - The company has implemented several policies in accordance with environmental regulations, focusing on assessing environmental impacts during the design, research, and development stages[107]. - The company’s senior management has established a clear environmental management framework and system to ensure compliance with domestic and international standards[107]. - The group has been closely monitoring the latest developments in domestic and international environmental laws and regulations[107]. Employee and Training - The group has maintained a stable core management team and focuses on employee training and development to ensure technical proficiency[110]. - Employee costs, including director remuneration, amounted to RMB 36.2 million for the year, down from RMB 38.9 million in 2022, representing a decrease of approximately 6.9%[187]. - The company emphasizes continuous training for employees to maintain current skills, providing onboarding and on-the-job training[187]. - The company has adopted an employee stock ownership plan to incentivize and reward qualified participants contributing to business achievements[187].

Revenue Performance - Revenue for the year ended December 31, 2023, was approximately RMB 94.9 million, a decrease of about 36.7% compared to RMB 149.9 million in 2022[4] - Revenue from the Automatic Meter Reading segment decreased by approximately 52.0% to about RMB 42.3 million, down from RMB 88.1 million in 2022[4] - Revenue from the Smart Manufacturing and Industrial Automation segment decreased by approximately 14.9% to about RMB 52.5 million, down from RMB 61.7 million in 2022[4] - The total revenue for the group in 2023 was RMB 94,868,000, compared to RMB 149,851,000 in 2022, representing a decrease of approximately 36.7%[23] - The revenue from automatic meter reading services was RMB 42,337,000 in 2023, down from RMB 88,140,000 in 2022, indicating a decline of about 52.0%[23] - The revenue from smart manufacturing and industrial automation services was RMB 44,662,000 in 2023, compared to RMB 53,804,000 in 2022, reflecting a decrease of approximately 16.9%[23] - The expected revenue from contracts with customers for the next year is RMB 35,133,000, down from RMB 64,752,000 in 2022, a decline of about 45.3%[24] Financial Losses - The net loss attributable to equity shareholders for the year was approximately RMB 138.5 million, compared to a net loss of RMB 118.6 million in 2022[4] - The company reported a total comprehensive loss of RMB 146,571,000 for the year ended December 31, 2023, compared to a loss of RMB 132,903,000 in 2022, representing an increase in loss of approximately 10.3%[7] - For the year ended December 31, 2023, the group reported a net loss of approximately RMB 143,648,000[15] - The annual loss for the group in 2023 was RMB 138,514,000, compared to RMB 118,584,000 in 2022, indicating an increase in losses of approximately 16.5%[41] Assets and Liabilities - The company's total assets decreased to RMB 250,488,000 as of December 31, 2023, down from RMB 341,340,000 in 2022, indicating a decline of about 26.7%[9] - The company’s cash and cash equivalents decreased significantly to RMB 35,919,000 in 2023 from RMB 86,652,000 in 2022, a reduction of approximately 58.5%[8] - The company’s non-current liabilities increased to RMB 114,622,000 in 2023 from RMB 17,718,000 in 2022, reflecting a substantial rise of about 547.5%[9] - The company’s total current liabilities decreased to RMB 170,399,000 in 2023 from RMB 249,241,000 in 2022, a decrease of approximately 31.5%[9] - The company’s equity attributable to owners of the parent decreased to RMB 222,000 in 2023 from RMB 158,000 in 2022, an increase of approximately 40.5%[8] - As of December 31, 2023, the group's net liabilities amounted to approximately RMB 34,533,000, indicating significant uncertainty regarding the group's ability to continue as a going concern[15] Cash Flow and Financial Management - The management has implemented cost control measures and timely collection of receivables to generate sufficient operating cash flow[15] - The financial statements have been prepared on a going concern basis, despite the significant uncertainties mentioned[17] - The group continues to focus on its operational plans to manage costs effectively and ensure cash flow generation[15] - The company plans to rely on internal resources, including cash and cash equivalents, to meet its liquidity needs[106] Research and Development - Research and development expenses amounted to approximately RMB 20,406,000 in 2023, down from RMB 22,265,000 in 2022, reflecting a decrease of about 8.3%[38] - The total research and development costs, including employee costs and other expenses, were approximately RMB 14,601,000 in 2023, compared to RMB 14,257,000 in 2022, showing a slight increase of about 2.4%[38] - The R&D team grew to 55 employees, representing about 35% of the total workforce, up from 47 employees and approximately 31% in 2022[77] Dividends and Shareholder Returns - The board of directors did not recommend the payment of a final dividend for the year ended December 31, 2023[4] - The company does not recommend any dividend payment for the years ended December 31, 2023, and 2022[39] Acquisitions and Strategic Initiatives - The group completed the acquisition of Zhongyi (BVI) International Limited on March 27, 2024, establishing a new business segment to provide wind farm management and operation services in China[19] - The company paid RMB 110,000,000 for the acquisition of Zhongyi (BVI), with RMB 60,000,000 already paid as a deposit and the remaining RMB 50,000,000 due upon completion[57] - The financial performance of Zhongyi (BVI) will be consolidated into the company's financial statements following the completion of the acquisition on March 27, 2024[125] Market and Industry Trends - The group is expanding its market in smart city lighting, smart air conditioning, and integrated energy management systems, driven by government support for smart grids and energy efficiency initiatives[132] - The industrial automation market in China is expected to continue healthy growth due to low penetration rates and rising labor costs, particularly in the petrochemical sector[133] - The group aims to enhance its expertise in integrated solutions for smart factories in oil refining and pipeline construction, leveraging its R&D resources and partnerships[134] Employee and Management Compensation - The management team’s total compensation for 2023 was RMB 9,182,000, an increase from RMB 8,880,000 in 2022[56] - Employee costs, including directors' remuneration, were approximately RMB 36.2 million for the year, compared to RMB 38.9 million in 2022[155] - The group had a total of 155 employees as of December 31, 2023, up from 151 employees in 2022[155] Financial Reporting and Compliance - The independent auditor confirmed that the financial statements for the year ended December 31, 2023, were consistent with the amounts reported by the group[159] - The group has adopted new Hong Kong Financial Reporting Standards effective from January 1, 2023, which do not have a significant impact on the financial position and performance for the current and prior years[19]

Revenue Performance - Revenue for the year ended December 31, 2023, was approximately RMB 94.9 million, a decrease of about 36.7% compared to RMB 149.9 million in 2022[4] - Revenue from the Automatic Meter Reading segment decreased approximately 52.0% to about RMB 42.3 million, down from RMB 88.1 million in 2022[4] - Revenue from the Smart Manufacturing and Industrial Automation segment decreased approximately 14.9% to about RMB 52.5 million, down from RMB 61.7 million in 2022[4] - The total revenue for the group in 2023 was RMB 94,868,000, compared to RMB 149,851,000 in 2022, indicating a decrease of approximately 36.7%[23] - The revenue from automatic meter reading and related services was RMB 42,337,000 in 2023, down from RMB 88,140,000 in 2022, representing a decline of about 52.0%[23] - The revenue from smart manufacturing and industrial automation services was RMB 44,662,000 in 2023, compared to RMB 53,804,000 in 2022, reflecting a decrease of approximately 17.0%[23] Financial Losses - The net loss attributable to equity shareholders for the year was approximately RMB 138.5 million, compared to a net loss of RMB 118.6 million in 2022[4] - The company reported a total comprehensive loss of RMB 146,571,000 for the year ended December 31, 2023, compared to a loss of RMB 132,903,000 in 2022, representing an increase in loss of approximately 10.3%[7] - For the year ended December 31, 2023, the group reported a net loss of approximately RMB 143,648,000[15] - The company recorded a pre-tax loss of RMB 120,436,000 in 2023, an improvement from a loss of RMB 137,025,000 in 2022[33] - The annual loss for the group in 2023 was RMB 138,514,000, compared to RMB 118,584,000 in 2022, indicating an increase in loss of approximately 16.5%[41] Assets and Liabilities - Total assets decreased to RMB 250,488,000 in 2023 from RMB 341,340,000 in 2022, indicating a decline of approximately 26.7%[8] - The company's total liabilities increased to RMB 250,488,000 in 2023 from RMB 341,340,000 in 2022, showing a rise of about 26.7%[9] - The company reported a significant increase in borrowings, with non-current borrowings rising to RMB 108,705,000 in 2023 from RMB 2,683,000 in 2022[9] - As of December 31, 2023, the group's net liabilities amounted to approximately RMB 34,533,000, indicating significant uncertainty regarding the group's ability to continue as a going concern[15] - As of December 31, 2023, the total interest-bearing liabilities of the group amounted to RMB 193.9 million, an increase from RMB 132.8 million as of December 31, 2022[108] Cash Flow and Financing - The cash and cash equivalents held by the group as of December 31, 2023, amounted to approximately RMB 35.9 million, compared to RMB 86.7 million as of December 31, 2022[107] - Financing costs increased to RMB 11,823,000 in 2023 from RMB 7,358,000 in 2022, primarily due to higher interest expenses on bank loans[35] - The company completed a share subscription on June 2, 2023, issuing a total of 274,000,000 shares at a subscription price of HKD 0.064 per share, representing an 11.1% discount to the market price[111] - The net proceeds from the May 2023 subscription were approximately HKD 17.5 million, which were fully utilized to reduce the group's debt[111] - The net proceeds from the June 2023 subscription totaled approximately HKD 23.8 million, with plans to allocate HKD 10 million for business development funds[149][150] Research and Development - Research and development expenses for the automatic meter reading segment increased to CNY (20,406) thousand in 2023 from CNY (22,265) thousand in 2022, showing a focus on innovation despite overall revenue decline[31] - The R&D team grew to 55 employees, representing about 35% of the total workforce, up from 47 employees and approximately 31% in 2022[77] - The total research and development costs, including employee costs and other expenses, were approximately RMB 14,601,000 in 2023, compared to RMB 14,257,000 in 2022, showing a slight increase of about 2.4%[38] Strategic Initiatives - The company plans to continue focusing on energy-saving and environmental protection products, particularly in the areas of streetlight control and photovoltaic power management[31] - The group aims to enhance its expertise in integrated solutions for smart factories in oil refining and pipeline construction, leveraging its R&D resources and partnerships[134] - The group plans to develop proprietary smart factory application programming interfaces and visual management platforms, which will enhance its core competitiveness[134] Market Outlook - The demand for charging piles and energy storage is expected to grow rapidly due to the integration of new energy and distributed photovoltaic generation[66] - The "14th Five-Year Plan" aims for 70% of large-scale manufacturing enterprises to achieve digital networking by 2025, which will expand the smart manufacturing market[67] - The industrial automation market in China is expected to continue healthy growth due to low penetration rates and rising labor costs, particularly in the petrochemical sector[133] Dividend and Shareholder Returns - The board of directors did not recommend the payment of a final dividend for the year ended December 31, 2023[4] - The company does not recommend any dividend payment for the years ended December 31, 2023, and 2022[39]

Financial Performance - The company recorded a revenue of approximately RMB 35.1 million for the period, a decrease of about 43.0% compared to RMB 61.6 million in the same period of 2022[10]. - The group's revenue from the smart manufacturing and industrial automation segment was approximately RMB 27.2 million, a decrease of about 28.3% compared to RMB 37.9 million in the same period of 2022, accounting for approximately 77.4% of total revenue[11]. - Gross profit decreased from approximately RMB 16.1 million in 2022 to approximately RMB 8.2 million, representing a decline of about 48.9%[18]. - Gross margin fell from approximately 26.1% in 2022 to about 23.4% in the current period, a decrease of approximately 2.7%[19]. - The group recorded a loss attributable to the owners of the company of approximately RMB 32.9 million, a slight decrease from approximately RMB 34.7 million in the same period of 2022[29]. - Total comprehensive loss for the period was RMB 36,955 thousand, down from RMB 41,952 thousand in the previous year, indicating a reduction of about 12%[104]. - The company reported a net loss of RMB 32,928,000 for the six months ended June 30, 2023, compared to a net loss of RMB 34,651,000 in the same period of 2022[164]. Revenue Breakdown - The automatic meter reading and other business segment generated a revenue of approximately RMB 7.9 million, down approximately 66.6% from RMB 23.7 million in the same period of 2022, accounting for about 22.6% of the total revenue[10]. - Revenue from automatic meter reading and other businesses totaled RMB 7,929,000, down 66% from RMB 23,710,000 in the previous year[152]. - Revenue from smart manufacturing and industrial automation business was RMB 21,123,000, a decline of 38% from RMB 34,197,000 in 2022[152]. Cash Flow and Financing - The company faced cash shortages that increased the difficulty of undertaking new projects, primarily due to the repayment of a large loan during the period[10]. - The company's cash and cash equivalents totaled approximately RMB 51.3 million as of June 30, 2023, compared to RMB 86.7 million as of December 31, 2022[30]. - The net cash used in operating activities was RMB 39,570 thousand for the six months ended June 30, 2023, compared to RMB 23,661 thousand in the same period of 2022, indicating an increase in cash outflow of about 67%[112]. - Financing costs surged by approximately 2391.2% to about RMB 9.6 million, mainly due to increased interest expenses from other borrowings[27]. - The company raised approximately HKD 17.5 million through a share subscription in May 2023, which was fully utilized to repay certain outstanding debts[95]. Research and Development - Research and development expenses increased by approximately 3.9% to about RMB 9.5 million, mainly due to higher employee costs and testing expenses related to new broadband dual-mode products[26]. - The R&D team consisted of 48 employees, accounting for approximately 32% of the total workforce, focusing on power line carrier communication products and applications[14]. - The company is developing new broadband dual-mode products and expanding its broadband power line communication products into more provincial markets in China[62]. Market Conditions and Strategic Initiatives - The company is exploring the industrial automation system field, particularly in maintenance and safety integrity systems for the oil and petrochemical industry[6]. - The market potential for smart manufacturing is expected to expand significantly, driven by government support and the digital transformation of the manufacturing sector[7]. - The company is experiencing various uncertainties in the market due to U.S. sanctions affecting domestic chip supply and delivery delays[6]. - The company plans to form strategic alliances with international system integrators to enhance its smart manufacturing and industrial automation business segments[63]. Share Capital and Corporate Governance - The company completed a share subscription on May 22, 2023, issuing 274 million shares at a subscription price of HKD 0.064 per share, raising approximately HKD 17.5 million net[34]. - A second share subscription was completed on July 19, 2023, issuing 42.62 million shares at a subscription price of HKD 0.56 per share, raising approximately HKD 23.8 million net[40]. - The company did not recommend the payment of an interim dividend for the period, consistent with the previous year[81]. - The company has adopted a corporate governance code and has complied with its provisions during the review period[83]. Assets and Liabilities - As of June 30, 2023, the group's current assets were approximately RMB 193.2 million, down from RMB 233.3 million as of December 31, 2022[30]. - Total interest-bearing liabilities amounted to approximately RMB 133.9 million as of June 30, 2023, slightly up from RMB 132.8 million as of December 31, 2022[32]. - The net debt-to-equity ratio was approximately 156.1% as of June 30, 2023, significantly increased from 62.0% as of December 31, 2022[32]. - The company's total assets amounted to RMB 294,691 thousand, down from RMB 341,340 thousand, indicating a decrease of approximately 14%[107]. Employee and Management Information - As of June 30, 2023, the company had 150 employees, a slight decrease from 151 employees at the end of 2022, with total employee costs around RMB 171 million[96]. - The total remuneration for directors and key management personnel for the six months ended June 30, 2023, was RMB 4,350,000, an increase from RMB 3,945,000 in the same period of 2022[190]. - The company has implemented training and development programs for employees to enhance their skills and capabilities[98].

Financial Performance - The group's total revenue for the year was approximately RMB 149.8 million, a decrease of about 39.6% from RMB 248.2 million in 2021[15]. - Revenue from the automatic meter reading and other business segment increased to approximately RMB 88.1 million, representing an increase of about 82.6% compared to RMB 48.3 million in 2021, accounting for approximately 58.8% of total revenue[15]. - The smart manufacturing and industrial automation business segment recorded revenue of approximately RMB 61.7 million, a decrease of about 69.1% from RMB 199.9 million in 2021, accounting for approximately 41.2% of total revenue[16]. - The group reported a loss attributable to equity shareholders of approximately RMB 118.6 million, an increase from RMB 55.3 million in the same period of 2021[17]. - Gross profit decreased to approximately RMB 39.1 million from RMB 43.0 million in 2021, with a gross margin increase to approximately 26.1% from 17.3%[24]. - The company recorded a net loss of approximately RMB 119.1 million for the review year, with current liabilities exceeding current assets by RMB 16.0 million[163]. Cost Management - The company will maintain a lean cost strategy to reduce operating expenses in response to future risks and pressures[7]. - The group maintained a lean cost strategy to reduce operating expenses in response to revenue declines due to the pandemic[16]. - Sales and marketing expenses decreased by approximately 30.0% to about RMB 17.3 million from RMB 24.7 million in the same period of 2021[27]. - General and administrative expenses reduced by approximately 9.2% to about RMB 55.2 million from RMB 60.8 million in the same period of 2021[28]. - Financing costs decreased by approximately 22.4% to about RMB 7.4 million from RMB 9.5 million in the same period of 2021[31]. Research and Development - The R&D team consisted of 47 employees as of December 31, 2022, representing about 31% of the total workforce, focusing on power line carrier chip design and software development for the oil and petrochemical industry[20]. - The company is strategically investing in product development in areas such as broadband technology, streetlight control, building energy management, and photovoltaic management to seize market opportunities[6]. - Research and development expenses increased by approximately 13.6% to about RMB 22.3 million from RMB 19.6 million in the same period of 2021, mainly due to increased amortization of capitalized development costs related to broadband technology[30]. Market Opportunities - The market demand for power line carrier communication products remains stable, driven by the Chinese government's push for broadband technology and smart city construction[6]. - The overall market potential for smart meters is large, driven by the integration of distributed energy sources and the increasing demand for charging stations and energy storage[10]. - The rapid development of the intelligent manufacturing industry is anticipated to create significant opportunities for the company, with government policies supporting digitalization and networking in manufacturing[11]. - The company believes that the industrial automation market in China will continue to grow due to low penetration rates and rising labor costs[55]. Corporate Governance - The company has adhered to the corporate governance code throughout the review year, except for the deviation regarding independent non-executive directors' attendance at the annual general meeting[171]. - The board comprises a total of six directors, including three independent non-executive directors, fulfilling the requirement of at least one with appropriate professional qualifications[182]. - The company has established a code of conduct for directors' securities transactions, ensuring compliance with the standards set forth in the listing rules[173]. - The company aims to maintain a suitable balance of diversity across all levels of the organization, including gender, age, and professional experience[200]. Shareholder Information - The total issued share capital of the company as of December 31, 2022, was approximately HKD 185,709, divided into 1,857,088,606 ordinary shares with a par value of HKD 0.0001 each[84]. - The largest customer accounted for approximately 24.3% of the total revenue for the year, down from 36.9% in 2021, while the top five customers contributed about 63.6% of total revenue, compared to 74.0% in 2021[148]. - Major shareholders include Seashore Fortune with 93,543,624 shares (5.0%) and SB Asia Investment Fund II L.P. with 197,340,537 shares (10.6%)[122]. Debt and Financing - The company extended the maturity date of the convertible bonds by 12 months to August 13, 2022, through a second amendment and extension agreement[43]. - The company fully redeemed its convertible bonds with a principal amount of HKD 150 million on September 2, 2022, and paid all accrued interest[43]. - The company plans to utilize the net proceeds from the general mandate subscription, totaling approximately HKD 14.5 million, to repay outstanding debts and reduce its debt-to-asset ratio[156]. - The company is in discussions with creditors to extend the repayment date of a HKD 120 million loan due on August 11, 2023[163]. Risk Management - The group faced various major risks and uncertainties, which are discussed in the relevant sections of the report[86]. - The group has not entered into any foreign currency forward contracts or other hedging instruments to mitigate foreign exchange risks during the review year[97]. Strategic Initiatives - The company plans to develop new broadband dual-mode products and expand its market presence in the broadband power line communication sector[55]. - The company aims to form strategic alliances with international system integrators to enhance its smart manufacturing and industrial automation business[56]. - The company is exploring industrial automation systems, particularly in the maintenance and safety integrity systems for the oil and petrochemical industry, utilizing its core technological capabilities[10].

香港交易及結算所有限公司及香港聯合交易所有限公司對本公告的內容 概不負責，對其準確性或完整性亦不發表任何聲明，並明確表示，概不對 因本公告全部或任何部分內容而產生或因倚賴該等內容而引致的任何損 失承擔任何責任。 RISECOMM GROUP HOLDINGS LIMITED 瑞 斯 康 集 團 控 股 有 限 公 司 （於開曼群島註冊成立之有限公司） （股份代號：1679） 截 至2022年12月31日 止 年 度 的 年 度 業 績 公 告 財務摘要 • 營 業 額 約 為 人 民 幣149.8百 萬 元（2021年：約 人 民 幣248.2百 萬 元）， 下降約39.6%。 • 來自自動抄表（「自動抄表」）及其他業務分部的營業額較2021年同期 上漲約82.6%至約人民幣88.1百萬元（2021年：約人民幣48.3百萬元）。 • 來自智慧製造及工業自動化（「智慧製造及工業自動化」）業務分部的 營業額較2021年同期減少約69.1%至約人民幣61.7百萬元（2021年：約 人民幣199.9百萬元）。 ...

Revenue Performance - The company recorded a revenue of approximately RMB 616 million for the period, representing an increase of about 63.4% compared to RMB 377 million in the same period of 2021[13]. - The smart manufacturing and industrial automation segment achieved a revenue of approximately RMB 379 million, up approximately 439.0% from RMB 70 million in the same period of 2021, accounting for about 61.5% of total revenue[16]. - The automatic meter reading and other business segment reported a revenue of approximately RMB 237 million, down about 22.7% from RMB 307 million in the same period of 2021, contributing approximately 38.5% to total revenue[16]. - The company's revenue increased from approximately RMB 37.7 million in the same period of 2021 to approximately RMB 61.6 million, representing a growth of about 63.4%[21]. - The smart manufacturing and industrial automation segment's revenue rose by approximately 439.0%, contributing RMB 17.5 million and RMB 18.2 million from safety production projects and software licensing projects, respectively[21]. - For the six months ended June 30, 2022, the group’s revenue for the six months ended June 30, 2022, was RMB 61,611 thousand, compared to RMB 37,705 thousand for the same period in 2021, representing a growth of 63.5%[171]. - Revenue from the automatic meter reading and other businesses was RMB 23,710 thousand, down from RMB 30,673 thousand in the previous year, a decrease of 22.7%[171]. - The smart manufacturing and industrial automation business generated revenue of RMB 37,901 thousand, significantly up from RMB 7,032 thousand, marking an increase of 438.5%[179]. Financial Losses - The company experienced a loss attributable to owners of the company increasing from approximately RMB 17.5 million in the same period of 2021 to approximately RMB 34.7 million[16]. - The company reported a loss attributable to owners of approximately RMB 34.7 million, compared to a loss of about RMB 17.5 million in the same period of 2021[31]. - The operating loss increased to RMB 25.8 million compared to RMB 8.3 million in the previous year, reflecting a significant deterioration in operational performance[108]. - The net loss attributable to the owners of the company for the period was RMB 34.7 million, compared to RMB 17.5 million in 2021, marking an increase of 98.5%[111]. - The company incurred a total comprehensive loss of RMB (41,952) thousand for the six months ended June 30, 2022, compared to a loss of RMB (13,760) thousand in the same period of 2021[121]. - The group experienced a pre-tax loss of RMB 34,096 thousand for the six months ended June 30, 2022, compared to a loss of RMB 22,230 thousand in the previous year[184]. Cost and Expenses - Gross profit decreased from approximately RMB 16.9 million in 2021 to approximately RMB 16.1 million, a decline of about 4.9%, with the gross margin dropping from approximately 44.9% to about 26.1%[22]. - Other income decreased by approximately 47.5% from RMB 4.4 million in 2021 to about RMB 2.3 million, primarily due to a reduction in government subsidies[23]. - General and administrative expenses decreased by approximately 3.2% from RMB 24.7 million in 2021 to about RMB 23.9 million, mainly due to reduced depreciation of machinery and strict cost control measures[28]. - The cost of sales for the group was RMB 45,521 thousand for the six months ended June 30, 2022, compared to RMB 20,782 thousand in the same period of 2021, reflecting an increase of 118.5%[179]. - The cost of sold inventory for the same period was RMB 27,979 thousand, significantly higher than RMB 14,001 thousand in 2021, reflecting a 99% increase[192]. Research and Development - As of June 30, 2022, the R&D team consisted of 50 employees, maintaining a stable workforce compared to 51 employees in the same period of 2021[20]. - Research and development expenses for the period were RMB 9.1 million, slightly up from RMB 9.0 million in the previous year, showing a commitment to innovation[108]. - Research and development expenses totaled RMB 9,122 thousand for the period, slightly up from RMB 9,078 thousand in the previous year[179]. - The company has established a significant intellectual property portfolio, including 25 patents and 129 software copyrights, reflecting its R&D achievements in power line carrier communication technology[20]. Assets and Liabilities - As of June 30, 2022, the group's current assets were approximately RMB 229.2 million, down from RMB 263.2 million as of December 31, 2021[34]. - Cash and cash equivalents totaled approximately RMB 64.1 million, a decrease from RMB 91.7 million as of December 31, 2021[34]. - Total interest-bearing liabilities amounted to approximately RMB 145.4 million, an increase from RMB 133.5 million as of December 31, 2021[34]. - The net debt-to-equity ratio was approximately 53.4% as of June 30, 2022, compared to 21.6% as of December 31, 2021[34]. - The company reported a net cash outflow from operating activities of RMB (23,661) thousand for the six months ended June 30, 2022, compared to a net inflow of RMB 29,707 thousand in the same period of 2021[121]. - The company’s total liabilities amounted to RMB 268,868 thousand, compared to RMB 277,746 thousand, indicating a slight decrease of about 3.2%[116]. - Current liabilities exceeded current assets by approximately RMB 438,000 as of June 30, 2022[124]. - The company’s inventory increased to RMB 19,617 thousand from RMB 15,890 thousand, an increase of approximately 23.3%[113]. Strategic Initiatives - The company is leveraging its core technology capabilities to explore the industrial automation system field, particularly in maintenance and safety integrity systems for the oil and petrochemical industry[11]. - The smart manufacturing industry is expected to expand rapidly, driven by national policy support and the transition towards digital and intelligent manufacturing[11]. - The company is expanding its broadband power line communication products into more provincial markets, enhancing competitiveness in the domestic market[54]. - The industrial automation market in China is expected to continue healthy growth due to low penetration rates and rising labor costs, particularly in the petrochemical sector[54]. - The company plans to form strategic alliances with international system integrators to enhance its smart manufacturing and industrial automation business segments[55]. - The company aims to develop proprietary smart factory applications and integrate big data platforms to enhance its core competitiveness[55]. - The company is exploring new business investment opportunities to enhance shareholder value and diversify growth in the long term[55]. - The government’s push for smart city construction and energy-saving initiatives is expected to drive sales in the automatic meter reading business[54]. Corporate Governance - The company has adopted the corporate governance code as per the listing rules and has complied with it, except for the absence of two independent non-executive directors at the annual general meeting[87]. - The company does not recommend the payment of an interim dividend for the period[86]. - The company has not made any significant acquisitions or disposals of subsidiaries or associates during the period[97]. - The company has not engaged in any purchase, sale, or redemption of its listed securities during the period[99]. - The company has adopted all new and revised Hong Kong Financial Reporting Standards effective from January 1, 2022, with no significant impact on the financial statements[130].

Revenue Growth and Market Demand - The overall revenue growth was recorded due to the easing of economic conflicts between China and the US, as well as the gradual recovery of the Chinese economy from the COVID-19 pandemic[10]. - The demand for power line carrier communication products began to rise, supported by the Chinese government's promotion of broadband technology and smart city construction[10]. - The number of tenders for electric meters and electricity information collection systems by the State Grid reached approximately 66.74 million, a year-on-year increase of about 26% compared to 2020[13]. - The overall market demand for power line carrier communication remains promising despite increased competition from state-owned enterprises and large tech companies entering the chip market[13]. - The company plans to expand its broadband powerline products into more provincial markets, enhancing competitiveness in the domestic market[49]. - The industrial automation market in China is expected to grow healthily due to low penetration rates and rising labor costs[49]. Financial Performance - The company's total revenue for the review year was approximately RMB 248.2 million, an increase of about 16.7% compared to RMB 212.7 million in 2020[18]. - The automatic meter reading and other business segment recorded revenue of approximately RMB 48.3 million, a decrease of about 11.7% from RMB 54.7 million in 2020, accounting for approximately 19.5% of total revenue[19]. - The smart manufacturing and industrial automation business segment achieved revenue of approximately RMB 199.9 million, an increase of about 26.5% from RMB 158.0 million in 2020, representing approximately 80.5% of total revenue[20]. - The software licensing revenue increased by approximately 157.1% to about RMB 82.5 million due to a significant rise in the number of high-value contracts awarded[20]. - The company reduced its loss attributable to equity shareholders from approximately RMB 126.0 million in 2020 to about RMB 55.3 million in the review year[21]. - Gross profit increased from approximately RMB 33.5 million in 2020 to approximately RMB 43.0 million in the review year, representing a growth of about 28.3%[27]. - Gross margin rose from approximately 15.8% in 2020 to approximately 17.3% in the review year, an increase of about 1.5 percentage points, primarily due to the construction contract services segment's gross margin improvement from approximately 2.1% to approximately 6.3%[27]. Cost Management and Expenses - The company is committed to maintaining a lean cost strategy to mitigate future risks and pressures arising from the pandemic and economic uncertainties[11]. - The company maintained a lean cost strategy to mitigate operational expenses amid uncertainties caused by the pandemic[20]. - Sales and marketing expenses increased by approximately 29.3% from about RMB 19.1 million in 2020 to approximately RMB 24.7 million in the review year, driven by higher project consultation costs in the smart manufacturing and industrial automation segments[30]. - General and administrative expenses decreased by approximately 21.3% from about RMB 77.2 million in 2020 to approximately RMB 60.8 million in the review year, mainly due to reduced amortization of intangible assets[31]. - Research and development expenses fell by approximately 9.7% from about RMB 21.7 million in 2020 to approximately RMB 19.6 million in the review year, attributed to strict cost control measures[32]. Research and Development - The smart manufacturing and industrial automation segment is exploring opportunities in the industrial automation systems field, particularly in maintenance and safety integrity systems for the oil and petrochemical industry[14]. - The company has strategically planned to allocate resources for product development in broadband technology, streetlight control, building energy management, and photovoltaic power management[10]. - The R&D team consisted of 51 employees as of December 31, 2021, representing about 31% of the total workforce, focusing on power line carrier chip design and software development for the oil and petrochemical industry[24]. - The company holds a significant intellectual property portfolio, including 22 patents and 129 software copyrights, reflecting its achievements in power line carrier communication technology[24]. - The company will leverage its R&D resources to develop proprietary applications and integrate big data platforms, enhancing its core competitiveness[50]. Environmental and Compliance - The company has implemented several environmental policies in compliance with regulations, including evaluating environmental impacts during the design and procurement phases[80]. - Two major operating subsidiaries of the company have obtained ISO 14001:2015 environmental management system certification, valid until May 2024 and December 2024 respectively[80]. - The company has not received any pollution-related complaints or warnings during the review period and has not faced any fines or legal actions for violating environmental laws in China[80]. - The company has established compliance and risk management policies, ensuring adherence to significant laws and regulations affecting its operations[84]. Management and Governance - The company’s management team has extensive experience in the electronics and smart technology industries, with key executives having over 20 to 30 years of relevant experience[72][73]. - The company has maintained a stable core management team and focuses on employee training and development, providing onboarding and ongoing training to enhance skills[82]. - The company has not experienced any significant labor disputes or controversies with the Chinese government's labor department during the review year[82]. - The company confirmed that all independent non-executive directors are independent individuals as per the requirements of the Listing Rules[146]. Share Capital and Dividends - The total issued share capital of the company as of December 31, 2021, was approximately HKD 177,591, divided into 1,775,908,606 ordinary shares with a par value of HKD 0.0001 each[77]. - The company intends to distribute at least 30% of its profits attributable to equity shareholders as dividends, subject to various conditions[90]. - The company does not recommend the distribution of a final dividend for the review year, with distributable reserves as of December 31, 2021, being zero[93]. Share Options and Convertible Bonds - The company has a share option plan that allows for a maximum of 10% of the total issued shares (80,000,000 shares) to be granted under the plan[132]. - The exercise price for the share options is set at HKD 1.724 per share[136]. - The company has a convertible bond with a total principal amount of HKD 150,000,000, convertible at an adjusted price of HKD 0.80 per share[124]. - A total of 2,930,000 share options became invalid due to the resignation of relevant employees during the specified exercise period[137].

Revenue Performance - The group recorded a revenue of approximately RMB 37.7 million for the period, representing an increase of about 1.4% compared to RMB 37.2 million in the same period of 2020[14]. - The automatic meter reading and other business segment achieved a revenue of approximately RMB 30.7 million, up approximately 87.0% from RMB 16.4 million in the same period of 2020, accounting for about 81.4% of the group's total revenue[14]. - Revenue increased from approximately RMB 37.2 million in the same period of 2020 to approximately RMB 37.7 million, an increase of about 1.4%, driven by an 87.0% increase in revenue from the automatic meter reading and other business segments[22]. - For the six months ended June 30, 2021, the revenue from the Automatic Meter Reading and Other Services segment was RMB 30,673,000, while the Manufacturing and Industrial Automation segment generated RMB 7,032,000, totaling RMB 37,705,000[131]. - The revenue from power line carrier chips was RMB 12,818,000, up from RMB 5,141,000 in the previous year, representing a growth of 149%[125]. - The revenue from automatic meter maintenance services increased to RMB 9,326,000 from RMB 4,761,000, marking a growth of 96%[125]. Profitability and Losses - The loss attributable to the company's owners decreased from approximately RMB 56.4 million in the same period of 2020 to approximately RMB 17.5 million, mainly due to a reversal of impairment losses on financial assets of about RMB 12.7 million[18]. - Gross profit increased from approximately RMB 11.9 million in the same period of 2020 to approximately RMB 16.9 million, an increase of about 42.5%, with the gross profit margin rising from about 32.0% to approximately 44.9%[23]. - The company reported a net loss attributable to owners of RMB 17,521,000, a reduction from RMB 56,418,000 in the prior year, reflecting a decrease of approximately 68.9%[99]. - The company reported a net loss before tax of RMB (22,230,000) for the six months ended June 30, 2021, compared to a loss of RMB (67,392,000) in 2020[136]. - Total comprehensive loss for the period was RMB 13,760 thousand, significantly reduced from RMB 57,426 thousand in the previous year, indicating a 76.0% decrease[101]. Expenses and Cost Management - Selling and marketing expenses increased by approximately 8.4% from about RMB 8.0 million in the same period of 2020 to approximately RMB 8.6 million, primarily due to increased marketing and promotional activities[26]. - General and administrative expenses decreased by approximately 29.3% from about RMB 34.9 million in the same period of 2020 to approximately RMB 24.7 million, mainly due to reduced intangible asset amortization and cost control measures[29]. - Research and development expenses decreased by approximately 17.8% from about RMB 11.0 million in the same period of 2020 to approximately RMB 9.1 million, due to strict cost control measures and a reduction in the R&D team size[30]. - The company has implemented cost control measures and is focusing on timely collection of receivables to generate sufficient operating cash flow[115]. Financial Position and Assets - As of June 30, 2021, the group's current assets were approximately RMB 311.9 million, an increase from RMB 281.6 million as of December 31, 2020[33]. - The group's cash and cash equivalents totaled approximately RMB 147.1 million, up from RMB 121.7 million as of December 31, 2020[33]. - Total assets as of June 30, 2021, amounted to RMB 535,304 thousand, compared to RMB 518,349 thousand as of December 31, 2020, showing a growth of 3.0%[104]. - The company’s total liabilities reached RMB 535,304 thousand, up from RMB 518,349 thousand, indicating a 3.0% increase[106]. - Trade receivables as of June 30, 2021, were RMB 103,338,000, down from RMB 163,125,000 on December 31, 2020, indicating a decrease of about 36.7%[169]. Strategic Initiatives and Market Position - The group continues to explore the industrial automation systems field, particularly in maintenance and safety integrity systems for the oil and petrochemical industries, with the market size for smart manufacturing solutions in China expected to reach RMB 283.7 billion in 2021[12]. - The group is leveraging its core technology capabilities to explore various aspects of the smart manufacturing sector, capitalizing on the significant market potential[12]. - The company intends to form strategic alliances with internationally recognized system integrators to expand its smart manufacturing and industrial automation business segments[52]. - The company plans to enhance market promotion of broadband power line products and expand into more provincial markets, aiming to strengthen competitiveness in the domestic market[51]. Corporate Governance and Shareholder Information - The company has adopted the corporate governance code as per the listing rules, with some deviations noted[82]. - The company did not recommend the payment of an interim dividend for the period[81]. - The total number of issued shares was 986,619,071, with significant shareholdings reported by major stakeholders[55][62]. - The company has a total of 64,500,000 shares available for issuance under the share option plan, representing approximately 6.54% of the issued share capital as of June 30, 2021[77]. Debt and Financing - Total interest-bearing liabilities amounted to approximately RMB 260.2 million as of June 30, 2021, compared to RMB 254.3 million as of December 31, 2020[34]. - The company issued convertible bonds totaling HKD 150 million with an annual coupon rate of 4%, aimed at raising funds for the acquisition of a subsidiary[41]. - The company has extended the maturity date of convertible bonds by an additional 12 months, from August 13, 2021, to August 13, 2022[115]. - The company is considering further fundraising through equity financing to address financial obligations[118].