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之內容概不負責，對其準 確性或完整性亦不發表任何聲明，並明確表示概不會就本公告之全部或任何部分內容而產 生或倚賴該等內容而引致之任何損失承擔任何責任。 Hong Kong Aerospace Technology Group Limited 香 港 航 天 科 技 集 團 有 限 公 司 （於開曼群島註冊成立之有限公司） （股份代號：1725） 截 至2022年12月31日 止 年 度 之 年 度 業 績 公 告 香港航天科技集團有限公司（「本公司」）董事（「董事」）會（「董事會」）欣然宣佈本 公司及其附屬公司（統稱「本集團」）截至2022年12月31日止年度（「報告期」）的綜 合年度業績，以及截至2021年12月31日止年度的比較數字。 財務摘要 • 本 集 團 報 告 期 的 收 益 約 人 民 幣635.4百 萬 元，較2021年 同 期 的 人 民 幣 650.2百萬元輕微減少約2.3%。 • 本 集 團 報 告 期 的 毛 利 約 人 民 幣26.0百 萬 元，較2021年 同 期 人 民 幣37.1百 萬元減少約29.9%。 ...

Financial Performance - The group's revenue for the six months ended June 30, 2022, was approximately RMB 324.5 million, an increase of about 25.6% compared to RMB 258.4 million for the same period in 2021[8]. - The group's gross profit for the review period was approximately RMB 31.1 million, representing a significant increase of about 116.0% from RMB 14.4 million in the same period of 2021[9]. - The loss attributable to equity holders increased from approximately RMB 4.1 million in 2021 to about RMB 46.6 million in the review period[10]. - The basic and diluted loss per share attributable to equity holders for the review period was RMB 15.086[11]. - The group recorded a revenue of approximately RMB 324.5 million, an increase of about 25.6% compared to the same period in 2021, with a loss attributable to equity holders of approximately RMB 46.6 million, compared to a loss of RMB 4.1 million in the same period of 2021[14]. - The gross profit for the same period was RMB 31,091,000, compared to RMB 14,350,000 in the previous year, indicating a significant increase of approximately 116.7%[78]. - The company reported a loss of RMB 46,615,000 for the six months ended June 30, 2022, compared to a loss of RMB 4,137,000 for the same period in 2021, representing an increase in loss of approximately 1,030%[82]. - The basic and diluted loss per share for the period was RMB 15.086, compared to RMB 1.379 in the previous year, indicating a worsening financial performance[78]. Revenue Breakdown - Revenue from PCBAs increased by approximately 48.7% to RMB 157.3 million, driven by increased demand in the banking and financial sectors as well as smart devices[19]. - Revenue from fully assembled electronic products rose by approximately 9.5% to RMB 167.2 million, primarily due to increased procurement orders for mPOS products from the largest customer[20]. - For the six months ended June 30, 2022, the total segment revenue was RMB 324,464 thousand, with EMS business contributing RMB 91,918 thousand and RMB 232,546 thousand from banking and financial equipment[128]. - Revenue from sales of goods was RMB 250,231 thousand for the six months ended June 30, 2022, up from RMB 230,614 thousand in the previous year, indicating an increase of about 8.5%[134]. - The revenue from the Chinese market reached RMB 238,690 thousand, a significant increase of 32.3% from RMB 180,416 thousand in the prior year[135]. Expenses and Costs - Administrative expenses surged by approximately 299.4% to RMB 62.7 million, mainly due to increased salaries and professional fees related to the aerospace business[27]. - Sales and distribution expenses increased by approximately 40.9% to RMB 9.3 million, attributed to higher employee benefits in the EMS business and increased advertising expenses in the aerospace sector[26]. - The cost of raw materials used increased to RMB 227,988 thousand for the six months ended June 30, 2022, compared to RMB 184,571 thousand in the same period of 2021, reflecting a rise of approximately 23.5%[141]. - The cost of inventory recognized as an expense and included in cost of sales for the six months ended June 30, 2022, was approximately RMB 290,143,000, up from RMB 243,308,000 in 2021, marking an increase of about 19.2%[161]. Assets and Liabilities - Total assets as of June 30, 2022, amounted to RMB 1,212,160,000, up from RMB 941,311,000 as of December 31, 2021, indicating a growth of approximately 29%[86]. - The company's total liabilities increased to RMB 861,720,000 as of June 30, 2022, compared to RMB 549,768,000 at the end of 2021, reflecting a rise of about 57%[86]. - The equity attributable to the company's shareholders decreased to RMB 350,440,000 as of June 30, 2022, down from RMB 391,543,000 at the end of 2021, a decline of approximately 10.5%[86]. - As of June 30, 2022, the net current assets were approximately RMB 32.0 million, down from RMB 55.6 million as of December 31, 2021, with a current ratio of about 1.1 for both periods[33]. - Trade payables decreased significantly to RMB 107,845 thousand as of June 30, 2022, down from RMB 176,118 thousand as of December 31, 2021[172]. Cash Flow and Financing - The net cash used in operating activities for the six months ended June 30, 2022, was RMB (90,656) thousand, compared to RMB (67,136) thousand for the same period in 2021, representing an increase of 34.9%[96]. - The net cash used in investing activities was RMB (94,031) thousand for the six months ended June 30, 2022, compared to RMB (58,467) thousand in the previous year, indicating a significant increase of 60.8%[96]. - The net cash from financing activities increased to RMB 195,770 thousand for the six months ended June 30, 2022, compared to RMB 35,477 thousand in the same period of 2021, reflecting a growth of 438.5%[96]. - The company has unutilized financing of approximately RMB 236 million from two banks as of June 30, 2022, to support manufacturing facility construction contracts[104]. - The company has secured a commitment from its ultimate controlling shareholder for an unsecured and interest-free revolving loan of up to RMB 256 million[104]. Corporate Governance - The company has established an Audit Committee, a Remuneration Committee, and a Nomination Committee to ensure compliance with corporate governance standards[64][66][67]. - The company has appointed new independent non-executive directors as part of its board changes, enhancing governance and oversight[70]. - The company continues to review and monitor its corporate governance practices to ensure adherence to high standards[68]. Strategic Outlook - The group primarily engages in electronic manufacturing services (EMS) and aerospace business, including satellite manufacturing, control, and launch[13]. - The group plans to establish a satellite manufacturing center and a satellite operation control and application center to generate new revenue streams in the aerospace business[15]. - The board remains optimistic about the aerospace business outlook despite challenges posed by ongoing COVID-19 variants and trade tensions between the US and China[14]. - The group aims to continue strengthening its research and development capabilities to uncover more business opportunities[15]. Shareholder Information - As of June 30, 2022, the company’s major shareholder, Hong Kong Aerospace Technology Holdings (BVI), holds 158,213,153 shares, representing 51.20% of the total issued shares[57]. - Vision International Group Limited owns 203,255,353 shares, accounting for 65.78% of the total issued shares[57]. - Mr. Wen Yichuan holds 203,255,353 shares through controlled entities, which is 65.78% of the total issued shares[49]. - Dr. Lin Jiali's spouse has an interest in 4,257,002 shares, representing 1.38% of the total issued shares[52]. - Dr. Ye Zhongxian and his family members hold 2,277,496 shares, which is 0.74% of the total issued shares[52].

Financial Performance - The group reported a revenue of HKD 1.2 billion for the year ended December 31, 2021, representing a year-on-year increase of 15%[13] - The group recorded a revenue of approximately RMB 650.2 million, an increase of about 18.7% compared to RMB 547.8 million in the same period of 2020[16] - The group reported a loss attributable to equity holders of approximately RMB 53.1 million, compared to a profit of approximately RMB 17.3 million in the same period of 2020, primarily due to additional administrative expenses from aerospace operations[16] - The management has provided a revenue guidance of HKD 1.5 billion for the fiscal year 2022, reflecting a growth target of 25%[13] - The overall gross profit was approximately RMB 37.1 million, a decrease of about RMB 12.5 million or 25.2% from RMB 49.6 million in the previous year, with a gross margin decline from 9.1% to 5.7%[27] - The company reported a loss attributable to equity holders of approximately RMB 531 million, compared to a profit of RMB 173 million in the same period of 2020[42] Business Segments - The electronic manufacturing services (EMS) segment contributed approximately 70% of total revenue, while the aerospace business accounted for the remaining 30%[13] - Revenue from the EMS business was divided into two main product categories: PCBA generated RMB 331.8 million (51.0% of total revenue) with a 28.3% increase, while fully assembled electronic products generated RMB 318.4 million (49.0% of total revenue) with a 10.1% increase[23] - The company remains optimistic about the aerospace business outlook for 2022, focusing on the development of the "Golden Bauhinia Constellation" project to provide aerospace data services in the Guangdong-Hong Kong-Macao Greater Bay Area[18] - The group focuses on electronic manufacturing services (EMS) and aerospace business, including PCB assembly and satellite applications[180] Strategic Initiatives - The company is actively developing satellite technology, including smart city satellite big data applications and satellite manufacturing, with a focus on the "Golden Bauhinia Constellation" project[13] - The group plans to expand its market presence in mainland China, particularly in Shenzhen, to leverage the growing demand for aerospace and electronic services[13] - A new product line for advanced satellite communication systems is expected to launch in Q3 2022, aiming to capture a larger share of the aerospace market[13] - The company plans to establish a satellite intelligent manufacturing center and expand its customer base to diversify revenue sources and mitigate business risks[18] - The group is exploring potential mergers and acquisitions to enhance its technological capabilities and market reach[13] Research and Development - The company has invested HKD 100 million in R&D for new technologies in the aerospace sector over the past year[13] - The company will continue to strengthen its research and development capabilities to explore more business opportunities[18] Expenses and Financial Management - Sales and distribution expenses amounted to approximately RMB 166 million, an increase of about 25.3% compared to RMB 132 million in 2020, with the ratio to revenue slightly rising from 2.4% to 2.5%[34] - Administrative expenses reached approximately RMB 696 million, a significant increase of about 203.2% from RMB 230 million in 2020, primarily due to additional salaries and donations related to disaster relief efforts[36] - Financing costs netted approximately RMB 7 million, up about 489.8% from RMB 1 million in 2020, mainly due to increased interest expenses related to lease liabilities[39] - Income tax expenses were approximately RMB 61 million, a 103.7% increase from RMB 30 million in 2020, driven by profit growth in a newly established subsidiary[40] Corporate Governance - The company has adopted and complied with the corporate governance code as per the Stock Exchange Listing Rules, except for the deviation where the roles of Chairman and CEO are held by the same individual[116] - The board consists of five executive directors, two non-executive directors, and five independent non-executive directors, ensuring a balance of skills and experience necessary for effective leadership[123] - The company has conducted annual assessments of the independence of all independent non-executive directors, confirming their independence throughout the year[122] - The company emphasizes the importance of strong corporate governance standards to enhance performance, transparency, and accountability[116] Board Composition and Diversity - The board includes independent non-executive directors from various sectors, ensuring a broad perspective in decision-making[78] - The board currently includes one female director, with plans to increase female representation in future appointments[135] - The board has adopted a diversity policy to enhance the quality of their responsibilities, focusing on skills, experience, and diverse perspectives[135] Environmental, Social, and Governance (ESG) - The board is responsible for overseeing the group's environmental, social, and governance (ESG) performance and assessing related risks and opportunities[194] - The group has established an ESG working group to implement sustainable development initiatives[189] - The group is committed to creating a zero-harm work environment and has implemented measures to ensure employee safety during the COVID-19 pandemic[199] - The environmental, social, and governance report covers the group's performance for the fiscal year from January 1 to December 31, 2021[178] Community Engagement - The company is actively involved in community service and holds significant positions in various industry associations, reflecting its commitment to corporate social responsibility[93][98] - The establishment of a satellite manufacturing center in Hong Kong aims to create more technology jobs for young people[199]

Financial Performance - The group's revenue for the six months ended June 30, 2021, was approximately RMB 258.4 million, a decrease of about 12.5% compared to RMB 295.3 million for the same period in 2020[10]. - The gross profit for the same period was approximately RMB 14.4 million, down about 2.7% from RMB 14.8 million in 2020[11]. - The loss attributable to equity holders of the company was approximately RMB 4.1 million, compared to a profit of RMB 0.6 million in the same period of 2020[11]. - The basic and diluted loss per share attributable to equity holders was RMB 1.379[12]. - Total revenue for the first half of 2021 was approximately RMB 258.4 million, a decrease of 12.5% compared to RMB 295.3 million in the same period of 2020[21]. - Other income for the first half of 2021 was approximately RMB 2.1 million, a decrease from RMB 7.2 million in the same period of 2020[29]. - Administrative expenses rose by 55.4% to approximately RMB 15.7 million, primarily due to wage increases and operational costs from new subsidiaries in Xiamen, China, and Germany[32]. - The company reported a net loss attributable to equity holders of RMB (4,137) thousand for the six months ended June 30, 2021, compared to a profit of RMB 560 thousand for the same period in 2020[160]. - Basic and diluted loss per share was RMB (1.379) for the six months ended June 30, 2021, compared to earnings of RMB 0.187 for the same period in 2020[160]. Business Development and Strategy - The company plans to develop the "Golden Bauhinia Constellation" project to provide aerospace data services in the Guangdong-Hong Kong-Macao Greater Bay Area[17]. - The company aims to expand its satellite launch business to collect satellite data for the Greater Bay Area[17]. - A satellite intelligent manufacturing center will be established to generate new revenue from aerospace business[17]. - The company will continue to strengthen its research and development capabilities to explore more business opportunities[17]. - A cooperation agreement was established with Huawei Cloud Hong Kong to build a remote sensing big data and AI service platform in the Greater Bay Area[60]. - The company is focused on expanding its capabilities in satellite manufacturing and aerospace technology applications through strategic acquisitions[191]. Financial Position - Net current assets as of June 30, 2021, were approximately RMB 98.6 million, down from RMB 142.0 million as of December 31, 2020, with the current ratio decreasing from 1.5 to 1.3[38]. - As of June 30, 2021, the company's interest-bearing liabilities amounted to approximately RMB 628 million, an increase from RMB 267 million as of December 31, 2020[39]. - The capital-to-debt ratio increased to approximately 25.5% as of June 30, 2021, compared to 10.7% as of December 31, 2020, due to the rise in interest-bearing borrowings[40]. - Total assets as of June 30, 2021, amounted to RMB 689,521 thousand, an increase from RMB 575,763 thousand as of December 31, 2020[109]. - Total liabilities increased to RMB 442,705 thousand from RMB 325,473 thousand, indicating a rise in financial obligations[109]. - The total equity attributable to equity holders decreased to RMB 246,816 thousand from RMB 250,290 thousand, indicating a slight decline in shareholder equity[109]. Cash Flow and Investments - The cash flow from operating activities for the six months ended June 30, 2021, was a net outflow of RMB 67,309 thousand, compared to an inflow of RMB 33,023 thousand for the same period in 2020[119]. - The company incurred a net cash outflow from investing activities of RMB 58,467 thousand for the six months ended June 30, 2021, compared to RMB 14,229 thousand in the previous year[119]. - The financing activities generated a net cash inflow of RMB 35,477 thousand for the six months ended June 30, 2021, compared to a net outflow of RMB 8,305 thousand in the same period of 2020[119]. - As of June 30, 2021, the company's cash and cash equivalents decreased by RMB 90,126 thousand, resulting in an ending balance of RMB 88,220 thousand[119]. Acquisitions and Corporate Actions - The company completed the acquisition of 100% equity in Shenzhen Port and Hong Kong Satellite on June 16, 2021, for a total consideration of RMB 1,000,000 and HKD 20,000 (approximately RMB 16,000)[191]. - The total net assets/liabilities acquired from Shenzhen Port and Hong Kong Satellite amounted to RMB 2,351,000, with net assets of RMB 3,407,000 and liabilities of RMB 1,056,000[194]. - The company has committed capital expenditures of RMB 54,981,000 as of June 30, 2021, compared to RMB 44,558,000 as of December 31, 2020[195]. Governance and Compliance - The company has complied with the corporate governance code, except for the separation of the roles of chairman and CEO[86]. - The audit committee reviewed the accounting principles and policies adopted by the group during the review period[81]. - The company has established a share option scheme to incentivize eligible participants and retain talent[78]. - The company maintains a sufficient public float of at least 25% of the total issued shares as of the report date[94].

Financial Performance - The company recorded a revenue of approximately RMB 547.8 million for the year ended December 31, 2020, a slight increase of about 0.3% compared to RMB 546.3 million in 2019[7]. - Profit attributable to equity holders for the reporting period was approximately RMB 17.3 million, a decrease of about 32.0% from RMB 25.5 million in 2019, primarily due to a decline in gross margin and increased administrative expenses[7]. - Revenue from PCBA (Printed Circuit Board Assembly) increased by 33.0% to RMB 258.6 million, accounting for 47.2% of total revenue, while revenue from fully assembled electronic products decreased by 17.8% to RMB 289.2 million, representing 52.8% of total revenue[13]. - Revenue from mainland China was RMB 439.8 million, a decrease from RMB 452.2 million in 2019, while revenue from the United States increased significantly to RMB 27.0 million from RMB 0.01 million[12]. - Gross profit for the group decreased by approximately RMB 10.9 million or 18.0% to RMB 49.6 million, with a gross margin decline from 11.1% to 9.1%[16]. - Other income increased by approximately 230.7% to RMB 12.6 million due to government subsidies received[21]. - Administrative expenses increased by approximately 23.7% to RMB 23.0 million, primarily due to increased professional fees related to government subsidies[22]. - Net impairment losses on financial assets amounted to approximately RMB 5.1 million, up from RMB 0.6 million in the previous year[23]. - The group held unused bank financing of approximately RMB 235.6 million as of December 31, 2020, a significant increase from RMB 9.1 million as of December 31, 2019[29]. Operational Strategy - The company plans to enhance production efficiency and expand its customer base to diversify revenue sources and mitigate business risks[8]. - The company aims to strengthen its R&D capabilities to explore new business opportunities and expand its customer base[8]. - The company is constructing its own production facility in Huizhou instead of renting, to increase long-term shareholder value[8]. - The company is committed to maintaining long-term growth of its existing business despite a challenging operating environment[8]. Corporate Governance - The company has adopted and complied with the corporate governance code as per the Listing Rules, with the exception of the separation of the roles of Chairman and CEO, which are held by the same individual[52]. - The board consists of three executive directors and three independent non-executive directors, with independent directors accounting for over one-third of the board[58]. - The company has confirmed that all independent non-executive directors are independent individuals as per the requirements of the Listing Rules[57]. - The board is responsible for leading and monitoring the company, overseeing business strategies and performance, and ensuring objective decision-making in the best interest of the company[59]. - The company has implemented a robust internal control system to enhance performance, transparency, and accountability, which is crucial for gaining shareholder trust[52]. - The board will continue to review and monitor the company's practices to ensure compliance with corporate governance standards[52]. Environmental, Social, and Governance (ESG) Practices - The environmental, social, and governance (ESG) report covers the performance from January 1, 2020, to December 31, 2020, focusing on the company's operations in China, which is the primary source of revenue[90]. - The board is responsible for overseeing the company's ESG management systems, policies, commitments, strategies, and goals, ensuring compliance with relevant laws and regulations[92]. - The company maintains regular communication with stakeholders, including employees, shareholders, customers, suppliers, and government organizations, to gather opinions on relevant ESG matters[93]. - The company has achieved ISO 14001:2004 certification for its environmental management system, indicating compliance with various environmental regulations in China[100]. - The company has not faced any significant penalties or sanctions for environmental violations during the reporting period[100]. - The company has implemented measures to track resource consumption and improve efficiency, promoting long-term sustainability[118]. Employee and Labor Practices - The total employee compensation for the reporting period was approximately RMB 47.5 million, slightly down from RMB 48.9 million in 2019, with a total of 546 employees as of December 31, 2020[36]. - The total number of full-time employees as of December 31, 2020, was 546, with a low employee turnover rate[120]. - The company has established a comprehensive training program for employees, including onboarding, pre-job, and on-the-job training[132]. - The company maintained a zero injury rate and no major safety incidents occurred during the year ending December 31, 2020[130]. - There were no significant labor disputes or compliance issues regarding child or forced labor reported as of December 31, 2020[127]. Risk Management - The company faced challenges due to the COVID-19 pandemic and trade tensions between the US and China, impacting its performance in the first half of 2020[7]. - The company faced risks related to customer concentration, which could significantly impact business operations and financial status[154]. - Fluctuations in raw material prices were noted as a potential adverse effect on sales costs and profitability[155]. - The company has implemented anti-corruption policies and training for employees to mitigate bribery and fraud risks[149]. Shareholder Information - The board of directors did not recommend the payment of a final dividend for the year ended December 31, 2020[35]. - The company has adopted a dividend policy to guide the board in determining whether to pay dividends and the level of dividends to be paid, considering factors such as actual and expected financial performance, operational funding needs, and capital expenditure requirements[87]. - There were no dividends recommended for the fiscal year ending December 31, 2020, consistent with the previous year[158]. - Major shareholder Rich Blessing holds 191,250,000 shares, representing 63.75% of the issued shares[182]. Quality Control and Product Responsibility - The company has implemented strict quality control measures and has been certified with ISO 9001:2008 quality management system[135]. - The company offers a warranty period of zero to 24 months for its products, with a commitment to respond to customer inquiries within 24 hours[136]. - The company has not received any significant claims or lawsuits related to product quality during the year ending December 31, 2020[135]. Capital Expenditures and Investments - The group's capital expenditures for the reporting period were approximately RMB 56.3 million, up from RMB 32.0 million in 2019, mainly related to the construction of the Huizhou production facility and acquisition of land use rights[34]. - The company successfully acquired land use rights in Huizhou for a consideration of RMB 25.5 million on July 7, 2020[37]. - As of December 31, 2020, the company's capital commitments amounted to approximately RMB 446 million, a significant increase from RMB 9 million in 2019, primarily related to the acquisition of machinery and equipment to expand production capacity and improve efficiency[41].

Revenue and Profitability - The group's revenue for the six months ended June 30, 2020, was approximately RMB 295.3 million, an increase of about 8.6% compared to RMB 271.9 million for the same period in 2019[11][17]. - The profit attributable to equity holders of the company was approximately RMB 0.6 million, a significant decrease of about 96.9% compared to RMB 17.9 million in the same period of 2019[13][17]. - Revenue from the PCBA segment was RMB 95.6 million, accounting for 32.4% of total revenue, while revenue from fully assembled electronic products was RMB 199.7 million, accounting for 67.6%[22]. - Revenue from PCBA sales increased by approximately 12.5% to RMB 95.6 million compared to RMB 85.0 million in the same period of 2019[23]. - Revenue from fully assembled electronic products rose by about 6.8% to RMB 199.7 million from RMB 187.0 million in the same period of 2019, driven by increased orders for mPOS products[25]. - The basic and diluted earnings per share attributable to equity holders during the review period were RMB 0.187[14]. - The company recorded revenue from China of RMB 264.0 million, an increase from RMB 235.7 million in the same period of 2019[21]. - Revenue from product sales was RMB 269,825 thousand, up 19.7% from RMB 225,337 thousand in the previous year[137]. - Revenue from services decreased to RMB 25,431 thousand, down 45.4% from RMB 46,575 thousand in the prior period[137]. Cost and Expenses - The gross profit for the group during the review period was approximately RMB 14.8 million, a decrease of about 56.5% from RMB 34.1 million in the same period of 2019[12]. - Gross margin fell from 12.5% in 2019 to 5.0% in the review period[26]. - Gross profit from PCBA sales decreased by approximately 34.1% to RMB 8.9 million, with a gross margin of 9.3% compared to 15.8% in the same period of 2019[28]. - Gross profit from fully assembled electronic products dropped by approximately 71.1% to RMB 6.0 million, with a gross margin of 3.0% compared to 11.0% in the same period of 2019[29]. - Total operating expenses for the six months ended June 30, 2020, amounted to RMB 301,213 thousand, an increase of 18.8% from RMB 253,380 thousand in the same period last year[142]. - Selling and distribution expenses decreased to RMB 6,100 thousand from RMB 7,126 thousand, a reduction of approximately 14.4%[100]. - Administrative expenses increased to RMB 10,137 thousand from RMB 8,437 thousand, reflecting an increase of approximately 20.1%[100]. Financial Position - The group’s liquidity ratio decreased from approximately 1.7 as of December 31, 2019, to approximately 1.4 as of June 30, 2020[40]. - The group’s interest-bearing liabilities amounted to approximately RMB 11.9 million as of June 30, 2020, down from RMB 16.4 million as of December 31, 2019[41]. - The capital debt ratio as of June 30, 2020, was approximately 5.0%, down from 7.0% as of December 31, 2019, indicating a low level of interest-bearing debt[42]. - The total assets of the company increased to RMB 598,224,000 as of June 30, 2020, compared to RMB 444,549,000 as of December 31, 2019, representing a growth of 34.5%[109]. - The company's total liabilities rose to RMB 360,018,000 as of June 30, 2020, compared to RMB 208,368,000 at the end of 2019, indicating an increase of 72.8%[109]. - Trade receivables amounted to RMB 272,578,000 as of June 30, 2020, an increase of 77.06% from RMB 153,796,000 as of December 31, 2019[164]. - The total amount of other payables was RMB 8,416,000 as of June 30, 2020, compared to RMB 6,520,000 as of December 31, 2019, marking an increase of 29%[174]. Cash Flow and Investments - Cash flow from operating activities for the six months ended June 30, 2020, was RMB 30,191,000, a substantial increase of 184.5% from RMB 10,611,000 in the same period of 2019[118]. - The company incurred a net cash outflow from investing activities of RMB 14,229,000 for the six months ended June 30, 2020, compared to RMB 483,000 in the previous year[118]. - The cash and cash equivalents at the end of the period were RMB 116,371,000, down from RMB 150,500,000 at the end of June 2019, reflecting a decrease of 22.6%[118]. - The total capital expenditure during the review period was approximately RMB 13.4 million, compared to RMB 2.3 million for the six months ended June 30, 2019[45]. - The company has contracted but not yet incurred capital expenditures of RMB 5,075,000 as of June 30, 2020, compared to RMB 876,000 at the end of 2019, showing a growth of 478%[175]. Government Grants and Other Income - Other income for the group was approximately RMB 7.2 million, including government grants of RMB 3.2 million received in the same period of 2019[32]. - Government grants received increased to RMB 7,181 thousand, compared to RMB 3,162 thousand in the previous year[143]. - The company received government grants amounting to RMB 6,900,000 during the six months ended June 30, 2020, compared to RMB 1,827,000 in the same period of 2019, marking an increase of 277.5%[118]. Shareholder Information - Rich Blessing Group Limited holds significant shares, with Mr. Ma owning 62.91%, Ms. Chen 20.00%, Ms. Cheng 14.89%, and Mr. Cheng 2.20%[62]. - The company has a stock option plan that allows for the issuance of up to 30,000,000 shares, equivalent to 10% of the issued share capital at the time of listing[77]. - No stock options were granted, exercised, canceled, or lapsed during the review period up to June 30, 2020[80]. - The board did not recommend the payment of an interim dividend for the review period, consistent with the previous year[48]. - The company did not declare or pay any dividends for the six months ended June 30, 2020, and 2019[152]. Future Plans and Challenges - The company plans to enhance production capacity and efficiency, expand its customer base, and strengthen research and development capabilities to explore more business opportunities[18]. - The company faced challenges due to trade tensions between the U.S. and China and the impact of COVID-19, which affected production and profitability during the review period[16]. - The company aims to build its own production facilities instead of leasing to increase long-term shareholder value[18].

Financial Performance - For the fiscal year ending December 31, 2019, the company reported revenue of approximately RMB 546.3 million, a slight decrease of 0.1% compared to RMB 546.7 million in 2018[11]. - Revenue from PCB assembly (PCBA) increased by approximately 42.9% to RMB 194.5 million, driven by demand in the banking and financial sectors as well as the introduction of a major client in smart devices[19]. - Revenue from fully assembled electronic products decreased by approximately 14.3% to RMB 351.9 million, primarily due to reduced demand in the tablet market[11]. - The company's geographical revenue breakdown shows that China accounted for RMB 452.2 million, while other regions contributed RMB 94.1 million collectively[16]. - Gross profit for the reporting period was approximately RMB 60.5 million, a decrease of about RMB 5.3 million or 8.1% from RMB 65.8 million for the year ended December 31, 2018, with overall gross margin declining from 12.0% to 11.1%[23]. - Profit attributable to equity holders increased by approximately 23.6% to RMB 25.5 million, up from RMB 20.6 million in the previous year[34]. - The company reported a significant increase in PCBA revenue, which now represents 35.6% of total revenue, up from 24.9% in the previous year[18]. - The company acknowledges the ongoing challenges posed by the US-China trade tensions affecting the EMS industry growth[11]. Operational Challenges - The impact of the COVID-19 pandemic has introduced uncertainties in the operational environment, prompting the company to prepare measures to mitigate its effects[12]. - The company is closely monitoring the impact of COVID-19 on its operations, with temporary production halts affecting financial performance[55]. - The company is collaborating with suppliers to expedite raw material deliveries and adjusting delivery schedules to mitigate economic impacts from the pandemic[56]. - The company plans to continue evaluating the financial impact of the pandemic and will take necessary measures as required[57]. Corporate Governance - The company has adopted and complied with the corporate governance code as per the Listing Rules, except for the deviation regarding the roles of Chairman and CEO being held by the same individual[71]. - The board consists of independent non-executive directors with extensive professional knowledge and experience in accounting, finance, and business, ensuring strong independent viewpoints in decision-making[75]. - The company emphasizes high corporate governance standards to enhance performance, transparency, and accountability, which is crucial for gaining shareholder and public trust[71]. - The company has a strong focus on internal controls and adequate disclosures to adhere to corporate governance principles[71]. - The independent non-executive directors have significant experience in auditing, accounting, and corporate finance, contributing to the board's effectiveness[75]. - The company has a commitment to reviewing and monitoring its corporate governance practices to maintain high standards[71]. - The board has established three committees: Audit Committee, Remuneration Committee, and Nomination Committee, each with specific written terms of reference[90]. Employee and Compensation - The total compensation for employees in 2019 was approximately RMB 48.9 million, an increase from RMB 34.0 million in 2018, with 490 employees as of December 31, 2019[44]. - The employee turnover rate remained low, with a total of 490 full-time employees as of December 31, 2019[157]. - The group has established employment contracts based on fairness, voluntary agreement, and mutual consent, providing compensation including salaries, bonuses, and other allowances[161]. - The group has maintained good employee relations through regular communication and feedback collection to improve the work environment[166]. Environmental, Social, and Governance (ESG) - The environmental, social, and governance (ESG) report covers the group's performance from January 1, 2019, to December 31, 2019, focusing on its operations in China[127]. - Key environmental issues include greenhouse gas emissions, energy consumption, and compliance with environmental protection laws[134]. - The group identified significant environmental, social, and operational issues impacting its financial condition and operational performance[133]. - The company achieved ISO 14001:2004 environmental management system certification for its PCB processing and wireless data terminal product production[139]. - The company has implemented policies to reduce air and water pollution and energy consumption[140]. - The group has not employed any child or forced labor, ensuring all job applicants are at least 18 years old[164]. - The group has adhered to anti-corruption policies, ensuring compliance with applicable laws against bribery and corruption, with no concluded corruption lawsuits against the group or its employees as of December 31, 2019[176]. Future Plans and Investments - The company plans to enhance its R&D capabilities and expand its customer base as part of its strategy to maintain long-term growth[12]. - The company aims to build its own production facilities to replace leased ones, thereby improving long-term shareholder value[12]. - The company is taking a cautious approach to its expansion plans due to uncertainties from US-China trade tensions, with plans to utilize remaining funds over the next two years[49]. - The company allocated HKD 42.8 million for capacity expansion and production efficiency improvements, with HKD 21.9 million remaining[49]. Financial Commitments and Expenditures - Capital expenditures for the reporting period were approximately RMB 32.0 million, down from RMB 40.9 million in 2018[42]. - The capital commitments as of December 31, 2019, were approximately RMB 0.9 million, down from RMB 1.4 million in 2018, indicating reduced investment in machinery and equipment[53]. - The net proceeds from the share sale amounted to approximately HKD 96.7 million, with HKD 52.0 million already utilized by December 31, 2019[49].

Financial Performance - The group's revenue for the six months ended June 30, 2019, was approximately RMB 271.9 million, a slight increase of about 2.7% compared to RMB 264.7 million for the same period in 2018[13]. - Gross profit for the review period was approximately RMB 34.1 million, a decrease of about 16.7% from RMB 41.0 million in the same period of 2018[14]. - Profit attributable to equity holders of the company was approximately RMB 17.9 million, an increase of about 2.8% compared to RMB 17.4 million in the same period of 2018[14]. - Revenue from PCB assembly (PCBA) increased by approximately 53.2%, driven by a significant rise in demand from the banking and financial sectors, with PCBA revenue growing from approximately RMB 21.1 million in 2018 to about RMB 46.9 million in the review period[18]. - Revenue from fully assembled electronic products decreased by approximately 10.7%, primarily due to a decline in demand for tablet computers, with revenue dropping by about 58.8% compared to the same period in 2018[18]. - Revenue from China was RMB 235.7 million, an increase from RMB 224.0 million in the same period of 2018[21]. - The company reported basic and diluted earnings per share of RMB 5.97 for the review period[15]. - Operating profit for the period was RMB 21,975 thousand, slightly down from RMB 22,107 thousand in the previous year, reflecting a decrease of 0.6%[98]. - Net profit attributable to equity holders was RMB 17,903 thousand, a 2.8% increase from RMB 17,414 thousand in the same period last year[98]. - Basic and diluted earnings per share were RMB 5.97, down from RMB 7.74 in the previous year, representing a decrease of 22.9%[98]. - The company reported a total comprehensive income of RMB 17,989 thousand for the period, compared to RMB 17,502 thousand in the same period last year, reflecting a growth of 2.8%[100]. Revenue Breakdown - The total revenue from PCBA accounted for 31.2% of total revenue in the review period, while fully assembled electronic products accounted for 68.8%[24]. - Revenue from PCBA sales increased by approximately 53.2% to RMB 85.0 million compared to RMB 55.5 million in the same period of 2018[25]. - Revenue from fully assembled electronic products decreased by approximately 10.7% to RMB 187.0 million from RMB 209.3 million in the same period of 2018, primarily due to a decline in tablet market demand[26]. - Revenue from product sales was RMB 225,337 thousand, while service revenue was RMB 46,575 thousand, indicating a shift towards service offerings[148]. - Revenue from China increased to RMB 235,676 thousand, up 5.7% from RMB 223,987 thousand in the previous year[149]. Cost and Expenses - Overall gross margin decreased from 15.5% in 2018 to 12.5% in the review period[27]. - Gross profit from PCBA sales increased by approximately 41.3% to RMB 13.4 million, while the gross margin decreased to 15.8%[31]. - Gross profit from fully assembled electronic products decreased by approximately 34.3% to RMB 20.7 million, with a gross margin of 11.0%[32]. - The cost of materials used rose to RMB 203,730 thousand, compared to RMB 188,316 thousand in the prior period, reflecting an 8.1% increase[151]. - The total operating expenses, including cost of sales and administrative expenses, amounted to RMB 253,380 thousand, up from RMB 244,801 thousand, representing a 3.2% increase[151]. - The cost of inventory recognized as an expense and included in cost of sales for the six months ended June 30, 2019, was approximately RMB 237,590,000, compared to RMB 223,279,000 for the same period in 2018[173]. Cash Flow and Liquidity - Operating cash flow for the six months ended June 30, 2019, was RMB 12,546 thousand, a significant improvement from a cash outflow of RMB 16,254 thousand in the same period of 2018[112]. - Net cash generated from operating activities was RMB 10,611 thousand, compared to a net cash outflow of RMB 17,884 thousand in the prior year[112]. - Cash and cash equivalents increased to RMB 150,500 thousand at the end of the period, up from RMB 27,674 thousand at the end of June 2018[112]. - The company received government grants amounting to RMB 1,827 thousand during the reporting period[112]. - Financing activities generated net cash inflow of RMB 3,255 thousand, compared to a net cash outflow of RMB 2,104 thousand in the previous year[112]. - The company reported a significant reduction in cash used in investing activities, with a net cash outflow of RMB 483 thousand compared to RMB 5,078 thousand in the same period last year[112]. - The company’s bank borrowings increased to RMB 18,811 thousand from RMB 10,666 thousand in the previous year[112]. - The company’s initial cash balance was RMB 137,678 thousand, reflecting a strong liquidity position[112]. Assets and Liabilities - Total assets increased to RMB 438,121 thousand as of June 30, 2019, compared to RMB 376,634 thousand at the end of 2018, marking a growth of 16.3%[103]. - Total liabilities as of June 30, 2019, were approximately RMB 17.3 million, an increase from RMB 13.2 million as of December 31, 2018[42]. - The capital debt ratio was approximately 7.6% as of June 30, 2019, compared to 6.3% as of December 31, 2018[43]. - Trade receivables as of June 30, 2019, amounted to RMB 114,027,000, an increase from RMB 78,545,000 as of December 31, 2018[175]. - The total amount of prepayments as of June 30, 2019, was RMB 14,180,000, an increase from RMB 9,472,000 as of December 31, 2018[171]. - Trade payables as of June 30, 2019, were RMB 109,395,000, an increase from RMB 107,624,000 as of December 31, 2018[188]. - The total amount of contract liabilities, other payables, and accrued liabilities as of June 30, 2019, was RMB 36,712,000, down from RMB 40,684,000 as of December 31, 2018[189]. Corporate Governance and Management - The company did not recommend the payment of an interim dividend for the review period[47]. - The major shareholder, Rich Blessing Group Limited, holds 191,250,000 shares, representing 63.75% of the total shareholding[71]. - The company has not granted any stock options under the stock option plan as of the report date[77]. - The audit committee was established on July 25, 2018, and consists of three independent non-executive directors[79]. - The company has complied with the corporate governance code, except for the separation of the roles of chairman and CEO[86]. - The remuneration committee was established on July 25, 2018, to review and recommend compensation policies for directors and senior management[81]. - The nomination committee was also established on July 25, 2018, to provide recommendations on director appointments and succession planning[85]. Future Plans and Investments - The company plans to enhance production efficiency and expand its customer base through continued investment in research and development[19]. - The company aims to maintain long-term growth despite an unstable market economic environment[19]. - The company plans to continue expanding its market presence and investing in new product development to drive future growth[108]. - The group plans to explore new business opportunities to enhance shareholder value, in addition to strengthening existing operations[53]. - The net proceeds from the share offering were approximately HKD 96.7 million, which were allocated as follows: RMB 64.7 million for capacity expansion and efficiency improvement, RMB 17.4 million for leasing new premises, RMB 4.5 million for R&D capabilities, RMB 3.4 million for upgrading IT systems, and RMB 6.7 million for general working capital[51]. - The group has committed capital expenditures of RMB 8,469,000 as of June 30, 2019, compared to RMB 1,370,000 as of December 31, 2018[191]. - On July 22, 2019, the group successfully acquired land use rights in Huizhou, China, for a total price of RMB 26.83 million[58].

Financial Performance - The company recorded a revenue of approximately RMB 546.7 million for the year ended December 31, 2018, representing an increase of about 47.7% compared to RMB 370.2 million in 2017[8]. - Revenue from fully assembled electronic products increased by approximately 63.0% to RMB 410.7 million, driven by the growth in cashless payment trends leading to increased mPOS orders[16]. - Revenue from PCBA sales rose by approximately 15.1% to RMB 136.0 million, primarily due to increased demand for smart device and telecom PCBA[15]. - The company’s revenue from the Chinese market was RMB 422.3 million, up from RMB 333.7 million in 2017, while revenue from the United States decreased to RMB 5.1 million from RMB 6.8 million[13]. - The company’s revenue from mPOS increased by approximately 37.5% to RMB 278.1 million, compared to RMB 202.2 million in the previous year[8]. - The company’s total revenue from Mexico increased significantly to RMB 97.1 million from RMB 16.5 million in 2017[13]. - The group's gross profit for the reporting period was approximately RMB 65.8 million, an increase of about RMB 5.5 million or 9.1% compared to RMB 60.3 million for the year ended December 31, 2017[18]. - The overall gross margin decreased from 16.3% for the year ended December 31, 2017, to 12.0% for the reporting period[18]. - Gross profit from PCBA sales increased by approximately 12.9% to about RMB 23.2 million, while the gross margin decreased to approximately 17.1%[20]. - Gross profit from fully assembled electronic products rose by about 7.1% to approximately RMB 42.6 million, with a gross margin decline to approximately 10.4%[21]. - Other income increased by approximately 269.8% to about RMB 3.1 million, up from approximately RMB 0.8 million for the year ended December 31, 2017[22]. - Selling and distribution expenses rose to approximately RMB 13.3 million, a 39.0% increase from RMB 9.5 million for the year ended December 31, 2017[23]. - Administrative expenses increased by approximately 64.9% to about RMB 30.4 million, primarily due to listing expenses and professional fees[24]. - The company's profit attributable to equity holders decreased by approximately 27.8% to about RMB 20.6 million, down from RMB 28.5 million for the year ended December 31, 2017[27]. Capital Expenditures and Financial Position - The group's net current assets as of December 31, 2018, were approximately RMB 155.5 million, an increase from RMB 69.5 million in 2017[28]. - Capital expenditures for the reporting period were approximately RMB 40.9 million, significantly up from RMB 5.4 million in 2017[33]. - The net proceeds from the share offering amounted to approximately HKD 96.7 million after deducting related underwriting fees and estimated expenses[37]. - As of December 31, 2018, the company utilized HKD 39.0 million for expanding production capacity and improving efficiency, leaving a remaining balance of HKD 25.7 million[37]. - The company has capital commitments of approximately RMB 1.4 million as of December 31, 2018, primarily related to the acquisition of machinery and equipment[38]. - There are no significant contingent liabilities reported as of December 31, 2018[40]. - The remaining unutilized net proceeds are deposited in licensed banks in Hong Kong and China as interest-bearing deposits[37]. - The company has allocated HKD 17.4 million for leasing new premises and establishing an additional smart warehouse, which has not yet been utilized[37]. - A total of HKD 4.5 million was allocated to strengthen research and development capabilities, with HKD 4.3 million remaining unutilized[37]. - The company has upgraded its enterprise resource planning system and enhanced IT capabilities with an allocation of HKD 3.4 million, leaving HKD 3.2 million unutilized[37]. - General working capital was allocated HKD 6.7 million, with HKD 5.4 million remaining unutilized[37]. Corporate Governance - The company has adopted and complied with the corporate governance code as per the listing rules, with the exception of the separation of roles between the Chairman and CEO, which is currently held by the same individual[53]. - The board consists of three executive directors and three independent non-executive directors, ensuring that independent directors account for over one-third of the board[57]. - All directors have confirmed compliance with the standards of conduct for securities trading since the listing date[54]. - The company has a robust internal control system in place, with independent non-executive directors providing necessary checks and balances to protect shareholder interests[56]. - The board is responsible for overseeing the company's business strategies and performance, ensuring decisions align with the company's best interests[58]. - Directors are appointed for a term of three years, with one-third of the board subject to re-election at each annual general meeting[59]. - The company has established a clear process for evaluating the independence of its independent non-executive directors annually[56]. - The company emphasizes the importance of strong market leadership and decision-making efficiency through the dual role of the Chairman and CEO[53]. - The board's composition reflects a balance of skills and experience necessary for effective leadership and business development[57]. - The company is committed to maintaining high standards of corporate governance and will continue to review its practices[53]. - The board has adopted a diversity policy aimed at enhancing the quality of its responsibilities through diverse skills, experiences, and perspectives[63]. - Currently, the board includes one female director, with plans to increase female representation in future appointments[63]. - The audit committee held two meetings during the year to discuss audit and financial reporting matters[69]. - The remuneration committee conducted one meeting to review and assess the performance of directors and senior management[71]. - The nomination committee has held one meeting to provide recommendations on director appointments and succession management[73]. - The company has established three committees: Audit Committee, Remuneration Committee, and Nomination Committee, each with specific written terms of reference[68]. - The audit committee is composed entirely of independent non-executive directors, ensuring unbiased oversight[69]. - The remuneration committee is responsible for recommending overall remuneration policies and structures for directors and senior management[71]. - The nomination committee's role includes considering the selection of directors and making recommendations to shareholders for elections[74]. - The company ensures that all committee decisions are reported to the board for approval[68]. - The company engaged PricewaterhouseCoopers as the external auditor for the year ending December 31, 2018, with audit fees amounting to approximately RMB 1.4 million[83]. - The board is responsible for maintaining an adequate internal control system to protect shareholder investments and group assets, with annual reviews conducted by the audit committee[84]. - The company has not established an internal audit department, considering the scale and complexity of its operations[84]. - The company secretary, Ms. Xu Jing, was appointed on February 28, 2018, and confirmed participation in no less than 15 hours of relevant professional training during the year[87]. - The board emphasizes the importance of diversity in its composition, particularly focusing on gender balance when recommending candidates[76]. - The company has a policy for continuous professional development for all directors to ensure they contribute effectively to the board[79]. - The board monitors and controls operational and financial performance, setting appropriate risk management policies aligned with strategic objectives[86]. - The company has a governance policy that emphasizes board quality, effective internal controls, and transparency to shareholders[78]. - The nomination committee may seek external agencies or consultants to assist in identifying potential candidates for the board[76]. - The company holds an annual general meeting for shareholders to communicate with the board, with special meetings called as needed[88]. Environmental and Social Responsibility - The company has implemented environmental policies to reduce air and water pollution and energy consumption, complying with various environmental regulations in China[100]. - The company achieved "ISO14001:2004 Environmental Management System" certification for PCB processing and wireless data terminal product production during the reporting period[100]. - The company has not faced any accusations, penalties, or administrative fines for failing to comply with applicable environmental regulations during the reporting period[100]. - The company maintains regular communication with stakeholders, including employees, shareholders, customers, and suppliers, through meetings, surveys, and discussions[99]. - The company’s environmental, social, and governance report covers its operations in China, which is the primary source of revenue[98]. - The company reserves the right to review and amend its dividend policy at any time, without any legal obligation to pay dividends[95]. - The company’s operational emissions primarily stem from gasoline, electricity, paper, and water consumption during business operations and travel[102]. - The total greenhouse gas emissions for the reporting period amounted to 5,154.53 tons of CO2 equivalent, with a density of 0.30 tons of CO2 equivalent per square meter[108]. - The company's vehicle operations generated 126.00 tons of CO2 equivalent emissions from driving approximately 263,874 kilometers[109]. - Electricity consumption during the reporting period was 5,573,660 kWh, resulting in 4,993.00 tons of CO2 equivalent emissions[110]. - The company consumed 6 tons of paper, leading to 0.03 tons of CO2 equivalent emissions[112]. - Water usage totaled 31.5 tons, contributing to 28.20 tons of CO2 equivalent emissions[113]. - Air travel by employees resulted in 7.30 tons of CO2 equivalent emissions during the reporting period[114]. - The group provided comprehensive training and development opportunities for employees, including onboarding, pre-job training, and on-the-job training[132]. - The group emphasized strict quality control measures throughout the production process, achieving ISO 9001:2008 certification, with no significant claims or lawsuits related to product quality during the reporting period[134]. - The group made a community investment of RMB 25,000 during the reporting period, focusing on environmental and cultural promotion[138]. Risks and Challenges - The group faced risks related to customer concentration, where any reduction in business from major customers could significantly impact operations and financial status[143]. - Fluctuations in raw material prices could adversely affect sales costs and, consequently, the group's business operations and profitability[144]. - The group registered various patents and copyrights in China to protect its intellectual property, with no known significant infringements during the reporting period[136]. - The group maintained compliance with anti-corruption laws in China, with no concluded corruption lawsuits against the group or its employees during the reporting period[137]. - The group focused on supply chain management by selecting qualified suppliers based on equipment specifications, quality, and delivery time[133]. Shareholder and Market Information - Major shareholder Rich Blessing holds 191,250,000 shares, representing 63.75% of the issued shares[173]. - The company has a stock option plan that allows for a maximum of 30,000,000 shares to be granted, which is 10% of the issued shares at the time of listing[177]. - The company aims to expand its customer base and enhance technology offerings for PCBA and fully assembled electronic products[179]. - No share buybacks or sales were conducted by the company or its subsidiaries during the year[181]. - The company has maintained a sufficient public float of at least 25% of the total issued shares since the listing date[188]. - The board believes that having the same person serve as both Chairman and CEO is necessary for strong market leadership and efficient decision-making[187]. - The company has complied with all relevant laws and regulations that significantly impact its operations during the year[194]. - The company recognizes the importance of maintaining good relationships with business partners, including customers and suppliers[196].