ANNUAL REPORT 年度報告 2024 CONTENTS 目錄 | Group Profile | 集團簡介 | 2 | | --- | --- | --- | | Corporate Information | 公司資料 | 3 | | Financial Highlights | 財務摘要 | 4 | | Chairman's Statement | 主席報告 | 5 | | Management Discussion and Analysis | 管理層討論及分析 | 8 | | Biographical Details of The Directors and | 董事及高級管理層履歷詳情 | 27 | | Senior Management | | | | Director's Report | 董事會報告 | 31 | | Corporate Governance Report | 企業管治報告 | 43 | | Environmental, Social and Governance Report | 環境、社會及管治報告 | 59 | | Independent Auditor's R ...

Group 1 - The core of China's modernization lies in technological advancement, with a focus on self-reliance and strength in technology as key to building a modern socialist country [1] - In 2024, China ranked 11th globally in innovation capability, marking it as one of the fastest-growing economies in innovation over the past decade [1] - The overall strength of China's technological innovation is steadily improving, driven by reforms in the technological system and an optimized innovation environment [1] Group 2 - The number of digital economy core industry enterprises in Honggutan District increased from 4,019 to 5,830 in 2024, leading the city of Nanchang in both total and incremental enterprise growth [2] - The software and information service industry in the district saw a dramatic increase from 27 to 59 enterprises, a growth rate of 185%, the highest in the city [2] - Annual revenue for enterprises in the district nearly doubled from 5.37 billion to close to 10 billion yuan [2] Group 3 - Nanchang Future Science City attracted five major projects with a total investment of 7.1 billion yuan, bolstering the local industrial cluster [3] - R&D investment in the district reached 1.391 billion yuan in 2024, a year-on-year increase of 28.2%, facilitating a prosperous environment for technology transfer [3] - The number of technology-based enterprises in Honggutan District increased significantly, with 171 technology-based enterprises now established [3] Group 4 - In Haicang District, the number of national high-tech enterprises is expected to reach 530 in 2024, an increase of 64 from 2023 [4] - The district's R&D investment intensity reached 5.09%, surpassing provincial and city levels, with significant contributions from large industrial enterprises [5] - Haicang has established 129 various innovation platforms, including 29 national-level platforms, to support collaborative innovation [5] Group 5 - In Qinyang City, the total value of technology contracts registered reached 1.02 billion yuan in 2024, ranking first in the city of Jiaozuo [7] - The Qinyang Science and Technology Park has successfully developed multiple high-tech projects, including advanced materials and energy solutions [8] - The park has become a hub for innovation, with significant achievements in technology transfer and commercialization [9] Group 6 - Zhuhai City ranked 13th in the latest national innovation development index, with R&D expenditure intensity at 4.06%, the second highest in Guangdong Province [10] - The city has established a collaborative innovation framework that integrates basic research, technology development, and commercialization [10] - Zhuhai has successfully launched various research platforms, including the first AI model for medical device registration in China [11]

Financial Performance - Revenue for the nine months ended December 31, 2023, was HK$4,826.3 million, a decrease of 16.3% compared to HK$5,764.8 million in the previous period[10]. - Gross profit for the same period was HK$679.9 million, representing an increase of 8.8% from HK$624.7 million[10]. - Profit for the period was HK$277.6 million, up 28.6% from HK$215.9 million year-on-year[10]. - Basic earnings per share increased to 14.2 Hong Kong cents, a rise of 27.9% from 11.1 Hong Kong cents[10]. - Cash generated from operations was HK$1,055.7 million, a significant improvement of 175.8% compared to a cash outflow of HK$1,393.4 million in the previous period[10]. - Bank balances and cash increased to HK$338.0 million, up 17.4% from HK$288.0 million[10]. - Shareholders' funds rose to HK$1,361.2 million, reflecting a growth of 20.2% from HK$1,132.4 million[10]. - Capital expenditure decreased to HK$80.5 million, down 64.6% from HK$227.3 million[10]. - Gross profit margin improved to 14.1%, up 3.3 percentage points from 10.8%[10]. - Return on shareholders' funds was 20.4%, an increase of 1.3 percentage points from 19.1%[10]. Business Expansion and Strategy - The Group expanded its business into the server sector, which significantly contributed to revenue and profit growth[14]. - A new wholly-owned subsidiary, Linkz Cables Mexico, was established to increase market share outside China and Asia, with a new plant expected to start production in 2024[14]. - Two wholly-owned subsidiaries were established to enhance production capacity and R&D capabilities for medical equipment cables, with production starting in September 2023[14]. - The Group underwent multi-dimensional operating integrations following the acquisition by Luxshare Precision Limited, enhancing operational efficiency[15]. - The financial year end date was changed from 31 March to 31 December to align with Luxshare Group, facilitating better preparation of consolidated financial statements[15]. - The Group's proactive approach includes seeking investment opportunities to diversify its business portfolio and enhance shareholder value[14]. - The Group aims to leverage the growth in 5G technology and increased demand for network communication products to drive business growth[21]. - The strategic alliance with Luxshare Precision is expected to enhance the Group's core competitiveness and facilitate growth opportunities in various sectors, including consumer electronics and healthcare[24]. Revenue Breakdown by Sector - The data center sector's revenue increased slightly by HK$0.1 million to HK$791.0 million, maintaining the highest revenue in the cable assembly business[40]. - The telecommunications sector experienced a revenue decline of HK$88.6 million or 13.8%, down to HK$555.4 million, despite stable order volume and improved profit margins from new models[41]. - The medical equipment sector's revenue rose by HK$12.4 million or 5.0% to HK$258.0 million, driven by sustained high demand for medical equipment cables[41]. - The industrial equipment sector's revenue decreased by HK$23.0 million or 48.5% to HK$24.4 million, attributed to slower-than-expected economic recovery and high inflation[43]. - The revenue of the automotive sector was HK$100.4 million, a decrease of HK$61.6 million or 38.0% compared to HK$162.0 million in the previous year, impacted by geopolitical issues and trade wars[44]. - The networking cable sector reported revenue of HK$788.7 million, down HK$466.0 million or 37.1% from HK$1,254.7 million in the previous year, due to suppressed overseas orders caused by war, high interest rates, and inflation[45]. - The server sector generated revenue of HK$2,231.4 million, a decline of HK$296.4 million or 11.7% from HK$2,527.8 million in the previous year, with a focus on developing new products related to AIGC[46]. Operational Efficiency and Cost Management - Total operating expenses as a percentage of revenue remained stable at 5.6% during the review period[37]. - Distribution and selling expenses decreased from HK$61.4 million to HK$48.1 million, a decrease of HK$13.3 million or 21.7% compared to the Previous Year, with the percentage of these expenses to revenue decreasing from 1.1% to 1.0%[48]. - Administrative expenses decreased from HK$143.6 million to HK$124.5 million, a decrease of HK$19.1 million or 13.3% compared to the Previous Year, with administrative expenses as a percentage of revenue increasing from 2.5% to 2.6%[49]. - Research and development expenses were HK$95.7 million, a decrease of HK$14.2 million or 12.9% compared to HK$109.9 million in the Previous Year, with R&D expenses as a percentage of revenue increasing from 1.9% to 2.0%[50]. - The Group focused on the development and delivery of new products with AIGC (Artificial Intelligence Generated Content) during the Review Period, improving profitability[48]. Dividend and Shareholder Returns - The Board proposed a final dividend of HK$0.7 cents per share, totaling approximately HK$13.6 million, compared to HK$0.5 cents per share for the previous year[19]. - The proposed final dividend is subject to approval at the upcoming annual general meeting scheduled for 29 May 2024[118]. - The dividend payout for the previous year was HK$0.5 cents per share, indicating a 40% increase in the proposed dividend for the current year[117]. - The Group's expected working capital requirements and future expansion plans are considered in the dividend declaration process[116]. Risk Management and Compliance - The Directors identified several principal risks, including potential labor shortages, credit risk from customers, and fluctuations in raw material prices, which could adversely affect the Group's business and financial conditions[94]. - The Group's ability to maintain strong relationships with customers and suppliers may be compromised if it fails to attract or retain key managerial and technical personnel[94]. - The Company has maintained high standards of compliance with relevant laws and regulations, with no identified breaches during the reporting period[160]. - The Group's policies and practices on compliance with legal and regulatory requirements are regularly reviewed and monitored[182]. Corporate Governance and Board Structure - The Board currently comprises two executive Directors, one non-executive Director, and three independent non-executive Directors, ensuring a diverse governance structure[188]. - The three independent non-executive Directors represent more than one-third of the Board, exceeding the requirement of the Listing Rules[188]. - The Company has adopted a Board Diversity Policy since December 28, 2018, to enhance the quality of its performance through diversity[188]. - The Nomination Committee will evaluate and recommend retiring Directors for re-appointment based on their overall contribution, attendance, and performance on the Board[190]. - The Company ensures that independent non-executive Directors do not participate in daily management, maintaining their independent judgment[194]. Sustainability and Corporate Social Responsibility - The Group is committed to sustainability, implementing initiatives to reduce carbon emissions and energy consumption, such as using LED lighting and heat recovery systems in its factories[164]. - The Group has received various recognitions for its corporate social responsibility efforts, including the 15 Years+ Caring Company logo and the Industry Cares Award during FY2023[164]. - The Company actively participates in non-profit social development projects in its operational cities and encourages employee involvement in community activities[166].

Financial Performance - Revenue for the six months ended September 30, 2023, was HK$2,626.7 million, a decrease of 19.9% compared to HK$3,280.0 million for the same period in 2022[11]. - Gross profit increased to HK$405.0 million, representing a 29.8% increase from HK$312.0 million in the previous year[11]. - Profit for the period rose to HK$151.3 million, a significant increase of 65.7% from HK$91.3 million in the prior year[11]. - Basic earnings per share improved to 7.8 Hong Kong cents, up 66.0% from 4.7 Hong Kong cents in the same period last year[11]. - Gross profit margin increased to 15.4%, up 5.9 percentage points from 9.5% in the previous year[11]. - Net profit margin rose to 5.8%, an increase of 3.0 percentage points from 2.8% in the prior year[11]. - EBITDA as a percentage of revenue improved to 10.8%, up 5.5 percentage points from 5.3% in the previous year[11]. - Operating profit for the Reporting Period was HK$235.1 million, an increase of HK$106.5 million or 82.8%, with the operating profit margin rising from 3.9% to 9.0%[14]. - Profit before taxation was HK$187.1 million, with an effective tax rate of 19.1%[16]. Revenue Breakdown by Sector - The server business contributed significantly to profit improvement by adjusting its customer/product portfolio and selling price structure[12]. - The Group's revenue decreased by HK$653.3 million or 19.9% to HK$2,626.7 million from HK$3,280.0 million for the same period last year, primarily due to declines in server and digital cable businesses[17]. - The data centre sector's revenue increased significantly by HK$126.1 million or 35.2% to HK$484.1 million, maintaining the highest revenue sector in the cable assembly business[19]. - The telecommunication sector recorded a slight revenue decrease of HK$4.1 million or 1.2% to HK$348.6 million, with stable order volume and improved profit margins from new models[20]. - The medical equipment sector's revenue rose by HK$16.6 million or 12.9% to HK$145.1 million, driven by sustained high demand for medical equipment cables[20]. - The industrial equipment sector's revenue decreased by HK$15.8 million or 55.2% to HK$12.8 million, impacted by slower global economic recovery and high inflation[22]. - The automotive sector's revenue fell by HK$21.2 million or 23.4% to HK$69.5 million, affected by geopolitical issues and a decrease in sales orders[23]. - The networking cable sector's revenue decreased by HK$243.1 million or 33.1% to HK$491.2 million, due to suppressed economic activities from various global factors[24]. - The server sector's revenue decreased by HK$513.1 million or 33.5% to HK$1,017.8 million, with a focus on developing new products related to artificial intelligence during the reporting period[26]. Cost and Expenses - Total operating expenses were HK$158.6 million, accounting for 6.0% of revenue[16]. - Research and development expenses for the Reporting Period were HK$59.8 million, a decrease of HK$8.0 million or 11.8% compared to HK$67.8 million for the same period last year[30]. - Finance costs for the Reporting Period were HK$49.1 million, up from HK$25.2 million in the same period last year[31]. - Total employee benefit expenses, including Directors' remuneration, were approximately HK$261.3 million for the reporting period, compared to approximately HK$261.9 million for the same period last year[47]. Cash Flow and Financing - Net cash used in operating activities for the six months ended September 30, 2023, was HK$92,672,000, a decrease from HK$102,847,000 in the prior year, indicating improved cash flow management[91]. - Net cash from investing activities was HK$526,496,000 for the six months ended September 30, 2023, compared to a net cash outflow of HK$70,380,000 in the same period last year, reflecting significant investment activity[91]. - Bank borrowings raised amounted to HK$704,525,000, while loans raised from related companies totaled HK$1,641,198,000, indicating strong financing efforts[91]. - The Group's bank loan decreased by HK$589.2 million or 43.7% to HK$758.9 million as of September 30, 2023, from HK$1,348.1 million as of March 31, 2023[41]. Shareholder Information - An interim dividend of HK0.75 cents per share was declared, amounting to a total of approximately HK$14.6 million[31]. - The total number of shares available for issue under the 2023 Share Option Scheme is 194,595,200, representing 10% of the issued shares of the Company[63]. - The Company has not purchased, sold, or redeemed any of its listed securities during the six months ended 30 September 2023[63]. - The total interests of Luxshare Precision and its controlled corporations are deemed to be 1,380,594,000 shares, maintaining a consistent percentage of 70.95%[60]. Market Outlook and Strategy - The global economy is expected to grow by 3.0% in 2024, with emerging markets in Asia, including China and India, projected to grow by 4.5% and 6.3% respectively[32]. - The Group has established a new wholly-owned subsidiary in Mexico to increase market share outside of China and Asia, with a new plant expected to be operational in 2024[32]. - The demand for cable assembly products is anticipated to rise due to the rapid deployment of 5G technology and the increasing application of network communication[32]. - The Group is optimistic about the growth potential of its server business, which includes customized products for data centers, driven by China's investment in digital infrastructure[34]. - The automotive wire harness products are positioned to capitalize on the booming electric vehicle market, with a target of 20% of new vehicle sales in China being new energy vehicles by 2025[36]. Corporate Governance and Compliance - The Audit Committee has reviewed the interim results for the six months ended 30 September 2023 and confirmed compliance with applicable accounting standards and legal requirements[65]. - The Company continues to comply with the Securities and Futures Ordinance regarding the disclosure of interests and short positions[61]. - The Company has fully complied with the Corporate Governance Code during the six months ended 30 September 2023[64]. Financial Position - As of September 30, 2023, total assets amounted to HK$4,618,229, a decrease of 5.1% from HK$4,866,739 as of March 31, 2023[84]. - Current liabilities increased to HK$3,878,196, down 9.2% from HK$4,270,635 in the previous period[84]. - The Group's total trade and other receivables reached HK$1,604,194,000 as of 30 September 2023, compared to HK$1,541,265,000 as of 31 March 2023[121]. Share Option Scheme - The Company adopted a new 2023 Share Option Scheme on March 21, 2023, which will remain in force for 10 years, replacing the 2018 Share Option Scheme[133]. - The purpose of the 2023 Share Option Scheme is to attract, retain, and motivate high-caliber participants aligned with the Group's performance goals[133]. - The Group recognized share-based payments of HK$6,622,000 for the six months ended 30 September 2023, compared to HK$2,156,000 for the same period in 2022[138].

Financial Performance - Revenue for the six months ended September 30, 2023, was HKD 2,626.7 million, a decrease of 19.9% compared to HKD 3,280.0 million for the same period in 2022[2] - Gross profit increased by 29.8% to HKD 405.0 million, up from HKD 312.0 million year-on-year[2] - Net profit for the period was HKD 151.3 million, representing a 65.7% increase from HKD 91.3 million in the previous year[2] - Basic earnings per share rose to HKD 7.8, a 66.0% increase compared to HKD 4.7 in the same period last year[2] - The gross margin improved to 15.4%, up 5.9 percentage points from 9.5% in the prior year[2] - Operating profit for the period was HKD 235.1 million, a significant increase of HKD 106.5 million or 82.8% from HKD 128.6 million in the previous year, with the operating profit margin rising from 3.9% to 9.0%[30] - EBITDA for the reporting period was HKD 283.5 million, up HKD 110.3 million or 63.7% from HKD 173.2 million year-on-year, with an EBITDA margin rising from 5.3% to 10.8%[38] Revenue Breakdown - The revenue from the wire components segment was HKD 1,060,151, an increase of 10.6% compared to HKD 958,456 in the previous year[17] - The digital wire segment generated revenue of HKD 548,789, down 30.6% from HKD 790,596 in the prior year[17] - Server product sales amounted to HKD 1,017,757, a significant decrease of 33.5% from HKD 1,530,925 in the same period last year[17] - Revenue from China was HKD 1,711,693, a decrease of 28% from HKD 2,373,145 in the same period last year[18] - Revenue from the United States increased to HKD 485,527, up 21% from HKD 400,935 in the previous year[18] - The data center segment's revenue rose by HKD 126.1 million or 35.2% to HKD 484.1 million, maintaining high shipment levels[33] - The telecommunications segment's revenue slightly decreased by HKD 4.1 million or 1.2% to HKD 348.6 million, with stable order volumes and improved profit margins from new product launches[34] - The medical equipment segment's revenue increased by HKD 16.6 million or 12.9% to HKD 145.1 million, driven by sustained demand for medical equipment wires[35] - The industrial equipment segment's revenue fell by HKD 15.8 million or 55.2% to HKD 12.8 million, impacted by slow global economic recovery[35] - The automotive segment's revenue decreased by HKD 21.2 million or 23.4% to HKD 69.5 million, affected by geopolitical issues and trade wars[35] - The network wire segment's revenue declined by HKD 243.1 million or 33.1% to HKD 491.2 million, due to suppressed overseas orders[35] - The server segment's revenue decreased by HKD 513.1 million or 33.5% to HKD 1,017.8 million, despite improvements in profitability from new AI-related product developments[36] Expenses and Costs - Research and development expenses decreased to HKD 59.8 million from HKD 67.8 million, reflecting a focus on cost management[4] - Total operating expenses decreased to HKD 158.6 million, down HKD 11.2 million or 6.6% from HKD 169.8 million, primarily due to a 4.3% decline in the average exchange rate of RMB to HKD[39] - The total interest expenses for the period were HKD 49,050,000, significantly higher than HKD 25,182,000 in the previous year, marking a 94.5% increase[20] - Financing costs increased to HKD 49.1 million from HKD 25.2 million in the previous year, including interest expenses from various loans and lease liabilities[40] - The company incurred a loss on inventory write-down of HKD 6,630,000, a significant improvement from a gain of HKD 168,000 in the previous year[20] Assets and Liabilities - Total assets as of September 30, 2023, were HKD 4,618.2 million, down from HKD 4,866.7 million as of March 31, 2023[6] - Current liabilities decreased to HKD 3,878.2 million from HKD 4,270.6 million, indicating improved liquidity[6] - The net asset value increased to HKD 1,224.4 million from HKD 1,144.1 million, reflecting a stronger financial position[6] - Total liabilities as of September 30, 2023, were HKD 4,592,816, down from HKD 4,962,894 as of March 31, 2023[15] - The company's debt ratio rose to 68.4% as of September 30, 2023, from 64.9% as of March 31, 2023, mainly due to loans from Luxshare Group[48] Dividends and Shareholder Equity - The company declared an interim dividend of HKD 0.75 per share, totaling HKD 14,595,000, compared to HKD 19,460,000 for the same period last year, which was HKD 1.00 per share[23] - The company's shareholder equity increased by HKD 80.6 million or 7.1% to approximately HKD 1,213.0 million as of September 30, 2023, driven by a profit of HKD 141.4 million during the period[45] Future Outlook and Strategic Initiatives - The company anticipates global economic growth of 3.0% in 2024, with emerging markets in Asia expected to grow by 5.0%[42] - The company is optimistic about the growth potential in the server business, driven by increasing demand for digital infrastructure in China and geopolitical factors[44] - The company has established a new wholly-owned subsidiary, Linkz Cables Mexico, to increase market share outside of China and Asia, with a new factory expected to commence production in 2024[43] - The company aims to leverage the "East Data West Computing" policy to enhance its market position and strategic resources for sustainable growth[44] - The company anticipates that the 5G technology development will drive demand for data center services and related products[43] - The automotive wiring harness products are expected to help the company tap into the growing electric vehicle market in China, which aims for 20% of new car sales to be electric by 2025[44] Employee and Corporate Governance - The group had a total of 4,607 employees as of September 30, 2023, an increase from 3,805 employees a year earlier[53] - The total employee benefit expenses, including directors' remuneration, for the period amounted to approximately HKD 261.3 million, slightly down from HKD 261.9 million in the previous year[53] - The audit committee has reviewed the interim results and confirmed compliance with applicable accounting standards and regulations[59] - The company continues to monitor foreign exchange risks and has implemented prudent financial management policies to mitigate these risks[50] Capital Expenditures - The company made capital expenditures of approximately HKD 58,179,000 on property, plant, and equipment, a decrease from HKD 151,211,000 in the previous year[26] - The group has capital commitments for property, plant, and equipment amounting to HKD 19.8 million as of September 30, 2023, compared to HKD 20.7 million as of March 31, 2023[51]

Company Overview - The Group has over 30 years of experience in providing customized interconnect solutions, with manufacturing facilities located in Shanghai, Suzhou, and Huizhou, PRC[3]. - The Group's product offerings include a variety of copper and optical fiber cable assemblies, digital cable products, and servers, tailored to customer specifications[3]. - The Group's headquarters is located in Hong Kong, with a registered office in the Cayman Islands[10]. - The Group's website is www.time-interconnect.com, providing further information about its services and products[10]. Business Strategy and Vision - The Group aims to become a Tier-1 supplier in sectors such as 5G telecommunications, data communication, healthcare, transport, and industrial markets[6]. - The Group's strategy focuses on maintaining long-term and stable business relationships with market leaders[7]. - The Group's vision is to be recognized as a "Preferred Supplier" capable of delivering world-class quality and services consistently[5]. - The Group aims to diversify its business portfolio and broaden its income sources through proactive investment opportunities[28]. Financial Performance - Revenue for the year ended 31 March 2023 was HK$5,764.8 million, representing a 60.6% increase from HK$3,590.1 million in 2022[11]. - Profit for the year increased by 28.3% to HK$215.9 million, up from HK$168.3 million in the previous year[11]. - Adjusted profit for the year was HK$215.9 million, a 10.6% increase from HK$195.2 million in 2022[11]. - Basic earnings per share rose to 11.1 Hong Kong cents, a 22.0% increase from 9.1 Hong Kong cents in the prior year[11]. - The company reported a significant cash outflow from operations of HK$1,393.4 million, a decrease of 630.8% compared to cash generated of HK$262.5 million in 2022[11]. - Capital expenditure increased dramatically to HK$227.3 million, up 282.7% from HK$59.4 million in the previous year[11]. Market and Product Development - The Group established a new subsidiary, Time X-Ware Technology Limited, to enter the server business, enhancing its product offerings in data centers[16]. - The Group plans to establish a new plant in Mexico to increase market share outside China and Asia, focusing on 5G-related and data center business[21]. - Demand for medical equipment cables is expected to positively impact the Group's orders in FY2023 due to increased health awareness post-pandemic[23]. - The automotive wiring products are anticipated to capture opportunities in the growing electric vehicle market, with a target of 20% new energy vehicle sales by 2025 in China[23]. - The Group aims to expand its server business to leverage the market potential of cloud services and communications in China[23]. Operational Efficiency - The Group emphasizes efficient production capabilities and extensive quality control measures[7]. - The average copper price decreased significantly during the review year, impacting the gross profit margin, which fell to 10.8% from 16.4%[15]. - The overall gross profit margin decreased from 16.4% to 10.8% compared to the Previous Year due to high material costs and the introduction of the server business[40]. - The Group's total operating expenses as a percentage of revenue decreased to 5.5% from 9.0% in the Previous Year[32]. Shareholder and Dividend Information - The Board proposed a final dividend of HK0.5 cents per share for FY2023, down from HK1 cent in FY2022[20]. - The Directors recommended a final dividend of HK0.5 cents per share for FY2023, down from HK1.0 cent in FY2022, totaling approximately HK$9.7 million[46]. - The Company reserves the right to update its Dividend Policy at any time without a legally binding commitment to pay dividends[107]. Corporate Governance and Management - The company is committed to maintaining high standards of corporate governance and financial transparency[94][95]. - The Group's management actively monitors foreign exchange exposure and may consider hedging significant foreign currency risks as necessary[85]. - The Company has established a Remuneration Committee to review the emolument policy and structure for Directors and senior management, meeting at least once a year[151][154]. - The Board currently consists of two executive Directors, one non-executive Director, and three independent non-executive Directors, exceeding the requirement of at least one-third independent non-executive Directors as per Listing Rules[189]. Sustainability and Social Responsibility - The Group has implemented various environmental initiatives, such as using LED lighting and heat recovery systems, and has received multiple recognitions for its sustainability efforts during FY2023[168]. - The Group is committed to reducing carbon emissions and has identified six key United Nations Sustainable Development Goals relevant to its operations[168]. - Charitable donations made by the group during the year ended March 31, 2023, totaled approximately HK$51,900, an increase from approximately HK$45,900 in 2022[121]. Future Outlook - The company provided a positive outlook for the next fiscal year, projecting a revenue growth of 25% to $625 million[101]. - The Group anticipates continued growth in the data center sector due to rising cloud technology utilization and the development of 5G[55]. - The Group's strategy focuses on achieving long-term, steady, and sustainable growth while considering environmental, social, and governance aspects[188].

Financial Performance - Revenue for the year ended March 31, 2023, was HKD 5,764.8 million, representing a 60.6% increase from HKD 3,590.1 million in the previous year[2] - Net profit for the year was HKD 215.9 million, up 28.3% from HKD 168.3 million, with adjusted net profit increasing by 10.6% to HKD 215.9 million[2] - Basic earnings per share rose to HKD 11.1, a 22.0% increase from HKD 9.1 in the previous year[2] - The operating profit for the year was HKD 316,594,000, compared to HKD 297,220,000 in the previous year, reflecting an increase of about 6.4%[12][14] - The company reported a pre-tax profit of HKD 256,240,000 for the year, up from HKD 232,855,000 in the previous year[13][14] - The adjusted net profit for the year was HKD 215.9 million, reflecting a 20.7% increase from HKD 195.2 million in the previous year[39] - The profit before tax for fiscal year 2023 was HKD 256.3 million, up HKD 23.4 million or 10.0% from HKD 232.9 million in the previous year[50] Revenue Breakdown - The revenue breakdown includes HKD 1,889,886,000 from wire components, HKD 1,370,708,000 from digital wires, and HKD 2,527,782,000 from server products[13] - Revenue from server sales amounted to HKD 2,499,162 thousand in 2023, with additional commission income from server-related components of HKD 28,620 thousand[22] - The group’s revenue from the Chinese market reached HKD 4,033,900,000 for the year ended March 31, 2023, up from HKD 1,664,349,000 in the previous year[18] - The new server business contributed significantly to revenue growth, with total revenue from this segment reaching HKD 2,527.8 million, accounting for 43.8% of total revenue[41] Expenses and Costs - Gross profit increased by 6.2% to HKD 624.7 million, down from HKD 588.1 million, resulting in a gross margin of 10.8%, a decrease of 5.6 percentage points[2] - Cash generated from operations was negative at HKD (1,393.4) million, a significant decline of 630.8% compared to HKD 262.5 million in the previous year[2] - Capital expenditure surged by 282.7% to HKD 227.3 million, up from HKD 59.4 million[2] - Total operating expenses for FY2023 were HKD 314.9 million, a decrease of HKD 7.0 million or 2.2% from HKD 321.9 million in the previous year[47] - Financing costs for the fiscal year 2023 amounted to HKD 55.8 million, an increase from HKD 38.0 million in the previous year[49] Assets and Liabilities - Total assets increased to HKD 4,866.7 million, compared to HKD 2,000.7 million in the previous year[6] - The total liabilities of the group as of March 31, 2023, were HKD 4,962,894,000, with reportable segment liabilities of HKD 1,132,672,000[15] - As of March 31, 2023, the shareholders' equity was approximately HKD 1,132.4 million, an increase of HKD 81.2 million or 7.7% compared to HKD 1,051.2 million on March 31, 2022[58] - The bank loans increased significantly to HKD 1,348.1 million as of March 31, 2023, up by HKD 285.9 million or 26.9% from HKD 1,062.2 million on March 31, 2022[59] Market and Strategic Developments - The company plans to establish a new factory in Mexico to expand its market share outside of China and Asia, aiming to capitalize on the upcoming 5G network opportunities[56] - The company is optimistic about the growth potential of its server business, which is expected to enhance its existing wire and cable products and expand its customer base[57] - The automotive market, particularly electric vehicles, is projected to grow significantly, with the Chinese government targeting 20% of new car sales to be electric vehicles by 2025[56] Employee and Operational Insights - The total employee costs for 2023 were HKD 504,591 thousand, an increase from HKD 459,472 thousand in 2022[25] - The group had approximately 3,949 employees as of March 31, 2023, an increase from 3,232 employees in the previous year, driven mainly by the growth in new server business and recruitment in Huizhou[67] Governance and Compliance - The company has adopted the corporate governance code as per the listing rules and has complied with all applicable provisions during the fiscal year ending March 31, 2023[69] - The audit committee believes that the audited consolidated financial statements are prepared in accordance with applicable accounting standards and fairly present the group's financial position as of March 31, 2023[74]

Financial Performance - For the six months ended 30 September 2022, the company reported revenue of HK$3,280.0 million, an increase of HK$1,539.5 million or 88.5% compared to HK$1,740.5 million for the same period last year[17]. - The gross profit for the period was HK$312.0 million, reflecting a slight increase of 1.2% from HK$308.4 million in the previous year[11]. - The total profit for the period was HK$91.3 million, showing a marginal decrease of 0.1% compared to HK$91.4 million in the same period last year[11]. - Basic earnings per share decreased by 6.0% to 4.7 Hong Kong cents from 5.0 Hong Kong cents in the previous year[11]. - The operating profit for the period was HK$128.6 million, a decrease of HK$29.2 million or 18.5% from HK$157.8 million in the same period last year[17]. - The company experienced a gross profit margin of 9.5%, down 8.2 percentage points from the previous year[11]. - The Group's adjusted profit for the period was HK$91.3 million, with an adjusted net profit margin of 2.8%[19]. - Total operating expenses as a percentage of revenue were 5.2%, compared to 9.0% in the previous year[19]. - The effective tax rate for the period was 12.2%, down from 32.2% in the previous year[19]. - The total profit for the reporting period was HK$91.3 million, a decrease of HK$0.1 million or 0.1% compared to the same period last year, with a net profit margin of 2.8% compared to 5.3% last year[36]. Revenue Breakdown - Revenue from the telecommunication sector increased by HK$69.8 million or 24.7% to HK$352.7 million, driven by steady orders for 5G products[23]. - The medical equipment sector's revenue was HK$128.5 million, a slight increase of HK$2.5 million or 2.0% compared to HK$126.0 million in the previous year[23]. - Revenue from the industrial equipment sector decreased by HK$31.1 million or 52.1% to HK$28.6 million due to global inflation and increased borrowing costs[25]. - The data centre sector's revenue slightly decreased by HK$17.0 million or 4.5% to HK$358.0 million, maintaining high shipment levels[24]. - The server business contributed significantly, generating HK$1,530.9 million, accounting for 46.7% of total revenue[22]. - Revenue from the People's Republic of China (PRC) reached HK$2,373,145, up from HK$857,157, indicating a growth of 176.5% year-over-year[123]. - Server product revenue was HK$1,530,925 for the six months ended September 30, 2022, compared to zero in the same period of 2021, marking a new revenue stream for the company[122]. Cost and Expenses - The average copper price during the reporting period was USD 8,594 per ton, a decrease of 9.8% compared to USD 9,531 per ton in the same period last year[13]. - The company adjusted selling prices to customers by 5% to 10% in May 2022 due to high material costs, including PVC and labor[13]. - Research and development expenses increased to HK$67.8 million, an increase of HK$10.4 million or 18.0% compared to the same period last year, with R&D expenses as a percentage of revenue decreasing from 3.3% to 2.1%[27]. - Total operating expenses were HK$169.8 million, an increase of HK$13.8 million or 8.9% compared to HK$156.0 million last year, with total operating expenses as a percentage of revenue decreasing from 9.0% to 5.2%[27]. Shareholder Information - The board declared an interim dividend of HK0.5 cent per share, amounting to approximately HK$9.7 million[33]. - Shareholders' funds decreased by HK$90.3 million or 8.6% to approximately HK$960.9 million as of 30 September 2022, primarily due to RMB depreciation[50]. - The Group's bank loan decreased by HK$80.1 million or 7.5% to HK$982.1 million as of 30 September 2022, mainly due to repayment of a club loan for digital cable business acquisition[51]. - The Group declared a final dividend of HK$19,460,000 for the interim period ended 30 September 2022, compared to HK$27,606,000 for the same period in 2021[130]. Corporate Governance - The company has fully complied with the Corporate Governance Code during the six months ended September 30, 2022[83]. - The Audit Committee was established on January 24, 2018, with a focus on reviewing financial information and internal control procedures[83]. - All Directors have complied with the Model Code for securities transactions during the six months ended September 30, 2022[83]. - The company emphasizes good corporate governance practices to enhance shareholder value[83]. Market Outlook - The management remains confident in capturing market opportunities with the arrival of the 5G network, supported by the group's enlarged production capacity and established business fundamentals[44]. - The demand for cable assembly products is expected to increase due to the rapid development and deployment of 5G technology[45]. - Future outlook remains positive with expectations of continued revenue growth driven by new product launches and market expansion strategies[123]. Acquisitions and Investments - The company acquired 100% of Time Interconnect Wire Technology Limited for a cash consideration of HK$69,000,000, completed on August 31, 2021[166]. - The acquisition resulted in a gain on bargain purchase of HK$3,201,000 due to the fair value of net assets acquired exceeding the consideration paid[167]. - The Group completed the acquisition of GP Industries Limited on August 31, 2021, which is detailed in note 17[183]. Employee Information - Total employee benefit expenses, including Directors' remuneration, were approximately HK$261.9 million for the reporting period, compared to approximately HK$215.9 million in the same period last year[70]. - The total headcount for the group increased to approximately 3,805 employees as of September 30, 2022, up from approximately 2,851 employees a year earlier[70].

Business Overview - The Group has over 30 years of experience in providing customized interconnect solutions and has expanded its business scale continuously in 2020 and 2021, covering digital cable and automotive wire harness sectors [6]. - The Group manufactures a wide variety of copper and optical fiber cable assemblies and digital cable products tailored to individual customer specifications, serving established PRC and international clients across various sectors [7]. - The Group aims to become a Tier-1 supplier of cable products and high-performance interconnect products in the 5G telecommunications, data communication, healthcare, transport, and industrial sectors [10]. - The Group's business model is based on Contract Manufacturing Services (CMS), producing made-to-order cable products upon receipt of customer orders [8]. - The Group emphasizes long-term and stable business relationships with market leaders, enhancing its competitive strength in the interconnect market [16]. - The Group's headquarters is located in Hong Kong, with manufacturing facilities in Shanghai, Suzhou, and Huizhou, PRC [6]. - The Group's vision is to be recognized as a leading provider of electronic interconnect products, delivering world-class quality and services consistently [9]. - The management team possesses extensive market knowledge, contributing to the Group's adaptability and customer-driven approach [16]. Financial Performance - Revenue for FY2022 was HK$3,590.1 million, an increase of 19.4% compared to HK$3,008.0 million in FY2021 [39]. - Gross profit increased by HK$7.9 million or 1.4% to HK$588.1 million, with a gross profit margin decrease from 19.3% to 16.4% [40]. - Net profit for FY2022 was HK$168.3 million, a decrease of 25.7% from HK$226.6 million in FY2021, with a net profit margin dropping from 7.5% to 4.7% [40]. - Operating profit decreased by 13.6% to HK$277.0 million, with the operating profit margin falling from 10.7% to 7.7% [40]. - Cash generated from operations increased by 38.3% to HK$262.5 million, and bank balances and cash rose by 41.1% to HK$220.9 million [24]. - Proposed final dividend for FY2022 is HK1 cent per share, down from HK1.5 cents in FY2021, totaling approximately HK$19.5 million [41]. - The effective tax rate increased to 27.7% from 15.5% in the previous fiscal year, impacting the profit before taxation which was HK$232.8 million, down HK$35.3 million or 13.2% from HK$268.1 million [84]. - Basic earnings per share for FY2022 was HK9.1 cents, compared to HK12.3 cents in FY2021 [120]. Market Trends and Opportunities - The company expects continued growth in the telecommunications sector driven by the large-scale replacement of 5G devices and increased demand for cable assembly products [47]. - The data center sector is anticipated to grow due to the increasing utilization of cloud technology and the development of 5G, which will boost applications in big data and IoT [48]. - The medical equipment sector is expected to maintain demand for medical cables due to ongoing pandemic challenges, with plans to enhance R&D capabilities in this area [49]. - The company is optimistic about the future growth potential of the new business, driven by investments in digital infrastructure and local supply chain enhancements in China [56]. - The Group remains confident in capturing market opportunities with the arrival of the 5G network due to its enlarged production capacity [138]. - By 2025, new energy vehicle sales in China are expected to reach 20% of total new vehicle sales, presenting significant opportunities for the Group [146]. Acquisitions and Strategic Alliances - The company completed the acquisition of automotive wire harness business for HK$69.0 million, aiming to expand its product portfolio and enter the electric vehicle market [33]. - Luxshare Precision acquired 72.18% of the company's shares for HK$1,104 million, becoming the controlling shareholder [38]. - The acquisition of GPIM Group is seen as a strategic move to diversify the business and enhance income sources, particularly in the automotive wiring products sector [53]. - The acquisition of TIME Interconnect Technology Group has been successfully completed, providing attractive opportunities for business expansion and enhancing revenue sources and long-term development potential [55]. - The strategic alliance with Luxshare Precision is expected to enhance the company's core competitiveness and growth potential in consumer electronics, communications, healthcare, and the automobile industry [58]. Challenges and Risks - The pandemic has caused disruptions in shipments and business growth due to container shortages and increased transportation costs [64]. - The average copper price significantly increased during the review year, impacting profitability despite passing costs to customers [31]. - The company adjusted selling prices in May 2021 and May 2022 due to rising material costs, including copper and PVC [31]. - The shift in economic activities due to the pandemic has increased the demand for network communication applications [141]. Research and Development - Research and development expenses increased by HK$33.0 million or 37.3% to HK$121.4 million for FY2022, representing 3.4% of the Group's revenue [110]. - The Digital Cable Business Unit is leveraging R&D resources to produce high-quality smart car products that meet advanced specifications [147]. - The Group is focused on expanding its medical equipment customer base and strengthening R&D capabilities to meet growing market demand [148]. Operational Efficiency - Total operating expenses increased to HK$321.9 million, representing 9.0% of revenue, compared to 8.7% in the previous fiscal year [84]. - The integration of GPIM Group's production facilities is expected to optimize management operations and enhance efficiency [150]. - Cash generated from operations was HK$262.5 million, an increase of HK$72.7 million compared to the previous year, reflecting improved operational efficiency [158].

Business Overview - The Group has nearly 30 years of experience in providing customized interconnect solutions and has expanded its business scale continuously in 2020 and 2021, covering digital cable and automotive wire harness sectors [3]. - The Group manufactures a wide variety of copper and optical fiber cable assemblies and digital cable products tailored to individual customer specifications, serving established PRC and international clients across various sectors [3]. - The Group aims to become a Tier-1 supplier of cable products and high-performance interconnect products in the 5G telecommunications, data communication, healthcare, transport, and industrial sectors [6]. - The Group's business model is based on Contract Manufacturing Services (CMS), producing made-to-order cable products upon receipt of customer orders [4]. - The Group has established long-term and stable business relationships with market leaders, enhancing its competitive strength in the interconnect market [7]. - The Group's headquarters is located in Hong Kong, with manufacturing facilities in Shanghai, Suzhou, and Huizhou, PRC [3]. - The Group's vision is to be recognized as a "Preferred Supplier" capable of delivering world-class quality products and services consistently [5]. - The Group's management team possesses extensive market knowledge, contributing to its competitive advantages in the industry [7]. Financial Performance - Revenue for the six months ended 30 September 2021 was HK$1,740.5 million, representing a 20.7% increase from HK$1,441.7 million in the same period last year [11]. - Gross profit for the same period was HK$308.4 million, a slight increase of 1.5% compared to HK$303.8 million in the previous year [11]. - Adjusted total profit for the period was HK$114.9 million, down 14.8% from HK$134.8 million in the prior year [11]. - Basic earnings per share (adjusted) decreased to 6.2 Hong Kong cents, a decline of 15.1% from 7.3 Hong Kong cents in the same period last year [11]. - The gross profit margin decreased to 17.7%, down 3.4 percentage points from 21.1% in the previous year [11]. - Operating profit for the Reporting Period was HK$157.8 million, a decrease of HK$32.4 million or 17.0% from HK$190.2 million for the same period last year, with the operating profit margin dropping to 9.1% [16]. - The Group's net profit margin for the Reporting Period was 6.6%, down from 9.4% in the previous year [16]. - Total operating expenses for the Reporting Period were HK$1,582.7 million, representing 90.9% of revenue, an increase from 86.8% in the previous year [16]. Market and Sector Performance - Data centre sector revenue increased by HK$7.1 million or 1.9% to HK$375.0 million compared to HK$367.9 million in the same period last year, maintaining the highest revenue sector in the cable assembly business [19]. - Telecommunication sector revenue declined by HK$25.8 million or 8.4% to HK$282.9 million from HK$308.7 million in the same period last year, although profit margins improved due to stable 5G product orders [20]. - Medical equipment sector revenue rose by HK$32.5 million or 34.8% to HK$126.0 million from HK$93.5 million in the same period last year, driven by increased orders for medical equipment cables [21]. - Industrial equipment sector revenue increased by HK$21.8 million or 57.5% to HK$59.7 million from HK$37.9 million in the same period last year, supported by economic recovery measures [21]. - Automotive sector generated HK$12.1 million in revenue for one month following the acquisition of automotive wire harness business, enhancing the company's investment portfolio [22]. - Networking cable revenue increased by HK$271.7 million or 47.8% to HK$839.8 million from HK$568.1 million in the same period last year, with price adjustments linked to copper price fluctuations [24]. - Specialty cable revenue decreased by HK$20.6 million or 31.4% to HK$45.0 million from HK$65.6 million in the same period last year, with a significant drop when excluding copper price impacts [25]. Acquisitions and Strategic Developments - The Group completed the acquisition of automotive wire harness manufacturing and sales business for a final consideration of HK$69.0 million, enhancing its income sources and long-term development potential [14]. - The Group has restructured its "Networking Cables Business Unit" into "Digital Cable Business Unit," subdividing it into "Networking Cable Sector" and "Specialty Cable Sector" to align with its strategy of accelerating specialty cable development [14]. - The successful acquisition of GPIM Group provides an opportunity to expand and diversify the Group's business and investment portfolio, enhancing income sources and long-term development potential [43]. - The acquisition of Linkz Cables Limited has created synergy by integrating R&D resources, enabling the production of reliable and high-quality smart car products [44]. Financial Position and Capital Management - As of September 30, 2021, shareholders' funds increased by HK$77.8 million or 9.1% to approximately HK$930.3 million from HK$852.5 million as of March 31, 2021 [46]. - The Group's bank balances and cash rose by 41.1% to HK$220.9 million as of September 30, 2021, compared to HK$156.6 million as of March 31, 2021 [46]. - The Group's bank loan increased by HK$115.4 million or 11.4% to HK$1,127.6 million as of September 30, 2021, primarily due to a new bank loan of HK$50 million for the acquisition of automotive wire harness business [46]. - Capital expenditure for the reporting period amounted to HK$39.7 million, funded entirely from internal resources [46]. - The Group's gearing ratio was 119.6% as of September 30, 2021, compared to 117.1% as of March 31, 2021 [47]. - The Group monitors foreign exchange risk exposure and enters into forward foreign exchange contracts to mitigate this risk [49]. - The Group maintains a prudent financial management policy and does not engage in high-risk speculative activities [50]. Corporate Governance and Compliance - The Company has fully complied with the Corporate Governance Code during the six months ended 30 September 2021 [84]. - The Audit Committee, established on 24 January 2018, is responsible for reviewing financial information, internal control procedures, and risk management systems [84]. - All Directors have fully complied with the required standards set out in the Model Code during the six months ended 30 September 2021 [85]. - The Company has established a framework for effective management and enhancing shareholders' value through good corporate governance practices [84]. Shareholder Information - The Group's issued share capital was HK$18.4 million with 1,840,432,000 ordinary shares as of September 30, 2021 [48]. - The company declared an interim dividend of HK1 cent per share, totaling approximately HK$18.4 million [37]. - The interim dividend is expected to be paid on or before January 7, 2022 [86]. - As of September 30, 2021, Mr. Lo Chung Wai Paul held 1,380,000,000 shares, representing approximately 74.98% interest in the Company [57]. Future Outlook - The global economy is expected to grow by 4.9% in 2022, with Asian emerging markets growing by 6.4% [38]. - The demand for cable assembly products is expected to increase due to the large-scale replacement of 5G devices and equipment in the coming years [39]. - The growth of cloud technology is anticipated to drive the development of data centers, benefiting the company's business [40]. - The medical equipment sector is expected to maintain dynamic growth, with continued demand for medical cables [41]. - The Group expects demand for sales orders in the industrial equipment sector to gradually increase in the coming year [43].