Investment Rating - The report maintains a "Buy" rating for the company with a target price of HK$ 1.95, reflecting a downward adjustment from the previous target of HK$ 2.85 [1]. Core Insights - The company experienced a disappointing revenue growth of 8% in the first half of 2024, with a further decline in gross margin to 15.9% and net profit margin dropping to 3.4% [1]. - Revenue growth was the lowest since 2021, primarily due to weak performance in the automotive market, which negatively impacted the company's key revenue segments: new energy and intelligent driving [1]. - Despite the increasing penetration rate of new energy vehicles, intense price competition has compressed profit levels for upstream participants, limiting growth potential for the company [1]. - The report indicates that the company needs to enhance pricing and offer upgraded product combinations to achieve significant improvement, although a major turnaround is unlikely before downstream price wars improve [1]. - Positive signals for recovery are anticipated in 2025, with new solutions expected to contribute significantly to profits by 2026 [1]. Summary by Sections Financial Performance - Revenue for 2024 is projected at RMB 6,277.2 million, with a year-on-year growth of 8.2% [5]. - Gross profit is expected to be RMB 1,002.7 million, with a gross margin of 16.0% [5]. - Net profit is forecasted to decline by 31.9% to RMB 212.9 million in 2024 [5]. Market Position - The company holds a market capitalization of approximately HK$ 1.3 billion [1]. - The report highlights the competitive landscape, noting that the average price-to-earnings ratio for similar companies is significantly higher, indicating potential undervaluation [2]. Future Outlook - The company is expected to see initial recovery in 2025, with profit margins normalizing by 2026 as new solutions are launched [1]. - The anticipated increase in the proportion of self-produced batteries by GAC is expected to bring more orders to the company [1].

Investment Rating - The report maintains a "Buy" rating for Intron Tech with a target price of HK$2.35, down from the previous target of HK$5.53, reflecting a significant potential upside from the current price of HK$1.2 [4][13]. Core Insights - Intron Tech reported revenue of RMB 2.84 billion for the first half of fiscal year 2024, representing an 8% year-on-year increase, but net profit decreased by 37% to RMB 977 million due to increased competition and pricing pressure from automotive OEMs, leading to a gross margin decline to 15.9% [1][2]. - The management expects a recovery in net profit margins in the second half of fiscal year 2024, driven by new orders in the new energy and ADAS sectors, as well as expansion into overseas markets [2][4]. - The report has adjusted earnings per share forecasts for fiscal years 2024 and 2025 down by 43%-49% due to the weak performance in the first half of 2024 and anticipated cost pressures [2][4]. Revenue Summary - Intron Tech's revenue is projected to grow by 9% year-on-year in fiscal year 2024, while net profit is expected to decline by 29% [2][12]. - The revenue breakdown shows strong growth in the new energy (16%), automation and connectivity (13%), and cloud server segments (25%), while body control, safety, and powertrain segments experienced weaker growth [1][11]. - The gross profit margin for the first half of 2024 was 15.9%, down from 20.6% in the same period last year, reflecting pressures in the automotive supply chain [1][12]. Financial Projections - For fiscal year 2024, revenue is estimated at RMB 6.32 billion, with a gross profit of RMB 1.02 billion and a net profit of RMB 225 million [9][10]. - The projected earnings per share for fiscal year 2024 is RMB 0.21, with a significant decrease from previous estimates [10][12]. - The report anticipates a gradual recovery in profit margins in fiscal year 2025, with net profit expected to rise to RMB 371 million [2][9]. Valuation Metrics - Intron Tech's current price-to-earnings ratios are 5.4x for fiscal year 2024 and 3.2x for fiscal year 2025, which are considered attractive compared to industry peers [2][13]. - The report highlights that Intron Tech is undervalued, especially given its high return on equity (ROE) levels [13].

Investment Rating - The report maintains a "BUY" rating for Intron Tech [15][16]. Core Insights - Intron Tech reported 1H24 revenue of RMB 2.84 billion, an 8% year-over-year increase, but net profit fell to RMB 97.7 million, a 37% decline year-over-year, primarily due to a gross profit margin (GPM) decline to 15.9% [1][19]. - The company expects a recovery in net profit margin in 2H24E driven by new order wins in new energy and ADAS, as well as expansion into overseas markets [1][15]. - The target price has been adjusted to HK$ 2.35, based on a lowered 10x FY24E P/E, reflecting near-term industry headwinds [1][15]. Financial Performance - 1H24 revenue growth was driven by strong performance in the new energy segment, which grew 16% year-over-year, while other segments like body control and powertrain saw declines [1][12]. - The GPM for 1H24 was 15.9%, down from 20.6% in 1H23, indicating pricing pressures along the auto supply chain [1][19]. - The report projects FY24E revenue to be RMB 6.32 billion, with a net profit of RMB 225 million, reflecting a 29% decline year-over-year [10][19]. Segment Analysis - The new energy segment is expected to continue its growth trajectory, with revenue projected to reach RMB 3.26 billion in FY24E, reflecting a year-over-year growth of 17.1% [12][19]. - The body control segment is projected to grow modestly, with revenue expected to reach RMB 951 million in FY25E, reflecting a 5% year-over-year increase [12][19]. - The powertrain segment is anticipated to face challenges, with a projected revenue decline of 23.1% in FY24E [12][19]. Valuation Metrics - Intron Tech is currently trading at 5.4x FY24E P/E and 3.2x FY25E P/E, which is considered attractive compared to peers in the automobile components sector [15][16]. - The report highlights that Intron's high return on equity (ROE) levels further support its undervaluation [15][16]. Upcoming Catalysts - Key catalysts for future growth include increased penetration of ADAS technologies and gaining market share among new energy vehicle clients [1][15].

Financial Performance - The total revenue for the first half of 2024 reached RMB 2,835.0 million, representing an 8% year-on-year increase from RMB 2,626.2 million[1]. - Net profit for the period was RMB 95.1 million, a decline of 37% compared to RMB 152.1 million in the same period last year[1]. - Gross profit decreased by 16% to RMB 451.9 million, with a gross margin of 15.9%, down 4.7 percentage points from the previous year[1][5]. - The net profit margin for the first half of 2024 was 3.4%, down from the previous year[5]. - Basic earnings per share for the period was RMB 8.98, down from RMB 14.21 in the previous year, reflecting a decline of 36.67%[36]. - Profit for the period decreased by 37% to RMB 95.1 million, down from RMB 152.1 million in the same period last year[23]. - Other income and gains fell by 19% to RMB 12.3 million, primarily due to a reduction in government subsidies compared to the previous year[17]. - Selling and distribution expenses were RMB 48.0 million, a 10% decrease year-on-year, attributed to cost control measures[18]. - Administrative expenses totaled RMB 248.8 million, down 9% from the previous year, with R&D expenses of RMB 215.0 million accounting for 7.6% of revenue[19]. - The total tax expense for the six months ended June 30, 2024, was RMB 27,134,000, compared to RMB 16,182,000 for the same period in 2023, indicating an increase of approximately 67.8%[52]. Revenue Segmentation - The revenue from the new energy vehicle segment increased by 15.9%, accounting for 51.2% of the total revenue[5]. - The revenue from the new energy vehicle solutions increased by 15.9% year-on-year to RMB 1,452.6 million for the six months ended June 30, 2024[6]. - The body system business recorded a 1.4% growth to RMB 422.7 million, accounting for 14.9% of total revenue, while the power system and safety system solutions saw declines of 26.3% and 8.9% respectively[7]. - The intelligent driving and networking solutions generated revenue of RMB 229.9 million, a 13% increase, representing 8.1% of total revenue[8]. - Revenue from cloud server-related electronic solutions surged by 24.9% to RMB 108.8 million, driven by the rapid development of artificial intelligence technology[9]. - Revenue from mainland China was RMB 2,698,257 thousand, up from RMB 2,613,056 thousand, indicating a growth of about 3.3% year-over-year[46]. Market Trends - The automotive market in China saw a total sales volume of 14.047 million vehicles in the first half of 2024, a year-on-year increase of 6.1%[2]. - The export volume of new energy vehicles reached 605,000 units, reflecting a year-on-year growth of 13.2%[2]. - The global sales of new energy vehicles are projected to reach 17 million units in 2024, indicating stable growth in demand over the next decade[13]. Research and Development - The company maintained R&D expenses at 7.6% of total revenue, amounting to RMB 215.0 million, to support long-term growth opportunities[5]. - Research and development expenses amounted to RMB 215.0 million, a decrease of 7.5%, representing approximately 7.6% of total revenue[10]. - The group established a research and development center in Hong Kong in 2023, focusing on intelligent driving software and advanced power semiconductor applications[12]. - The group optimized the MCU 4th generation software platform architecture, accelerating software integration speed by solidifying more standard modules[11]. - The group completed the development of a vehicle-grade wireless Bluetooth smart sensor solution, addressing interference issues in complex electrical environments[11]. Financial Health - As of June 30, 2024, the company maintained a strong liquidity position with cash and cash equivalents of RMB 732.5 million, up from RMB 517.0 million at the end of 2023[24]. - The company did not declare any interim dividends for the review period, consistent with the previous year[26]. - The group expects to fully utilize the remaining unutilized net proceeds by the end of 2025 due to economic uncertainties[29]. - The company reported a decrease in trade receivables to RMB 1,647,149 thousand from RMB 1,848,235 thousand, a decline of 10.89%[38]. - The company’s equity attributable to owners of the parent was RMB 2,361,658 thousand as of June 30, 2024, compared to RMB 2,352,790 thousand as of December 31, 2023, reflecting a growth of about 0.4%[40]. Employee and Governance - As of June 30, 2024, the group employed 1,373 employees, a decrease from 1,517 employees as of June 30, 2023[27]. - Employee costs totaled RMB 199.3 million, representing 7.0% of the group's revenue during the period[27]. - The company has adopted the corporate governance code as per the listing rules and believes that its governance structure is appropriate despite deviations from certain provisions[32]. Strategic Initiatives - The company established a comprehensive testing and verification base in Nantong, Jiangsu Province, which began operations in 2023, enhancing its capabilities in power module packaging and assembly[10]. - The company is set to begin mass delivery of its new "motor controller power brick" solution by the end of this year, which is expected to enhance vehicle performance and reduce system costs[6]. - The group plans to enhance its market share and performance by developing innovative new energy solutions, including power bricks[13]. - The group aims to strengthen product localization and international market expansion to sustain long-term growth[14]. - The group emphasizes collaboration with leading chip suppliers to enhance product quality and industrial effectiveness[14].

Investment Rating - The report assigns a "Buy" rating to the company with a target price of HK$ 2.85, down from a previous target of HK$ 6.13 [2][11]. Core Insights - The company, 英恒科技 (01760.HK), experienced a decline in gross margin by 2.9 percentage points year-on-year to 18.7%, which was below expectations and significantly lower than the average gross margin [2]. - The slowdown in revenue growth was noted across various business segments, with the new energy segment remaining the primary revenue contributor, while the intelligent driving network was identified as the main growth driver [2]. - The company has faced intense competition, leading to a shift in pricing strategy to cope with market pressures, resulting in a gross margin of only 17.1% for the second half of the fiscal year 2023 [2]. - The report indicates a significant reduction in profit forecasts by approximately 51% to 58% due to the challenges faced, including low gross margins and high R&D expenditures [2]. Financial Summary - For the fiscal year 2023, the company achieved total revenue of RMB 5.8 billion, representing a year-on-year growth of 20.1% [11]. - The projected revenues for the upcoming years are RMB 6.84 billion in 2024, RMB 7.52 billion in 2025, and RMB 8.17 billion in 2026, with respective growth rates of 17.9%, 10.0%, and 8.6% [15]. - The net profit for 2023 is projected to decline by 24.0%, with further reductions expected in 2024 and 2025 [15]. Operational Challenges - The company is experiencing increased operational capital pressure due to rising financing costs and a longer cash conversion cycle, which has led to a higher net debt-to-equity ratio of 48.1% [2][14]. - The report highlights that the company has not seen signs of improvement in the first quarter of 2024 amidst ongoing price wars in the downstream market [2]. Market Position - The company is positioned within a highly competitive landscape, with significant pressure on product pricing and profit margins due to aggressive competition in the automotive sector [4][22]. - The report notes that the company’s pricing strategy has been adjusted to "cost + ~20%" but has not yielded significant changes in market conditions [2]. Conclusion - Overall, the report reflects a cautious outlook on the company's performance, emphasizing the need for strategic adjustments to navigate the challenging market environment while maintaining a "Buy" rating based on potential recovery and growth opportunities [2].

Investment Rating - The report maintains a "BUY" rating for Intron (01760.HK) with a target price of HKD 2.85 per share, down from HKD 6.13 [2][10]. Core Insights - Intron reported a year-on-year revenue increase of 20.1% to RMB 5,802.3 million for FY 2023, but the gross margin fell by 2.9 percentage points to 18.7%, which was lower than estimates [3][4]. - The company experienced a significant decline in net profit, retreating by 23.0% year-on-year, attributed to increased R&D expenses and a competitive pricing environment [4][10]. - The revenue growth was driven primarily by NEV Solutions, but competition led to manufacturers opting for lower-cost solutions, impacting growth in advanced driver-assistance systems (ADAS) [4][10]. - A shift in pricing strategy was noted, with a gross margin of 17.1% in the second half of 2023, indicating adjustments to cope with market pressures [4][10]. - The report anticipates continued challenges in 2024, with profit margins expected to remain under pressure due to lower gross margins and high R&D expenses [4][10]. Financial Summary - Revenue projections for the next few years are as follows: RMB 6,840.5 million in 2024, RMB 7,524.0 million in 2025, and RMB 8,174.4 million in 2026, reflecting a year-on-year growth rate of 17.9%, 10.0%, and 8.6% respectively [15]. - The gross profit is projected to increase from RMB 1,083.6 million in 2023 to RMB 1,247.8 million in 2024, with gross margins expected to stabilize around 18.8% in 2026 [15][17]. - The net profit is forecasted to decline significantly in 2024, with estimates of RMB 219.4 million, before recovering to RMB 301.3 million in 2025 and RMB 398.7 million in 2026 [15]. Operational Outlook - The report indicates a cautious operational outlook, with estimates cut by 51% to 58% due to ongoing difficulties, including lower gross margins and increased financial expenses [4][10]. - The company is expected to face a tightening working capital situation due to a longer cash conversion cycle and high R&D expenses [13][17].

Investment Rating - The report maintains a "BUY" rating for Intron Tech with a new target price (TP) of HK$5.53, based on a 12x FY24E P/E valuation methodology [13][14][21]. Core Insights - Intron's FY23 revenue was RMB 5.8 billion, reflecting a 20% year-over-year (YoY) growth, while net income decreased by 23.5% YoY to RMB 317 million. The gross profit margin (GPM) was 18.7%, down 2.8 percentage points YoY, attributed to intensified price competition [21][32]. - The company expects solid growth in the New Energy Vehicle (NEV) and Hybrid Electric Vehicle (HEV) segments, driven by increasing demand and export opportunities in China. However, margin pressure may persist due to heightened competition [21][32]. - The report highlights a significant increase in R&D expenses, which reached 9.0% of revenue due to talent recruitment and upfront investments. Management anticipates a normalization of these expenses in FY24E [21][32]. Revenue Forecasts - Revenue is projected to grow from RMB 6,975 million in FY24E to RMB 10,805 million in FY26E, with a YoY growth rate of 20.2% in FY24E and 24.2% in FY25E [21][26]. - The breakdown of revenue by segment shows strong growth in New Energy (131.6% YoY in 2021, 91.0% in 2022) and Automation & Connectivity (151.3% YoY in 2022) [21][26]. Earnings Summary - The earnings forecast for FY24E includes a revenue estimate of RMB 6,975 million, a gross profit of RMB 1,298 million, and a net profit of RMB 441 million, indicating a 39% YoY growth in net profit [21][26][32]. - The report notes that the EPS for FY24E is expected to be RMB 0.41, with a consensus estimate of RMB 0.55 for FY25E [21][26]. Valuation Metrics - Intron is currently trading at 4.5x FY24E P/E, significantly lower than the average P/E of 22.8x for its peers, indicating that it is undervalued [14][21]. - The report emphasizes the attractive risk/reward profile of Intron, especially in light of potential catalysts such as favorable NEV policies and increasing penetration of Advanced Driver Assistance Systems (ADAS) [14][21].

Revenue Performance - Total revenue for the year ended December 31, 2023, was RMB 5,802.3 million, representing a 20% increase compared to RMB 4,829.9 million in 2022, driven by growth across all automotive business segments, particularly in new energy vehicles and intelligent connected vehicles [4]. - Total revenue for the year increased by approximately 20% to RMB 5,802.3 million, driven by growth in the new energy vehicle, intelligent driving, and safety system segments [41]. - Total revenue for the year ended December 31, 2023, was RMB 5,802.33 million, representing a 20% increase from RMB 4,829.94 million in 2022 [45]. - Revenue from the new energy vehicle solutions grew by over 35% to RMB 2,787.6 million, increasing its share of total revenue from 42.8% in 2022 to 48.0% in 2023 [30]. - Revenue from safety system solutions rose by 33% to RMB 844.7 million, accounting for 14.6% of total revenue [31]. - The intelligent driving business saw a significant revenue increase of 59%, contributing 7% to total revenue [41]. - The revenue from the new energy segment reached RMB 2,787.59 million, a 35% increase compared to RMB 2,066.81 million in the previous year [45]. - Revenue from external customers in mainland China was RMB 5,623,425 thousand, up 17% from RMB 4,795,684 thousand in the previous year [173]. Profitability - The company reported a net profit of RMB 312.5 million for the year, compared to RMB 411.1 million in the previous year [39]. - Net profit for the year was RMB 312.55 million, a decrease of 24% from RMB 411.11 million in 2022, resulting in a net profit margin of 5.4% [45][56]. - The gross profit for the year was RMB 1,083.6 million, with a gross margin of 18.7%, down 2.8 percentage points from the previous year due to increased competition in the automotive industry [41]. - The gross profit margin decreased to 18.7% from 21.5% in the previous year, reflecting a 2.8 percentage point decline [45]. - The group’s pre-tax profit for 2023 was RMB 531,950 thousand, compared to RMB 392,097 thousand in 2022, marking a 36% rise [184]. Expenses and Costs - The group’s employee costs amounted to RMB 597.7 million, accounting for 10.3% of total revenue, an increase from RMB 481.3 million in 2022 [16]. - The group’s sales and distribution expenses were RMB 113.5 million, a 7% increase from the previous year, mainly due to higher travel and business entertainment expenses [6]. - Financing costs rose by 125% to RMB 1 billion, attributed to increased bank borrowings and rising interest rates [128]. - Cost of goods sold for the year was RMB 4,631,206 thousand, compared to RMB 3,752,535 thousand in 2022, reflecting a 23% increase [184]. Research and Development - The group continues to invest in R&D, focusing on advanced power semiconductors and collaborative robotics, aiming for long-term sustainable growth [3]. - Research and development expenses increased by 56% to RMB 520.2 million, accounting for 9.0% of total revenue, up from 6.9% in the previous year [62]. - The group has established a new R&D center in Hong Kong Science Park, focusing on intelligent driving software and advanced power semiconductor applications, set to operate in November 2023 [71]. - The group has completed the testing and validation capabilities for the zonal control unit solution and hybrid dual-motor drive testing, with over 669 testing projects undertaken in 2023, a 35.7% increase year-on-year [70]. Financial Position - The group maintained a strong cash position with cash and cash equivalents totaling RMB 517.0 million as of December 31, 2023, up from RMB 336.9 million in the previous year [9]. - As of December 31, 2023, the group had outstanding bank loans of RMB 1,651.8 million, an increase from RMB 950.2 million in the previous year [10]. - The net debt-to-equity ratio rose to 51% as of December 31, 2023, up from 41% in the previous year [100]. - The net value of current assets reached RMB 1,672.2 million, up from RMB 1,444.2 million as of December 31, 2022 [130]. - Total assets less current liabilities rose to RMB 2,644.5 million for the year ended December 31, 2023, up from RMB 2,168.2 million in 2022 [162]. Corporate Governance and Compliance - The company aims to maintain high levels of corporate governance to protect shareholder interests and enhance corporate value [141]. - The board proposed amendments to the company's articles of association to comply with the latest regulatory requirements effective from December 31, 2023 [143]. - The audit committee reviewed the accounting principles and policies adopted by the group for the year ended December 31, 2023, confirming compliance with applicable accounting standards [145]. Market Outlook and Strategy - The group is cautiously optimistic about business growth in the automotive sector, particularly in the context of global trends towards electrification and smart connectivity [3]. - The company plans to enhance its market presence in the international arena as domestic new energy vehicle exports accelerate [56]. - The company will maintain a flexible business model focused on light assets and heavy R&D to adapt to high global interest rates [120]. - The Chinese automotive market is expected to grow by approximately 3% in 2024, with sales projected to exceed 31 million vehicles [120].

FY23E Preview: industry headwinds mostly priced in; Awaiting recovery in FY24E PLEASE READ THE ANALYST CERTIFICATION AND IMPORTANT DISCLOSURES ON LAST PAGE MORE REPORTS FROM BLOOMBERG: RESP CMBR OR http://www.cmbi.com.hk1 Source: Company data, CMBIGM estimates 28% 37% 15% -14% 59%52% 19% 20% 24% 0 2,000 4,000 6,000 8,000 10,000 12,000 2017 2018 2019 2020 2021 2022 2023E 2024E 2025E (RMB mn) Revenue YoY Source: Company data, CMBIGM estimates PLEASE READ THE ANALYST CERTIFICATION AND IMPORTANT DISCLOSURES ON ...

Financial Performance - In the first half of 2023, the revenue from intelligent driving and networking business surged by 118% to RMB 203.3 million, driven by increased solution assembly rates and penetration [11]. - The group's revenue for the first half of 2023 reached RMB 2,626.2 million, a year-on-year increase of 27%, driven by strong performance in the automotive sector, particularly in new energy vehicles [42]. - Revenue from the new energy business increased by 58% year-on-year to RMB 1,253.0 million, outperforming the growth rate of the new energy vehicle market [30]. - The safety systems business saw a 43% year-on-year increase in revenue to RMB 390.2 million, supported by the growing application of advanced driver-assistance systems [31]. - The intelligent driving network revenue surged by 118% year-on-year to RMB 203.3 million, reflecting significant growth in this segment [43]. - Gross profit for the first half of 2023 increased by 21% year-on-year to RMB 541.0 million, with an overall gross margin of 20.6% [43]. - The group’s shareholder profit for the period was RMB 154.5 million, with a shareholder profit margin of 5.9%, down from 7.4% in the previous year [28]. - The company’s profit rose by 1% to RMB 152.1 million for the six months ended June 30, 2023, compared to RMB 151.4 million for the same period in 2022 [59]. - The net profit attributable to the parent company was RMB 154,456,000, slightly increasing from RMB 152,556,000 in the previous year, reflecting a growth of 1.2% [163]. Research and Development - Research and development expenses increased by 59% year-on-year, accounting for 8.9% of total revenue, up from 7.0% in the previous year [29]. - The group continues to enhance its research and development capabilities in electric, intelligent, and hydrogen-powered control systems to align with market trends [15]. - The group plans to expand its R&D capabilities with new centers in Shanghai and Shenzhen, and a new R&D center in Hong Kong expected to commence operations in November 2023 [38]. - The group has developed a high-performance intelligent driving system, MADC2.5, which has received certification from Horizon Matrix, enhancing its competitive edge in the autonomous driving sector [33]. - R&D expenses for the period amounted to RMB 205,811 thousand, a significant rise of 49.9% compared to RMB 137,244 thousand in the previous year [183]. Market Trends and Demand - The market share of new energy vehicles reached 28.3% in the first half of 2023, indicating a steady increase in demand [24]. - The company expects continued positive prospects in the Chinese automotive market, focusing on new energy and intelligent connected vehicles [51]. Financial Position and Cash Flow - Cash and cash equivalents totaled RMB 534.8 million as of June 30, 2023, up from RMB 336.9 million at the end of 2022 [60]. - The company’s total assets as of June 30, 2023, amounted to RMB 4,912,297,000, compared to RMB 3,974,913,000 as of December 31, 2022, indicating a significant increase of 23.4% [166]. - The company’s total liabilities increased to RMB 2,537,983,000 from RMB 1,906,676,000, representing a growth of 33.1% [166]. - The company reported a net cash inflow from operating activities of RMB 7,573,000, compared to a net outflow of RMB 8,917,000 in the same period of 2022 [199]. - The financing activities generated a net cash inflow of RMB 318,699,000, a recovery from a net outflow of RMB 29,127,000 in the same period last year [199]. Corporate Governance - The company has adopted the corporate governance code as per the listing rules and believes that its governance practices are in compliance, with a noted deviation regarding the roles of the chairman and CEO [157]. - The board of directors confirmed compliance with the corporate governance code throughout the review period [187]. - The company maintained a high level of corporate governance to enhance shareholder value and transparency [185]. Employee and Administrative Expenses - Administrative expenses rose by 35% to RMB 274.4 million, driven by increased travel and office-related costs [56]. - The company employed 1,517 staff as of June 30, 2023, compared to 1,171 a year earlier, with total employee costs amounting to RMB 226.5 million [73]. - The company has implemented attractive compensation packages, including competitive base salaries and annual performance bonuses [97]. Financing and Debt - The net debt-to-equity ratio increased to 48% as of June 30, 2023, compared to 41% at the end of 2022 [61]. - Financing costs surged by 197% to RMB 46.8 million due to increased bank borrowings and rising interest rates [58]. - The company has entered into a financing agreement for a syndicated loan of up to USD 60,000,000, with a repayment period of 36 months from the first drawdown date [160]. Shareholder Information - Major shareholder Magnate Era Limited holds 48.28% of the shares, totaling 525,000,000 shares [107]. - The combined shareholding of the top two shareholders, Magnate Era Limited and Treasure Map Ventures Limited, is approximately 55.18% [107]. - The company has a stock option plan with a maximum issuance limit of 10% of the shares outstanding as of July 12, 2018, which is approximately 100,000,000 shares [119].