Investment in Digital Technologies - The company plans to use approximately HKD 117.7 million (equivalent to RMB 100.6 million) for investment and upgrading of big data and AI analysis technology to expand its existing APM business [2]. - The board has decided to change the intended use of proceeds to invest in or upgrade digital technologies, including but not limited to CBDC, big data, and AI, to enhance all existing business segments [3]. - The company anticipates utilizing approximately RMB 32.6 million and RMB 50.6 million in the six months ending December 31, 2023, and the year ending December 31, 2024, respectively, for the new digital technology initiatives [6]. - The company has allocated HKD 83.2 million (equivalent to RMB 83.2 million) for the new digital technology initiatives, which were not part of the original plan [6]. Financial Proceeds and Allocation - The total net proceeds available as of June 30, 2023, amount to approximately HKD 138.0 million (equivalent to RMB 118.0 million), with a revised allocation due to the change in intended use [5]. - The company will continue to utilize HKD 17.4 million (equivalent to RMB 17.4 million) for general corporate and operational funding purposes [6]. Business Strategy and Impact - The board believes that the change in intended use will not adversely affect the existing business operations and will enhance the company's profitability [3]. - The initial intended use of proceeds was deemed insufficient for generating adequate profits, prompting the board to seek more flexibility in resource allocation [3]. - The board's decision aligns with the company's overall business strategy and is in the best interest of the company and its shareholders [3]. Reporting and Compliance - The supplementary information provided does not affect any other information contained in the 2022 annual report [7].

Financial Performance - The company reported revenue of RMB 103,767,000 for the year ended December 31, 2022, representing a 4.7% increase from RMB 99,120,000 in 2021[7]. - Gross profit decreased to RMB 48,052,000, down 12.3% from RMB 54,811,000 in the previous year, resulting in a gross margin of 46.3% compared to 55.3%[7]. - The company experienced a net loss of RMB 14,125,000, with a net loss margin of (13.6)%, contrasting with a profit of RMB 3,481,000 and a margin of 3.5% in 2021[7]. - The group's revenue increased by approximately 4.7% for the year ended December 31, 2022, but recorded a loss attributable to shareholders of approximately RMB 11.9 million[9]. - Revenue from the overall APM system solutions decreased by approximately 5.6% to about RMB 44.6 million for the year ended December 31, 2022, down from approximately RMB 47.3 million in the previous year[15]. - Revenue from software development services slightly decreased by about 1.3% to approximately RMB 27.7 million for the year ended December 31, 2022, compared to RMB 28.1 million in 2021[16]. - Revenue from technical services decreased by approximately 13.6% to about RMB 14.1 million for the year ended December 31, 2022, down from RMB 16.3 million in the previous year[17]. - Revenue from embedded hardware and standard APM software sales increased by approximately 132.0% to about RMB 17.4 million for the year ended December 31, 2022, compared to RMB 7.5 million in 2021[18]. - The company's basic loss per share for the year was RMB (1.85), compared to earnings per share of RMB 0.73 in the previous year[155]. Cash and Liquidity - Cash and cash equivalents increased significantly to RMB 171,366,000, a 167.5% rise from RMB 64,061,000 in the prior year[8]. - The company's cash and cash equivalents increased to approximately RMB 171.4 million as of December 31, 2022, compared to RMB 64.1 million as of December 31, 2021, with a current ratio improvement from 5.8 to 8.2[25]. - The total cash and cash equivalents at the end of 2022 increased to RMB 171,366 thousand from RMB 64,061 thousand in 2021, representing a growth of 167%[160]. Assets and Liabilities - Total assets grew by 49.5% to RMB 329,372,000, up from RMB 220,302,000 in 2021[8]. - Total liabilities increased by 9.1% to RMB 39,997,000, compared to RMB 36,647,000 in the previous year[8]. - The company's net assets grew to RMB 289,375,000, an increase of 57.5% from RMB 183,655,000 in 2021[157]. - Total current assets reached RMB 313,323,000, a significant increase of 56.8% from RMB 199,948,000 in the previous year[156]. Capital Structure and Financing - The company completed a rights issue in June 2022 to strengthen its capital structure, with plans to use the funds for competitive advantage and potential acquisitions[6]. - The group raised approximately HKD 139.7 million (equivalent to approximately RMB 119.5 million) through a rights issue to invest in big data and AI analysis technologies[11]. - The company raised approximately HKD 139.7 million (around RMB 119.5 million) through a rights issue, issuing 254 million shares at a subscription price of HKD 0.55 per share, which is a discount of about 34.5% from the market price on the announcement date[28]. - The net proceeds of approximately HKD 117.7 million from the rights issue will be used for investments and upgrades in big data and AI analytics technology, including the development of big data mining capabilities and privacy computing capabilities[29]. - The company issued shares raising RMB 119,450 thousand in 2022, with issuance costs of RMB (1,448) thousand[160]. Research and Development - Research and development costs increased by approximately 52.6% to about RMB 36.6 million for the year ended December 31, 2022, compared to RMB 24.0 million in 2021[22]. - The company plans to continue investing in R&D and market expansion to drive future growth despite the current financial challenges[158]. Management and Governance - The company reported a significant management experience with the current CEO, Mr. Shi, having over 10 years of experience in listed company management[44]. - The independent non-executive director, Mr. Yang, has over 24 years of experience in corporate finance and management, including roles as CFO and CEO in various listed companies[46]. - The company has a diverse board with members having backgrounds in finance, law, and technology, enhancing its strategic decision-making capabilities[46][47]. - The company has established three committees: Audit Committee, Remuneration Committee, and Nomination Committee, with the majority of members being independent non-executive directors[109]. - The board consists of three executive directors and three independent non-executive directors as of the report date[97]. Shareholder Relations - The company has a dividend policy to distribute dividends semi-annually, subject to profitability and cash flow considerations[86]. - Shareholders holding at least 10% of the paid-up capital have the right to request the board to convene a special general meeting[136]. - The company has established a policy for shareholder communication to ensure that information is provided in a balanced and comprehensible manner[135]. Risk Management and Compliance - The group conducted an annual assessment of its risk management and internal control systems, which include risk identification, assessment, management, and control, ensuring reasonable assurance against material misstatements or losses[132]. - The company has implemented a fair disclosure policy, ensuring that insider information is disclosed promptly and in compliance with relevant regulations[133]. - The company has complied with relevant laws and regulations, including intellectual property laws, during the year ended December 31, 2022[89]. Employee and Labor Relations - The company had 299 employees as of December 31, 2022, with total employee costs amounting to approximately RMB 69.1 million, up from RMB 56.3 million in 2021[35]. - There were no significant labor disputes between the company and its employees during the year ended December 31, 2022, indicating a stable work environment[83]. - The employee gender ratio as of December 31, 2022, is approximately 20% female to 80% male, reflecting the industry's typical demographic[121]. Environmental and Social Responsibility - The company has implemented various environmental policies to reduce operational impact, including energy-saving measures and resource management[87]. Audit and Financial Reporting - The total audit fee paid to Ernst & Young for the year ending December 31, 2022, is RMB 1,200,000[130]. - The company is responsible for preparing financial statements that fairly reflect its situation according to Hong Kong Financial Reporting Standards[151]. - The auditors' responsibility includes assessing the risk of material misstatement due to fraud or error in the financial statements[152]. Future Outlook - The company remains optimistic about the 2023 outlook, particularly in the high-tech sector, as the Chinese economy normalizes[6]. - The group expects a significant increase in the number, amount, and quality of procurement orders due to post-pandemic economic recovery and increased infrastructure investment[12].

Financial Performance - For the year ended December 31, 2022, the company's revenue was approximately RMB 103,767,000, an increase of about 4.7% compared to RMB 99,120,000 for the year ended December 31, 2021[2] - The loss attributable to equity holders of the company for the year ended December 31, 2022, was approximately RMB 11,929,000, compared to a profit of RMB 3,643,000 for the year ended December 31, 2021[2] - The basic loss per share for the year ended December 31, 2022, was approximately RMB 1.85, compared to a basic earnings per share of RMB 0.73 for the year ended December 31, 2021[2] - The company's gross profit for the year ended December 31, 2022, was RMB 48,052,000, down from RMB 54,811,000 in the previous year[3] - The overall APM system solutions revenue for 2022 was RMB 44,627,000, a decrease from RMB 47,275,000 in 2021, reflecting a decline of 5.5%[13] - Gross profit decreased by approximately 12.3% from RMB 54.8 million in the year ended December 31, 2021, to RMB 48.1 million in the year ended December 31, 2022, with gross margin dropping from approximately 55.3% to 46.3%[53] Research and Development - Research and development costs increased to RMB 36,592,000 for the year ended December 31, 2022, compared to RMB 23,974,000 for the year ended December 31, 2021, reflecting a significant investment in innovation[3] - Research and development expenses for the year amounted to RMB 36,592,000, up from RMB 23,974,000 in 2021, reflecting a growth of 52%[22] - The management remains optimistic about medium to long-term revenue growth and is increasing resources for R&D and product teams, including establishing a dedicated AI team[43] Assets and Liabilities - Total current assets as of December 31, 2022, amounted to RMB 313,323,000, an increase from RMB 199,948,000 as of December 31, 2021[4] - The company's total assets less current liabilities as of December 31, 2022, were RMB 291,253,000, compared to RMB 185,904,000 in the previous year[4] - The net assets of the company increased to RMB 289,375,000 as of December 31, 2022, from RMB 183,655,000 as of December 31, 2021[5] - The total trade receivables as of December 31, 2022, amounted to RMB 26,386,000, showing an increase from RMB 25,593,000 in 2021, representing a growth of 3.1%[34] - The total contract assets as of December 31, 2022, were RMB 101,340,000, up from RMB 95,410,000 in 2021, indicating a growth of 6.4%[37] Revenue Sources - Revenue from state-owned telecommunications operators was RMB 92,899,000 in 2022, up from RMB 85,631,000 in 2021, representing an increase of 8.8%[14] - Revenue from embedded hardware and standard APM software sales increased significantly to RMB 17,375,000 in 2022 from RMB 7,490,000 in 2021, marking a growth of 132.5%[13] - The group recorded a loss attributable to equity holders of approximately RMB 11.9 million for the year[43] - The revenue from embedded hardware and standard APM software sales increased by approximately RMB 9.9 million, while revenue from overall APM system solutions, software development services, and technical services decreased by approximately RMB 2.6 million, RMB 0.4 million, and RMB 2.2 million respectively[48] Expenses - Cost of goods sold increased to RMB 10,238,000 in 2022 from RMB 3,603,000 in 2021, representing a significant rise of 184%[22] - The total employee benefits expense (excluding directors and key management personnel) rose to RMB 66,962,000 in 2022 from RMB 57,050,000 in 2021, an increase of 17.5%[22] - Administrative expenses increased by approximately 44.5% from RMB 16.8 million in the year ended December 31, 2021, to RMB 24.3 million in the year ended December 31, 2022[57] Dividends and Shareholder Actions - The company did not recommend the payment of a final dividend for the year ended December 31, 2022, consistent with the previous year[2] - The company did not declare or pay any dividends for the year, consistent with 2021[28] - The company completed a rights issue on June 20, 2022, issuing a total of 254,000,000 rights shares, representing approximately 33.3% of the enlarged issued share capital, resulting in the offeror holding approximately 74.8% of the total issued share capital[71] Compliance and Governance - The company confirmed compliance with relevant laws and regulations for the year ended December 31, 2022, including the Copyright Law and Patent Law of the People's Republic of China[72] - The board of directors did not recommend the payment of a final dividend for the year ended December 31, 2022[74] - The audit committee, established on November 21, 2016, reviewed the consolidated financial performance for the year ended December 31, 2022, ensuring compliance with applicable accounting standards and regulations[76] - Ernst & Young has verified the financial statements for the year ended December 31, 2022, ensuring consistency with the preliminary financial report[77]

Financial Performance - The company's revenue for the first half of 2022 was RMB 45.695 million, an increase of approximately 8.1% compared to RMB 42.274 million in the same period of 2021[9]. - The net loss for the first half of 2022 was RMB 3.115 million, compared to a profit of RMB 3.018 million in the same period of 2021[9]. - The gross profit margin decreased to 52.2% in 2022 from 55.9% in 2021[9]. - Revenue for the six months ended June 30, 2022, was approximately RMB 45.7 million, an increase of about RMB 3.4 million or 8.1% compared to RMB 42.3 million for the same period in 2021[18]. - The overall APM system solution revenue increased by approximately 7.0% to about RMB 25.5 million from RMB 23.8 million year-on-year[19]. - Software development service revenue rose by approximately 6.4% to about RMB 11.2 million from RMB 10.5 million year-on-year[20]. - Revenue from embedded hardware and standard APM software sales surged by approximately 218.2% to about RMB 2.5 million from RMB 0.8 million year-on-year[23]. - Gross profit increased by approximately 0.8% to about RMB 23.8 million, while gross margin decreased to approximately 52.2% from 55.9% due to rising labor costs[24]. - Other income rose to approximately RMB 3.6 million from RMB 2.7 million, mainly due to increased government subsidies and foreign exchange gains[25]. - The company recorded a net loss of approximately RMB 3.1 million for the six months ended June 30, 2022, compared to a net profit of approximately RMB 3.0 million for the same period in 2021[30]. - The company reported a loss before tax of RMB 3,487 thousand, compared to a profit of RMB 3,073 thousand in the prior year, indicating a significant decline in profitability[74]. - The company’s basic and diluted loss per share for the period was RMB (0.53), compared to earnings per share of RMB 0.58 in the previous year[74]. Assets and Liabilities - Total assets as of June 30, 2022, were RMB 331.558 million, up from RMB 220.302 million at the end of 2021[10]. - The group's net current assets increased from approximately RMB 165.6 million as of December 31, 2021, to approximately RMB 284.4 million as of June 30, 2022[31]. - Total current assets increased to RMB 314,372 thousand as of June 30, 2022, compared to RMB 199,948 thousand at the end of 2021, showing improved liquidity[75]. - Total liabilities decreased to RMB 31,096 thousand from RMB 36,647 thousand, indicating a reduction in financial obligations[75]. - Net assets increased significantly to RMB 300,462 thousand from RMB 183,655 thousand, reflecting strong equity growth[75]. - Trade receivables amounted to RMB 30,106,000 as of June 30, 2022, compared to RMB 25,593,000 at the end of 2021, reflecting an increase of 17.56%[97]. - Trade payables totaled RMB 2,183 thousand as of June 30, 2022, compared to RMB 2,111 thousand as of December 31, 2021, reflecting an increase of 3.4%[103]. - The company's total financial liabilities measured at amortized cost decreased to RMB 13,930 thousand from RMB 16,602 thousand, a decline of 16.1%[115]. Cash Flow and Financing - The company raised approximately HKD 139.7 million (around RMB 119.5 million) through a rights issue, with a net amount of about HKD 138.1 million (approximately RMB 118.1 million) after expenses[15]. - The company achieved a net cash inflow from financing activities of RMB 118,572 thousand for the six months ended June 30, 2022, compared to a net outflow of RMB (4,440) thousand in the same period of 2021[78]. - The total cash and cash equivalents at the end of the period increased to RMB 167,688 thousand, compared to RMB 61,692 thousand at the end of the same period in 2021, representing a growth of 171.5%[78]. - Cash and cash equivalents amounted to approximately RMB 167.7 million as of June 30, 2022, compared to approximately RMB 64.1 million as of December 31, 2021[31]. - The company reported a cash flow from operating activities of RMB (15,134) thousand, compared to RMB (17,573) thousand for the same period in 2021, indicating an improvement of 13.9%[77]. Strategic Initiatives - The company anticipates stable growth in operating performance due to government economic stimulus policies and increased investment in 5G infrastructure[13]. - Significant investments in 5G technology have been made, with major telecom operators in China accumulating nearly RMB 500 billion in investments over the past three years[13]. - The company has signed formal commercial cooperation agreements with major telecom operators and key industry application solution providers[13]. - Strategic measures have been taken in the first half of 2022 to solidify the company's capital structure for future business development[13]. - Approximately HKD 117.7 million of the net proceeds from the rights issue will be used to invest in and upgrade big data and AI analytics technology[35]. Employee and Management Information - As of June 30, 2022, the group had a total of 281 employees, with employee costs amounting to approximately RMB 31.4 million for the six months ended June 30, 2022, compared to RMB 22.6 million for the same period in 2021[43]. - The total remuneration for key management personnel for the six months ended June 30, 2022, was RMB 4,772 thousand, an increase from RMB 3,346 thousand for the same period in 2021[113]. - The company adopted a share option scheme on November 21, 2016, allowing the grant of options to eligible participants as an incentive for their contributions to the group[49]. - The share incentive plan was terminated on March 25, 2022, with no further grants to be made, which the board believes will not have a significant adverse impact on the company[53]. Compliance and Governance - The audit committee reviewed the financial performance for the six months ended June 30, 2022, and confirmed compliance with applicable accounting standards and regulations[71]. - The company has maintained compliance with the corporate governance code as per the listing rules[66]. - The chairman and CEO roles are held by the same individual, which the board believes ensures consistency in leadership and effective strategic planning[66]. - The company confirmed that all previous controlling shareholders adhered to the non-competition agreement during the specified period[64]. - The company has adopted a standard code of conduct for securities trading by directors, and all directors confirmed compliance for the six months ended June 30, 2022[68]. Future Outlook - The company is focusing on expanding its market presence and enhancing its product offerings through ongoing research and development initiatives[76]. - The company has no significant future plans for major investments or capital assets beyond those disclosed in previous announcements[39]. - No significant events occurred after June 30, 2022, that would severely impact the group's operational and financial performance[72].

Financial Performance - In 2021, the company's revenue was approximately RMB 991 million, an increase of 22.3% compared to RMB 810 million in 2020[13] - The net profit for 2021 was approximately RMB 35 million, a significant increase of 218.2% from RMB 11 million in 2020[13] - The company's revenue for 2021 reached RMB 99,120 thousand, representing a 22.4% increase from RMB 80,999 thousand in 2020[22] - Gross profit for 2021 was RMB 54,811 thousand, up 25.7% from RMB 43,590 thousand in 2020, with a gross margin of 55.3%[22] - Annual profit surged to RMB 3,481 thousand, a remarkable increase of 216.7% compared to RMB 1,099 thousand in the previous year[22] - The overall performance of the company has steadily increased compared to 2020, reflecting the effectiveness of its business upgrade and transformation strategy[12] - Profit before tax surged by approximately 172.7% from RMB 1.1 million for the year ended December 31, 2020, to approximately RMB 3.0 million for the year ended December 31, 2021[41] - Net profit increased by approximately 218.2% from RMB 1.1 million for the year ended December 31, 2020, to approximately RMB 3.5 million for the year ended December 31, 2021, with a net profit margin rising from about 1.4% to approximately 3.7%[44] Business Strategy and Development - The company aims to develop digital, intelligent, and innovative APM solutions to create job opportunities and prepare for changes in the global economy, particularly in technology and sustainable development[12] - The company is exploring opportunities arising from the Chinese government's digital new infrastructure strategy[12] - The demand for digital services has increased due to the COVID-19 pandemic, accelerating the trend of digital transformation and enhancing the need for application performance management (APM)[12] - The company plans to increase investment in technology research and development, focusing on 5G, IoT, AI, and smart business platforms to drive future growth[21] - The company is actively participating in the construction of smart platforms for operators, leveraging its strengths in data governance and analysis[20] - The company is expanding its business to the second and third largest telecom groups in China and the broadcasting industry, targeting small and medium-sized enterprises with a new SaaS cloud platform product[56] - The company aims to reduce reliance on one-time project revenues by promoting products to other telecom operators and increasing the proportion of recurring services in its projects[56] Market and Customer Base - The expansion of 5G intelligent network operation management solutions has been rapid, with over 1 million 5G base stations opened in China, leading to a customer base exceeding 330 million[14] - The number of households served by the company's video-centric digital home performance management solutions exceeded 100 million, maintaining a leading market share[18] - The company has established a long-term stable business relationship with a major telecommunications group in China, maintaining this relationship for over 14 years[119] - The company's major customers accounted for approximately 26.5% of total sales for the year ended December 31, 2021, down from 36.4% in 2020, with the largest customer contributing about 6.3% of sales[81] Research and Development - Research and development costs rose by about 10.6% from RMB 21.7 million for the year ended December 31, 2020, to approximately RMB 24.0 million for the year ended December 31, 2021[39] - The company is considering stock option and share reward plans to enhance employee loyalty and reduce turnover in its R&D department[56] - The company has implemented competitive compensation and benefits to retain talented R&D staff and strengthen training for new employees[56] Corporate Governance - The board of directors did not recommend the distribution of a final dividend for the year ending December 31, 2021, consistent with the previous year where no dividend was declared[74] - The board consists of three executive directors and three independent non-executive directors, with changes in appointments occurring on April 7, 2022[135] - The company has established a policy for the remuneration of directors and has appropriate insurance for potential legal actions against them[125] - The independent non-executive directors have confirmed their independence in writing, ensuring compliance with listing regulations[142] Environmental and Social Responsibility - The company has implemented various environmental policies to minimize operational impact, including energy-saving measures and resource management practices[123] - The company has maintained a strong commitment to corporate social responsibility, focusing on sustainable development and employee welfare to enhance core competitiveness[130] Financial Position and Assets - Cash and cash equivalents as of December 31, 2021, were approximately RMB 64.1 million, down from approximately RMB 85.9 million as of December 31, 2020[45] - The company's debt ratio as of December 31, 2021, was 5.4%, slightly down from 5.5% as of December 31, 2020[45] - Trade receivables and contract assets accounted for approximately 12% and 43% of the total assets in the consolidated financial position as of December 31, 2021[196] Audit and Compliance - The group’s financial statements were prepared in accordance with Hong Kong Financial Reporting Standards and reflect a true and fair view of the group's financial position as of December 31, 2021[188] - The audit opinion confirmed that the consolidated financial statements were properly prepared in compliance with the disclosure requirements of the Hong Kong Companies Ordinance[188] - The company has no internal audit department but has engaged external auditors for independent internal control reviews, which were completed as of the report date[175] Shareholder Relations - The company has maintained an open investor relations policy, providing timely updates to investors through various communication channels, including annual reports and announcements[179] - Shareholders holding at least 10% of the voting rights can request a special general meeting, with specific procedures outlined for such requests[180] - The company has established a shareholder communication policy to ensure balanced and timely information dissemination to shareholders and investors[184]