Financial Performance - The company achieved a sales revenue of HKD 10,006.1 million for the year ended December 31, 2022, despite facing a challenging economic environment [27]. - The company's total sales for 2022 reached HKD 10,006.1 million, a slight decrease of 3.7% year-on-year, while gross profit increased by 10.6% to HKD 1,094.7 million [47]. - The gross profit margin for the year was reported at 10.6% [12]. - The net profit margin for the year was 3.8% [13]. - Profit for the year ended December 31, 2022, was HKD 379.7 million, a decrease of 3.1% from HKD 391.9 million in 2021, with a net profit margin of 3.8% [89]. - Net profit attributable to owners for the year ended December 31, 2022, was HKD 164.7 million, a decrease of 23.1% from HKD 214.1 million in 2021 [90]. - The group's revenue for the year ended December 31, 2022, was HKD 10,006.1 million, a decrease of 3.7% from HKD 10,389.3 million in 2021 [80]. - The decline in revenue was primarily due to a reduction in sales of optoelectronic displays and storage products, which fell by approximately HKD 992.0 million [81]. Market Trends - The semiconductor industry experienced a significant downturn, with China's integrated circuit imports decreasing by approximately 5% in value and 15% in quantity compared to 2021 [30]. - The global semiconductor market is expected to decline by 4.1% in 2023, with key regions experiencing reduced growth rates [35]. - The global semiconductor market is projected to decline by an average of 6.9% in 2023, with a potential recovery in 2024 [61]. - The consumer electronics market saw a decline in demand, with global smartphone shipments dropping by 12% to under 1.2 billion units, and PC shipments decreasing by 16.2% to 286.2 million units [46]. - The global storage chip market is expected to decline by 17% in 2023, driven by decreasing demand for devices like PCs and smartphones [70]. - The global device shipment is forecasted to drop by 4.4% to 1.7 billion units in 2023, with PC shipments declining by 6.8% [64]. Business Strategy - The company plans to navigate the current downturn in the semiconductor industry by focusing on maintaining its distribution business and exploring new market opportunities [30]. - The group anticipates continued business growth in 2023, supported by the recovery of domestic demand and the expansion of independent distribution and technology value-added services [36]. - The company plans to enhance its overseas business layout and growth in 2023, leveraging its established presence in major countries across the Asia-Pacific and Europe [40]. - The company aims to expand new product lines and services in response to market uncertainties in 2023 [65]. - The company plans to strengthen its authorized distribution business and expand independent distribution globally in 2023 [79]. Operational Highlights - The independent distribution business accounted for approximately one-third of the group's total revenue in 2022, showing healthy growth in key business indicators such as sales performance and gross profit [31]. - The smart display business, which constitutes nearly 30% of total revenue, achieved sales of HKD 2,899.5 million, a slight increase of 4.4% year-on-year [50]. - The optoelectronic display business unit reported a significant decline in sales, achieving HKD 1,080.0 million in 2022, a year-on-year decrease of 41.9% due to a global downturn in electronic product demand [51]. - The independent distribution business unit achieved sales of HKD 3,114.7 million in 2022, reflecting a substantial year-on-year growth of 8.9%, bolstered by strong performance in overseas markets [58]. - The comprehensive products unit saw significant growth, achieving sales of HKD 267.0 million in 2022, a year-on-year increase of 76.4%, driven by the rapid expansion of IoT and software service markets [56]. Economic Outlook - The IMF projects a global economic growth rate of 2.9% for 2023, with expectations of acceleration to 3.1% in 2024, driven by China's reopening and increased domestic consumption [34]. - The global economic outlook for 2023 is cautious, with expected growth rates between 1.4% and 2.8%, and a forecasted growth rate of 4.8% for China, indicating potential recovery in the domestic market [60]. Financial Position - The company's total assets as of December 31, 2022, amounted to HKD 2,860.9 million [15]. - As of December 31, 2022, the group had cash and bank balances totaling HKD 951.7 million, an increase from HKD 711.8 million in 2021 [97]. - The current ratio as of December 31, 2022, was 1.57, up from 1.32 in 2021, indicating improved liquidity [98]. - The group’s total bank borrowings as of December 31, 2022, were HKD 1,030.2 million, down from HKD 1,638.1 million in 2021, resulting in a decrease in the debt-to-equity ratio from 159.8% to 87.7% [97]. Research and Development - Research and development expenses for the year ended December 31, 2022, were HKD 39.6 million, a decrease of 1.5% from HKD 40.2 million in 2021 [83]. Employee Relations - The company emphasizes employee relations, offering competitive compensation and implementing stock reward and stock option plans to incentivize senior management and employees [126]. - The total employee cost (excluding directors' remuneration) for the year ended December 31, 2022, was approximately HKD 331.2 million, an increase from HKD 279.7 million for the year ended December 31, 2021 [104]. - The group had 579 employees as of December 31, 2022, compared to 570 employees as of December 31, 2021 [104]. Compliance and Governance - The company has complied with all relevant laws and regulations impacting its business operations during the fiscal year [123]. - Environmental protection is recognized as crucial for the company's long-term development, with no penalties incurred for non-compliance with health, safety, or environmental regulations during the fiscal year [124].

[Financial Highlights](index=1&type=section&id=Financial%20Highlights) The Group's total revenue decreased by 3.7% to HK$10,006.1 million in FY2022, while gross profit increased by 10.6% to HK$1,094.7 million 2022 Financial Year Key Financial Data | Indicator | 2022 (HK$ million) | 2021 (HK$ million) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Total Revenue | 10,006.1 | 10,389.3 | -3.7% | | Gross Profit | 1,094.7 | 990.0 | +10.6% | | Net Profit Attributable to Owners of the Company | 164.7 | 214.1 | -23.1% | | Basic Earnings Per Share (HK cents) | 34.03 | 43.82 | -22.3% | | Diluted Earnings Per Share (HK cents) | 33.89 | N/A | - | - The Board recommended a final dividend of **HK 6 cents per share** for FY2022, a decrease from HK 8 cents per share in 2021[196](index=196&type=chunk) [Consolidated Financial Statements](index=2&type=section&id=Consolidated%20Financial%20Statements) [Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=2&type=section&id=Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) In FY2022, Group revenue decreased by 3.7% to HK$10,006.1 million, while gross profit increased by 10.6% to HK$1,094.7 million, with net profit attributable to owners of the Company decreasing by 23.1% to HK$164.7 million due to increased expenses and exchange losses 2022 Financial Year Consolidated Statement of Profit or Loss and Other Comprehensive Income Summary | Indicator | 2022 (HK$ thousand) | 2021 (HK$ thousand) | | :--- | :--- | :--- | | Revenue | 10,006,078 | 10,389,312 | | Cost of Sales | (8,911,337) | (9,399,359) | | Gross Profit | 1,094,741 | 989,953 | | Other Income | 21,289 | 11,374 | | Other Gains or (Losses) – Net | (44,142) | 2,229 | | Net Impairment Loss (Reversal) under Expected Credit Loss Model | 30,305 | (18,911) | | Research and Development Expenses | (39,562) | (40,172) | | Administrative Expenses | (144,732) | (113,604) | | Selling and Distribution Expenses | (380,454) | (300,642) | | Share of Results of an Associate | 32 | (4,837) | | Finance Costs | (79,179) | (53,769) | | Profit Before Tax | 458,298 | 471,621 | | Income Tax Expense | (78,553) | (79,720) | | Profit for the Year | 379,745 | 391,901 | | Profit for the Year Attributable to Owners of the Company | 164,736 | 214,061 | | Profit for the Year Attributable to Non-controlling Interests | 215,009 | 177,840 | | Basic Earnings Per Share (HK cents) | 34.03 | 43.82 | | Diluted Earnings Per Share (HK cents) | 33.89 | N/A | [Consolidated Statement of Financial Position](index=4&type=section&id=Consolidated%20Statement%20of%20Financial%20Position) As of December 31, 2022, the Group's net current assets increased to HK$935.9 million, with the current ratio improving to 1.57 times, and total assets less current liabilities rising to HK$1,215 million 2022 Financial Year Consolidated Statement of Financial Position Summary | Indicator | December 31, 2022 (HK$ thousand) | December 31, 2021 (HK$ thousand) | | :--- | :--- | :--- | | **Non-current Assets** | | | | Property, Plant and Equipment | 15,118 | 8,408 | | Right-of-use Assets | 21,728 | 26,689 | | Goodwill | 29,894 | 9,735 | | Intangible Assets | 9,888 | 4,384 | | Financial Assets at Fair Value Through Profit or Loss | 157,547 | 152,149 | | Deferred Tax Assets | 5,882 | 9,011 | | **Current Assets** | | | | Inventories | 288,388 | 606,026 | | Trade and Bills Receivables | 1,212,520 | 1,984,625 | | Pledged Bank Deposits | 457,286 | 420,830 | | Cash and Cash Equivalents | 494,405 | 290,931 | | **Current Liabilities** | | | | Trade Payables | 350,674 | 536,103 | | Bank and Other Borrowings | 1,025,519 | 1,628,565 | | **Non-current Liabilities** | | | | Bank and Other Borrowings | 4,707 | 9,567 | | **Equity** | | | | Total Equity | 1,200,923 | 1,042,875 | [Notes to the Consolidated Financial Statements](index=6&type=section&id=Notes%20to%20the%20Consolidated%20Financial%20Statements) [General Information](index=6&type=section&id=General%20Information) The Company is an investment holding company incorporated in the Cayman Islands, with its subsidiaries primarily engaged in the trading of electronic components, and its shares listed on the Main Board of the Hong Kong Stock Exchange - The Company is an investment holding company, with its subsidiaries primarily engaged in the trading of electronic components[2](index=2&type=chunk) - The Company's shares are listed on the Main Board of the Hong Kong Stock Exchange, with its functional currency being USD and presentation currency being HKD[201](index=201&type=chunk)[213](index=213&type=chunk) [Application of Amended Hong Kong Financial Reporting Standards](index=6&type=section&id=Application%20of%20Amended%20Hong%20Kong%20Financial%20Reporting%20Standards) Several amended Hong Kong Financial Reporting Standards were first applied this year, with no material impact on the Group's financial position or performance - Several amended Hong Kong Financial Reporting Standards were first applied this year, but they had no material impact on the Group's financial position and performance[3](index=3&type=chunk)[202](index=202&type=chunk)[204](index=204&type=chunk)[214](index=214&type=chunk) - Amendments to HKFRS 9 clarified the criteria for assessing the substantial modification of financial liability terms, including only fees paid or received between the borrower and the lender[203](index=203&type=chunk)[216](index=216&type=chunk) [Revenue](index=7&type=section&id=Revenue) The Group's revenue primarily derives from the sale of electronic components, totaling HK$10,006.1 million in 2022, a 3.7% year-on-year decrease, with product lines in authorized distribution reorganized into Smart Display and Smart Vision Revenue by Category of Goods or Services and Timing of Recognition | Category | 2022 (HK$ thousand) | 2021 (HK$ thousand) | | :--- | :--- | :--- | | Sale of Electronic Components | 10,006,078 | 10,389,312 | | Recognized at a point in time | 10,006,078 | 10,389,312 | Revenue by Sales Channel/Product Line | Sales Channel/Product Line | 2022 (HK$ thousand) | 2021 (HK$ thousand) | | :--- | :--- | :--- | | **Authorized Distribution** | | | | Optoelectronic Display | 1,080,031 | 1,860,011 | | Storage Products | 301,608 | 513,578 | | Communication Products | 683,334 | 672,731 | | Smart Vision | 1,428,147 | 1,344,174 | | Smart Display | 2,899,524 | 2,776,541 | | Integrated Products | 266,953 | 151,334 | | Others | 231,822 | 209,733 | | **Total Authorized Distribution** | **6,891,419** | **7,528,102** | | **Independent Distribution** | **3,114,659** | **2,861,210** | | **Total** | **10,006,078** | **10,389,312** | - In 2022, the Group reorganized its authorized distribution sales channels/product lines, reclassifying most TV products and smart terminals into Smart Display, and most security monitoring and other product lines into Smart Vision[7](index=7&type=chunk) [Segment Information](index=8&type=section&id=Segment%20Information) The Group's reportable segments include authorized distribution and independent distribution, with Hong Kong remaining the largest market, while China and Singapore markets experienced significant revenue growth Segment Revenue and Profit (2022) | Segment | Revenue from External Customers (HK$ thousand) | Segment Profit (HK$ thousand) | | :--- | :--- | :--- | | Authorized Distribution | 6,891,419 | 89,051 | | Independent Distribution | 3,114,659 | 299,469 | | **Total Segments** | **10,006,078** | **388,520** | Segment Revenue and Profit (2021) | Segment | Revenue from External Customers (HK$ thousand) | Segment Profit (HK$ thousand) | | :--- | :--- | :--- | | Authorized Distribution | 7,528,102 | 143,486 | | Independent Distribution | 2,861,210 | 260,826 | | **Total Segments** | **10,389,312** | **404,312** | Sales Analysis by Geographical Market | Region | 2022 (HK$ thousand) | 2021 (HK$ thousand) | | :--- | :--- | :--- | | Hong Kong | 7,323,814 | 8,336,444 | | China | 1,906,177 | 1,807,406 | | Singapore | 584,600 | 240,101 | | Japan | 161,527 | 2,080 | | Others | 29,960 | 3,281 | | **Total** | **10,006,078** | **10,389,312** | [Income Tax Expense](index=11&type=section&id=Income%20Tax%20Expense) Total income tax expense for 2022 was HK$78.553 million, a slight decrease from HK$79.720 million in 2021, primarily comprising China enterprise income tax, Hong Kong profits tax, and Singapore enterprise income tax Income Tax Expense Composition | Tax Category | 2022 (HK$ thousand) | 2021 (HK$ thousand) | | :--- | :--- | :--- | | Current Tax: Hong Kong Profits Tax | 6,384 | 8,763 | | China Enterprise Income Tax | 56,084 | 68,511 | | Singapore Enterprise Income Tax | 13,351 | 6,148 | | Deferred Tax | 2,734 | (3,702) | | **Total** | **78,553** | **79,720** | [Dividends](index=12&type=section&id=Dividends) The Board recommended a final dividend of HK 6 cents per share for FY2022, totaling approximately HK$29.321 million, which is lower than the HK 8 cents per share (totaling HK$38.944 million) for FY2021 - The Board recommended a final dividend of **HK 6 cents per share** for FY2022, totaling approximately **HK$29.321 million**[33](index=33&type=chunk)[229](index=229&type=chunk) - The final dividend for FY2021 was **HK 8 cents per share**, totaling **HK$38.944 million**[33](index=33&type=chunk)[229](index=229&type=chunk) Dividends Declared and Paid to Ordinary Shareholders | Dividend Type | 2022 (HK$ thousand) | 2021 (HK$ thousand) | | :--- | :--- | :--- | | 2022 Interim Dividend (HK 4 cents per share) | 19,199 | 19,599 | | 2021 Final Dividend (HK 8 cents per share) | 38,944 | 19,547 | | **Total** | **58,143** | **39,146** | [Earnings Per Share](index=13&type=section&id=Earnings%20Per%20Share) In FY2022, profit for the year attributable to owners of the Company was HK$164.7 million, resulting in basic earnings per share of HK 34.03 cents and diluted earnings per share of HK 33.89 cents Earnings Per Share Calculation Data | Indicator | 2022 (HK$ thousand) | 2021 (HK$ thousand) | | :--- | :--- | :--- | | Profit for the Year Attributable to Owners of the Company | 164,736 | 214,061 | | **Number of Ordinary Shares** | **2022** | **2021** | | Weighted Average for Basic EPS | 484,045,140 | 488,524,783 | | Effect of Dilutive Potential Ordinary Shares (Restricted Share Units) | 2,000,000 | – | | Weighted Average for Diluted EPS | 486,045,140 | 488,524,783 | - Basic earnings per share for 2022 was **HK 34.03 cents**, and diluted earnings per share was **HK 33.89 cents**[196](index=196&type=chunk)[198](index=198&type=chunk) [Trade and Bills Receivables](index=13&type=section&id=Trade%20and%20Bills%20Receivables) As of December 31, 2022, total trade and bills receivables significantly decreased to HK$1.213 billion from HK$1.985 billion in 2021, with the trade receivables turnover period increasing to 58 days due to delayed payments from some SME customers Trade and Bills Receivables | Indicator | 2022 (HK$ thousand) | 2021 (HK$ thousand) | | :--- | :--- | :--- | | Trade Receivables | 1,212,970 | 1,932,795 | | Less: Provision for Credit Losses | (23,172) | (53,348) | | Bills Receivables | 23,278 | 105,344 | | Less: Provision for Credit Losses | (556) | (166) | | **Total** | **1,212,520** | **1,984,625** | Ageing Analysis of Trade Receivables (Net of Provision for Credit Losses) | Ageing | 2022 (HK$ thousand) | 2021 (HK$ thousand) | | :--- | :--- | :--- | | 0–60 Days | 823,528 | 1,307,653 | | 61–120 Days | 321,450 | 479,411 | | Over 120 Days | 44,820 | 92,383 | | **Total** | **1,189,798** | **1,879,447** | - The trade receivables turnover period increased from **54 days in 2021 to 58 days in 2022**, primarily due to delayed payments from some small and medium-sized enterprise customers[159](index=159&type=chunk) [Trade Payables](index=14&type=section&id=Trade%20Payables) As of December 31, 2022, trade payables significantly decreased to HK$351 million from HK$536 million in 2021, with the turnover period improving from 22 days to 18 days Ageing Analysis of Trade Payables | Ageing | 2022 (HK$ thousand) | 2021 (HK$ thousand) | | :--- | :--- | :--- | | 0–30 Days | 269,729 | 448,331 | | 31–60 Days | 19,174 | 56,621 | | 61–90 Days | 36,670 | 27,712 | | Over 90 Days | 25,101 | 3,439 | | **Total** | **350,674** | **536,103** | - The trade payables turnover period improved from **22 days in 2021 to 18 days in 2022**, primarily due to timely repayment of supplier accounts[160](index=160&type=chunk) [Bank and Other Borrowings](index=15&type=section&id=Bank%20and%20Other%20Borrowings) As of December 31, 2022, the Group's outstanding bank borrowings significantly decreased to HK$1.03 billion from HK$1.638 billion in 2021, with the gearing ratio falling from 159.8% to 87.7% Bank and Other Borrowings Composition | Borrowing Type | 2022 (HK$ thousand) | 2021 (HK$ thousand) | | :--- | :--- | :--- | | Import and Export Loans | 464,411 | 747,803 | | Other Bank Borrowings | 556,801 | 890,329 | | Other Borrowings | 9,014 | – | | **Total** | **1,030,226** | **1,638,132** | - The gearing ratio decreased from **159.8% as of December 31, 2021, to 87.7% as of December 31, 2022**, primarily due to a reduction in bank borrowings[128](index=128&type=chunk) - Certain bank facilities contain covenants such as financial ratios, and the Board confirmed no breaches occurred in either year[52](index=52&type=chunk) [Management Discussion and Analysis](index=16&type=section&id=Management%20Discussion%20and%20Analysis) [Business Review](index=16&type=section&id=Business%20Review) In 2022, despite global economic challenges and a downturn in the consumer electronics industry, the Group's authorized distribution business developed new product lines, and independent distribution achieved growth through scale expansion and efficiency improvements, resulting in a slight 3.7% decrease in total sales but a 10.6% increase in gross profit - The global economic recovery faced significant difficulties in 2022, with global economic growth sharply declining from **5.7% in 2021 to 3%**[34](index=34&type=chunk) - The consumer electronics industry was impacted by slowing global consumer demand, with significant declines in shipments of smartphones, tablets, PCs, and TVs[55](index=55&type=chunk) - Global semiconductor sales increased by **3.2% to US$573.5 billion in 2022**, falling short of expectations, primarily constrained by reduced demand for consumer electronic products[56](index=56&type=chunk) 2022 Group Overall Performance | Indicator | 2022 (HK$ million) | YoY Change (%) | | :--- | :--- | :--- | | Sales Revenue | 10,006.1 | -3.7% | | Gross Profit | 1,094.7 | +10.6% | [Authorized Distribution Business](index=17&type=section&id=Authorized%20Distribution%20Business) The authorized distribution business faced market demand challenges in 2022 but achieved growth in some units by expanding new product lines and optimizing its business structure, with Smart Display and Smart Vision showing slight increases while Optoelectronic Display and Storage Products declined significantly - The authorized distribution business steadily served existing customer groups while actively exploring new product lines with growth potential[35](index=35&type=chunk) - The Group's invested optoelectronic device semiconductor business began mass shipments in 2022 and has achieved break-even[87](index=87&type=chunk) [Smart Display](index=18&type=section&id=Smart%20Display) The Smart Display business accounted for nearly 30% of Group revenue, with sales of HK$2,899.5 million in 2022, a 4.4% year-on-year increase, despite a decline in global TV shipments, driven by growth opportunities in smart home projectors and laser projection Smart Display Business Sales Revenue | Indicator | 2022 (HK$ million) | YoY Change (%) | | :--- | :--- | :--- | | Sales Revenue | 2,899.5 | +4.4% | - Global TV set shipments decreased by **3.9% year-on-year in 2022**, reaching a ten-year low, but shipments of smart home projectors increased by **51%**, and the laser projection market grew by **214%**[58](index=58&type=chunk) [Optoelectronic Display](index=18&type=section&id=Optoelectronic%20Display) The Optoelectronic Display business, focusing on display drivers, touch, and mobile TDDI chips, saw sales sharply decline by 41.9% to HK$1,080.0 million in 2022 due to the global slump in electronic product demand Optoelectronic Display Business Sales Revenue | Indicator | 2022 (HK$ million) | YoY Change (%) | | :--- | :--- | :--- | | Sales Revenue | 1,080.0 | -41.9% | - In 2022, smartphone and tablet sales both declined by approximately **12%**, the PC market by **16.2%**, and the laptop market by **22.8%**, significantly impacting shipments of Tcon, Driver, Power, Scaler, and CMOS image sensor chips[59](index=59&type=chunk) [Smart Vision](index=18&type=section&id=Smart%20Vision) The Smart Vision business, primarily involving camera-related equipment, achieved sales of HK$1,428.1 million in 2022, a 6.2% year-on-year increase, despite market challenges from the pandemic and supply chain instability, by actively expanding new product lines, application scenarios, and customer bases Smart Vision Business Sales Revenue | Indicator | 2022 (HK$ million) | YoY Change (%) | | :--- | :--- | :--- | | Sales Revenue | 1,428.1 | +6.2% | - Camera-related equipment accounts for nearly **50%** of China's security market, with consumer-grade product shipments reaching approximately **18.7 million units in 2022**, holding nearly **80%** market share[60](index=60&type=chunk) [Communication Products](index=19&type=section&id=Communication%20Products) The Communication Products business, selling MCP storage chips and RF PA chips for cellular IoT modules, achieved sales of HK$683.3 million in 2022, a 1.6% year-on-year increase, driven by the rapid growth of the IoT market, making China the first country to achieve "things outnumbering people" in mobile IoT connections Communication Products Business Sales Revenue | Indicator | 2022 (HK$ million) | YoY Change (%) | | :--- | :--- | :--- | | Sales Revenue | 683.3 | +1.6% | - As of the end of September 2022, China's mobile IoT connections totaled **1.75 billion**, accounting for over **70%** of the global total[92](index=92&type=chunk) [Storage Products](index=19&type=section&id=Storage%20Products) The Storage Products business experienced a sharp 41.3% decline in sales to HK$301.6 million in 2022, severely impacted by weak market demand for PCs, laptops, tablets, and smartphones, leading to halved storage chip prices and significant performance drops for major manufacturers Storage Products Business Sales Revenue | Indicator | 2022 (HK$ million) | YoY Change (%) | | :--- | :--- | :--- | | Sales Revenue | 301.6 | -41.3% | - Since the second half of 2021, market demand for PCs, laptops, tablets, and smartphones has remained weak, leading to a severe oversupply of storage chips, with prices and shipments continuously declining[93](index=93&type=chunk) [Integrated Products](index=19&type=section&id=Integrated%20Products) The Integrated Products division, including AIoT, MCU, CE, and software product groups, achieved a significant 76.4% increase in sales to HK$267.0 million in 2022, benefiting from the rapid growth of the IoT, smart hardware, and software services markets, with fast growth in WLAN and Bluetooth BLE IoT businesses Integrated Products Business Sales Revenue | Indicator | 2022 (HK$ million) | YoY Change (%) | | :--- | :--- | :--- | | Sales Revenue | 267.0 | +76.4% | - The Integrated Products division focuses on wireless interconnectivity in WLAN, LPWAN, and Bluetooth BLE, with the MCU product group expanding into smart hardware applications, the CE product group focusing on the consumer electronics market, and the software group based on SaaS cloud services[94](index=94&type=chunk) [Optoelectronic Products](index=20&type=section&id=Optoelectronic%20Products) The Optoelectronic Products business, promoting core optical components for 5G wireless optical communication modules and data center optical interconnect modules, saw sales decline by 18.8% to HK$93.7 million in 2022 due to slowing 5G infrastructure construction amid global economic inflation and recession expectations Optoelectronic Products Business Sales Revenue | Indicator | 2022 (HK$ million) | YoY Change (%) | | :--- | :--- | :--- | | Sales Revenue | 93.7 | -18.8% | - The slowdown in 5G infrastructure construction led to poor sales of optical modules for wireless access at the client end, and new generation technical solutions and chips have not yet generated revenue[65](index=65&type=chunk) [Independent Distribution Business](index=20&type=section&id=Independent%20Distribution%20Business) The independent distribution business maintained strong growth in 2022, with sales increasing by 8.9% to HK$3,114.7 million, achieving performance gains by expanding scale, improving efficiency, and making breakthroughs in overseas markets despite a decline in domestic demand Independent Distribution Business Sales Revenue | Indicator | 2022 (HK$ million) | YoY Change (%) | | :--- | :--- | :--- | | Sales Revenue | 3,114.7 | +8.9% | - The independent distribution business maintained stability in the domestic market and achieved breakthroughs in overseas markets by expanding its business scale and improving operational efficiency[66](index=66&type=chunk) - Independent distribution business volume now accounts for **one-third** of the Group's total revenue[87](index=87&type=chunk) [Outlook for 2023](index=20&type=section&id=Outlook%20for%202023) In 2023, while the global economy is expected to slow and the semiconductor market faces downward pressure, China's economy is projected to accelerate, prompting the Group to continue diversifying its business and investing in overseas markets to seize new opportunities in the semiconductor downturn, particularly in AI applications and data centers - The UN predicts global economic growth will decrease from **3% in 2022 to 1.9% in 2023**, but China's economy is expected to accelerate to **4.8%**[67](index=67&type=chunk) - Industry research institutions generally predict a negative growth for the global semiconductor market in 2023, with an average decline of around **-6.9%**, expected to bottom out in the first half and recover in the second half[68](index=68&type=chunk) - The Group will continue to actively invest in business diversification and overseas markets, enhance its business resilience, and seize new opportunities during the semiconductor industry downturn[69](index=69&type=chunk)[144](index=144&type=chunk) [Authorized Distribution Business Outlook](index=21&type=section&id=Authorized%20Distribution%20Business%20Outlook) The authorized distribution business faces challenges in 2023, with a cautious outlook for Smart Display and Optoelectronic Display, but Smart Vision, Communication Products, and Integrated Products are expected to maintain good growth, while the storage market remains unfavorable, and Optoelectronic Products may benefit from accelerated 5G and AI infrastructure development - TrendForce predicts global TV panel shipments will slightly decrease by **2.8% year-on-year in 2023**, and global TV set shipments will continue to decline by **1.4% to 199 million units**[69](index=69&type=chunk) - Gartner predicts that PCs will be the category with the largest decline among all devices in 2023, expected to decrease by **6.8%**, with mobile phones declining by **4%**, but the rate of decline is expected to slow compared to 2022[71](index=71&type=chunk) - China's consumer-grade camera market size is expected to reach **51.2 million units in 2023**, a year-on-year increase of **8.5%**, and the security video surveillance equipment market size will grow by **6.8% to US$25 billion**[73](index=73&type=chunk)[74](index=74&type=chunk) [Smart Display Outlook](index=21&type=section&id=Smart%20Display%20Outlook) A cautious outlook is held for the Smart Display business performance in 2023, with global TV panel shipments expected to slightly decrease by 2.8% and global TV set shipments to continue declining by 1.4% - TrendForce predicts global TV panel shipments will slightly decrease by **2.8% year-on-year in 2023**, and global TV set shipments will continue to decline by **1.4% to 199 million units**[69](index=69&type=chunk) - Global TV shipments are expected to decline sharply by **24.3% in Q1 2023**, with Chinese brands declining by **30.6%**[100](index=100&type=chunk) [Optoelectronic Display Outlook](index=22&type=section&id=Optoelectronic%20Display%20Outlook) The Optoelectronic Display business is heavily influenced by PC and laptop market demand, with the market situation remaining unclear, though China's enterprise PC procurement demand is expected to rebound in 2023 - Gartner predicts that PCs will be the category with the largest decline among all devices in 2023, expected to decrease by **6.8%**[71](index=71&type=chunk) - IDC believes that China's enterprise PC procurement demand will bottom out in 2023, with large enterprise market PC procurement demand expected to increase by **3.7% year-on-year in the second half**[102](index=102&type=chunk) [Smart Vision Outlook](index=22&type=section&id=Smart%20Vision%20Outlook) The Smart Vision business market is relatively stable and active, expected to maintain good growth in 2023, with China's consumer-grade camera market size projected to reach 51.2 million units, an 8.5% year-on-year increase - RUNTO predicts China's consumer-grade camera market size will reach **51.2 million units in 2023**, a year-on-year increase of **8.5%**[73](index=73&type=chunk) - The global security video surveillance equipment market size will grow by **6.8% to US$25 billion in 2023**[74](index=74&type=chunk) [Communication Products Outlook](index=23&type=section&id=Communication%20Products%20Outlook) The Communication Products business is expected to maintain rapid growth in 2023, with 5G RF PA potentially bringing new revenue increments, and global cellular IoT module shipments projected to exceed 1.2 billion by 2030 - 5G Red Cap is expected to be commercialized in 2023, primarily applied in video surveillance, industrial sensing, wearables, and smart grids[75](index=75&type=chunk) - Counterpoint predicts that global cellular IoT module annual shipments will exceed **1.2 billion by 2030**, with an average compound annual growth rate of **12%**[106](index=106&type=chunk) - This business unit's 5G RF PA achieved significant sales in 2022 and is expected to bring new revenue increments in 2023[107](index=107&type=chunk) [Storage Products Outlook](index=24&type=section&id=Storage%20Products%20Outlook) The overall storage chip market remains unfavorable, with WSTS predicting a further 17% decline in global storage chip market size in 2023, requiring the Group to actively seek new growth points in AI applications and data centers while awaiting industry recovery - WSTS predicts that the global storage chip market size will experience a further **17% decline in 2023**[77](index=77&type=chunk) - TrendForce research indicates that Nand flash prices will narrow their decline to **10–15% in Q1 2023**, with the industry expected to enter an upward cycle of both volume and price by 2024 at the latest[139](index=139&type=chunk) [Optoelectronic Products Outlook](index=24&type=section&id=Optoelectronic%20Products%20Outlook) The Optoelectronic Products business is expected to see new growth in 2023, benefiting from China's economic recovery and accelerated 5G and AI infrastructure construction, with the Group promoting 400G/800G silicon photonic integrated optical modules and next-generation 50G PON solutions - With strengthening expectations for China's economic recovery in 2023, infrastructure construction around **5G and AI artificial intelligence** is expected to accelerate[78](index=78&type=chunk) - The Group is promoting **400G/800G silicon photonic integrated optical module solutions** for data centers and next-generation **50G PON solutions** for FTTX[79](index=79&type=chunk) - ChatGPT's high demand for computing power means that **800Gbps high-end products** even have the opportunity to become the largest source of orders in the incremental market[140](index=140&type=chunk) [Integrated Products Outlook](index=25&type=section&id=Integrated%20Products%20Outlook) The Integrated Products business is expected to continue its strong growth in 2023, achieving counter-cyclical growth, with the global MCU market size projected to reach US$24.3 billion and China's MCU market size reaching RMB42 billion, a 7.7% year-on-year increase - ICInsight predicts the global MCU market size will reach **US$24.3 billion in 2023**, and IHS predicts China's MCU market size will reach **RMB42 billion**, a year-on-year increase of **7.7%**[80](index=80&type=chunk) - Markets and Markets Research predicts the global IoT market size will reach **US$650.5 billion by 2026**, with an average compound annual growth rate of **16.7% from 2021-2026**[111](index=111&type=chunk) - This business unit maintained rapid growth during the industry downturn in 2022 and is expected to continue its strong growth trend after market demand recovers in 2023[142](index=142&type=chunk) [Independent Distribution Business Outlook](index=25&type=section&id=Independent%20Distribution%20Business%20Outlook) The independent distribution business faces both challenges and opportunities in 2023, continuing to benefit from imbalances in electronic industry supply and demand and overseas market expansion, with the Group actively developing its international presence and leveraging its extensive domestic spot chip inventory - The independent distribution business primarily includes "reverse supply chain" and "spot trading" models, which can meet manufacturers' sudden incremental spot demands[81](index=81&type=chunk) - Independent distribution, as a crucial business model in the semiconductor supply chain, can effectively meet the incremental demand arising from imbalances in electronic component supply and demand[113](index=113&type=chunk) - The Group's independent distribution business invested heavily in developing overseas operations in 2022, actively expanding and improving its global business network, laying a solid foundation for business growth in 2023[113](index=113&type=chunk) [Summary](index=26&type=section&id=Summary) The Group has built an "all-round" distribution business system through comprehensive strategic deployment in authorized distribution, independent distribution, value-added technology, e-commerce platforms, semiconductor design, manufacturing, and packaging, aiming to consolidate authorized distribution, expand global independent distribution, promote value-added technology and e-commerce, and enhance optical communication device development in the semiconductor sector to improve efficiency and profitability through digitalization - The Group has built an "all-round" distribution business system through diversified strategic deployment and the establishment of domestic and international business networks, ensuring steady business growth[114](index=114&type=chunk) - In the future, the Group will continue to consolidate and expand its authorized distribution business, explore overseas market opportunities, develop its independent distribution business, and build a business data platform[83](index=83&type=chunk) - The Group will promote the growth of value-added technology and e-commerce platform businesses, strengthen the development and implementation of new optical communication devices in the semiconductor industry, and enhance business quality and profitability through digitalization[83](index=83&type=chunk)[115](index=115&type=chunk) [Financial Review](index=27&type=section&id=Financial%20Review) [Revenue and Gross Profit](index=27&type=section&id=Revenue%20and%20Gross%20Profit) In FY2022, Group revenue decreased by 3.7% to HK$10,006.1 million, primarily due to reduced sales of optoelectronic display and storage products, while gross profit increased by 10.6% to HK$1,094.7 million, with the gross profit margin rising by 1.4 percentage points to 10.9% due to higher margins in independent distribution Revenue and Gross Profit Overview | Indicator | 2022 (HK$ million) | 2021 (HK$ million) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 10,006.1 | 10,389.3 | -3.7% | | Gross Profit | 1,094.7 | 990.0 | +10.6% | | Gross Profit Margin | 10.9% | 9.5% | +1.4pp | - The decrease in revenue was primarily due to a reduction in sales of optoelectronic display and storage products by approximately **HK$992 million**[116](index=116&type=chunk) - The increase in gross profit margin was mainly due to the higher gross profit margin of the independent distribution business[116](index=116&type=chunk) [Expense Analysis](index=27&type=section&id=Expense%20Analysis) In FY2022, R&D expenses slightly decreased, while administrative, selling, and distribution expenses significantly increased due to higher staff and marketing costs, and finance costs rose due to increased bank borrowing interest rates, with the share of results of an associate turning from loss to profit [Research and Development Expenses](index=27&type=section&id=Research%20and%20Development%20Expenses) In FY2022, research and development expenses were HK$39.6 million, a 1.5% year-on-year decrease, primarily comprising staff costs for the R&D department Research and Development Expenses | Indicator | 2022 (HK$ million) | 2021 (HK$ million) | YoY Change (%) | | :--- | :--- | :--- | :--- | | R&D Expenses | 39.6 | 40.2 | -1.5% | [Administrative, Selling and Distribution Expenses](index=28&type=section&id=Administrative,%20Selling%20and%20Distribution%20Expenses) In FY2022, administrative, selling, and distribution expenses totaled HK$525.2 million, an increase of HK$111 million (or 26.8%) year-on-year, representing 5.2% of revenue, mainly due to increased staff and marketing costs to support business expansion Administrative, Selling and Distribution Expenses | Indicator | 2022 (HK$ million) | 2021 (HK$ million) | YoY Change (HK$ million) | | :--- | :--- | :--- | :--- | | Admin, Selling & Distribution Expenses | 525.2 | 414.2 | +111.0 | | % of Revenue | 5.2% | 4.0% | +1.2pp | - The increase in expenses was primarily due to increased staff costs and marketing expenses to support business expansion[150](index=150&type=chunk) [Finance Costs](index=28&type=section&id=Finance%20Costs) In FY2022, finance costs were HK$79.2 million, an increase of HK$25.4 million year-on-year, mainly due to higher bank borrowing interest rates during the year Finance Costs | Indicator | 2022 (HK$ million) | 2021 (HK$ million) | | :--- | :--- | :--- | | Finance Costs | 79.2 | 53.8 | - The increase in interest expenses was primarily due to higher bank borrowing interest rates during the year[150](index=150&type=chunk) [Share of Results of an Associate](index=28&type=section&id=Share%20of%20Results%20of%20an%20Associate) In FY2022, the Group recorded a profit of approximately HK$0.03 million from its share of results of an associate, compared to a loss of HK$4.8 million in 2021, mainly due to improved operations of Shanghai Zhoujia Optoelectronics Co., Ltd Share of Results of an Associate | Indicator | 2022 (HK$ million) | 2021 (HK$ million) | | :--- | :--- | :--- | | Share of Results of an Associate | +0.03 | -4.8 | - This profit was primarily due to improved operations of the associate, Shanghai Zhoujia Optoelectronics Co., Ltd[151](index=151&type=chunk) [Profit for the Year and Net Profit](index=28&type=section&id=Profit%20for%20the%20Year%20and%20Net%20Profit) In FY2022, the Group's profit for the year was HK$379.7 million, a 3.1% year-on-year decrease, and net profit attributable to owners of the Company was HK$164.7 million, a 23.1% year-on-year decrease, mainly due to increased administrative, selling, and distribution expenses and net exchange losses Profit for the Year and Net Profit | Indicator | 2022 (HK$ million) | 2021 (HK$ million) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Profit for the Year | 379.7 | 391.9 | -3.1% | | Net Profit Attributable to Owners of the Company | 164.7 | 214.1 | -23.1% | | Net Profit Margin | 3.8% | 3.8% | 0.0pp | - The decrease in profit for the year was primarily due to increased administrative, selling, and distribution expenses and net exchange losses, partially offset by the reversal of impairment losses under the expected credit loss model[151](index=151&type=chunk) [Use of Proceeds from Global Offering](index=29&type=section&id=Use%20of%20Proceeds%20from%20Global%20Offering) As of December 31, 2022, the Group had utilized HK$179.5 million of the net proceeds from its listing, with HK$26.3 million remaining as bank deposits, allocated for new staff recruitment, e-commerce platform promotion, technology infrastructure upgrades, R&D, and potential acquisitions or investments Use of Proceeds from Global Offering and Utilization | Use of Proceeds | Net Amount (HK$ million) | Amount Utilized as of Dec 31, 2022 (HK$ million) | Remaining Amount (HK$ million) | | :--- | :--- | :--- | :--- | | Recruit new staff for sales, marketing, and business development, and upgrade warehouse facilities | 20.6 | 20.6 | 0.0 | | Advertising and marketing activities for e-commerce platform, Xinquiu program, and new products | 41.2 | 41.2 | 0.0 | | Upgrade, further develop, and maintain our e-commerce platform and improve technology infrastructure | 41.2 | 14.9 | 26.3 | | For research and development | 20.6 | 20.6 | 0.0 | | Fund potential acquisitions or investments in e-commerce or electronics industry businesses or companies | 61.7 | 61.7 | 0.0 | | General working capital | 20.5 | 20.5 | 0.0 | | **Total** | **205.8** | **179.5** | **26.3** | - The timeline for utilizing the remaining net proceeds was delayed due to factors such as technological changes, US-China trade tensions, social unrest in Hong Kong, and the outbreak of COVID-19[126](index=126&type=chunk) [Liquidity and Financial Resources](index=30&type=section&id=Liquidity%20and%20Financial%20Resources) The Group possesses sufficient cash and bank financing to meet its commitments, with total bank balances and cash of HK$951.7 million, net current assets of HK$935.9 million, and a current ratio of 1.57 times as of December 31, 2022, while inventory turnover remained stable, trade receivables turnover slightly increased, and trade payables turnover improved Liquidity Indicators | Indicator | December 31, 2022 (HK$ million) | December 31, 2021 (HK$ million) | | :--- | :--- | :--- | | Bank Balances and Cash | 951.7 | 711.8 | | Current Assets | 2,581.8 | 3,387.4 | | Current Liabilities | 1,646.0 | 2,571.4 | | Net Current Assets | 935.9 | 816.0 | | Current Ratio | 1.57x | 1.32x | Turnover Period Indicators | Indicator | 2022 (Days) | 2021 (Days) | | :--- | :--- | :--- | | Inventory Turnover Period | 18 | 20 | | Trade Receivables Turnover Period | 58 | 54 | | Trade Payables Turnover Period | 18 | 22 | - The increase in trade receivables turnover period was due to delayed payments from certain small and medium-sized enterprise customers affected by changes in the economic environment[159](index=159&type=chunk) [Foreign Currency Risk](index=31&type=section&id=Foreign%20Currency%20Risk) The Group's transactions are primarily denominated in USD and RMB, recording a net exchange loss of approximately HK$41 million in FY2022, though business operations were not materially adversely affected, and while no foreign currency hedging policy is currently adopted, the Group will consider using forward foreign exchange contracts if risks become significant - The Group's transactions are primarily denominated in **USD and RMB**, and a net exchange loss of approximately **HK$41 million** was recorded in FY2022[161](index=161&type=chunk) - The Group currently does not adopt a foreign currency hedging policy but will consider using forward foreign exchange contracts when foreign exchange risks become significant[161](index=161&type=chunk) [Pledged Assets](index=31&type=section&id=Pledged%20Assets) As of December 31, 2022, the Group had pledged HK$153 million in financial assets, HK$338.8 million in factored trade receivables, and HK$457.3 million in bank deposits as collateral for bank borrowings and financing arrangements Pledged Assets | Asset Type | 2022 (HK$ million) | 2021 (HK$ million) | | :--- | :--- | :--- | | Financial Assets at Fair Value Through Profit or Loss | 153.0 | 147.3 | | Factored Trade Receivables | 338.8 | 854.3 | | Bank Deposits | 457.3 | 420.8 | [Material Investments Held](index=31&type=section&id=Material%20Investments%20Held) The Group held no material investments for the years ended December 31, 2022, and 2021 - The Group held no material investments for the years ended December 31, 2022, and 2021[162](index=162&type=chunk)[179](index=179&type=chunk) [Capital Commitments and Contingent Liabilities](index=31&type=section&id=Capital%20Commitments%20and%20Contingent%20Liabilities) The Group had no material capital commitments or contingent liabilities for the years ended December 31, 2022, and 2021 - The Group had no material capital commitments or contingent liabilities for the years ended December 31, 2022, and 2021[133](index=133&type=chunk)[162](index=162&type=chunk) [Material Acquisitions and Disposals of Subsidiaries and Associates](index=31&type=section&id=Material%20Acquisitions%20and%20Disposals%20of%20Subsidiaries%20and%20Associates) For the year ended December 31, 2022, the Group did not undertake any material acquisitions or disposals of subsidiaries and associates - For the year ended December 31, 2022, the Group did not undertake any material acquisitions or disposals of subsidiaries and associates[134](index=134&type=chunk)[180](index=180&type=chunk) [Other Information](index=32&type=section&id=Other%20Information) [Employees](index=32&type=section&id=Employees) As of December 31, 2022, the Group's employee count was 579, a slight increase from 2021, with total employee costs (excluding directors' emoluments) amounting to approximately HK$331.2 million Employee Count and Costs | Indicator | December 31, 2022 | December 31, 2021 | | :--- | :--- | :--- | | Number of Employees | 579 | 570 | | Total Employee Costs (HK$ million) | 331.2 | 279.7 | [Employee Incentive Schemes](index=32&type=section&id=Employee%20Incentive%20Schemes) The Group adopted a Share Award Scheme and a Share Option Scheme in 2016, with the trustee acquiring 15.6 million shares and granting 3 million share awards to employees in FY2022, resulting in a total share-based payment expense of HK$2.6 million - The Group adopted a Share Award Scheme and a Share Option Scheme on **September 19, 2016**[137](index=137&type=chunk)[164](index=164&type=chunk) - In FY2022, the trustee acquired **15.6 million shares** and granted **3 million share awards** to employees under the Share Award Scheme[183](index=183&type=chunk) - In FY2022, the Group recognized a total share-based payment expense of **HK$2.6 million**[183](index=183&type=chunk) [Purchase, Sale or Redemption of Listed Securities](index=33&type=section&id=Purchase,%20Sale%20or%20Redemption%20of%20Listed%20Securities) For the year ended December 31, 2022, neither the Company nor any of its subsidiaries purchased, redeemed, or sold any of the Company's listed securities - For the year ended December 31, 2022, neither the Company nor any of its subsidiaries purchased, redeemed, or sold any of the Company's listed securities[138](index=138&type=chunk)[184](index=184&type=chunk) [Events After the Reporting Period Ended December 31, 2022](index=33&type=section&id=Events%20After%20the%20Reporting%20Period%20Ended%20December%2031,%202022) As of the date of this announcement, the Group had no material subsequent events requiring disclosure after December 31, 2022 - As of the date of this announcement, the Group had no material subsequent events requiring disclosure after December 31, 2022[185](index=185&type=chunk) [Compliance with Corporate Governance Code](index=33&type=section&id=Compliance%20with%20Corporate%20Governance%20Code) The Company complied with the Corporate Governance Code throughout FY2022, with one deviation from code provision C.2.1 where the roles of Chairman and Chief Executive Officer were combined, which the Board believes ensures consistent internal leadership and efficient strategic planning - The Company complied with the Corporate Governance Code throughout FY2022, except for a deviation from code provision C.2.1[168](index=168&type=chunk) - The deviation from code provision C.2.1, where the roles of Chairman and Chief Executive Officer are combined and held by Mr. Tian Weidong, is believed by the Board to ensure consistent internal leadership and efficient strategic planning[169](index=169&type=chunk)[186](index=186&type=chunk) [Standard Code for Securities Transactions](index=34&type=section&id=Standard%20Code%20for%20Securities%20Transactions) The Company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers as set out in Appendix 10 to the Listing Rules, and all Directors have confirmed full compliance throughout FY2022 - The Company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers, and all Directors have confirmed full compliance throughout FY2022[188](index=188&type=chunk) [Sufficiency of Public Float](index=34&type=section&id=Sufficiency%20of%20Public%20Float) For the year ended December 31, 2022, and up to the date of this announcement, at least 25% of the Company's total issued share capital was held by the public, meeting the minimum public float requirement of the Stock Exchange - For the year ended December 31, 2022, and up to the date of this announcement, at least **25%** of the Company's total issued share capital was held by the public[189](index=189&type=chunk) [Audit Committee](index=34&type=section&id=Audit%20Committee) The Company has established an Audit Committee comprising three independent non-executive directors, responsible for reviewing and monitoring the Group's financial reporting process and internal control systems, and has reviewed the audited consolidated financial statements for FY2022 - The Audit Committee comprises three independent non-executive directors, with primary responsibilities including reviewing and monitoring the Group's financial reporting process and internal control systems[189](index=189&type=chunk) - The Audit Committee has reviewed the Group's audited consolidated financial statements for the year ended December 31, 2022[189](index=189&type=chunk) [Scope of Work by Deloitte Touche Tohmatsu](index=34&type=section&id=Scope%20of%20Work%20by%20Deloitte%20Touche%20Tohmatsu) The Group's auditor, Deloitte Touche Tohmatsu, has reconciled the consolidated financial statement figures for FY2022 in the preliminary announcement with the audited consolidated financial statements approved by the Board, but has not expressed any opinion or assurance conclusion - The Group's auditor, Deloitte Touche Tohmatsu, has reconciled the consolidated financial statement figures for FY2022 contained in the preliminary announcement with the audited consolidated financial statements approved by the Board[190](index=190&type=chunk) - The work performed by Deloitte Touche Tohmatsu in this regard does not constitute an assurance engagement, and therefore no opinion or assurance conclusion is expressed[190](index=190&type=chunk) [Publication of Annual Results](index=34&type=section&id=Publication%20of%20Annual%20Results) This announcement has been published on the Stock Exchange and the Company's website, and the Company's 2022 annual report will be dispatched to shareholders and published on the Stock Exchange and the Company's website in due course - This announcement has been published on the Stock Exchange website (www.hkexnews.hk) and the Company's website (www.smart-core.com.hk)[191](index=191&type=chunk) - The Company's 2022 annual report will be dispatched to shareholders and published on the Stock Exchange and the Company's website in due course[191](index=191&type=chunk) [Annual General Meeting and Closure of Register of Members](index=35&type=section&id=Annual%20General%20Meeting%20and%20Closure%20of%20Register%20of%20Members) The Company will hold its Annual General Meeting on May 25, 2023, with the register of members closed from May 22 to May 25, 2023, to determine eligibility for attending and voting, and from June 6 to June 9, 2023, to determine eligibility for the proposed final dividend - The Company will hold its Annual General Meeting on **Thursday, May 25, 2023**[175](index=175&type=chunk) - To determine eligibility for attending and voting at the Annual General Meeting, the register of members will be closed from **May 22 to May 25, 2023**[175](index=175&type=chunk) - To determine eligibility for the proposed final dividend, the register of members will be closed from **June 6 to June 9, 2023**[193](index=193&type=chunk)

Financial Performance - Revenue for the first half of 2022 reached HKD 5,661,548 thousand, representing a 15.3% increase from HKD 4,911,942 thousand in the same period of 2021[10] - Gross profit increased by 62.8% to HKD 677,125 thousand, up from HKD 415,899 thousand year-over-year[10] - Profit before tax rose by 85.3% to HKD 362,033 thousand, compared to HKD 195,345 thousand in the previous year[10] - Net profit attributable to shareholders increased by 53.6% to HKD 145,230 thousand, up from HKD 94,576 thousand[10] - Basic earnings per share increased by 53.8% to HKD 29.78, compared to HKD 19.36 in the prior year[10] - Profit for the six months ended June 30, 2022, was HKD 299.8 million, an increase of 85.5% from HKD 161.6 million in 2021, with a net profit margin of approximately 5.3%, up from 3.3% in 2021[77] - Net profit attributable to owners for the six months ended June 30, 2022, was HKD 145.2 million, a 53.5% increase from HKD 94.6 million in the same period of 2021[78] - The net profit for the period was HKD 299,766 thousand, up from HKD 161,630 thousand, reflecting an increase of about 85.5%[145] Assets and Liabilities - Total assets as of June 30, 2022, were HKD 3,880,634 thousand, a 6.6% increase from HKD 3,639,011 thousand at the end of 2021[10] - Total liabilities increased slightly by 1.1% to HKD 2,624,607 thousand from HKD 2,596,136 thousand[10] - The net asset value increased by 20.4% to HKD 1,256,027 thousand, compared to HKD 1,042,875 thousand at the end of 2021[10] - The group's capital debt ratio decreased from 159.8% as of December 31, 2021, to 125.5% as of June 30, 2022, primarily due to a reduction in bank and other borrowings[87] - The company’s total liabilities decreased slightly to HKD 2,606,519 thousand from HKD 2,571,405 thousand, showing improved financial stability[149] Sales and Market Segments - In the first half of 2022, the company's total sales reached HKD 5,661.5 million, representing a year-on-year growth of 15.3%[19] - The semiconductor chip distribution business maintained stable revenue in smart display, smart vision, and optoelectronic products, while communication products and independent distribution saw substantial growth[19] - Sales in the smart display segment amounted to HKD 1,516.2 million, a slight decline of 4.0% year-on-year due to a decrease in global TV shipments[20] - The optoelectronic display business reported sales of HKD 685.9 million, a significant drop of 21.0% year-on-year, impacted by weak demand in the consumer electronics market[24] - The smart vision segment achieved sales of HKD 621.2 million, a minor decrease of 2.4% year-on-year, despite challenges from supply chain disruptions[25] - The communication products segment experienced a remarkable growth of 59.6%, with sales reaching HKD 434.1 million, driven by the demand for cellular IoT modules[28] - The independent distribution business generated sales of HKD 1,965.2 million in the first half of 2022, marking a substantial year-on-year increase of 75.6% driven by overseas market recovery[35] Economic and Industry Outlook - The company faced significant challenges due to global economic conditions, including inflation and geopolitical tensions, impacting the electronics manufacturing and semiconductor industries[14] - The overall semiconductor industry is expected to reach a bottom in 2023 after entering a downturn phase since Q3 2021[16] - The company anticipates challenges in the second half of 2022 due to global economic instability, but remains confident in maintaining business growth[41] - The semiconductor industry is expected to experience a rebound in demand post-2023, influenced by global economic conditions and trade dynamics[66] Operational Efficiency and Strategy - The company is actively enhancing its digital platform to improve operational efficiency and is focusing on expanding its distribution capabilities[19] - The company is focusing on expanding its independent distribution business and enhancing its digital transformation to improve operational efficiency[69] - The company plans to continue expanding its market presence and investing in new technologies to drive future growth[156] - The company aims to enhance shareholder value through strategic acquisitions and investments in high-growth areas[156] Employee and Administrative Costs - Total employee costs for the six months ended June 30, 2022, were approximately HKD 176.1 million, compared to HKD 119.5 million for the same period in 2021, representing a 47.3% increase[101] - Administrative, sales, and distribution expenses totaled HKD 262.1 million for the six months ended June 30, 2022, compared to HKD 167.8 million in the same period of 2021, representing 4.6% of revenue, up from 3.4% in 2021[75] Research and Development - Research and development expenses for the six months ended June 30, 2022, amounted to HKD 20.2 million, a 6.3% increase from HKD 19.0 million for the same period in 2021, primarily due to increased employee costs[72] - Research and development expenses increased slightly to HKD 20,215 thousand from HKD 19,014 thousand, indicating a focus on innovation[145] Shareholder Information - The company declared an interim dividend of HKD 0.04 per share for the six months ended June 30, 2022, consistent with the interim dividend of HKD 0.04 per share for the same period in 2021[108] - As of June 30, 2022, Mr. Tian Weidong held a controlled corporation interest of 262,500,000 shares, representing approximately 53.72% of the total shares[117] - Mr. Huang Ziliang held a controlled corporation interest of 90,000,000 shares, representing approximately 18.42% of the total shares[118] Compliance and Governance - The company has adopted the Corporate Governance Code and has complied with its applicable provisions during the six months ended June 30, 2022[112] - The company has established an audit committee consisting of three independent non-executive directors to oversee financial reporting and internal control systems[134] - The interim financial report for the six months ended June 30, 2022, has been reviewed and complies with relevant regulations[139]

Financial Performance - The company reported a revenue of HKD 10,389.3 million for the year ended December 31, 2021, representing an increase of 87.5% compared to the previous year[12]. - The net profit attributable to the owners of the company for the year was HKD 214.1 million, with a net profit margin of 3.8%[12]. - Total assets as of December 31, 2021, amounted to HKD 3,639.0 million, reflecting a growth of 27.8% year-on-year[12]. - The company achieved a gross profit of HKD 990.0 million, which is a significant increase of 218.8% compared to the previous year[12]. - The company's basic earnings per share reached 43.82 HKD cents, representing a 203.9% increase[21]. - The return on assets was reported at 10.8%, reflecting a significant improvement of 176.9%[17]. - The company declared a dividend of 12 HKD cents per share, marking a 100% increase compared to previous years[16]. - The group's profit for the year was HKD 391.9 million, an increase of HKD 306.5 million (358.9%) compared to HKD 85.4 million in 2020, mainly due to increased gross profit[88]. - The profit attributable to the company's owners reached HKD 214.1 million, a 201.5% increase from HKD 71.0 million in the previous year[91]. Market Expansion and Strategy - The company plans to expand its market presence and invest in new product development to drive future growth[12]. - The company aims to maintain a sustainable growth trajectory through innovative strategies and market expansion initiatives[12]. - Strategic acquisitions are being considered to bolster the company's competitive position in the market[12]. - The company plans to fully implement a new ERP system in 2022 to support its diversified and global business expansion[30]. - The group plans to establish an independent e-commerce center to enhance its online distribution capabilities over the next 2-3 years[34]. - The group aims to achieve a revenue scale exceeding HKD 1 billion in the industrial control and automotive sectors in 2022[39]. - The group is focusing on developing new products in the optical communication chip sector and expanding production capacity[39]. - The company is focused on overall business strategy, project development, and operational management under the leadership of its executive directors[118]. Operational Efficiency and Technological Development - The company is focusing on enhancing its technological capabilities to improve operational efficiency and customer satisfaction[12]. - The company implemented various cost-reduction and efficiency-enhancement measures, including the development of multiple information management software systems[30]. - The company has a strong commitment to research and development, focusing on new products and technologies in the electronic components sector[136]. - The company integrates industry resources through close collaboration with integrated circuit technology sources, adopting an OAO (online and offline) business model to provide high-quality core integrated circuits and value-added services[136]. Industry Trends and Market Insights - The global semiconductor industry is expected to grow by 9.5% in 2022, with a market size surpassing $600 billion[31]. - The semiconductor market is expected to see significant growth, with the global storage chip market projected to exceed USD 200 billion by 2023[74]. - The demand for DRAM is expected to grow by 17.1% in 2022, while supply growth is anticipated at 18.6%, potentially leading to a decline in DRAM chip prices[74]. - The global semiconductor market is projected to grow at an average rate of approximately 8.0% in 2022, with some forecasts suggesting a double-digit growth of 11%[59]. - The semiconductor import value in China reached approximately USD 439.7 billion, a year-on-year increase of 25.6%[24]. Corporate Governance and Compliance - The board of directors emphasized the importance of corporate governance and compliance in driving long-term success[12]. - The company has complied with all relevant laws and regulations impacting its business operations during the fiscal year, ensuring adherence through various internal controls and training measures[138]. - The company has maintained compliance with listing rules regarding the appointment of independent non-executive directors, ensuring at least three independent directors on the board[164]. Employee Relations and Corporate Culture - The company emphasizes employee relations, offering competitive compensation and implementing self-assessment programs to motivate employees towards achieving their goals[142]. - A strict internal training program is in place for new employees, focusing on company introduction and workflow skills to ensure quality across all employee levels[142]. - The company has a share incentive plan and stock option plan to reward senior management and employees for their dedication and loyalty[142]. Financial Position and Capital Management - The company's cash and bank balances totaled HKD 711.8 million as of December 31, 2021, an increase from HKD 416.7 million in the previous year[98]. - The company's outstanding bank borrowings increased to HKD 1,638.1 million as of December 31, 2021, up from HKD 727.1 million a year earlier, resulting in a capital debt ratio of 159.8%[98]. - The company's available distributable reserves as of December 31, 2021, were HKD 185.0 million, down from HKD 230.0 million in 2020[157]. - The company's distributive operations rely heavily on short-term financing, which poses a risk if credit lines are withdrawn or interest rates increase[149]. Customer and Supplier Relationships - The company generated over 30% of its revenue from its top five customers during the year, indicating a high customer concentration risk[148]. - Total procurement from the top five suppliers accounted for approximately 68.8% of the company's total procurement, with the largest supplier contributing about 50.3%[160]. - The company has established long-term relationships with major suppliers, some lasting between 9 to 15 years, ensuring stable supply channels[143]. - The company is expanding its supplier base by exploring new supplier partnerships and introducing new product segments with growth potential[145]. Shareholder and Stock Management - The company repurchased a total of 1,960,000 shares on the Hong Kong Stock Exchange during January 2021, with a total cost of HKD 2,421,660[113]. - The board believes that share buybacks can enhance earnings per share, benefiting the company and its shareholders[183]. - The proposed final dividend is HKD 0.08 per share, up from HKD 0.04 per share in 2020, with an interim dividend of HKD 0.04 per share already paid[150].

Financial Performance - Revenue for the six months ended June 30, 2021, was HKD 4,911,942, representing a 130.95% increase compared to HKD 2,126,863 in the same period of 2020[8]. - Gross profit increased to HKD 415,899, a 245.72% rise from HKD 120,298 year-on-year[8]. - Profit before tax surged by 362.61% to HKD 195,345, up from HKD 42,227 in the previous year[8]. - Net profit attributable to shareholders reached HKD 94,576, marking a 217.20% increase from HKD 29,816 in 2020[8]. - Basic earnings per share rose to HKD 19.36, a 220.00% increase compared to HKD 6.05 in the same period last year[8]. - Profit for the six months ended June 30, 2021, was HKD 161.6 million, an increase of HKD 126.8 million (364.4%) compared to HKD 34.8 million for the same period in 2020[65]. - Net profit for the period was HKD 161,630 thousand, compared to HKD 34,840 thousand in 2020, indicating a growth of 364.5%[128]. - The company reported a significant increase in sales of smart devices, which rose to HKD 300,234 from HKD 154,546, marking a growth of 94.3%[171]. Assets and Liabilities - Total assets as of June 30, 2021, were HKD 3,296,272, reflecting a 50.12% increase from HKD 2,195,687 at the end of 2020[8]. - Total liabilities increased by 63.98% to HKD 2,460,254 from HKD 1,500,344 at the end of 2020[8]. - The net asset value grew by 20.23% to HKD 836,018 from HKD 695,343 at the end of 2020[8]. - The group’s total outstanding bank and other borrowings increased to HKD 1,348.1 million as of June 30, 2021, from HKD 727.1 million as of December 31, 2020[75]. - The company’s total liabilities increased to HKD 2,431,587 thousand from HKD 1,481,385 thousand, representing a rise of 64%[129]. Market and Business Segments - The semiconductor chip distribution business benefited significantly, with sales and profitability experiencing substantial growth due to increased demand[13]. - The company anticipates continued growth in the semiconductor sector, driven by the ongoing global demand and supply chain shifts[13]. - The television product segment generated sales of HKD 1,284.6 million, reflecting a year-on-year increase of 91.3%[18]. - The optoelectronic display segment saw sales of HKD 868.5 million, with a year-on-year growth of 118.4%[19]. - The image processing segment reported sales of HKD 513.1 million, which is a remarkable year-on-year increase of 402.8%[20]. - The smart devices segment achieved sales of HKD 300.2 million, representing a year-on-year growth of 94.3%[23]. - The communications products segment recorded sales of HKD 272.0 million, showing a significant year-on-year increase of 129.2%[25]. Future Outlook - The company is focused on enhancing its core competitiveness through digital transformation and internal innovation[14]. - The overall market demand for the company's products is expected to remain strong, driven by various industry trends and new customer acquisitions[14]. - The company anticipates a strong demand for display-related products in the second half of 2021, driven by the upcoming smartphone launches and traditional sales peak season[40]. - The company is optimistic about the growth opportunities in the second half of 2021 across various business directions, supported by a diversified business layout[35]. - The independent distribution business is projected to maintain high growth rates in the second half of 2021, driven by strong demand for semiconductor chips[55]. Operational Metrics - Current ratio as of June 30, 2021, was 1.3, down from 1.4 as of December 31, 2020[76]. - Inventory turnover period increased to 22 days for the six months ended June 30, 2021, compared to 17 days for the same period in 2020[77]. - The total employee count as of June 30, 2021, was 536, compared to 408 as of June 30, 2020, with total employee costs for the six months amounting to approximately HKD 119.5 million, up from HKD 46.8 million in the same period last year[88]. Governance and Compliance - The company has adopted the Corporate Governance Code and has complied with its applicable provisions during the six months ended June 30, 2021[99]. - The board believes that consolidating the roles of Chairman and CEO under the same individual ensures consistency in leadership and effective strategic planning[100]. - The audit committee has reviewed the interim financial results and discussed them with external auditors[117]. - Deloitte has conducted a review of the interim financial statements and found no issues that would lead to non-compliance with accounting standards[124]. Cash Flow and Investments - Operating cash flow before working capital changes for the six months ended June 30, 2021, was HKD 240,327,000, compared to HKD 51,519,000 for the same period last year[141]. - Net cash used in operating activities for the six months ended June 30, 2021, was HKD (497,526,000), significantly higher than HKD 115,504,000 in the previous year[141]. - The company raised new bank and other borrowings amounting to HKD 1,136,528,000 during the financing activities[141]. - The company has made investments in joint ventures and third-party loans, indicating ongoing strategic financial activities[141]. Shareholder Information - The board declared an interim dividend of HKD 0.04 per share for the six months ended June 30, 2021, compared to HKD 0.02 per share for the same period in 2020[95]. - The company repurchased a total of 1,960,000 shares at a total cost of HKD 2,421,660, with the highest and lowest prices per share being HKD 1.26 and HKD 1.20 respectively[92]. - As of June 30, 2021, the total number of issued shares was 488,681,030[113].

Financial Performance - Revenue for the year reached HKD 5,541.0 million, representing a year-on-year increase of 16.3%[9] - Gross profit increased by 14.6% to HKD 310.5 million[9] - Net profit attributable to owners of the company grew by 18.8% to HKD 71.0 million[11] - Total assets increased by 8.9% to HKD 2,195.7 million[12] - The company's net profit margin stood at 1.5%[11] - Basic earnings per share increased by 31.6% to 14.42 HK cents[17] - Dividend per share rose by 50.0% to 6 HK cents[17] - Return on equity improved by 25.6% to 12.3%[17] - Full-year sales reached HK$5,541 million, a year-on-year increase of 16.3%, with gross profit of HK$310.5 million, up 14.6%[22] - Revenue for the year ended December 31, 2020, increased by 16.3% to HKD 5,541.0 million compared to HKD 4,762.8 million in 2019[67] - Gross profit increased by HKD 39.6 million to HKD 310.5 million in 2020, with a slight decrease in gross margin to 5.6% from 5.7% in 2019[69] - Annual profit increased by 38.2% to HKD 85.4 million in 2020, with a net profit margin of 1.5% compared to 1.3% in 2019[73] - Net profit attributable to owners of the company increased by 28.9% to HKD 71.0 million in 2020[74] Business Segments and Product Performance - Authorized distribution business showed steady growth, with significant revenue increases in optoelectronics, security, communication products, and optical communication sectors[22] - The optoelectronics display business unit achieved sales of HKD 947.3 million in 2020, a significant year-on-year increase of 78.1%[41] - The storage products business unit achieved sales of HKD 492.2 million in 2020, a slight year-on-year decrease of 0.2%[42] - The smart terminal business unit achieved sales of HKD 396.2 million in 2020, a year-on-year decrease of 26.2%[45] - The TV business unit achieved sales of HKD 2,049.3 million in 2020, a slight year-on-year decrease of 1.8%[40] - The company's optical communication product line sales doubled in 2020 due to increased demand for optical modules, driven by global infrastructure investments in data centers and 5G networks[46] - The security product line saw a significant revenue growth of 98.4% in 2020 compared to 2019, driven by the rapid growth of China's domestic security market[46] - The communication product line, focusing on cellular IoT communication modules, achieved a 57.0% increase in sales revenue in 2020 compared to 2019[46] - The automotive electronics product line remained flat in 2020 due to pandemic impacts and supply shortages, despite some recovery in the second half of the year[47] - The independent distribution business experienced substantial growth in both revenue and profit in 2020, benefiting from market volatility and supply chain disruptions caused by COVID-19[48] Market Trends and Industry Outlook - The global semiconductor market grew by 5.4% to USD 442 billion in 2020[20] - The global semiconductor market grew by 5.4% in 2020, reaching USD 442 billion[38] - Global semiconductor market revenue is expected to grow by 7.7% to $476 billion in 2021, driven by 5G, IoT, big data, and AI industries[28] - The global storage chip market is expected to grow by 12.22% in 2020, reaching USD 119.4 billion[42] - The global semiconductor market is expected to grow by 7.7% in 2021, reaching a market size of $476 billion, driven by recovery and increased demand for 5G, AI, and big data technologies[51] - The company's TV product line is expected to benefit from delayed international sports events and advancements in 8K and Mini LED technologies, with global TV shipments projected to reach 223 million units in 2021, a 2.8% increase[52] - The optoelectronics display business unit is expected to see growth in 2021, with new product lines in the industrial control sector projected to achieve over $1.0 million in incremental sales[53] - The memory product line is expected to grow significantly in 2021, with DRAM sales projected to increase by 18% and NAND flash sales by 17%, driven by new data center investments and 5G smartphone shipments[56] - The domestic 5G optical module market is expected to reach USD 2.27 billion (approximately RMB 15.8 billion) in 2021, driven by 5G infrastructure construction[59] - The Chinese car DVR market size is expected to reach RMB 55.92 billion in 2020, with a year-on-year growth of 27.44%, and is projected to continue growing rapidly in 2021[62] Strategic Initiatives and Future Plans - The company plans to expand its authorized and independent distribution businesses, targeting breakthrough growth in product business units[29] - The company aims to leverage its overseas network to penetrate more international markets with spot distribution business[30] - The company plans to focus on software services and cloud service capabilities, collaborating with internet cloud service providers in IoT, cloud services, and SaaS[33] - The company will continue to provide customized storage solutions and expand its semiconductor chip business in 2021[34] - The company plans to focus on expanding its independent distribution business and exploring e-commerce opportunities in the semiconductor industry in 2021[64] - The company has restructured its memory business to focus on South China, East China, and overseas markets, with plans to expand into server storage, aiming for substantial growth in 2021[56] Overseas Expansion and Operations - Overseas business achieved million-dollar revenue growth in newly established branches, with a new Southeast Asia base set up in 2020[23] - The company's overseas business covers Japan, Singapore, India, and Southeast Asia, with localized services and cloud collaboration helping to mitigate the impact of the pandemic[35] Research and Development - R&D expenses increased by 7.1% to HKD 25.7 million in 2020, primarily due to higher employee costs[70] Expenses and Financial Management - Administrative, sales, and distribution expenses increased by HKD 15.0 million to HKD 168.5 million in 2020, accounting for 3.0% of revenue[71] - Financial expenses decreased by HKD 9.1 million to HKD 18.2 million in 2020 due to lower average interest rates[72] - The company's capital gearing ratio increased from 72.3% in 2019 to 108.5% in 2020 due to increased bank borrowings to meet working capital needs[83] - The company's trade receivables turnover period increased to 62 days in 2020 from 48 days in 2019, attributed to increased sales and delayed payments by SME clients[84] - The company's inventory turnover period increased to 21 days in 2020 from 18 days in 2019, remaining relatively stable[84] Employee and Human Resources - Global employee count grew by double digits in 2020, with increased investment in IT infrastructure and enterprise informatization[24] - The company's employee count increased to 444 by the end of 2020, with total employee costs (excluding directors' remuneration) amounting to HKD 108.3 million[93] - The company conducts strict and standardized internal training programs for new employees, focusing on company introduction and workflow skills[127] - The company provides competitive compensation and has established a self-assessment program to motivate employees and help them achieve their goals[127] Share Repurchases and Capital Management - The company repurchased a total of 2,564,000 shares on the Hong Kong Stock Exchange in 2020, with a total of 11,150,000 shares canceled during the year[98] - In 2021, the company repurchased an additional 1,960,000 shares and canceled 4,274,000 repurchased shares on March 5, 2021[98] - The highest price per share for repurchases in January 2020 was HKD 1.51, and the lowest was HKD 1.49, with a total price of HKD 376,580[98] - In December 2020, the company repurchased 814,000 shares at a price range of HKD 1.33 to HKD 1.30, totaling HKD 1,064,640[98] - The company believes share repurchases can enhance earnings per share and benefit shareholders[171] - The company repurchased a total of 2,564,000 shares during the year, with a total of 11,150,000 shares canceled by the end of 2020[170] - Post-year-end, the company repurchased an additional 1,960,000 shares and canceled 4,274,000 repurchased shares on March 5, 2021[170] - The highest repurchase price per share was HKD 1.51 in January, while the lowest was HKD 1.24 in July[171] - The total repurchase cost (after deducting commissions) was HKD 3,417,700 for the year[171] Joint Ventures and Investments - A joint venture was established on March 8, 2021, with a registered capital of $6,250,000, in which the company holds a 46% stake[100] - The joint venture focuses on designing and manufacturing electronic components for the optical communication market[100] - HKD 61.7 million was set aside for potential acquisitions or investments in the e-commerce or electronics industry, with HKD 28.6 million utilized and HKD 33.1 million remaining, expected to be fully utilized by December 31, 2022[79] Corporate Governance and Leadership - The company's Chairman and CEO, Mr. Tian Weidong, has over 20 years of experience in the semiconductor industry[103] - Mr. Huang Ziliang, the company's CFO, has over 20 years of experience in business management and financial operations[104] - Mr. Liu Hongbing, an executive director, has over 20 years of experience in the electronic engineering industry[108] - Mr. Tian Weidong holds a 53.25% stake in the company through Smart IC Limited, which he wholly owns[157][175] - Mr. Huang Ziliang holds an 18.26% stake in the company through Insight Limited, which he wholly owns[157][175] Compliance and Environmental Responsibility - The company emphasizes compliance with environmental regulations and reported no fines or penalties for non-compliance with health, safety, or environmental laws during the fiscal year 2020[124] - The company ensures compliance with relevant laws and regulations through internal controls, approval procedures, and training for various business departments[123] - The company's environmental policies are supported by employees and effectively implemented, aligning business development with environmental responsibilities[124] Supplier and Customer Relationships - The company's top five suppliers accounted for approximately 78.9% of total procurement, with the largest supplier contributing about 54.7%[147] - The company's top five customers accounted for approximately 51.1% of total revenue, with the largest customer contributing about 18.7%[148] - The company's credit terms with major suppliers range from 30 to 60 days, while credit terms with major customers range from 30 to 120 days[128] - Over 50% of the company's revenue in the year came from its top five customers, highlighting customer concentration risks[132] - The company's major suppliers are well-established integrated circuit and electronic component companies, with business relationships lasting 8 to 14 years[128] - The company's major customers include leading brand electronics manufacturers, ODMs, and OEMs in China, with business relationships lasting 5 to 14 years[128] Dividends and Shareholder Returns - The company proposed a final dividend of 4 HK cents per share for 2020, up from 2 HK cents in 2019, subject to shareholder approval[134] - The company's distributable reserves as of December 31, 2020, were HKD 230.0 million, compared to HKD 255.5 million in 2019[143] Corporate Social Responsibility - The company made charitable and other donations totaling approximately HKD 66,000 in 2020, compared to HKD 60,000 in 2019[145] Financial Risks and Challenges - The company relies on short-term financing, and any withdrawal or increase in interest rates on credit lines could adversely affect its operations and profitability[133] Connected Transactions - The company's wholly-owned subsidiary, Smart IC International, provided a revolving loan facility of $3.8 million to Mingguan Hong Kong at an annual interest rate of 7%, with the loan to be used for financing electronic component procurement orders[182] - The loan agreement between Smart IC International and Mingguan Hong Kong constitutes a connected transaction under the Listing Rules, as Mingguan Hong Kong is a jointly held entity with a 25% stake owned by Smart IC Cloud Holdings Limited[182] - The company's connected transactions with Smart IC Taiwan for goods sales amounted to HKD 101,000 in 2020, a significant decrease from HKD 2,823,000 in 2019[185] - The company's connected transactions with Quiksol International Components Pte Ltd for goods sales amounted to HKD 228,000 in 2020, a significant decrease from HKD 2,898,000 in 2019[185] - The company's connected transactions with Smart IC Taiwan for goods purchases amounted to HKD -1,408,000 in 2020, compared to no transactions in 2019[185] - The company's connected transactions with Quiksol International Components Pte Ltd for goods purchases amounted to HKD -13,000 in 2020, a significant decrease from HKD -690,000 in 2019[185] Share Incentive Plans - The company's share incentive plan and share option plan did not result in any new shares being subscribed or acquired during the year ended December 31, 2020[191] - The maximum number of shares that may be issued upon the exercise of all outstanding options under the company's share option plan is 50,000,000 shares, representing 10.23% of the company's issued share capital[196] - The maximum number of shares that can be granted to any eligible person under the share option plan is limited to 1% of the total issued shares on the date of the option grant[198] Miscellaneous - The company's 2020 annual report is available for review[199] - The document contains a reference to the number 33, which may be relevant to financial data or other metrics[200]

Financial Performance - The company achieved revenue of HKD 2,126.9 million for the first half of 2020, representing a year-on-year increase of 1.76%[10] - Gross profit amounted to HKD 120.3 million, a decrease of 3.47% compared to the same period in 2019[10] - Profit before tax increased by 10.97% to HKD 42.2 million, while net profit attributable to shareholders was HKD 29.8 million, a slight increase of 0.08%[10] - The group's revenue for the six months ended June 30, 2020, was HKD 2,126.9 million, an increase of HKD 36.8 million (1.8%) compared to HKD 2,090.1 million in the same period of 2019[42] - Gross profit for the same period decreased by HKD 4.3 million (3.5%) to HKD 120.3 million, with a gross margin decline of 0.3% to 5.7%[43] - The group’s profit for the six months ended June 30, 2020, was HKD 34.8 million, an increase of HKD 2.9 million (9.1%) compared to HKD 31.9 million in the same period of 2019[50] - Total comprehensive income for the period was HKD 34,303, compared to HKD 32,045 in the same period last year, reflecting a growth of 7.1%[120] - Basic earnings per share for the period was HKD 6.05, compared to HKD 5.91 in the previous year, representing a 2.4% increase[120] Market and Sales Performance - The semiconductor market is projected to grow by 3.3% in 2020, reaching USD 425.9 billion, despite the adverse effects of the pandemic[14] - The company faced challenges in sales from its television and smart terminal product divisions, while other segments like optical display and security products saw significant growth[15] - Overall, the company maintained stable operations despite the pandemic's impact, with a slight increase in sales performance[15] - In the first half of 2020, the sales revenue of television products was HKD 718.5 million, a significant decline of 27.7% year-on-year due to the impact of the pandemic[16] - The sales performance of storage products reached HKD 255.5 million in the first half of 2020, representing a growth of 16.0% compared to the same period last year[19] - The sales revenue of optoelectronic display products amounted to HKD 398.5 million in the first half of 2020, showing a substantial increase of 105.3% year-on-year[20] - The sales revenue of smart terminal products dropped to HKD 122.8 million in the first half of 2020, reflecting a significant decline of 48.9% year-on-year[21] - Independent distribution business achieved sales of HKD 243.4 million in the first half of 2020, marking a year-on-year increase of 43.4%[26] Financial Position and Ratios - Total assets decreased by 4.76% to HKD 1,503.1 million, while total liabilities reduced by 10.58% to HKD 846.1 million[10] - The company's net asset value increased by 3.96% to HKD 657.0 million, indicating a stable financial position[10] - The capital debt ratio improved to 56.4%, down from 72.3% in the previous year, reflecting better financial leverage[10] - The group's capital debt ratio decreased from 72.3% as of December 31, 2019, to 56.4% as of June 30, 2020, due to reduced bank borrowings[61] - The group’s current assets were HKD 1,327.1 million, while current liabilities were HKD 834.0 million, resulting in a current ratio of 1.6 times[62] - The trade receivables turnover period increased to 63 days as of June 30, 2020, compared to 50 days in the same period of 2019[62] Cash Flow and Investments - The total cash and bank balances as of June 30, 2020, were HKD 360.4 million, an increase from HKD 347.4 million as of December 31, 2019[61] - The operating cash flow before changes in working capital for the six months ended June 30, 2020, was HKD 51,519,000, compared to HKD 60,376,000 for the same period in 2019, representing a decrease of approximately 13%[138] - The company raised new bank borrowings amounting to HKD 127,348,000 during the six months ended June 30, 2020, compared to HKD 677,641,000 in the same period of 2019, showing a decrease of approximately 81.2%[138] - The net cash used in financing activities for the six months ended June 30, 2020, was HKD 105,227,000, a significant reduction from HKD 413,518,000 in 2019, indicating a decrease of about 74.6%[138] - The company reported a net cash inflow from investing activities of HKD 32,559,000 for the six months ended June 30, 2020, compared to a net cash outflow of HKD 70,800,000 in the same period of 2019[138] Future Outlook and Strategy - The company plans to focus on the Southeast Asian market and high-end IPTV and Hybrid STB products to enhance performance in the second half of the year[36] - The independent distribution segment will target market opportunities arising from material shortages and increased inventory due to the pandemic[38] - The group aims to leverage its existing distribution business and explore new markets, particularly in Southeast Asia and India, while integrating hardware, software, and cloud services for IoT solutions[41] - The storage chip market is projected to recover in the second half of 2020, driven by demand from online education, remote work, and the gaming console market[31] Corporate Governance and Shareholder Information - The company has adopted the Corporate Governance Code and has complied with its applicable provisions during the six months ended June 30, 2020[83] - The board declared an interim dividend of HKD 0.02 per share for the six months ended June 30, 2020, expected to be distributed around September 30, 2020[81] - As of June 30, 2020, the company’s major shareholders included Mr. Tian Weidong with 53.25% ownership (262,500,000 shares) and Mr. Huang Ziliang with 18.26% ownership (90,000,000 shares)[90] - The company believes that share repurchases can enhance earnings per share and benefit the company and its shareholders[79] - The company has established a non-competition agreement with its major shareholder to prevent direct competition[98] Employee and Operational Information - As of June 30, 2020, the company had a total of 408 employees, with total employee costs amounting to approximately HKD 46.8 million for the six months ended June 30, 2020, compared to HKD 49.3 million for the same period in 2019[73] - The company did not grant any reward shares or stock options under the share incentive plan or stock option plan for the six months ended June 30, 2020, consistent with the previous year[74] - The company recognized approximately 1,710,000 HKD in right-of-use assets and lease liabilities related to new lease agreements for office space during the interim period[196] Audit and Compliance - The interim financial report for the six months ended June 30, 2020, has been published and sent to shareholders[108] - The interim financial statements were reviewed in accordance with Hong Kong accounting standards[115] - No significant issues were found that would lead to a belief that the financial statements were not prepared in accordance with the relevant standards[115]

Financial Performance - The company achieved a revenue of HKD 4.7628 billion for the year ended December 31, 2019, representing a decrease of 3.5% compared to the previous year[22]. - Gross profit for the same period was HKD 270.9 million, an increase of 15.7% year-on-year[22]. - The net profit attributable to owners of the company was HKD 55.1 million, with a net profit margin of 1.3%[9]. - Basic earnings per share for the year were HKD 10.96 cents, down 32.1% from the previous year[15]. - The group's total consolidated revenue for 2019 was HKD 4.76 billion, a slight decrease of 3.5% compared to 2018[38]. - The group's profit for the year ended December 31, 2019, was HKD 61.8 million, a decrease of HKD 19.6 million or 24.1% compared to HKD 81.4 million in 2018[65]. - The net profit attributable to the owners of the company for the year ended December 31, 2019, was HKD 55.1 million, down 31.6% from HKD 80.5 million in 2018[66]. Assets and Liabilities - Total assets as of December 31, 2019, amounted to HKD 1.5782 billion, reflecting a growth of 31.5%[10]. - The company's equity attributable to owners totaled HKD 579.0 million, with a debt-to-equity ratio of 72.3%[14]. - As of December 31, 2019, the group's cash and bank balances amounted to HKD 347.4 million, an increase from HKD 263.2 million as of December 31, 2018[72]. - The group's total bank financing (excluding standby letters of credit) as of December 31, 2019, was HKD 955.8 million, with unutilized amounts of HKD 521.0 million[75]. - The group's capital debt ratio increased from 9.7% as of December 31, 2018, to 72.3% as of December 31, 2019, due to increased bank borrowings[72]. Business Operations - The company maintained stable operations despite a challenging international environment and a 12.1% decline in global semiconductor industry revenue in 2019[22]. - The company serves over 4,200 diverse customers, maintaining stable partnerships with upstream semiconductor manufacturers[22]. - The authorized distribution business, represented by ChipSmart International, maintained stable operations in 2019, contributing to the group's business foundation[25]. - The electronic components distribution business is the main source of cash flow and profit, with a focus on expanding business scope and improving efficiency in 2020[29]. - The group aims to activate its sales network and expand into overseas markets, particularly in India and Southeast Asia, which are expected to have good growth potential[33]. Market Trends and Future Outlook - Future outlook remains cautious due to ongoing global economic uncertainties affecting the electronics manufacturing sector[22]. - The semiconductor industry is expected to face significant impacts in Q2 and Q3 of 2020 due to the COVID-19 pandemic, but long-term growth prospects remain positive with the acceleration of 5G commercialization[28]. - The semiconductor market showed signs of improvement in the second half of 2019, driven by the commercial launch of 5G and increased sales of smart speakers[38]. Product Performance - The group's TV SoC chip distribution accounted for approximately 30% of the global market share, despite a slight decline in global TV sales to 224 million units in 2019[26]. - The group achieved significant sales growth in the optical display, security, automotive electronics, and optical communication sectors in 2019[26]. - Sales of television SoC chips amounted to HKD 2.086 billion, a year-on-year decline of 6.1%[39]. - The smart terminal product line generated sales of approximately HKD 537.2 million, down 30.2% year-on-year[40]. - The optical display business achieved sales of HKD 531.7 million, reflecting a growth of 6.5% compared to 2018[44]. - Sales of storage products totaled HKD 493.2 million, a decrease of 22.7% year-on-year due to falling prices[45]. - The overall sales in the other products category declined by 11.1% compared to the previous year[46]. Research and Development - The group plans to enhance technical R&D investment and strengthen intellectual property management, aiming for long-term value creation through technology[32]. - The group will focus on new applications of AI in smart terminals and explore more business opportunities in cross-sector areas[51]. - The group plans to expand its business scale in storage solutions and establish a new company focused on niche market storage solutions[54]. Shareholder and Corporate Governance - The company proposed a final dividend of HKD 0.02 per share for the year, down from HKD 0.04 in 2018, with an interim dividend of HKD 0.02 already declared and paid[128]. - Over 50% of the company's revenue in the current year came from its top five customers, indicating a concentration risk[126]. - The company has a strict internal training program for new employees to ensure quality and promote internal advancement[121]. - The board maintained compliance with listing rules by having at least three independent non-executive directors, constituting more than one-third of the board[146]. - Major shareholders include Mr. Tian Weidong with a controlled corporation interest of 262,500,000 shares, representing 52.07% ownership, and Mr. Huang Ziliang with 90,000,000 shares, representing 17.85% ownership as of December 31, 2019[166][171]. Employee and Management - The total employee cost for the year ended December 31, 2019, was approximately HKD 102.1 million, up from HKD 87.9 million in 2018[87]. - The management team includes experienced executives with over 20 years in the semiconductor and electronics industries, overseeing overall business strategy and operations[97][98][102]. - The company is focused on research and development, with a dedicated executive responsible for overseeing these initiatives[102]. Compliance and Environmental Responsibility - The company reported compliance with all relevant laws and regulations affecting its business operations during the year[117]. - Environmental protection is recognized as crucial for the company's long-term development, with no fines or penalties incurred for non-compliance with health, safety, or environmental regulations during the year[118].

Financial Performance - Revenue for the six months ended June 30, 2019, was HKD 2,090,115 thousand, a decrease of 7.7% compared to HKD 2,264,513 thousand in the same period of 2018[9]. - Gross profit increased by 23.6% to HKD 124,625 thousand from HKD 100,818 thousand year-on-year[9]. - Profit attributable to owners of the company decreased by 19.6% to HKD 29,792 thousand from HKD 37,059 thousand in the previous year[9]. - Basic earnings per share decreased by 20.2% to HKD 5.91 from HKD 7.41 in the same period last year[9]. - The company's profit for the six months ended June 30, 2019, was HKD 31.9 million, a decrease of HKD 5.1 million (13.8%) from HKD 37.0 million in the same period of 2018[52]. - Net profit attributable to owners of the company decreased by 19.7% to HKD 29.8 million compared to the same period in 2018[53]. - The company reported a profit before tax of HKD 38,052 thousand, down 11.1% from HKD 42,973 thousand in the prior period[107]. - Net profit for the period was HKD 31,916 thousand, a decrease of 13.5% compared to HKD 36,953 thousand in the same period last year[107]. - Total comprehensive income for the period was HKD 32,045 thousand, down from HKD 36,124 thousand, reflecting a decrease of 11.5%[107]. Assets and Liabilities - Total assets increased by 29.3% to HKD 1,551,977 thousand from HKD 1,199,855 thousand as of December 31, 2018[9]. - Total liabilities increased by 58.0% to HKD 926,367 thousand from HKD 586,126 thousand as of December 31, 2018[9]. - As of June 30, 2019, the group had cash and bank balances totaling HKD 220.7 million, down from HKD 263.2 million as of December 31, 2018[58]. - The group's outstanding bank and other borrowings increased significantly to HKD 509.1 million as of June 30, 2019, compared to HKD 59.3 million as of December 31, 2018, resulting in a capital debt ratio increase from 9.7% to 81.4%[58]. - Current assets amounted to HKD 1,390.4 million as of June 30, 2019, compared to HKD 1,050.5 million as of December 31, 2018, while current liabilities rose to HKD 918.1 million from HKD 584.2 million[59]. - The total current liabilities were HKD 918,084 thousand, compared to HKD 584,219 thousand, representing an increase of about 57.1%[108]. - The company's cash and bank balances decreased to HKD 84,247 thousand from HKD 159,568 thousand, a decline of approximately 47.3%[108]. Inventory and Receivables - The average inventory turnover days increased by 50.0% to 30 days from 20 days year-on-year[9]. - The average trade receivables turnover days increased by 72.4% to 50 days from 29 days year-on-year[9]. - The company's total employee cost for the six months ended June 30, 2019, was approximately HKD 49.3 million, compared to HKD 38.3 million for the same period in 2018[70]. - The company recognized a trade receivables impairment loss of HKD 2,524,000 for the six months ended June 30, 2019, compared to a reversal of HKD 5,259,000 in the same period of 2018[157]. - Trade receivables rose to HKD 681,990 thousand, up from HKD 471,044 thousand, indicating a growth of approximately 44.7%[108]. - The company experienced an increase in trade receivables by HKD (213,508,000) for the six months ended June 30, 2019, compared to HKD (147,445,000) in the same period of 2018, indicating a rise in credit sales[115]. Market and Sales Performance - The company faced challenges due to global economic trade tensions, impacting sales targets for the first half of 2019[19]. - Sales of storage chips and set-top box chips decreased, while growth was noted in new product areas such as security monitoring and automotive electronics[19]. - In the first half of 2019, the group's core television chip sales decreased by 2.4% year-on-year to approximately HKD 948.3 million, despite a 4.3% decline in domestic color TV consumption[20]. - The total sales of the group's broadcasting and television products in the first half of 2019 amounted to HKD 1,245.8 million, representing a year-on-year decline of 8.7%[20]. - The group's storage chip business saw a significant decline, with total sales dropping by 24.4% year-on-year to approximately HKD 220.3 million in the first half of 2019[22]. - The average price of DRAM products fell by over 30% in the first half of 2019 due to oversupply and weaker-than-expected market demand[21]. - The group's AIoT business sales decreased by 36.9% year-on-year to approximately HKD 33.5 million in the first half of 2019, primarily due to significant fluctuations in demand from a major customer[27]. - The security monitoring product line achieved sales of approximately HKD 66.8 million in the first half of 2019, reflecting a year-on-year growth of 41.5%[28]. - The independent distribution business maintained a steady upward trend, with total revenue of approximately HKD 169.7 million in the first half of 2019[29]. Corporate Governance and Shareholder Information - The board of directors committed to maintaining high standards of corporate governance, adopting effective management accountability systems and high ethical standards[81]. - The company has adopted the Corporate Governance Code as per the listing rules and has complied with applicable code provisions during the reporting period[81]. - The company has no major transactions or contracts involving directors or their related entities as of June 30, 2019[90]. - The company has established a non-competition agreement with its controlling shareholder to prevent direct competition with its business[93]. - As of June 30, 2019, Mr. Tian Weidong holds 262,500,000 shares (52.07%) and Mr. Huang Ziliang holds 90,000,000 shares (17.85%) in the company[85][94]. - The total number of issued shares as of June 30, 2019, is 504,105,030[88][96]. Dividends and Shareholder Returns - The company declared an interim dividend of HKD 0.02 per share for the six months ended June 30, 2019, expected to be distributed around September 30, 2019[79]. - The company will suspend share transfer registration from September 16 to September 18, 2019, to qualify for the interim dividend[80]. Research and Development - Research and development expenses rose by 5.3% to HKD 11.9 million, attributed to increased technical support for new products and higher average salary costs for technical staff[49]. - The AIoT market is projected to grow from USD 5.1 billion in 2019 to USD 16.2 billion by 2024, with a compound annual growth rate of 26.0%[42]. - The company plans to leverage the latest AIoT platform from MediaTek to offer customizable turnkey solutions in smart attendance, access control, and smart retail[42]. - The company anticipates a recovery in business growth in the second half of 2019, driven by the expansion of new product lines and markets[40]. Accounting and Financial Reporting - The company adopted new accounting standards, including HKFRS 16 on leases, which may impact financial reporting[122]. - The company confirmed that the application of HKFRS 16 did not have a significant impact on the financial position or performance for the period[123]. - The company will recognize right-of-use assets at the commencement date of the lease, measured at cost[130]. - The company will present right-of-use assets as a separate item in the consolidated financial position[132]. - The company recognized lease liabilities of HKD 469,000 thousand and corresponding right-of-use assets upon the initial application of HKFRS 16 on January 1, 2019[145].

Financial Performance - The company reported a revenue of HKD 4,935.6 million for the year ended December 31, 2018, representing a growth of 3.1% compared to the previous year[20]. - Gross profit for the same period was HKD 234.1 million, reflecting an increase of 1.4% year-on-year[20]. - The net profit margin improved to 1.9% for the year ended December 31, 2018[23]. - Basic earnings per share rose by 4.0% to HKD 16.14 cents for the year ended December 31, 2018[29]. - In 2018, the company achieved sales of HKD 4.9 billion and a net profit attributable to shareholders of HKD 80.4 million, representing a year-on-year growth of 3.7%[35]. - The group's profit for the year ended December 31, 2018, was HKD 81.5 million, an increase of HKD 4.1 million or 5.3% compared to HKD 77.4 million in 2017[75]. - The net profit attributable to the owners of the company for the year ended December 31, 2018, was HKD 80.4 million, up by HKD 3.7 million from HKD 77.6 million in 2017[76]. - The net cash inflow from operating activities for the year ended December 31, 2018, was HKD 71.9 million, compared to HKD 20.9 million for the year ended December 31, 2017[81]. Assets and Liabilities - Total assets increased by 22.1% to HKD 1,191.6 million as of December 31, 2018[22]. - The company reported a return on assets of 6.8% for the year ended December 31, 2018[33]. - The company’s current ratio was reported at 1.80 as of December 31, 2018, indicating a stable liquidity position[32]. - The group’s current ratio as of December 31, 2018, was 1.80 times, slightly down from 1.83 times as of December 31, 2017[81]. Market Expansion and Strategic Initiatives - The company successfully acquired a 25% stake in Ming Kwan International Hong Kong Limited for USD 3,044,000, becoming its largest single shareholder[15]. - The company established a joint venture in Hong Kong with DTDS Technology Pte. Ltd. to expand into the Indian and Southeast Asian markets, holding a 70% stake in the venture[14]. - A joint venture was established with Singapore's DTDS to develop incremental markets in India and Southeast Asia, indicating a strategic focus on international market expansion[37]. - The company plans to actively seek new investment opportunities in overseas markets due to the shift of low-end electronic manufacturing to India and Southeast Asia[41]. - The company aims to integrate industry resources amid increasing competition and challenges in the electronic components distribution industry, positioning itself as a leading trading platform[44]. - The company plans to expand its distribution business by leveraging existing product lines and exploring new valuable product lines and customer groups[39]. - The company plans to focus on differentiated products such as commercial displays and smart projectors for future growth[57]. Product Performance - The sales of storage power products increased by approximately 8% year-on-year in 2018[47]. - The optical display product business grew by 60.1% year-on-year in 2018[50]. - The sales performance of communication products surged by 88.5% compared to 2017, driven by the demand for cellular IoT modules[51]. - The optical communication products achieved a significant sales increase of 65.4% year-on-year in 2018[52]. - AIoT products saw a sales growth of 43.6% compared to 2017[53]. - The sales of security monitoring products increased dramatically by 390% year-on-year in 2018[54]. - The total sales of broadcasting and television products decreased by 4.9% compared to 2017[46]. Research and Development - Research and development expenses rose by 7.7% to HKD 27.1 million, attributed to long-term technical support needs and increased average salary costs for technical staff[70]. - The company will continue to enhance its technology value-added business by increasing R&D investment and improving financial conversion capabilities in areas such as smart commercial displays and IoT[40]. - The company is actively pursuing new product development and market opportunities in the 5G and AIoT sectors, anticipating significant growth potential[64][65]. Employee and Governance - The company invested HKD 15.23 million in a stock incentive plan for key internal employees to enhance talent retention and motivation[37]. - The group’s employee count increased to 353 as of December 31, 2018, from 299 as of December 31, 2017, with total employee costs amounting to approximately HKD 87.9 million[90]. - The company values employees as its most valuable resource and offers competitive compensation packages[121]. - The board includes independent non-executive directors with extensive experience in financial management and investment, ensuring robust governance[104]. - The company has implemented a rigorous internal training program for new employees, focusing on company introduction and workflow skills[121]. Compliance and Environmental Responsibility - The company has complied with all relevant laws and regulations impacting its business operations during the fiscal year[117]. - Environmental protection is recognized as crucial for the company's long-term development, with no fines or penalties incurred for non-compliance with health, safety, or environmental regulations during the fiscal year[120]. - The company emphasizes the importance of compliance with applicable laws and regulatory requirements, investing significant internal resources to ensure adherence[117]. Shareholder and Financial Policies - The company proposed a final dividend of HKD 0.04 per share for the year, up from HKD 0.03 in 2017, and declared an interim dividend of HKD 0.02 per share[127]. - Over 50% of the company's revenue in the current year came from its top five customers, indicating a high customer concentration risk[125]. - The company has maintained long-term relationships with major suppliers, with business ties ranging from 6 to 12 years, ensuring stable supply channels[124]. - The company is expanding its supplier base through strategic partnerships and exploring new product segments to mitigate risks associated with reliance on major suppliers[124]. - The company has identified multiple strategic product segments that are expected to grow rapidly and plans to continue expanding its product portfolio[125].