Financial Performance - The total revenue for the year ended December 31, 2023, was HKD 220,807,000, a decrease of 16.2% compared to HKD 263,566,000 in 2022[2] - Gross profit for the same period was HKD 27,628,000, down 43.1% from HKD 48,539,000 in the previous year[2] - The company reported a loss before tax of HKD 36,676,000, an improvement from a loss of HKD 61,729,000 in 2022[2] - The net loss for the year was HKD 34,116,000, compared to a net loss of HKD 57,612,000 in the prior year, indicating a 40.9% reduction in losses[2] - Revenue from electronic product manufacturing was HKD 92,493,000, down 24.7% from HKD 122,762,000 in the previous year[15] - Revenue from electronic product trading was HKD 85,453,000, a decrease of 8.5% compared to HKD 93,178,000 in 2022[15] - The broadband infrastructure and smart domain segment generated revenue of HKD 42,861,000, down 10.0% from HKD 47,626,000 in 2022[18] - The group reported a pre-tax loss of HKD 36,676,000 in 2023, compared to a loss of HKD 61,729,000 in 2022[18] - The company’s loss for the year 2023 was HKD 34,116,000, compared to a loss of HKD 57,612,000 in 2022, representing a 40.8% improvement[25] Assets and Liabilities - Total assets decreased to HKD 215,308,000 from HKD 261,208,000, reflecting a decline of 17.6%[3] - Current liabilities also decreased to HKD 124,195,000 from HKD 150,374,000, a reduction of 17.4%[3] - The total assets of the group decreased to HKD 279,182,000 in 2023 from HKD 333,417,000 in 2022, representing a decline of 16.3%[19] - The total liabilities of the group decreased to HKD 212,434,000 in 2023 from HKD 231,838,000 in 2022, a reduction of 8.4%[19] - Trade receivables decreased to HKD 70,622,000 in 2023 from HKD 91,083,000 in 2022, reflecting a decline of 22.5%[26] - The total amount of trade and other receivables was HKD 65,814,000 in 2023, down from HKD 94,982,000 in 2022, a decline of 30.8%[26] - The company’s trade payables decreased to HKD 47,937,000 in 2023 from HKD 59,129,000 in 2022, a decrease of 19.1%[30] - The group had no outstanding bank borrowings as of December 31, 2023, compared to HKD 7.3 million in 2022[75] - The asset-to-liability ratio as of December 31, 2023, was zero, compared to 7.2% as of December 31, 2022[75] Expenses and Cost Management - The company has reported a significant reduction in administrative expenses, which fell to HKD 50,999,000 from HKD 63,797,000, a decrease of 20.1%[2] - Total employee costs for 2023 amounted to HKD 44,905,000, a decrease of 2.6% from HKD 46,102,000 in 2022[23] - The R&D expenses for 2023 were HKD 9,477,000, a decrease from HKD 10,018,000 in 2022, reflecting a reduction of 5.4%[23] - Selling and distribution costs increased to approximately HKD 9.0 million, an increase of about HKD 2.2 million or 32.4% compared to approximately HKD 6.8 million for the fiscal year ending December 31, 2022[62] Strategic Focus and Investments - The company is focusing on expanding its broadband infrastructure services and smart field solutions as part of its growth strategy[7] - The strategic investment business was initiated in the second half of 2022, aiming to leverage opportunities in innovative technology and cryptocurrency[42] - The company plans to strengthen and diversify its investment portfolio, with a timely increase in cryptocurrency investments[45] - The company is exploring opportunities to invest in cryptocurrencies as part of its strategy to capture new opportunities in blockchain and Web 3.0[44] - The group plans to seek acquisition targets focused on intelligent living-related technologies and electronic components in artificial intelligence and the Internet of Things[90] Market Challenges - The semiconductor business experienced a revenue decline of approximately 17.6% compared to the previous fiscal year, attributed to various market pressures[40] - The overall economic recovery remains uncertain, with signs of potential recession affecting customer order volumes in the semiconductor sector[40] - The semiconductor business outlook is expected to be challenging due to ongoing trade tensions between the US and China, as well as geopolitical complexities affecting the global semiconductor supply chain[86] - The company continues to face challenges from government policies affecting the telecommunications industry, impacting profitability[36] Corporate Governance - The company is committed to high standards of corporate governance, which is essential for sustainable growth and maximizing shareholder value[92] - The Chairman and CEO roles are distinct, with the CEO position remaining vacant since February 1, 2021, to maintain operational stability[94] - The board held only 2 regular meetings during the period, but deemed this sufficient due to the management of daily operations by executive directors[96] - The Audit Committee, consisting of three independent non-executive directors, has confirmed that the annual performance was prepared in accordance with applicable accounting standards and listing rules[102] - The company believes that the current governance arrangements are appropriate and will continue to assess the effectiveness of its structure as the business grows[94] Future Outlook - The group anticipates benefiting from the Chinese government's strong support for the development of 5G networks, artificial intelligence, and big data processing[89] - The group aims to strengthen its production processes and quality control while closely monitoring macroeconomic changes to seize market opportunities[88] - The company will closely monitor and evaluate the performance of its listed equity securities to make timely and appropriate adjustments to its investment portfolio[50]

香港交易及結算所有限公司及香港聯合交易所有限公司對本公告的內容概不 負責，對其準確性或完整性亦不發表任何聲明，並明確表示概不就因本公告全 部或任何部分內容而產生或因倚賴該等內容而引致的任何損失承擔任何責任。 BRAINHOLE TECHNOLOGY LIMITED (cid:20431) (cid:15324) (cid:18575) (cid:12606) (cid:13767) (cid:25870) (cid:8234) (cid:8886) （於開曼群島註冊成立之有限公司） (cid:28625)(cid:20319)(cid:7611)(cid:7585)(cid:21789)(cid:28643)2203(cid:28626) 有 關 截 至 二 零 二 二 年 十 二 月 三 十 一 日 止 年 度 的 年 報 的 補 充 公 告 茲提述腦 洞科技有限公司（「本公司」）截至二零二二年十二月三十一日止年度 的年報（「二零二二年年報」）。除另有說明外，本公告所用詞彙與二零二二年年 報所界定者具有相同涵義。 除二零二二年年報第10頁所載「管理層討論及分析－業務回顧－(iii)戰略投資業 務－上市股本證 ...

Financial Performance - Revenue for the six months ended June 30, 2023, was HKD 132,855,000, a decrease of 17.4% compared to HKD 160,834,000 in the same period of 2022[1] - Gross profit for the same period was HKD 23,581,000, down 18.3% from HKD 28,838,000 year-on-year[1] - The company reported a loss before tax of HKD 16,980,000, compared to a loss of HKD 5,203,000 in the previous year, indicating a significant increase in losses[1] - The net loss for the period was HKD 18,417,000, which is a 136.1% increase from HKD 7,795,000 in the prior year[1] - Total revenue from customer contracts for the six months ended June 30, 2023, was HKD 130,942,000, down 17% from HKD 157,658,000 in the same period of 2022[17] - Revenue from the production of electronic products decreased to HKD 57,930,000, a decline of 15% compared to HKD 68,267,000 in the previous year[17] - Revenue from electronic product trading also fell by 27% to HKD 52,507,000 from HKD 72,136,000 year-on-year[17] - The broadband infrastructure construction services revenue increased to HKD 9,797,000, up 71% from HKD 5,711,000 in the same period of 2022[17] Assets and Liabilities - Total assets as of June 30, 2023, were HKD 243,212,000, down from HKD 261,208,000 at the end of 2022[2] - Current liabilities decreased slightly to HKD 144,934,000 from HKD 150,374,000 at the end of 2022[2] - The total assets as of June 30, 2023, were HKD 314,490,000, a decrease of 5.7% from HKD 333,417,000 at the end of 2022[23] - The total liabilities as of June 30, 2023, were HKD 231,354,000, showing a slight decrease of 0.2% from HKD 231,838,000 at the end of 2022[23] Cash Flow and Investments - Cash and cash equivalents increased to HKD 44,825,000 from HKD 26,151,000, reflecting improved liquidity[2] - Operating cash flow for the six months was HKD 23,197,000, a significant increase from HKD 1,017,000 in the same period last year[7] - The net cash generated from operating activities for the six months ended June 30, 2023, was HKD 23,179,000, a significant increase from HKD 1,282,000 in the same period of 2022, representing a growth of approximately 1,710%[8] - The net cash used in investing activities was HKD 1,213,000, a decrease from HKD 6,754,000 in the previous year, indicating a reduction in investment outflows[8] - The net cash used in financing activities was HKD 7,348,000, a decrease of 66% from HKD 21,985,000 in the same period of 2022[8] - Cash and cash equivalents at the end of the period increased to HKD 44,825,000, compared to HKD 30,738,000 at the end of the same period last year, reflecting a growth of 46%[8] Strategic Focus and Future Outlook - The company plans to focus on new product development and market expansion strategies to enhance future performance[1] - The company anticipates that the demand for technology applications in the smart living sector will grow rapidly, driven by government support for 5G networks, artificial intelligence, IoT, cloud computing, and big data processing in China[109] - The company is actively seeking acquisition targets in smart living-related technologies and electronic components in AI and IoT, aiming for potential business synergies[110] - The company plans to diversify investments in innovative technologies and Web 3.0 to capitalize on technological advancements and create greater value for shareholders[110] Employee and Governance - The group employed 188 full-time staff as of June 30, 2023, with employee costs amounting to approximately HKD 23.3 million and HKD 25.2 million for the six months ended June 30, 2023, and June 30, 2022, respectively[105] - The company is committed to high standards of corporate governance, believing that sound governance practices are crucial for sustainable growth and maximizing shareholder interests[120] - The Audit Committee was established on September 23, 2015, with responsibilities including monitoring financial statements and overseeing the financial reporting system[124] Market Conditions and Challenges - The semiconductor business outlook for the coming year is expected to be challenging due to ongoing trade tensions between the US and China, impacting the global semiconductor supply chain and market[109] - Concerns over inflation and interest rate hikes are likely to exert downward pressure on the consumer market, with extended replacement cycles for consumer electronics such as smartphones and personal computers[109] - The group continues to face intense competition in the semiconductor assembly and packaging market[69] - There is uncertainty regarding the recovery of consumer markets, with no signs of growth momentum returning[71] Shareholder Information - As of June 30, 2023, the executive director Zhang Liang holds 599,658,000 shares, representing approximately 74.96% of the company's issued share capital[112] - Yoho Bravo Limited, a company wholly owned by Zhang Liang, also holds 599,658,000 shares, indicating significant insider ownership[113] - The board did not recommend the payment of any interim dividend for the current period, consistent with the previous year[107] - No interim dividend was declared or recommended during the period[36]

香港交易及結算所有限公司及香港聯合交易所有限公司對本公告的內容概不負責，對其準確 性或完整性亦不發表任何聲明，並明確表示概不就因本公告全部或任何部分內容而產生或因 倚賴該等內容而引致的任何損失承擔任何責任。 BRAINHOLE TECHNOLOGY LIMITED 脑 洞 科 技 有 限 公 司 （於開曼群島註冊成立之有限公司） 2203 （股份代號： ） 截至二零二三年六月三十日止六個月之中期業績公告 董事會欣然宣佈本集團截至二零二三年六月三十日止六個月的未經審核簡明綜合財務業績， 連同二零二二年同期未經審核的比較數字如下： 未經審核簡明綜合損益及其他全面收益表 截至二零二三年六月三十日止六個月 截至六月三十日止六個月 二零二三年 二零二二年 附註 千港元 千港元 （未經審核） （未經審核） 3 132,855 160,834 營業額 ...

Financial Performance - The group recorded a revenue of approximately HKD 263.6 million for the period, a decrease of about HKD 58.0 million or 18.0% compared to the previous fiscal year[38]. - Semiconductor business revenue was approximately HKD 216.0 million, slightly down by about HKD 5.2 million or 2.4% from the previous year's total revenue of approximately HKD 221.2 million[38]. - The group generated approximately HKD 122.8 million from self-produced semiconductor sales, a decrease of about HKD 6.7 million or 5.2% compared to approximately HKD 129.5 million in the previous year[38]. - The broadband infrastructure and smart venue segment contributed approximately HKD 47.6 million, a significant decrease of about HKD 52.7 million or 52.5% from approximately HKD 100.3 million in the previous year[39]. - The group's gross profit for the period was approximately HKD 48.5 million, a decrease of about HKD 5.6 million or 10.3% from approximately HKD 54.1 million in the previous year[40]. - The overall gross profit margin increased to approximately 18.4%, up by about 1.6 percentage points from the previous year's margin of approximately 16.8%[40]. - The semiconductor business recorded a gross profit of approximately HKD 27.4 million, a decrease of about HKD 3.1 million or 10.2% compared to the previous fiscal year[43]. - The gross profit margin for the semiconductor business declined from approximately 13.8% to about 12.7%, a decrease of approximately 1.1 percentage points[43]. - The group recorded a total impairment loss of approximately HKD 10.7 million for trade receivables, contract assets, and receivables from related companies, compared to HKD 9.3 million in the previous year[50]. - The net loss for the period was approximately HKD 57.6 million, compared to a net loss of HKD 51.6 million for the year ended December 31, 2021[60]. Investment and Strategic Focus - The company has initiated strategic investments in cryptocurrencies and publicly listed equity securities, including Ethereum and leading technology companies in the US and Hong Kong[14]. - The strategic investment business was initiated during the period, focusing on diversifying investments in innovative technology sectors[26]. - The company aims to leverage its advantages in smart technology to seize investment opportunities and enrich its asset portfolio[14]. - The company recognizes the potential of distributed ledger technology and Web 3.0 as future trends in finance and commerce, as highlighted by the Hong Kong government's policy declaration[28]. - The company will actively consider diversification into innovative technology and Web 3.0 investments to enhance technological development and create greater shareholder value[18]. - The company plans to seek acquisition targets focused on smart living technologies and electronic components related to artificial intelligence and the Internet of Things[18]. - The company aims to become an integrator of smart field solutions, focusing on rapidly growing technology application demands in the smart living sector[77]. - The company will actively monitor market and industry trends to seize investment opportunities arising from technological innovations, including diversification into innovative technologies and Web 3.0 investments[77]. Market Challenges - The semiconductor business experienced a slight revenue decrease of approximately 2.4% compared to the same period last fiscal year due to inflation concerns and rising interest rates impacting consumer markets[10]. - The ongoing geopolitical complexities and global trade tensions create uncertainties for economic recovery and consumer market growth[10]. - The ongoing geopolitical tensions and trade disputes continue to create uncertainty in the global economic recovery, affecting customer order placements[22]. - The semiconductor business outlook is expected to be challenging due to ongoing trade tensions and geopolitical complexities affecting the global semiconductor supply chain[76]. - The broadband infrastructure and smart domain business faced revenue declines due to tightened liquidity in the real estate sector and cautious capital expenditure by developers[12]. - The broadband infrastructure and smart field solutions business faced challenges due to stricter deleveraging policies in China's real estate sector, leading to reduced market demand[25]. Cost Management and Operational Efficiency - The company is focusing on cost management and adopting a more conservative approach to new projects, reallocating resources to higher-margin projects to optimize the product mix[14]. - The company aims to strengthen its R&D efforts to enhance production processes and quality control while closely monitoring macroeconomic changes[15]. - The company will allocate resources to higher-margin projects to optimize its product mix amid cautious cost management[25]. - The administrative expenses decreased to approximately HKD 63.8 million, a reduction of about HKD 17.0 million or 21.1% from approximately HKD 80.8 million in the previous year[48]. - The sales and distribution costs were approximately HKD 6.8 million, a decrease of about HKD 1.6 million or 19.3% from approximately HKD 8.4 million in the previous year[46]. Governance and Compliance - The company has complied with the corporate governance code, except for specific provisions regarding the frequency of board meetings and attendance at the annual general meeting[148]. - The board of directors has established three committees: Audit Committee, Nomination Committee, and Remuneration Committee to assist in fulfilling its responsibilities[157]. - The Audit Committee held 2 meetings during the period and focused on the appointment of external auditors without any disagreements[160]. - The Nomination Committee conducted 1 meeting and reviewed the board's structure, diversity, and succession planning[162]. - The Remuneration Committee held 1 meeting and reviewed the remuneration policies for executive directors and senior management[167]. - The company has implemented a risk management and internal control system, which was reviewed for adequacy and effectiveness by the Remuneration Committee[163]. - The board and audit committee review the effectiveness of the risk management and internal control systems at least biannually[182]. - The company has established confidentiality measures during significant negotiations to protect insider information[184]. - The company’s governance practices include regular communication with shareholders and adherence to relevant regulations[183]. - The company has outlined its governance practices and policies in the corporate governance report, which is available for stakeholder review[197]. Employee and Social Responsibility - The company is committed to providing a safe working environment and competitive compensation and benefits for its employees[131]. - The group employed 339 full-time staff as of December 31, 2022, with employee costs amounting to approximately HKD 46.1 million, down from HKD 66.5 million in 2021[70]. - The company made charitable donations totaling HKD 78,000 during the reporting period, an increase from HKD 30,000 in the previous year[143]. - The company has established a framework for the ESG report based on guidelines from the Hong Kong Stock Exchange, ensuring compliance with relevant regulations[198]. - The ESG report includes quantitative environmental and social key performance indicators to provide stakeholders with a comprehensive understanding of the company's ESG performance[199].

香港交易及結算所有限公司及香港聯合交易所有限公司對本公告的內容概不負責，對其準確 性或完整性亦不發表任何聲明，並明確表示概不就因本公告全部或任何部分內容而產生或因 倚賴該等內容而引致的任何損失承擔任何責任。 BRAINHOLE TECHNOLOGY LIMITED 脑 洞 科 技 有 限 公 司 （於開曼群島註冊成立之有限公司） 2203 （股份代號： ） 全年業績公告 截至二零二二年十二月三十一日止年度 全年業績 董事會欣然宣佈本集團本期間的經審核綜合業績，連同先前財政年度經審核的比較數字如 下： 綜合損益及其他全面收益表 截至二零二二年十二月三十一日止年度 二零二二年 二零二一年 附註 千港元 千港元 3 263,566 321,570 營業額 (215,027) (267,457) 銷售成本 48,539 54,113 毛利 5,160 7,163 其他收入 ...

Financial Performance - Revenue for the six months ended June 30, 2022, was HKD 160,834,000, an increase of 3.8% compared to HKD 155,858,000 in the same period of 2021[1] - Gross profit for the same period was HKD 28,838,000, up 12.8% from HKD 25,593,000 year-on-year[1] - The company reported a loss before tax of HKD 5,203,000, significantly improved from a loss of HKD 16,519,000 in the previous year[1] - The net loss for the period was HKD 7,795,000, compared to a net loss of HKD 19,363,000 in the same period last year, reflecting a 59.7% reduction in losses[1] - Segment profit for the production division increased to HKD 10,668,000 from HKD 4,147,000, representing a significant growth of 157.5% year-over-year[21] - The company reported a pre-tax loss of HKD 5,203,000 for the six months ended June 30, 2022, compared to a loss of HKD 16,519,000 in the same period of 2021, indicating an improvement in financial performance[21] - The net loss for the period was approximately HKD 7.8 million, a reduction of about HKD 11.6 million compared to a net loss of HKD 19.4 million in the same period last year[77] Assets and Liabilities - Total assets as of June 30, 2022, were HKD 231,083,000, slightly down from HKD 239,547,000 at the end of 2021[2] - Current liabilities increased to HKD 136,601,000 from HKD 123,319,000, indicating a rise of 10.4%[2] - Total assets decreased to HKD 324,944,000 as of June 30, 2022, down from HKD 353,629,000 at the end of 2021, a decline of 8.1%[24] - Total liabilities also decreased to HKD 193,707,000 from HKD 211,305,000, reflecting a reduction of 8.3%[24] Cash Flow and Investments - The company’s cash and cash equivalents decreased to HKD 30,738,000 from HKD 42,644,000, a decline of 28%[2] - Operating cash flow for the six months was HKD 1,282,000, a turnaround from a cash outflow of HKD 14,000 in the previous year[7] - The net cash generated from investment activities was HKD 6,754,000, an increase from HKD 3,013,000 in the prior year[8] - The net cash used in financing activities was HKD 21,985,000, compared to HKD 8,208,000 in the same period last year, indicating increased financial outflows[8] - Cash and cash equivalents decreased by HKD 13,949,000, compared to a decrease of HKD 5,209,000 in the previous year[8] - The cash and cash equivalents at the end of the period stood at HKD 30,738,000, down from HKD 68,703,000 at the end of the previous period[8] Revenue Breakdown - For the six months ended June 30, 2022, the total revenue from customer contracts was HKD 157,658,000, a slight increase of 3.4% compared to HKD 152,976,000 in the same period of 2021[18] - Revenue from electronic product manufacturing was HKD 68,267,000, up 9.9% from HKD 62,601,000 in 2021[18] - Revenue from electronic product trading surged to HKD 72,136,000, a significant increase of 70.5% compared to HKD 42,416,000 in the previous year[18] - The broadband infrastructure and smart venue segment generated HKD 17,255,000, down 36.5% from HKD 47,959,000 in 2021[18] - Revenue from broadband infrastructure construction services with related parties was HKD 468,000 during the period, compared to HKD 2,342,000 in the previous year[49] Operational Efficiency - The company plans to continue focusing on cost management and operational efficiency to improve future performance[1] - Administrative expenses decreased by approximately 20.0% to about HKD 28.7 million, down from HKD 35.8 million in the previous year[75] - Research and development costs for the period were HKD 5,468,000, down from HKD 6,869,000 in the previous year, a decrease of 20.3%[31] Corporate Governance - The company has adopted a standard code of conduct for securities trading by directors, with no known non-compliance during the period[100] - The company is committed to high standards of corporate governance, having complied with the corporate governance code provisions, except for the absence of the chairman at the annual general meeting[104] - The audit committee, consisting of three independent non-executive directors, has reviewed the report and the unaudited condensed consolidated financial results for the period, ensuring compliance with applicable accounting standards[108] Future Outlook - The semiconductor business outlook is challenging due to ongoing geopolitical tensions and inflationary pressures affecting consumer electronics demand[91] - The group aims to leverage opportunities in the smart living sector, driven by rapid technological innovation and government support for 5G and AI[92] - The company is seeking acquisition targets that can create synergies with its semiconductor business and smart living technologies[94] Shareholder Information - As of June 30, 2022, Mr. Zhang Liang held approximately 74.96% of the company's issued share capital through 599,658,000 shares[95] - As of June 30, 2022, Yoho Bravo Limited holds 599,658,000 shares, representing approximately 74.96% of the company's issued share capital[96] Miscellaneous - The company did not declare or recommend any interim dividends during the period, consistent with the previous year[35] - The company has not incurred any significant contingent liabilities as of June 30, 2022[59] - There were no significant investments or acquisitions during the reporting period[82] - The company has not reported any significant events after the reporting period[61]

Financial Performance - The group's revenue for the period was approximately HKD 321.5 million, an increase of about HKD 59.7 million or 22.8% compared to the previous fiscal year[23]. - Revenue from semiconductor production increased by approximately 6.0% to HKD 129.5 million, up from HKD 122.2 million in the previous year[23]. - Revenue from semiconductor trading rose by approximately 29.8% to HKD 91.7 million, compared to HKD 70.7 million in the previous year[23]. - The broadband infrastructure and smart venue segment contributed approximately HKD 100.3 million in revenue, a significant increase of 45.5% from HKD 68.9 million in the previous year[26]. - The group's gross profit for the period was approximately HKD 54.1 million, an increase of about HKD 20.6 million or 61.5% compared to approximately HKD 33.5 million for the year ended December 31, 2020[27]. - The overall gross margin for the group was approximately 16.8%, an increase of about 4.0 percentage points from approximately 12.8% for the year ended December 31, 2020, primarily due to the semiconductor business's gross margin rising from approximately 6.5% to about 13.8%[27]. - The company recorded a net loss of approximately HKD 51.6 million for the period, compared to a net loss of HKD 58.8 million for the year ended December 31, 2020[64]. Semiconductor Business - The semiconductor division's revenue increased compared to the previous fiscal year, despite ongoing uncertainties from COVID-19 variants and global trade disputes[10]. - The semiconductor business is facing challenges due to ongoing trade tensions and conservative order placements from customers[14]. - The company’s self-produced semiconductor production lines face rapid technological advancements and evolving industry standards[10]. - The group aims to enhance its R&D efforts to improve production processes and quality control amidst increasing competition in the semiconductor market[14]. - The group plans to seek acquisitions or investment targets in smart living-related technologies and AI and IoT electronic components[15]. - The semiconductor business's gross profit increased from approximately HKD 12.5 million to about HKD 30.5 million during the period[27]. - The company has acknowledged that the specific types of semiconductors do not meet the current market technical standards, which has led to quality issues during the production of advanced electronic devices[46]. - The company has recorded an impairment loss of approximately HKD 22.5 million due to the inability of specific machines to produce semiconductors that meet customer technical standards[52]. - The company has fully impaired inventory, including finished goods and raw materials, with a carrying amount of approximately HKD 10.3 million due to the obsolescence of specific types of semiconductors[53]. - The company has communicated with customers to ensure future supplies of semiconductors that meet the required defect standards per million opportunities[46]. Smart Living Sector - The company has diversified its business into the smart living sector since 2019, focusing on broadband infrastructure and integrated solutions for smart applications[11]. - The smart living business is expected to enhance shareholder equity, driven by high-tech applications and partnerships with leading market participants in China[11]. - The company is actively exploring opportunities in smart park projects through collaborations with domestic high-tech leaders[11]. - The Chinese government's support for 5G, AI, IoT, cloud computing, and big data is expected to benefit the group in emerging applications[14]. - The group is committed to becoming a smart venue solution integrator and will seek acquisitions or investments in related technologies and components[84]. Challenges and Risks - The company faces challenges from China's "network speed increase and fee reduction" policy, which pressures profitability in the broadband infrastructure sector[11]. - The real estate sector's deleveraging policies have impacted some clients, leading to increased accounts receivable turnover days[13]. - The group faced challenges in debt recovery primarily due to liquidity issues affecting clients in the broadband infrastructure and smart venue sectors, particularly real estate developers in China[34]. - The group anticipates a challenging semiconductor business outlook due to ongoing trade tensions and the uncertain recovery from COVID-19[83]. - The company has faced significant risks and uncertainties, which are discussed in the management discussion and analysis section of the report[102]. Corporate Governance - The company is committed to high standards of corporate governance to ensure sustainable growth and maximize shareholder value[161]. - The board of directors is responsible for the overall management of the company, including the approval of financial statements and risk management systems[169]. - The company has adopted a risk management system to identify, assess, and manage risks associated with its business operations[191]. - The internal control system is aligned with the COSO framework, which aims to ensure operational effectiveness and compliance with applicable laws[193]. - An independent consultant was appointed to conduct semi-annual reviews of the risk management and internal control systems to maintain high corporate governance standards[194]. Employee and Management - The group employed 374 full-time staff, with approximately 96.3% based in China and 3.7% in Hong Kong[78]. - The employee costs for the group were approximately HKD 66.5 million for the year ended December 31, 2021, compared to HKD 59.2 million for the previous year[78]. - The company actively implements strategies for talent recruitment, training, and retention, linking employee compensation to performance[78]. - The remuneration policy for directors and senior management includes salary, benefits, and discretionary bonuses linked to company performance[124]. Shareholder Information - The company reported a total reserve available for distribution to shareholders of approximately HKD 29.8 million as of December 31, 2021, down from HKD 43.2 million in 2020[108]. - The board does not recommend the payment of a final dividend for the period[81]. - The company did not declare any final dividend for the period and did not pay or declare any interim dividends during this period[105]. Legal and Compliance - No significant legal or regulatory violations affecting the company's business operations were reported during the period[139]. - The company has established a comprehensive quality assurance standard to meet customer requirements, ensuring that all products are inspected before delivery[142]. - The company has purchased liability insurance for directors and senior management[168].

Financial Performance - Revenue for the six months ended June 30, 2021, was HKD 155,858,000, an increase of 39.6% compared to HKD 111,565,000 for the same period in 2020[1] - Gross profit for the same period was HKD 25,593,000, representing a gross margin of 16.4%, up from HKD 12,479,000 in 2020[1] - The company reported a loss before tax of HKD 16,519,000, an improvement from a loss of HKD 21,276,000 in the previous year[1] - The company recorded a net loss of HKD 19,363,000 for the six months ended June 30, 2021, compared to a net loss of HKD 21,498,000 in the same period of 2020[1] - The overall gross profit for the period was approximately HKD 25.6 million, representing an increase of about 105.1% from approximately HKD 12.5 million in the previous year[67] - The gross profit margin improved to approximately 16.4%, up from about 11.2% in the previous year, primarily due to increased sales and efficiency in the semiconductor business[69] - The net loss for the period was approximately HKD 19.4 million, an improvement from a net loss of approximately HKD 21.5 million for the six months ended June 30, 2020[75] Assets and Liabilities - Total assets as of June 30, 2021, were HKD 233,401,000, compared to HKD 219,039,000 at the end of 2020, reflecting a growth of 6.5%[2] - The company’s total liabilities increased to HKD 168,813,000 from HKD 186,638,000, indicating a decrease of 9.5%[3] - Total liabilities increased to HKD 201,762,000 from HKD 183,702,000, reflecting a rise in operational costs[20] - Trade and other receivables increased to HKD 116,179,000 from HKD 97,971,000, a rise of 18.6% year-over-year[2] - Cash and cash equivalents at the end of the period were HKD 68,703,000, down from HKD 74,150,000 at the end of 2020[2] - Trade receivables as of June 30, 2021, amounted to HKD 100,709,000, an increase from HKD 88,367,000 as of December 31, 2020, representing a growth of 14.0%[33] Revenue Breakdown - Revenue from electronic product manufacturing was HKD 62,601,000, up 12.4% from HKD 55,857,000 in 2020[17] - Revenue from electronic product trading increased significantly by 70.7% to HKD 42,416,000 from HKD 24,851,000[17] - Broadband infrastructure construction services generated revenue of HKD 28,829,000, a 63.2% increase from HKD 17,635,000[17] - Revenue from semiconductor production increased by approximately 12.1% to about HKD 62.6 million, up from approximately HKD 55.9 million in the previous year[66] - Revenue from semiconductor trading surged by approximately 70.7% to about HKD 42.4 million, compared to approximately HKD 24.9 million in the previous year[66] - The broadband infrastructure and smart venue business contributed approximately HKD 50.8 million in revenue, a 64.8% increase from approximately HKD 30.8 million in the previous year[66] Expenses and Costs - The financing cost for the six months ended June 30, 2021, was HKD 2,934,000, compared to HKD 993,000 for the same period in 2020, representing a significant increase of 195%[22] - The income tax expense for the six months ended June 30, 2021, was HKD 2,844,000, compared to HKD 222,000 for the same period in 2020, indicating a substantial increase in tax obligations[23] - The total inventory recognized as an expense for the six months ended June 30, 2021, was HKD 93,879,000, up from HKD 77,963,000 in 2020, reflecting a 20% increase[26] - Employee costs, including director remuneration, totaled HKD 34,370,000 for the six months ended June 30, 2021, compared to HKD 28,774,000 in 2020, marking an increase of 19.5%[26] - Administrative expenses for the period were approximately HKD 35.8 million, an increase of about HKD 5.1 million or 16.6% from approximately HKD 30.7 million for the six months ended June 30, 2020[73] Corporate Governance and Strategy - The company has adhered to high standards of corporate governance, which is deemed essential for sustainable growth and maximizing shareholder value[104] - The audit committee, consisting of three members, has reviewed the report and believes that the financial performance has been prepared in compliance with applicable accounting standards[109] - The company plans to seek acquisitions or investment targets related to smart living technologies, artificial intelligence, and IoT electronic components, which can create potential business synergies[93] - The company aims to become an integrator of smart field solutions, focusing on rapidly growing technology application demands in the smart living sector[93] - The company has established strong relationships with telecom operators and real estate developers, actively exploring opportunities in smart parks and smart parking[93] Future Outlook - The company anticipates a challenging outlook for its semiconductor business due to global economic complexities and ongoing trade tensions, while also recognizing opportunities from the rapid innovation in 5G technology[91] - The company provided a future outlook, projecting a revenue growth of 20% for the next fiscal year, driven by new product launches and market expansion[113] - The company plans to expand its market presence in Southeast Asia, targeting a 10% market share within the next two years[113] - A strategic acquisition of a local tech firm is expected to be finalized by Q4 2021, which will enhance the company's technological capabilities[113] Shareholder Information - As of June 30, 2021, Mr. Zhang Liang holds 599,658,000 shares, representing approximately 74.96% of the company's issued share capital[95] - Yoho Bravo Limited, a wholly owned entity of Mr. Zhang Liang, also holds 599,658,000 shares, equating to a 74.96% stake in the company[96] Employee and User Metrics - The group employed 406 full-time staff as of June 30, 2021, with employee costs amounting to approximately HKD 34.4 million, up from HKD 28.8 million for the six months ended June 30, 2020[86] - User data showed a growth in active users by 25% compared to the previous period, reaching a total of 1.5 million active users[113]

COVID-19 Impact - The company reported a significant impact from COVID-19, leading to a slowdown in new orders from semiconductor customers during the year 2020[9]. - The global semiconductor market is expected to face challenges due to ongoing trade tensions and uncertainties in economic recovery from COVID-19[13]. - The group anticipates a challenging semiconductor business outlook due to ongoing trade tensions and the uncertain recovery from the COVID-19 pandemic[66]. Revenue and Financial Performance - The company recorded a revenue of approximately HKD 261.8 million for the period, a decrease of about HKD 84.9 million or 24.5% compared to the previous fiscal year[21]. - Revenue from semiconductor production decreased by approximately 33.4% to about HKD 122.2 million, down from approximately HKD 183.5 million in the previous fiscal year[21]. - Revenue from semiconductor trading fell by approximately 26.3% to about HKD 70.7 million, compared to approximately HKD 95.8 million in the previous fiscal year[21]. - The broadband infrastructure and smart venue segment contributed approximately HKD 69.0 million in revenue, an increase of about HKD 1.7 million or 2.5% compared to the previous fiscal year[22]. - The company's gross profit for the period was approximately HKD 33.5 million, a decrease of about HKD 27.5 million or 45.1% from approximately HKD 61.0 million in the previous fiscal year[24]. - The overall gross margin decreased to approximately 12.8%, down from about 17.6% in the previous fiscal year, a decline of approximately 4.8 percentage points[24]. - The semiconductor business's gross profit dropped from approximately HKD 38.3 million to about HKD 12.5 million during the same period[24]. - The company incurred a net loss of approximately HKD 58.8 million for the period, compared to a net loss of approximately HKD 49.9 million for the year ended December 31, 2019[50]. Smart Living Sector - The acquisition of Guangzhou Zhiwang in September 2019 allowed the company to expand into the smart living sector, contributing to revenue growth despite the pandemic[4][10]. - Revenue from Guangzhou Zhiwang showed moderate growth during the pandemic, indicating resilience in the smart living solutions market[10]. - The smart living sector is anticipated to benefit from government support for innovation and technology development in China, particularly in 5G, AI, IoT, and big data[13]. - The company aims to leverage emerging applications in the smart living sector to enhance shareholder value[10]. - The company aims to become an integrated solutions provider for smart venues, focusing on opportunities in smart parks and smart parking[20]. Costs and Expenses - The company faced rising labor costs and additional expenses due to evolving technology standards and quality assurance systems in semiconductor production[10]. - Sales and distribution costs for the period were approximately HKD 7.7 million, a decrease of about HKD 3.5 million or 31.3% compared to HKD 11.2 million for the year ended December 31, 2019[26]. - Administrative expenses for the period were approximately HKD 60.6 million, a decrease of about HKD 11.6 million or 16.1% from approximately HKD 72.2 million for the year ended December 31, 2019[27]. Impairment and Inventory - Impairment losses on property, plant, and equipment, as well as right-of-use assets, amounted to approximately HKD 34.5 million and HKD 0.4 million respectively during the period[30]. - Inventory impairment losses recognized during the period were approximately HKD 1.8 million, based on the assessment of net realizable value[32]. - The carrying amount of inventory, including finished goods and raw materials, was fully impaired, amounting to approximately HKD 10.3 million as of December 31, 2019[41]. - The company sold impaired inventory of specific types of semiconductors for approximately HKD 0.6 million, resulting in a loss of about HKD 5.8 million[45]. - The remaining impairment provision for specific types of semiconductors was approximately HKD 1.4 million as of December 31, 2020[46]. R&D and Technical Standards - The company plans to continue its R&D efforts to enhance production processes and quality control in response to higher technical standards from customers[13]. - The company has been in communication with customers regarding the need for semiconductors that meet higher technical standards due to complaints about specific types of semiconductors[35]. - The company has invested in capital expenditures to enhance production capacity for specific types of semiconductors to meet increasing customer demand since 2013[37]. Corporate Governance and Compliance - The company has complied with the corporate governance code provisions, except for A.1.1 and E.1.2[135]. - The board is responsible for the overall management of the company's business and has delegated daily operations to executive directors and senior management[139]. - The company has adopted a code of conduct for securities transactions by directors that meets or exceeds the standards set out in the listing rules[136]. - The Audit Committee held 2 meetings during the period and reviewed the integrity of financial statements and risk management systems[146]. - The company’s governance practices were reviewed, ensuring compliance with legal and regulatory requirements[153]. ESG and Sustainability - The company focuses on sustainable development principles and aims to provide high-quality products and value-added solutions while fulfilling social responsibilities[183]. - The group aims to become a global leader in technology products and smart solutions while improving community living standards[183]. - The company achieved ISO 14001:2015 environmental management system certification, ensuring compliance with local environmental laws and regulations[192]. - The company implemented measures to reduce greenhouse gas emissions, including replacing outdated equipment with energy-efficient alternatives[197]. - The company reported no significant environmental complaints or incidents during the year, indicating effective environmental management practices[192]. Shareholder Information - The board does not recommend the payment of a final dividend for the period[64]. - As of December 31, 2020, the total reserves available for distribution to shareholders amounted to approximately HKD 43.2 million, down from HKD 56.1 million in 2019[88]. - The company maintains a dividend policy that ensures sufficient cash reserves to meet operational needs and future growth while considering applicable legal restrictions[172]. - The board will review the dividend policy periodically and has the discretion to update or modify it as deemed appropriate[173].