Financial Performance - The Group achieved a net profit of RMB 53 million in 2022, representing a year-on-year growth of 4.6%[23] - The overall gross profit margin for the Group's products was 53.6%, with a product sales rate of 100%[23] - The Group's revenue for the year ended December 31, 2022, was approximately RMB 217.8 million, representing an increase of 1.9% compared to approximately RMB 213.7 million for the year ended December 31, 2021, mainly due to an increase in product sales prices[59] - The Group's gross profit for the year ended December 31, 2022, was approximately RMB 116.8 million, an increase of approximately RMB 3.2 million from approximately RMB 113.6 million for the year ended December 31, 2021, with a gross profit margin rising from approximately 53.2% to approximately 53.6%[91] - Other income for the Group increased by approximately RMB 14.6 million to approximately RMB 20.1 million for the year ended December 31, 2022, primarily due to increased exchange gains, government subsidies, and rental income[61] Market Expansion and Strategy - International business revenue increased by 51.5% year-on-year in 2022, indicating effective market expansion strategies[23] - The Group's international business strategy is gradually showing results, contributing to its overall growth amidst global economic challenges[48] - The Group is strategically seeking acquisitions to enhance business capabilities and expand its international market presence[18] - The Group intends to pursue strategic acquisitions to complement its business and strategic priorities, focusing on horizontal expansion in the industry chain and supply chain[88] Innovation and Technology - The Group owns 104 invention and utility model patents and is applying for over 60 additional patents, emphasizing its commitment to technology innovation[9] - The PM3 production line was launched, establishing the Group as the first enterprise in the PRC with an advanced production line for the widest papermaking felt globally[25] - The Group plans to upgrade its Paper Machine Efficiency Operation System to enhance data collection and analysis for customized product services[56] - The Group's new digital platform optimizes operational efficiency and provides comprehensive services for papermaking felt, enhancing customer responsiveness[26] Economic Environment - The PRC's GDP reached RMB 121 trillion in 2022, reflecting a 3.0% growth despite economic pressures, benefiting the papermaking industry[21] - The papermaking industry in the PRC continues to grow, with increasing demand for paper products, positioning the Group favorably for future opportunities[21] - China's GDP reached 121 trillion RMB in 2022, with a growth rate of 3.0%, providing a favorable environment for the papermaking industry[50] Corporate Governance - The Board of Directors comprises seven members, including the Chairperson and the Chief Executive Officer, overseeing the overall strategy and financial performance of the company[147] - The Board is responsible for overseeing the overall strategy and financial performance of the Group, with all executive directors attending 100% of board meetings[169] - The Company has adopted a Shareholders' Communication Policy to ensure effective communication with shareholders and investors[148] - The Board conducts an annual review of the effectiveness of the Group's risk management and internal control systems, including financial, operational, and compliance controls[176] - The Company has mechanisms in place to ensure independent views are available to the Board, including annual reviews of independent non-executive directors' contributions[189] Financial Position and Ratios - As of December 31, 2022, the Group's net assets reached approximately RMB 373.4 million, compared to approximately RMB 215.0 million as of December 31, 2021[100] - The current ratio of the Group as of December 31, 2022, was 191.7%, compared to 96.1% as of December 31, 2021, indicating improved liquidity[100] - The gearing ratio decreased to approximately 60.4% as of December 31, 2022, down from 61.7% as of December 31, 2021, primarily due to an increase in total equity[105] - The Group's outstanding bank borrowings and other loans amounted to approximately RMB 215.5 million as of December 31, 2022, compared to RMB 127.5 million as of December 31, 2021[106] - The Group held cash and bank balances of approximately RMB 85.6 million as of December 31, 2022, significantly up from RMB 12.6 million as of December 31, 2021[106] IPO and Fund Utilization - The company successfully listed on the Hong Kong Stock Exchange on January 11, 2022, after issuing 114,200,000 shares at a price of HK$1.22 per share[155] - The net proceeds from the IPO amounted to approximately HK$92.8 million after deducting underwriting fees and other listing expenses[155] - As of December 31, 2022, the utilized net proceeds were HK$75.1 million, leaving an unutilized balance of HK$21.9 million[144] - 40% of the proceeds were allocated for purchasing machinery to upgrade production sites, with HK$38.8 million utilized for this purpose[144] - 20% of the proceeds were designated to strengthen research and development capabilities, with HK$19.4 million utilized, and HK$12.2 million remaining unutilized[144] Risk Management - The Company has engaged an external consultant to review its internal control and risk management systems, which were found to be effective and adequate[180] - The risk management strategies and internal control processes are designed to manage rather than eliminate risks associated with achieving business objectives[176] - The Directors confirmed that they are not aware of any material uncertainties that may affect the Company's ability to continue as a going concern[165] - There is currently no internal audit function within the Group, as the Board has sufficient capacity to oversee risk management and internal control systems[179]

Financial Performance - Revenue for the year ended December 31, 2022, was RMB 217,756 thousand, representing a 1.9% increase from RMB 213,668 thousand in 2021[7] - Gross profit for 2022 was RMB 116,817 thousand, up 2.8% from RMB 113,622 thousand in the previous year[7] - Profit before tax increased by 8.4% to RMB 64,442 thousand in 2022, compared to RMB 59,460 thousand in 2021[7] - Net profit attributable to equity holders of the company was RMB 52,437 thousand, a 4.6% increase from RMB 50,136 thousand in 2021[7] - Basic and diluted earnings per share decreased by 20.3% to RMB 10.93 in 2022 from RMB 13.71 in 2021[7] - The company achieved a net profit of RMB 53 million in 2022, representing a year-on-year growth of 4.6%[49] - The company's total revenue for the year ended December 31, 2022, was approximately RMB 2.178 billion, a 1.9% increase from RMB 2.137 billion in 2021[53] - Other income for the year was approximately RMB 201 million, up from RMB 55 million in the previous year, mainly due to increased foreign exchange gains and government subsidies[54] Assets and Liabilities - Total assets minus current liabilities increased to RMB 518,770 thousand in 2022 from RMB 231,471 thousand in 2021[4] - The company’s net asset value rose to RMB 373,354 thousand in 2022, compared to RMB 214,982 thousand in 2021[4] - As of December 31, 2022, the company's outstanding bank loans and other borrowings amounted to approximately RMB 2.155 billion, compared to RMB 1.275 billion in 2021[58] - The net asset liability ratio as of December 31, 2022, was 35.1%, a significant decrease from 55.9% in the previous year[58] - The company's debt-to-equity ratio was approximately 60.4%, down from 61.7% on December 31, 2021, primarily due to an increase in total equity[59] - The company's total assets pledged as collateral for bank and other borrowings amounted to approximately RMB 134.1 million as of December 31, 2022[60] Operational Efficiency and Projects - The company has initiated the PM3 project at its Shanghai production base, aiming to establish a leading paper blanket production facility in China[25] - Plans to upgrade the operational efficiency optimization service digital platform for paper machines to enhance data collection and analysis capabilities[27] - The company has developed a digital platform for optimizing paper machine operational efficiency, enhancing customer service and product quality[50] - The company has initiated a capacity expansion plan from 2021 to 2024 in three phases to meet the rising demand for high-speed paper machine blankets[52] Expenses and Costs - The company's sales and distribution expenses were approximately RMB 216 million, accounting for about 9.9% of total revenue, an increase of RMB 17 million from the previous year[54] - The company's total administrative and operating expenses for the year ended December 31, 2022, were approximately RMB 40.3 million, up from RMB 31.6 million for the year ended December 31, 2021[80] - The company's total financial costs for the year ended December 31, 2022, were approximately RMB 10.5 million, an increase of about RMB 2.3 million from RMB 8.2 million for the year ended December 31, 2021[81] Dividend and Share Issuance - The company proposed a final dividend of HKD 0.04 per share, totaling approximately HKD 19.34 million for the year ended December 31, 2022, compared to no dividend in 2021[104] - The net proceeds from the share issuance are allocated as follows: 40% (HKD 38.8 million) for purchasing machinery to upgrade production facilities, 20% (HKD 19.4 million) for enhancing R&D capabilities, 10% (HKD 9.7 million) for seeking strategic acquisitions, and 20% (HKD 19.4 million) for debt reduction[95] - The company plans to utilize the remaining net proceeds according to the previously disclosed plans, with expectations for full utilization by December 31, 2023[96] Employee and Workforce - As of December 31, 2022, the total employee cost amounted to approximately RMB 37.8 million, with 327 employees compared to 309 employees as of December 31, 2021[93] Compliance and Governance - The company has adopted the code of conduct for securities transactions as per the listing rules, with all directors confirming compliance for the year ended December 31, 2022[97] - The company has maintained sufficient public float as required by the listing rules as of December 31, 2022[109] - The audit committee reviewed the consolidated financial statements for the year ended December 31, 2022, ensuring compliance with applicable accounting standards and regulations[123] Taxation - The actual tax rate for the year ended December 31, 2022, was approximately 17.8%, an increase from 14.7% for the year ended December 31, 2021[82] - The income tax expense for the year was approximately RMB 11.4 million, an increase of about RMB 2.6 million from RMB 8.8 million in the previous year, primarily due to increased pre-tax profits[135] Inventory and Receivables - The company's inventory turnover period for the year ended December 31, 2022, was 52.9 days, compared to 40 days for the year ended December 31, 2021[83] - Inventory increased to RMB 17,333,000 from RMB 11,903,000, reflecting a growth of approximately 45.0%[129] - Trade and other receivables rose to RMB 181,543,000 from RMB 153,477,000, representing an increase of about 18.3%[129] Innovation and Development - The group has over 100 patents and more than 60 patents pending, emphasizing its commitment to technological innovation[133] - The company has established two major production bases in Chengdu and Shanghai, focusing on sustainable development through technological innovation[133]

Financial Performance - In the first half of 2022, the Group achieved a net profit of approximately RMB 19.6 million, representing a year-on-year increase of 33.1%[14]. - The Group's revenue for the six months ended June 30, 2022, was approximately RMB 77.4 million, representing an increase of 1.1% compared to RMB 76.5 million for the same period in 2021[33]. - Profit for the period was RMB 15,212,000, an increase from RMB 14,286,000 in the previous period, representing a growth of 6.5%[137]. - Revenue for the six months ended June 30, 2022, was RMB 77,372,000, compared to RMB 76,515,000 for the same period in 2021, indicating a year-over-year increase of 1.1%[140]. - Gross profit for the same period was approximately RMB 39.7 million, an increase of approximately RMB 0.6 million from RMB 39.1 million in the prior year, with a gross profit margin rising from 51.1% to 51.3%[34]. - Other income significantly increased to RMB 9,035,000 from RMB 1,264,000, marking a rise of 613.5%[140]. - Profit before income tax was RMB 17,627,000, compared to RMB 16,457,000 in the previous period, showing an increase of 7.1%[140]. - Basic and diluted earnings per share attributable to equity holders of the Company were RMB 3.16, down from RMB 3.86 in the previous period, a decrease of 18.1%[140]. Operational Efficiency - The Group's consolidated gross profit margin increased by 0.2 percentage points to 51.3%, with a production-to-sales rate of 100%[14]. - The Group has developed the Huanlong Paper Machine Efficiency Operation System to enhance operational efficiency and provide customized products to customers[22]. - The Group plans to upgrade its efficiency operation system to facilitate data collection and analysis from customers' machinery, enhancing customized product services[28]. - Selling and distribution expenses were approximately RMB 7.5 million, accounting for about 9.7% of revenue, reflecting an increase of approximately RMB 0.4 million compared to the previous year[36]. - Administrative and other operating expenses rose to approximately RMB 18.6 million from RMB 13.0 million, mainly due to costs associated with the initial public offering[43]. Research and Development - The Group owns more than 100 registered patents and has nearly 40 patents under application for registration, emphasizing its commitment to research and development[19]. - The Group's focus on continuous innovation in technology is seen as key to maintaining product competitiveness[19]. - Research and development costs were reported at RMB 2,782,000, slightly down from RMB 3,006,000, a decrease of 7%[198]. Market Presence - The Group's products have reached both domestic and international markets, including North America, Europe, and Southeast Asia[14]. - Following the entry into the capital market in early 2022, the Group has transformed its marketing strategies to a dual driver model of product and technology solutions[20]. - Revenue from the PRC accounted for RMB 70,445,000, while overseas revenue was RMB 6,927,000, indicating a significant increase of approximately 87.5% in overseas revenue compared to RMB 3,703,000 in 2021[182]. - The Group generated approximately RMB 1.1 million from transactions with Russian clients, accounting for about 1.4% of total income during the reporting period[183]. - The Group did not have any single customer contributing 10% or more to total revenue for the six months ended June 30, 2022[186]. Financial Position - As of June 30, 2022, net assets reached approximately RMB 335.6 million, an increase from approximately RMB 215.0 million as of December 31, 2021[54]. - Current ratio as of June 30, 2022, was 252.9%, compared to 96.1% as of December 31, 2021[54]. - Outstanding bank borrowings and other borrowings as of June 30, 2022, were approximately RMB 172.0 million, up from approximately RMB 127.5 million as of December 31, 2021[55]. - Gearing ratio as of June 30, 2022, was approximately 51.5%, down from 61.7% as of December 31, 2021[65]. - Total assets amounted to RMB 566,570,000, an increase from RMB 416,764,000 as of December 31, 2021, representing a growth of approximately 36%[142]. - Current assets increased significantly to RMB 274,143,000 from RMB 177,989,000, marking a rise of about 54%[142]. - Cash and cash equivalents surged to RMB 116,620,000, up from RMB 12,609,000, reflecting a substantial increase of approximately 825%[142]. - Non-current liabilities totaled RMB 122,605,000, a notable increase from RMB 16,489,000 as of December 31, 2021[144]. Strategic Initiatives - The Group aims to expand production capacity in three phases from 2021 to 2024 to meet increasing demand for high-speed papermaking felts[28]. - Strategic acquisitions are being pursued to complement the Group's business and expand horizontally within the industry and supply chain[28]. - The Group's future plans include strengthening research and development capabilities and pursuing strategic acquisitions[85]. Risks and Liabilities - The Group has no major contingent liabilities as of June 30, 2022[74]. - The Group has not established any foreign exchange hedging policy but monitors currency fluctuations to manage risks[73]. - The Group's assets and liabilities are primarily denominated in RMB, exposing it to foreign exchange risk[73]. Shareholding Structure - As of June 30, 2022, Ms. Shen Genlian and Mr. Zhou Jun each hold 359,947,200 shares, representing approximately 74.46% of the company's total shares[94]. - Perfect Angle Limited holds 269,960,400 shares (55.84% of total shares) and Wonderful Advisor Limited holds 89,986,800 shares (18.61% of total shares) in the company[110]. - The total number of shares held by Perfect Angle and Wonderful Advisor combined is 359,947,200, which constitutes 74.46% of the company's shares[110].

Financial Performance - The Group's total revenue in 2021 increased by 16.9% to RMB 213.7 million compared to the previous year[13]. - Net profit for 2021 increased by 22.6% to RMB 59.5 million, with net profit attributable to owners of the Company amounting to RMB 50.1 million[13]. - Earnings per share for the year were RMB 13.7 cents, up from RMB 11.1 cents in 2020[13]. - The Group's revenue for the year ended December 31, 2021, was approximately RMB 213.7 million, representing an increase of 16.9% compared to approximately RMB 182.8 million for the year ended December 31, 2020, mainly due to increased sales of medium-speed and high-speed felts[45]. - The Group's gross profit for the year ended December 31, 2021, was approximately RMB 113.6 million, an increase of approximately RMB 14.0 million from approximately RMB 99.6 million for the year ended December 31, 2020, with a gross profit margin decreasing from approximately 54.5% to 53.2%[45]. - Other income decreased by approximately RMB 0.5 million to approximately RMB 5.5 million for the year ended December 31, 2021, primarily due to a decrease in government subsidies[45]. - Selling and distribution expenses for the year ended December 31, 2021, were approximately RMB 19.9 million, accounting for approximately 9.3% of revenue, an increase of approximately RMB 2.1 million compared to RMB 17.8 million for the year ended December 31, 2020[45]. - Administrative and other operating expenses for the year ended December 31, 2021, were approximately RMB 31.6 million, accounting for approximately 14.8% of revenue, a decrease of approximately RMB 0.6 million from RMB 32.1 million for the year ended December 31, 2020[48]. - Total finance costs for the year ended December 31, 2021, reached approximately RMB 8.2 million, an increase of approximately RMB 1.0 million compared to RMB 7.2 million for the year ended December 31, 2020, mainly due to increased loan interests[49]. - Income tax expense for the year ended December 31, 2021, was approximately RMB 8.8 million, an increase of approximately RMB 1.3 million from RMB 7.5 million for the year ended December 31, 2020, primarily due to an increase in profit before tax[50]. - The effective tax rate for the year ended December 31, 2021, was approximately 14.7%, down from 15.4% for the year ended December 31, 2020, attributed to favorable tax policies and increased deductible research and development expenses[51]. Production and Market Trends - The total sales volume of the Group in 2021 was 1,401 tonnes[13]. - The nationwide production volume of machine-made paper and paperboard in China reached 135.839 million tonnes in 2021, representing a year-on-year increase of 6.8%[14]. - The disclosed production capacity of the household paper industry accumulated to approximately 2.686 million tonnes per year in 2021[18]. - The demand for packaging papers and household paper is expected to demonstrate steady and sustainable growth in the forthcoming years due to urbanization and economic growth[18]. - The production and consumption volume of machine-made paper and paperboard in China is expected to grow at a CAGR of approximately 4.9% and 5.1%, respectively, from 2021 to 2025[20]. - The sales volume of papermaking felts in China increased from approximately 12,820.1 tonnes in 2016 to approximately 17,487.9 tonnes in 2020, representing a CAGR of approximately 8.1%[25]. Strategic Initiatives - The company aims to expand production capacity in 2022 while increasing investments in research and development to consolidate market share[27]. - The company plans to strengthen its core business of high-quality, intelligent papermaking felts to establish world-class production, sales, and technical capabilities[28]. - The development of a papermaking machine efficiency operation system is underway, which will allow for data analysis and customization of products to improve customer efficiency[39]. - The company is focused on creating a service ecosystem for papermaking machines that integrates IoT and AI technologies to enhance operational efficiency and reduce energy consumption[29]. - The company is committed to strengthening ESG management and reducing carbon emissions through advanced production technologies[32]. - The company may pursue strategic acquisitions to complement its business, particularly targeting manufacturers of papermaking screens, which are essential consumables in the papermaking process[89]. Corporate Governance - The Company has maintained high standards of corporate governance and complied with all code provisions of the Corporate Governance Code since its listing date[95]. - All directors confirmed compliance with the Model Code for Securities Transactions during the reporting period[96]. - The Board comprises seven Directors, including four Executive Directors and three Independent non-executive Directors, all of whom have confirmed compliance with the trading standards since the Listing Date[102][109]. - The Company has adopted the corporate governance code as per the Listing Rules, ensuring compliance and regular reviews of governance practices[100][108]. - The Audit Committee consists of three independent non-executive Directors, with Mr. Wang Yunchen serving as the chairman[138]. - The Audit Committee reviewed the audited financial statements for the year ended December 31, 2021, and made recommendations to the Board for approval[138]. - The roles of the chairperson and the chief executive are separated, with Ms. Shen Genlian as Chairperson and Mr. Zhou Jun as CEO[126]. - The Company has established mechanisms to ensure independent views are available to the Board, including strengthening the recruitment process for independent non-executive Directors[129]. - The Company has set up an audit committee, a remuneration committee, and a nomination committee to assist the Board in fulfilling its responsibilities[136]. - The Audit Committee's primary duties include reviewing the Group's financial reporting process and internal control systems[137]. Risk Management - The Company has established comprehensive risk management policies to identify, evaluate, and manage operational risks[178]. - The Board acknowledges its responsibility for maintaining effective internal control and risk management systems to safeguard shareholder investments[175]. - The risk management strategies and internal control processes are designed to prevent, avoid, or mitigate identified risks[188]. - The Audit Committee assists the Board in reviewing operational, financial, compliance controls, and risk management functions[192]. - The Company does not have an internal audit function due to the size and complexity of its business, but the Board has sufficient capacity to oversee risk management[191]. - An external consultant was engaged to review the Group's internal control and risk management systems, and no significant weaknesses were identified[192]. Employee and Diversity - The Group had 309 employees as of December 31, 2021[64]. - The total staff cost for the year ended December 31, 2021, amounted to approximately RMB35.8 million[70]. - As of December 31, 2021, the workforce gender ratio is 53% male and 47% female, while the senior management gender ratio is 60% male and 40% female[163]. - The Board's composition reflects a commitment to diversity, considering various perspectives in its appointments[162]. - The Company aims to ensure diversity in its hiring practices and will continue to consider diverse perspectives[163]. Dividend Policy - The Company has adopted a Dividend Policy allowing for annual dividends if profitable, with special dividends declared at the Board's discretion[165]. - The Board will consider factors such as actual and expected financial performance, retained earnings, and economic conditions when proposing dividend payouts[167]. - The Company will periodically review its Dividend Policy and submit amendments for Board approval if necessary[168].