Good morning, investors. I'm Ma Xiao, a flight attendant at Department of Transparency Internet of Things. Today, we are honored to invite Mr. Fang from XuanWuYun to share and communicate with you. This time, we will have two sessions. The first session is about the relevant situation of the company. The second session is about the interaction. Let's give the time to Mr. Fang. Thank you, Mr. Ma. Good morning, investors. I am Fang Wenwen, IRD of XuanWuYun. Thank you for coming to the show today to introduce ...

Good morning, investors. I'm Ma Xiao, a flight attendant at Debian. Today, we are honored to invite Mr. Fan from XuanWuYun to share and communicate with you. This time, we will have two sessions. The first one is about the company's situation. The second session is about the interaction. Let's give the time to XuanWuYun. Okay, thank you, Mr. Ma. Good morning, investors. I'm Fang Wenwen, the IRD of Xuanwu Cloud. I'd like to thank Lu Yanzhong for introducing the business of Xuanwu Cloud Group to our investors ...

Investment Rating - The report gives a "Buy" rating for the company, with a target price of HKD 1.62 based on a PS valuation of 0.55X for 2024 [35]. Core Insights - The company is focusing on AI and fast-moving consumer goods (FMCG) to create a second growth curve, leveraging its strengths in CRM SaaS and expanding into AI-driven solutions [11][35]. - The FMCG sector has significant market potential for intelligent transformation, with a high willingness to pay from companies for digital marketing solutions [8][56]. - The company has established a strong position in the CRM market, holding a 13.8% market share in China as of 2021, and is the largest domestic supplier of smart CRM services [22][31]. Summary by Sections Company Overview - The company was founded in 2010 and listed on the Hong Kong main board in July 2022, providing aPaaS, cPaaS, AI, and DI platforms as its technological foundation [9][22]. - It offers comprehensive CRM products and services across various industries, including FMCG, finance, and government [22][31]. Business Segments - The company operates in three main segments: cloud communication, smart finance, and AI + FMCG, with the latter becoming a key growth driver [11][44]. - The AI + FMCG segment includes sales cloud services and innovative products like the AloT smart freezer, which are designed to enhance operational efficiency in the FMCG sector [11][32]. Financial Performance - The company reported a revenue of HKD 1.28 billion in 2023, a year-on-year increase of 22.80%, driven by growth in PaaS services and marketing cloud business [30][31]. - Revenue projections for 2024 to 2026 are estimated at HKD 1.53 billion, HKD 1.76 billion, and HKD 2.02 billion, respectively, with a gradual return to profitability expected [35][88]. Market Potential - The FMCG industry is characterized by a large market size and numerous enterprises, with significant sales expenditure, indicating a strong capacity for investment in digital solutions [56][57]. - The report highlights the potential for AI technology to transform marketing and sales processes in the FMCG sector, which is currently underutilized [56][79].

Financial Performance - Total revenue for 2023 increased by 22.8% to RMB 1,281.3 million, compared to RMB 1,043.4 million in 2022[16] - In 2023, the company achieved a revenue of RMB 1,281.3 million, representing a growth of 22.8% compared to the previous year[27] - The overall gross profit decreased by 9.3% to RMB 204.6 million, with the gross profit margin dropping from 21.6% to 16.0%[42] - Other income decreased by 22.8% to RMB 10.7 million, primarily due to a reduction in government subsidies[44] - The net loss for the group was RMB 71.8 million during the reporting period, compared to a net loss of RMB 35.0 million for the year ended December 31, 2022, attributed to increased sales and distribution expenses and R&D costs[124] Customer Metrics - SaaS customer count reached 2,120, representing a year-on-year growth of 28.9%[8] - The average contribution per core SaaS customer reached RMB 2.4 million, reflecting a 12.3% year-on-year increase[8] - The total core customer contribution value reached RMB 3.7 million, representing a 25.9% increase year-on-year, with core customers accounting for 94.9% of total customer revenue[133] - The core customer revenue retention rate improved to 112.7% during the reporting period[133] - The customer service cloud saw a 66.1% growth in paid seats for contact centers, indicating strong demand in the financial sector[145] Revenue Breakdown - Revenue from CRM PaaS services rose by 21.3% to RMB 690.3 million, up from RMB 569.2 million in 2022[17] - Revenue from CRM SaaS services increased by 24.6% to RMB 591.0 million, compared to RMB 474.2 million in 2022[19] - CRM PaaS service revenue reached RMB 690.3 million, accounting for 53.9% of total revenue, while CRM SaaS service revenue was RMB 591.0 million, making up 46.1%[152] - The marketing cloud revenue grew by 26.8% year-on-year, reaching RMB 495.6 million, driven by the ICC product's focus on industry-specific needs[167] Operating Costs and Expenses - The cost of sales for CRM SaaS services increased by 43.4% to RMB 420.6 million, compared to RMB 293.4 million in 2022[20] - The cost of sales for CRM PaaS services increased by 25.1% to RMB 656.0 million, primarily due to rising telecom resource costs[154] - Research and development expenses increased by 12.0% to RMB 926 million, compared to RMB 827 million in the previous year, driven by ongoing investments in CRM SaaS services and increased employee benefits[176] - The group recorded a 12.4% increase in sales and distribution expenses to RMB 125.1 million, up from RMB 111.3 million for the year ended December 31, 2022, primarily due to business expansion[123] Strategic Initiatives - The company plans to focus on AI and large consumer sectors to enhance market competitiveness and achieve high-quality growth in 2024[13] - The company launched innovative products such as multimodal large models and AIGC applications during the reporting period, enhancing its competitive edge in key industries[26] - The company plans to enhance its AI and DI technology platforms, focusing on standardized product development and addressing consumer pain points[36] - The company aims to expand its user-centered omnichannel communication platform to optimize customer acquisition and relationship management[114] - The company plans to enhance its overseas business in 2024, focusing on strategic resource cooperation and customer expansion in key regions[149] Assets and Financial Position - Total assets as of December 31, 2023, amounted to RMB 691.0 million, up from RMB 674.7 million in 2022[25] - Cash and cash equivalents increased by 19.4% to RMB 192.3 million as of December 31, 2023, compared to RMB 161.0 million in 2022[50] - As of December 31, 2023, the company's debt-to-equity ratio was 53.0%, up from 27.6% on December 31, 2022[71] - The total employee cost for the reporting period was RMB 230.9 million, compared to RMB 206.1 million for the year ended December 31, 2022[75] Research and Development - The company obtained 80 new patents and software copyrights in 2023, bringing the total to 148 patents and 184 software copyrights[139] - The company successfully passed the CMMI Level 5 certification in 2023, reflecting its advanced software development management capabilities[139] - The industry research institute established by the company has developed a structured research system across six major industries, focusing on driving digital transformation[115] Market Position and Partnerships - The company has developed a proprietary data advantage in the consumer goods industry, with over 300,000 SKU categories and more than 10 million product features[168] - The company has established partnerships with major players like Huawei Cloud to expand its ecosystem and market reach[146]

Financial Performance - The company achieved a revenue of RMB 1,281.3 million for the reporting period, representing a growth of 22.8% compared to the previous year[8]. - Total revenue for the year ended December 31, 2023, was RMB 1,281,276 thousand, compared to RMB 1,043,378 thousand for the year ended December 31, 2022, reflecting a growth of approximately 22.8%[38]. - Revenue for the year ended December 31, 2023, was RMB 1,281,276 thousand, representing a 22.8% increase from RMB 1,043,378 thousand in 2022[46]. - The company reported a 26.8% increase in marketing cloud revenue, reaching RMB 495.6 million compared to the previous year[27]. - In 2023, the revenue from the sales cloud reached RMB 69.7 million, representing a year-on-year growth of 15.0%[30]. - The sales cloud contract order amount achieved a year-on-year growth of 30.0% in Q4 2023, laying a foundation for continued revenue growth[30]. - The revenue from CRM PaaS services increased by 21.3% to RMB 690.3 million for the year ended December 31, 2023, compared to RMB 569.2 million for the previous year[130]. - The revenue from CRM SaaS services rose by 43.4% to RMB 420.6 million for the year ended December 31, 2023, up from RMB 293.4 million in the previous year[134]. - The company’s total revenue for the year ended December 31, 2023, was RMB 1,281.3 million, compared to RMB 1,043.4 million in the previous year, indicating a growth in overall business performance[126]. Customer Metrics - The number of SaaS customers reached 2,120, marking a year-on-year increase of 28.9%[8]. - Core customer net revenue retention rate improved to 112.7% during the reporting period[8]. - The average revenue per core customer increased by 25.9% to RMB 3.7 million[8]. - The SaaS core customer average revenue per user reached RMB 2.4 million, a year-on-year increase of 12.3%[8]. - The customer cloud's paid seat growth rate reached 66.1%, with significant breakthroughs in the banking and consumer finance sectors[30]. Profitability and Loss - The gross profit for 2023 was RMB 204,649 thousand, down from RMB 225,647 thousand in 2022, indicating a decline of about 9.3%[38]. - Overall gross profit decreased by 9.3% to RMB 204.6 million for the year ended December 31, 2023, down from RMB 225.6 million in the previous year, with a gross margin decline from 21.6% to 16.0%[135]. - The company reported an operating loss of RMB 68,901 thousand for the year ended December 31, 2023, compared to an operating loss of RMB 33,352 thousand for the year ended December 31, 2022[83][84]. - The net financing cost for the year ended December 31, 2023, was RMB 2,808 thousand, compared to RMB 2,950 thousand for the year ended December 31, 2022[90]. - The company reported a net loss of RMB (71,770) thousand for the year, compared to RMB (34,968) thousand in 2022[46]. - Basic and diluted loss per share was RMB (0.129), compared to RMB (0.066) in the previous year[46]. - The group's net loss for the reporting period increased to RMB 71.8 million, compared to a net loss of RMB 35.0 million for the year ended December 31, 2022, primarily due to increased competition in the industry and higher sales and distribution expenses related to new product development and AIGC technology[141]. Research and Development - The company successfully obtained 80 new patents and software copyrights in 2023, totaling 148 patents and 184 software copyrights[7]. - The company launched several innovative products, including a multi-modal large model and AIGC applications, enhancing its competitive edge in the consumer and financial sectors[23]. - Research and development expenses increased by 12.0% to RMB 92.6 million, compared to RMB 82.7 million for the year ended December 31, 2022, reflecting ongoing investments in CRM SaaS services and increased employee benefits for AI personnel[164]. Market Expansion and Strategy - The company expanded its international cloud communication platform, successfully entering markets in the Middle East, Southeast Asia, and Latin America[7]. - The company continues to focus on strategic partnerships to expand its overseas market presence and create a win-win ecosystem[24]. - The company plans to focus on AI and large consumer sectors in 2024, aiming to create standardized solutions for brand owners[33]. - The company aims to expand its overseas business in 2024, providing global cloud communication capabilities including international SMS and precision marketing solutions[35]. - The marketing cloud will enhance its precision marketing capabilities in the financial sector, aiming to improve customer segmentation and marketing effectiveness[35]. Financial Position - Total assets as of December 31, 2023, were RMB 691,016 thousand, compared to RMB 674,651 thousand in 2022[72]. - Total liabilities increased to RMB 351,996 thousand from RMB 251,862 thousand in the previous year[53]. - Current liabilities included borrowings of RMB 157,244 thousand, significantly up from RMB 88,481 thousand in 2022[71]. - Trade receivables as of December 31, 2023, amounted to RMB 279,483 thousand, a decrease of 8.8% from RMB 306,349 thousand in 2022[17]. - Trade receivables decreased by 11.0% year-over-year, with a significant increase in receivables aged over two years, rising to RMB 14,266 thousand from RMB 8,143 thousand[26]. - Trade payables as of December 31, 2023, totaled RMB 64,438 thousand, an increase from RMB 48,327 thousand in 2022[43]. - Trade payables increased by 16.1% to RMB 120.8 million as of December 31, 2023, compared to RMB 104.1 million as of December 31, 2022, in line with the growth in sales costs[143]. - The group's cash and cash equivalents increased significantly to RMB 157.2 million as of December 31, 2023, from RMB 88.5 million as of December 31, 2022[145]. - The capital debt ratio as of December 31, 2023, was 53.0%, significantly up from 27.6% as of December 31, 2022[179]. Corporate Governance - The company is committed to maintaining high standards of corporate governance and has adopted the Corporate Governance Code[198]. - The board does not recommend the distribution of a final dividend for the reporting period, consistent with the previous year[183]. - The group has not made any significant investments, acquisitions, or disposals related to subsidiaries, associates, or joint ventures during the reporting period[175]. - The group has implemented a comprehensive training program to ensure employees' skills remain up-to-date[174]. - The board will regularly review the need to appoint a separate individual to fulfill the roles of chairman and CEO[197]. - The group continues to seek investment opportunities that align with the overall interests of shareholders[182].

Revenue Growth - Revenue for the six months ended June 30, 2023, increased by 18.0% year-on-year to RMB 529.96 million, compared to RMB 448.99 million in the same period of 2022[40]. - The revenue from CRM PaaS services rose by 18.2% to RMB 268.4 million, driven by an increase in average revenue per user (ARPU) from core clients[8]. - The Marketing Cloud revenue achieved a year-on-year growth of 18.0%, with the integrated communication center (ICC) contributing to a rapid revenue growth of 61.9% during the reporting period[5]. - The Group's revenue from CRM PaaS services accounted for 50.6% of total revenue, while CRM SaaS services accounted for 49.4%[40]. - Revenue from CRM SaaS services rose by 17.9% to RMB261.6 million for the six months ended June 30, 2023, up from RMB221.9 million in the prior year[54]. Financial Performance - The Group reported an operating loss of RMB 19.61 million for the six months ended June 30, 2023, compared to an operating loss of RMB 4.18 million in the same period of 2022[29]. - The total comprehensive loss for the period was RMB 20.16 million, resulting in a loss per share of RMB 0.037[29]. - The Group's gross profit for the six months ended June 30, 2023, was RMB 100.61 million, down from RMB 109.56 million in the same period of 2022[29]. - Overall gross profit decreased by 8.2% to RMB100.6 million for the six months ended June 30, 2023, down from RMB109.6 million in the same period of 2022[56]. - The Group recorded a net loss of RMB20.2 million for the six months ended June 30, 2023, compared to a net loss of RMB3.4 million in the same period of 2022, primarily due to lower gross profit margin from increased revenue from a major strategic client[58]. Cost and Expenses - The cost of sales for CRM PaaS services increased by 22.5% to RMB248.1 million for the six months ended June 30, 2023, compared to RMB202.5 million in the same period of 2022[56]. - The cost of sales for CRM SaaS services rose by 32.3% to RMB181.2 million for the six months ended June 30, 2023, up from RMB136.9 million in the prior year[56]. - Selling and distribution expenses increased by 12.6% to RMB54.8 million for the six months ended June 30, 2023, compared to RMB48.7 million in the prior year[57]. - Administrative expenses decreased by 21.3% to RMB26.6 million for the six months ended June 30, 2023, down from RMB33.8 million in the same period of 2022[57]. - R&D expenses increased by 12.2% to RMB41.2 million for the six months ended June 30, 2023, compared to RMB36.7 million in the prior year[57]. Shareholder Information - Mr. Song Xiaohu holds 89,101,170 shares, representing 15.90% of the total issued shares[102]. - Guangzhou Xuandong and Ms. Ge Ping each hold 31,500,000 shares, accounting for 5.62% of the total issued shares[102]. - Shanghai Fosun Weishi Phase I holds 30,190,000 shares, representing 5.39% of the total issued shares[102]. - The total liabilities include borrowings and lease liabilities, impacting the gearing ratio significantly[90]. - Fosun International Limited beneficially owns more than one third of the issued share capital of Fosun High Technology, representing 5.39% of the Company as at the date of this report[7]. Employee and Compensation - As of June 30, 2023, the Group had a total of 881 employees, with total employee costs (including directors' emoluments) amounting to RMB100.4 million, an increase from RMB89.1 million for the same period in 2022[140][143]. - The Group's employee costs reflect its strategy to attract and retain qualified personnel through competitive salaries, bonuses, and share-based compensation[143]. - The Group has established comprehensive training programs to ensure employees' skills remain up-to-date, enabling them to meet client needs effectively[143]. - The Group's employee retention strategy is considered a key factor for its success, emphasizing the importance of competitive compensation and training[143]. Strategic Focus - The Group is focusing on expanding its market share by collaborating with cloud vendors such as Huawei Cloud and investing in AI technology for future growth[32]. - The Group is focused on strengthening its CRM SaaS services and providing all-channel marketing cloud solutions[131]. - The Company plans to enhance its aPaaS and cPaaS platforms with an investment of HK$13.2 million by December 31, 2024[119]. - The Company aims to foster AI capacity with an investment of HK$5.6 million, also expected to be fully utilized by December 31, 2024[119]. Corporate Governance - The roles of chairman and CEO are currently held by the same individual, Mr. Chen, which deviates from the Corporate Governance Code but is deemed beneficial for operational efficiency[196]. - The Board will regularly review the need to separate the roles of chairman and CEO to ensure good corporate governance[196]. - The Group continues to monitor developments related to the Foreign Investment Law and will make announcements as necessary[184]. - The Board believes that adequate safeguards are in place to ensure a balance of powers within the Board despite the dual role of chairman and CEO[196]. Compliance and Audit - The Audit Committee has reviewed the unaudited condensed consolidated interim results of the Group for the Reporting Period, confirming compliance with applicable accounting standards and adequate disclosures[176]. - The Company’s auditor, PricewaterhouseCoopers, reviewed the interim financial information in accordance with Hong Kong standards[176]. - The Group has complied with all material aspects of the contractual arrangements and the Foreign Investment Law of the PRC during the reporting period[180].

啊好的谢谢美玲证券的daily的分析师的这个问题哈呃我们玄武云的话呢AI呢是在2016 17年的时候我们就有AI实验室了然后我们当时就开始把AI这一块助理我们原有的客户呢去让他去做相应的图像识别我们从一开始的这种单张的照片识别发展到视频的识别以及今年我们推出的AIGC的这个智慧助手你会发觉AI的技术应用到我们的产品里面 那好我们在这个净利率水平里面整体的因为玄武云的产品是比较这个复合的所以你会看到我们的整体的玄武云的增速18%上半年其实也符合整体的市场我们叫营销数字化的这个市场的增速也是在78%左右所以玄武云整体的产品现在因为比较我们讲比较多样化包括我们也在拥抱一些生态的厂家所以我们在净利率水平上我们也是能考虑到 客服云和我们的营销云那今年上半年毛利会下滑呢还有一个比较关键的因素是在营销云这里那营销云您会看到我们整体的话在因为后疫情时代嘛那有些客户呢在相应的一些产品的这个验收环节呀或者说在这个预算投放上会有一点点放缓所以我们在财务的这个体现上呢有一些在我们的验收啊在延迟情况下财务维度是不能确认输入的 两个方向的一个变化首先呢是对整体的成本化的一个软件的一些管理方面的一些软件的话他的投入的意愿相对来说可能会相对 ...

Financial Performance - Revenue for the six months ended June 30, 2023, was RMB 529,963 thousand, representing an 18.0% increase from RMB 448,992 thousand in the same period of 2022[4] - Gross profit decreased to RMB 100,611 thousand, down 8.2% from RMB 109,562 thousand year-over-year[4] - Operating loss for the period was RMB (19,612) thousand, compared to a loss of RMB (4,181) thousand in the prior year[4] - Loss before tax was RMB (20,715) thousand, significantly higher than RMB (5,704) thousand in the previous year[5] - Total comprehensive loss for the period was RMB (20,155) thousand, compared to RMB (3,410) thousand in the same period last year[4] - Basic and diluted loss per share was RMB (0.037), compared to RMB (0.006) in the prior year[5] - The company reported a loss attributable to equity holders of RMB (20,564) thousand for the six months ended June 30, 2023, compared to a loss of RMB (3,405) thousand in the same period of 2022, representing a significant increase in losses[60] - The company recorded a net loss of RMB 20.2 million for the six months ended June 30, 2023, compared to a net loss of RMB 3.4 million for the same period in 2022, primarily due to lower gross margins from increased revenue from major strategic clients[140] Revenue Breakdown - CRM PaaS service revenue was RMB 268,397 thousand for the six months ended June 30, 2023, compared to RMB 227,088 thousand in the same period of 2022, reflecting a growth of about 18%[51] - CRM SaaS service revenue increased to RMB 261,566 thousand for the six months ended June 30, 2023, up from RMB 221,904 thousand in 2022, marking a growth of approximately 18%[51] - Total revenue for the six months ended June 30, 2023, was RMB 503,543 thousand, an increase from RMB 429,329 thousand for the same period in 2022, representing a growth of approximately 17.3%[72] - Revenue from CRM PaaS services rose by 18.2% to RMB 268.4 million for the six months ended June 30, 2023, up from RMB 227.1 million in the same period of 2022, mainly due to increased per capita contribution from core users[153] - Revenue from CRM SaaS services increased by 17.9% to RMB 261.6 million for the six months ended June 30, 2023, compared to RMB 221.9 million in the same period of 2022, driven by increased customer demand and enhanced solution features[155] Expenses and Costs - The total operating expenses for the six months ended June 30, 2023, were RMB 551,976 thousand, compared to RMB 458,647 thousand for the same period in 2022, indicating an increase of around 20%[52] - Employee benefit expenses rose to RMB 100,401 thousand for the six months ended June 30, 2023, compared to RMB 89,082 thousand in 2022, indicating an increase of approximately 12.5%[52] - Telecom resource costs increased to RMB 411,085 thousand for the six months ended June 30, 2023, from RMB 326,768 thousand in the same period of 2022, representing a growth of around 26%[52] - Sales and distribution expenses increased by 12.6% to RMB 54.8 million for the six months ended June 30, 2023, compared to RMB 48.7 million in the same period of 2022, primarily due to increased business hospitality and travel expenses[160] - The company's administrative expenses decreased by 21.3% to RMB 26.6 million, primarily due to the absence of listing expenses[134] Assets and Liabilities - Total assets as of June 30, 2023, were RMB 701,295 thousand, an increase from RMB 674,651 thousand as of December 31, 2022[6] - Total liabilities increased to RMB 296,335 thousand from RMB 251,862 thousand at the end of 2022[13] - As of June 30, 2023, trade receivables amounted to RMB 325,278 thousand, an increase from RMB 306,349 thousand as of December 31, 2022[82] - Trade payables decreased by 25.6% to RMB 77.4 million as of June 30, 2023, from RMB 104.1 million as of December 31, 2022, primarily due to a reduction in accrued expenses[143] - Contract liabilities as of June 30, 2023, amounted to RMB 34,183 thousand, compared to RMB 31,086 thousand as of December 31, 2022, indicating an increase of approximately 6.7%[72] Research and Development - The company reported a significant increase in research and development expenses, totaling RMB 41,222 thousand, compared to RMB 36,746 thousand in the previous year[5] - R&D expenses increased by 12.2% to RMB 41.2 million, driven by ongoing investments in CRM SaaS services and an increase in AI personnel[135] Strategic Focus and Future Plans - The company continues to focus on expanding its CRM SaaS services, which include marketing cloud, sales cloud, and customer service cloud[23] - The company plans to continue investing in AI technology and expand AIGC applications in the FMCG sector, aiming for further market share growth[97] - The company aims to optimize its ICC product matrix to assist banking clients in automating marketing activities and modernizing communication with end-users[99] - The company plans to focus on vertical industry clients, AI applications in fast-moving consumer goods, and expanding into overseas markets[125] - The company launched its first AIGC product, "Fast-Moving Consumer Goods Smart Assistant," aimed at enhancing sales efficiency and reducing costs for fast-moving consumer goods companies[148] - The company is engaging in strategic cooperation with Tianrun Cloud to enhance product experience and application scenarios through AIGC technology[150] Client and Market Insights - The company served a total of 2,359 clients across four major industries, with CRM SaaS clients reaching 1,551, an increase of 335 year-over-year[118] - The average contribution value per core customer reached RMB 1.8 million, with core customer revenue accounting for 95.0% of total customer revenue[118] - The net revenue retention rate for core customers improved to 121.4% during the reporting period[118] - Marketing cloud revenue grew by 18.0% year-over-year, with the ICC product contributing to a 61.9% increase in revenue from existing customers[120] Cash and Financial Management - The company’s cash and cash equivalents as of June 30, 2023, were RMB 157,994 thousand, compared to RMB 88,481 thousand as of December 31, 2022[83] - The group's cash and cash equivalents as of June 30, 2023, were RMB 138.1 million, a decrease of 14.2% from RMB 161.0 million as of December 31, 2022[180] - The group has maintained a prudent financial management policy, regularly reviewing and adjusting its financial structure to adapt to economic changes[167] Dividends and Shareholder Information - The company did not declare an interim dividend for the six months ended June 30, 2023, consistent with the previous year[116] - The group did not recommend the distribution of an interim dividend for the six months ended June 30, 2023, consistent with no dividend declared for the same period in 2022[174] - The average number of shares outstanding increased to 560,321 thousand for the six months ended June 30, 2023, compared to 525,930 thousand in the same period of 2022, reflecting a growth of about 6.5%[60]

Corporate Governance - The board of directors includes executive directors and independent non-executive directors, ensuring a diverse governance structure[4] Compliance and Regulations - The company confirmed compliance with the relevant rules regarding related party transactions as disclosed in the 2022 annual report[5] - The company reiterated that the related party transactions do not require further announcements or shareholder approvals under the listing rules[6]

Financial Performance - The company's total revenue for the year ended December 31, 2022, was RMB 1,043.4 million, representing a growth of 5.2% compared to the previous year[10]. - Revenue from AI-related products and services grew by 73.8% year-on-year, contributing to the overall revenue growth despite challenging external conditions[32]. - CRM PaaS services generated RMB 569.2 million in revenue, accounting for 54.6% of total revenue, slightly down from 55.9% in 2021[43]. - CRM SaaS services revenue reached RMB 474.2 million, making up 45.4% of total revenue, an increase from 44.1% in the previous year[41]. - The Group's CRM SaaS service revenue increased by 8.4% to RMB 474.2 million for the year ended December 31, 2022, accounting for 45.4% of total revenue, up from 44.1% in the previous year[46]. - The gross profit decreased by 2.9% to RMB 225.6 million for the year ended December 31, 2022, with a gross profit margin decline from 23.4% to 21.6%[52]. - The net loss for the year ended December 31, 2022, was RMB 34.968 million, compared to a profit of RMB 15.351 million in the previous year[57]. - The Group's other income increased by 10.3% to RMB 13.9 million for the year ended December 31, 2022, compared to RMB 12.6 million for the year ended December 31, 2021, primarily due to increased government grants[106]. - The Group recorded a net loss of RMB 35.0 million for the year ended December 31, 2022, compared to a net profit of RMB 15.4 million for the year ended December 31, 2021, mainly due to increased R&D expenses and the impact of strict COVID-19 lockdowns[106]. Market and Strategic Focus - The company aims to leverage the digital economy, which is projected to exceed RMB 60 trillion by 2025, and the information technology application innovation industry, expected to surpass RMB 2 trillion by 2025[9]. - The digital economy is expected to contribute 10% to China's GDP by 2025, highlighting the growth potential for the company's services[9]. - The ITAI industry is expected to surpass RMB 2 trillion by 2025, which will support the company's strategic initiatives in technological innovation[35]. - The company plans to enhance its AIoT products and services to optimize business strategies for clients and increase market share in the FMCG sector[32]. - The company aims to launch more new products and services in 2023, focusing on the digital transformation of smart retail stores[32]. - The company is committed to transforming existing services into systems that support cloud-native technology, enhancing customer service efficiency[32]. - The company continues to expand its product and service boundaries, including the introduction of AIoT products to enhance sales for clients in the FMCG sector[33]. - The company aims to strengthen its market position through innovative product development and strategic partnerships[1]. Operational Efficiency and Costs - The cost of sales rose by 7.7% to RMB 817.7 million for the year ended December 31, 2022, compared to RMB 759.5 million in the previous year, aligning with the business expansion of CRM PaaS and SaaS services[48]. - The sales cost for CRM SaaS services increased by 10.5% to RMB 293.4 million for the year ended December 31, 2022, from RMB 265.5 million in the previous year[52]. - The Group's selling and distribution expenses increased by 22.3% to RMB 111.3 million for the year ended December 31, 2022 from RMB 91.0 million for the year ended December 31, 2021[75]. - The Group's administrative expenses increased by 11.5% to RMB 76.4 million for the year ended December 31, 2022 from RMB 68.5 million for the year ended December 31, 2021, primarily due to listing expenses of RMB 23.0 million[75]. - The Group's research and development expenses increased by 25.1% to RMB 82.7 million for the year ended December 31, 2022 from RMB 66.1 million for the year ended December 31, 2021, driven by continuous investment in expanding CRM SaaS services[75]. - The company reported a 10% reduction in operational costs due to efficiency improvements[200]. Employee and Governance - As of December 31, 2022, the Group had a total employee cost of RMB 206.1 million, an increase from RMB 171.0 million as of December 31, 2021, reflecting a significant rise in employee remuneration[95]. - The management team has extensive experience in technology and finance, contributing to strategic decision-making[1]. - The company has a focus on expanding its board with experienced independent directors to enhance governance[171]. - The company is committed to improving its corporate governance structure through the appointment of qualified independent directors[171]. Future Outlook and Investments - The company aims to strengthen CRM PaaS services and improve aPaaS and cPaaS platforms by investing HK$13.2 million, with a completion target of December 31, 2024[157]. - The company plans to enhance CRM SaaS services with an investment of HK$25.4 million, expected to be completed by December 31, 2024[158]. - The company is considering strategic acquisitions to bolster its market position, with a budget of $100 million earmarked for potential deals[200]. - The company has not identified any suitable CRM SaaS or AI technology companies for acquisition or investment as of the report date due to the impact of the COVID-19 pandemic and the slow recovery of the PRC intelligent CRM services market[161]. - The Board resolved to extend the expected timeline for the use of net proceeds from December 31, 2022, to December 31, 2024, due to ongoing macroeconomic challenges[134]. Product Development and Innovation - The company is focusing on the development of AIoT products, including smart boxes and intelligent fridges, to improve real-time monitoring and sales performance for clients[17]. - The company has continued to invest in research and development, enhancing its in-house capabilities and supporting clients' digital intelligence transformation[192]. - The CRM PaaS services saw innovation in the self-developed full-stack 3+1 structure, achieving recurrent computing upgrades and breakthroughs in technology patents[192]. - New AIoT products, such as intelligent fridges, were launched to enhance terminal sales for FMCG enterprises, creating value for clients[192]. - The company optimized its three cloud services: Marketing Cloud, Sales Cloud, and Service Cloud, improving service portfolios and business models[192].