Group 1 - The core viewpoint of the news highlights the significant stock performance of the company "迷策略" (Mistrategy), which has seen a cumulative increase of 77.53% over the past month and 407.21% year-to-date, outperforming the Hang Seng Index by 22.58% [2] - As of December 31, 2024, the company reported total revenue of 98.58 million yuan, a year-on-year decrease of 77.62%, and a net profit attributable to shareholders of -77.527 million yuan, a decrease of 404.11% [2] - The company operates in the Internet of Things (IoT) sector, providing data transmission and processing services as well as communication equipment to various industries, including manufacturing and municipal services [3][4] Group 2 - The company has strategically expanded into the 5G business since 2019 and began offering 5G private network data transmission and processing services in 2020 [3] - The company has established dual R&D centers in Nanjing and Shenzhen, focusing on hardware and software design, which allows it to provide integrated solutions for communication equipment and data management platforms [3] - As of November 21, 2022, the company holds 93 utility model patents, 17 invention patents, 2 industrial design patents, and 80 copyrights registered in China related to IoT applications and communication equipment [4]

Financial Performance - Revenue for the year ended December 31, 2024, was RMB 98,580, a decrease of 77.7% compared to RMB 440,550 in 2023[18] - Gross loss for 2024 was RMB (456), compared to a gross profit of RMB 83,827 in 2023[18] - Loss before tax for 2024 was RMB (70,426), a significant decline from a profit of RMB 34,456 in 2023[18] - Loss attributable to owners of the parent for 2024 was RMB (77,527), compared to a profit of RMB 25,493 in 2023[18] - The Group's revenue decreased by approximately 77.6% from approximately RMB440.6 million in 2023 to approximately RMB98.6 million in 2024[22] - The adjusted net loss was approximately RMB64.0 million in 2024, compared to an adjusted net profit of approximately RMB36.0 million in 2023[22] - The Group's net loss was approximately RMB77.5 million in 2024, compared to a net profit of approximately RMB25.5 million in 2023[40] - The Group's gross (loss)/profit decreased from approximately RMB83.8 million in 2023 to approximately RMB(0.5) million in 2024[40] - The Group's adjusted net loss in 2024 was approximately RMB64.0 million, compared to an adjusted net profit of approximately RMB36.0 million in 2023[102] Assets and Liabilities - Total assets as of December 31, 2024, were RMB 252,053, down from RMB 350,769 in 2023[18] - Total equity decreased to RMB 205,437 in 2024 from RMB 268,377 in 2023, reflecting a decline of 23.4%[18] - Current liabilities decreased to RMB 46,391 in 2024 from RMB 81,465 in 2023, a reduction of 43.0%[18] - Non-current assets decreased to RMB 16,236 in 2024 from RMB 28,147 in 2023, a decline of 42.4%[18] - Total liabilities decreased to RMB 46,616 in 2024 from RMB 82,392 in 2023, a reduction of 43.4%[18] Revenue Breakdown - Revenue from data transmission and processing services for IoT applications decreased by approximately 80.8%, from approximately RMB380.3 million in 2023 to approximately RMB73.2 million in 2024[23] - Non-5G business revenue decreased by approximately 81.7% from approximately RMB350.7 million in 2023 to approximately RMB64.2 million in 2024[39] - The Group's 5G business revenue decreased from approximately RMB89.9 million in 2023 to RMB34.3 million in 2024[39] - Revenue from sales of telecommunication equipment decreased by approximately 56.4% from approximately RMB58.2 million in 2023 to approximately RMB25.4 million in 2024[64] - Revenue from data transmission and processing services decreased by approximately 80.8% from approximately RMB380.3 million in 2023 to approximately RMB73.2 million in 2024[85] - Non-5G network services revenue decreased by approximately 81.2% from approximately RMB342.3 million in 2023 to approximately RMB64.2 million in 2024[61] - Sales of 5G telecommunication equipment decreased by approximately 51.0% from approximately RMB51.8 million in 2023 to approximately RMB25.4 million in 2024[64] Operational Strategies - The decrease in revenue for 2024 was mainly due to clients delaying projects due to cash flow concerns and macroeconomic uncertainty[36] - The Group plans to strengthen independent research and development capabilities and actively study advanced technologies in the 5G era[26] - The Group aims to implement effective operational management policies and cost control measures to promote sustainable business development[26] - The Group plans to diversify its 5G private network industrial customers to include advanced manufacturing, transportation, environmental protection, and energy industries[46] - The Group will upgrade its industry data platform to incorporate AI and big data, extending its functions to cover industrial IoT applications[47] - The Group aims to strengthen risk management and control, enhance efforts to collect trade receivables, and ensure sufficient cash flow for operations[48] Innovation and Development - As of December 31, 2024, the Group had successfully registered 30 utility model patents, 23 patents for invention, one international PCT, and 90 copyrights in the PRC[73] - The Group's one-stop solution and diversified product portfolio are expected to help it stand out in the competitive IoT market[54] - R&D expenses increased by 40.3% from approximately RMB9.6 million in 2023 to approximately RMB13.5 million in 2024[93] - The Group's impairment losses on financial assets increased by approximately 194.2% from approximately RMB10.0 million in 2023 to approximately RMB29.4 million in 2024[96] Cash Flow and Financing - Cash and cash equivalents decreased from approximately RMB33.2 million as of December 31, 2023, to approximately RMB4.1 million as of December 31, 2024, primarily due to net cash used in operating activities of approximately RMB27.0 million[108] - Net cash flow used in operating activities was approximately RMB27.0 million in 2024, compared to approximately RMB39.5 million in 2023[122] - Net cash flow from investing activities amounted to approximately RMB5.7 million in 2024, down from approximately RMB50.4 million in 2023[123] - The net cash flow used in financing activities was approximately RMB2.2 million in 2024, compared to RMB33.0 million in 2023, primarily due to the repayment of bank loans amounting to RMB5.0 million[128] Market Outlook - The IoT market in China is expected to grow at a CAGR of approximately 13.3% from 2021 to 2026, reaching approximately RMB 5,466.0 billion in 2026[49] - The 5G-based IoT market is projected to grow at a CAGR of approximately 62.2% from 2021 to 2026, reaching approximately RMB 491.9 billion in 2026[49] - The private 5G network market in China is expected to reach approximately RMB 236.1 billion in 2026, with a CAGR of approximately 108.2% from 2021 to 2026[49] Leadership and Corporate Governance - The Group's CEO, Mr. Ray Chan, has a global audience of 200 million across various social media channels, including 56 million on Instagram and 40 million on Facebook[139] - Mr. Kevin Kwong has successfully driven the group's transition from Web2 to Web3, significantly enhancing business performance during his tenure at 9GAG[158] - The leadership team has over 20 years of experience in their respective fields, with expertise spanning traditional finance, centralized finance, and decentralized finance[161] - The Company aims to enhance investor relations and corporate governance functions under the leadership of Mr. Tony Liu[187] - The Company has expanded its senior management team to include experienced professionals with backgrounds in finance and investment banking[185] Company Background - The Company was incorporated in the Cayman Islands on August 25, 2021, and listed on the Main Board of the Stock Exchange on December 12, 2022, issuing 36,000,000 Shares at an offer price of HK$2.73 per Share, resulting in net proceeds of approximately HK$47.1 million[191] - The Group is a PRC provider of data transmission and processing services for IoT applications and telecommunication equipment, serving a broad range of industrial customers[193] - The Group generates revenue primarily from customized data transmission and processing services, with additional income from telecommunication equipment maintenance and consulting services[198]

Financial Performance - For the fiscal year ending December 31, 2024, the company reported revenue of RMB 98,580 thousand, a significant decrease of 77.7% compared to RMB 440,550 thousand in 2023[2]. - The cost of sales for the same period was RMB 99,036 thousand, resulting in a gross loss of RMB 456 thousand, compared to a gross profit of RMB 83,827 thousand in the previous year[4]. - The net loss for the year was RMB 77,527 thousand, contrasting with a net profit of RMB 25,493 thousand in 2023, indicating a substantial decline in profitability[4]. - Adjusted net loss, excluding certain expenses, was RMB 64,002 thousand, compared to an adjusted net profit of RMB 36,014 thousand in the prior year[2]. - Total revenue for 2024 is RMB 98,580,000, down from RMB 440,550,000 in 2023, indicating a significant decline in overall performance[40]. - The group recorded a total loss of RMB 77,527,000 and a net cash outflow from operating activities of RMB 27,007,000 as of December 31, 2024[14]. - The company reported a pre-tax loss of RMB 70,426 thousand for 2024, compared to a profit of RMB 34,456 thousand in 2023[56]. - The basic loss per share attributable to ordinary equity holders was RMB (360.00) for 2024, compared to a profit of RMB 116.00 in 2023[61]. - The company reported a net asset value of RMB 223,268 thousand at the end of 2024, down from RMB 279,831 thousand in 2023[61]. - The company’s revenue for the year ended December 31, 2024, decreased by approximately 77.6% to RMB 98.6 million from RMB 440.6 million in 2023[86]. Assets and Liabilities - Total assets minus current liabilities decreased to RMB 205,662 thousand from RMB 269,304 thousand in 2023, reflecting a decline in financial health[8]. - The company's cash and cash equivalents dropped to RMB 4,082 thousand from RMB 27,540 thousand, indicating liquidity challenges[6]. - Trade receivables decreased to RMB 223,268 thousand from RMB 279,831 thousand, suggesting a reduction in sales or collection issues[6]. - The total equity attributable to the owners of the parent company decreased to RMB 205,437 thousand from RMB 268,377 thousand, indicating a decline in shareholder value[8]. - The group has unutilized bank credit facilities amounting to RMB 7,000,000 to partially meet its debt obligations and capital expenditure requirements[14]. - The group has not recognized any deferred tax assets related to unutilized tax losses as of December 31, 2024, and December 31, 2023[38]. - The total deferred tax liabilities as of December 31, 2024, amount to RMB 70,000, down from RMB 151,000 in 2023, reflecting a reduction in tax obligations[75]. - The deferred tax assets for 2024 are recorded at RMB 56,000, a decrease from RMB 7,238,000 in 2023, indicating a decline in potential tax benefits[76]. Revenue Breakdown - Revenue from external customers in mainland China for 2024 is RMB 98,580,000, a decrease of 77.25% from RMB 433,814,000 in 2023[40]. - Revenue from IoT application data transmission and processing services was RMB 73,207,000 in 2024, down 80.7% from RMB 380,316,000 in 2023[43]. - Non-5G business revenue fell approximately 81.7% to RMB 64.2 million in 2024 from RMB 350.7 million in 2023[87]. - The 5G business revenue decreased from RMB 89.9 million in 2023 to approximately RMB 34.3 million in 2024[87]. - The revenue from data transmission and processing services decreased approximately 80.8% from about RMB 380.3 million in 2023 to about RMB 73.2 million in 2024[95]. - Sales revenue from communication equipment dropped approximately 56.4% from about RMB 58.2 million in 2023 to about RMB 25.4 million in 2024[99]. Operational Insights - The company continues to focus on providing Internet of Things (IoT) application data transmission and processing services, as well as communication equipment[9]. - The group operates as a single reportable operating segment, focusing on overall operational performance for resource allocation and evaluation[39]. - The company has 100% ownership in several subsidiaries, including Howkingtech (BVI) Limited and Parka Aragon Holding Limited, both focused on investment holding[11]. - The company has been rapidly developing its IoT services since 2012 and has established itself as a notable supplier in the growing 5G private network market in China[84]. - The company plans to diversify its 5G private network customer types, targeting advanced manufacturing, transportation, environmental protection, and energy sectors[89]. - The company aims to enhance its industry data platform using artificial intelligence and big data to support various applications[90]. Credit Risk and Impairment - The expected credit loss for trade receivables, notes receivable, and contract assets is calculated using a provisioning matrix based on industry-specific expected credit loss rates[34]. - The group has updated the expected credit loss amounts to reflect changes in credit risk since initial recognition, with significant estimates being influenced by economic conditions[36]. - The impairment loss on trade receivables increased to RMB 70,815 thousand in 2024 from RMB 42,785 thousand in 2023[62]. - The expected credit loss on trade receivables was RMB 70,815 thousand, reflecting a significant increase in credit risk[63]. - The company’s expected credit loss for financial assets increased by approximately 194.2%, from RMB 10.0 million in 2023 to RMB 29.4 million in 2024, primarily due to a slowdown in the recovery of overdue trade receivables[114]. Corporate Governance - The company aims to maintain high standards of corporate governance and internal control measures[137]. - The chairman and CEO roles are currently held by the same individual, which the board believes ensures unified leadership[138]. - The audit committee, consisting of three independent non-executive directors, has reviewed the audited consolidated financial statements for the year ending December 31, 2024[139]. - The company has adopted the standard code of conduct for securities trading applicable to all directors and relevant employees[136]. Future Outlook - The group believes it will have sufficient operating funds to meet its financial obligations in the foreseeable future[15]. - The company is considering the application of HKFRS 19 in specific financial statements of its subsidiaries[27]. - The company will strengthen risk management and improve cash flow recovery efforts in a challenging economic environment[90].

Howkingtech International Holding Limited 濠暻科技國際控股有限公司* (Incorporated in the Cayman Islands with limited liability) （於開曼群島註冊成立的有限公司) Stock code 股份代號 : 2440 2024 中期報告 INTERIM REPORT ＊ 僅供識別 | --- | --- | --- | --- | --- | |-------|-------|-------|-----------------------------------------------------------------------------------------------------------------------------|-------| | | | | | | | | | | CONTENTS 目錄 | | | | | | | | | | | 2 | CORPORATE INFORMATION 公司資料 | | | | | 5 | MANAGEMENT DISCUSSION AND ANALYSI ...

Financial Performance - Revenue for the six months ended June 30, 2024, was RMB 31,050 thousand, a decrease of 82.5% compared to RMB 176,744 thousand for the same period in 2023[3] - Gross profit for the same period was RMB 1,325 thousand, down 95.1% from RMB 27,203 thousand year-on-year[3] - The adjusted net loss for the period was RMB 30,742 thousand, compared to a profit of RMB 10,291 thousand in the previous year[3] - Basic loss per share for the period was RMB (14.34), compared to earnings of RMB 4.58 per share in the same period last year[3] - The net loss for the six months ending June 30, 2024, was approximately RMB 30.7 million, compared to a net profit of RMB 10.3 million in the same period of 2023[32] - The group reported revenue of RMB 31.05 million for the six months ended June 30, 2024, a decrease of approximately 82.4% from RMB 176.74 million in the same period of 2023[46] - The company's gross profit fell by 95.1% to RMB 1.3 million for the six months ending June 30, 2024, compared to RMB 27.2 million in the prior year[32] - The group recorded a loss before tax of approximately RMB 30.7 million for the six months ended June 30, 2024, compared to a profit of RMB 12.0 million for the same period in 2023[51] Expenses and Costs - Administrative expenses increased significantly to RMB 25,990 thousand, up 87.0% from RMB 13,909 thousand in the prior period[3] - Total employee costs, including share-based payment expenses, amounted to approximately RMB 11.6 million, an increase of about 5.6% compared to the same period in 2023[44] - Employee costs increased from RMB 3.96 million in 2023 to RMB 8.61 million in 2024, largely due to increased share-based payment expenses and severance payments[49] - Sales costs decreased by approximately 80.1% to RMB 29.73 million from RMB 149.54 million, primarily due to a sharp decline in revenue[48] - The group's research and development costs increased significantly to RMB 12,536,000 in the first half of 2024, compared to RMB 4,538,000 in the same period of 2023, representing a growth of 176%[19] Assets and Liabilities - Total current assets decreased to RMB 287,710 thousand from RMB 322,622 thousand, reflecting a decline of 10.8%[5] - Total non-current assets were valued at RMB 24,860 thousand, down from RMB 28,147 thousand, a decrease of 11.4%[5] - The net asset value attributable to equity holders of the parent company was RMB 241,830 thousand, down from RMB 268,377 thousand, a decline of 9.9%[6] - Trade receivables amounted to RMB 312,636,000 as of June 30, 2024, slightly down from RMB 321,254,000 at the end of 2023, indicating a decrease of 5.1%[23] - The impairment loss on trade receivables increased to RMB 49,279,000 as of June 30, 2024, compared to RMB 42,785,000 at the end of 2023, reflecting a rise of 15.5%[26] - Cash and cash equivalents decreased from approximately RMB 33.2 million as of December 31, 2023, to approximately RMB 14.1 million as of June 30, 2024, primarily due to a net cash outflow from operating activities of approximately RMB 18.1 million[53] Revenue Sources - Revenue from customer contracts for the six months ended June 30, 2024, was RMB 31,050 thousand, a decrease of 82.5% compared to RMB 176,744 thousand for the same period in 2023[16] - Revenue from IoT application data transmission and processing services was RMB 31,050 thousand, while sales of communication equipment generated no revenue in the current period[17] - The company recorded zero revenue from 5G business for the six months ending June 30, 2024, down from RMB 72.8 million in the same period of 2023[32] - Revenue from communication equipment sales decreased to zero in the first half of 2024, down from RMB 58.5 million in the same period of 2023, primarily due to insufficient customer demand[41] - Revenue from the top five customers amounted to approximately RMB 30.2 million, accounting for about 97.2% of total revenue, compared to 85.2% in the same period of 2023[42] Market and Business Strategy - The company continues to focus on providing Internet of Things (IoT) application data transmission and processing services, indicating ongoing commitment to its core business despite financial challenges[7] - The company plans to diversify its customer base in the 5G private network sector, targeting industries such as advanced manufacturing, transportation, environmental protection, and energy[33] - The company aims to enhance its industry data platform using artificial intelligence and big data to support industrial IoT applications[33] - The Chinese IoT market is expected to grow at a compound annual growth rate (CAGR) of approximately 13.3% from 2021 to 2026, reaching about RMB 546.6 billion by 2026[34] - The 5G-based IoT market is projected to grow at a CAGR of approximately 62.2% from 2021 to 2026, reaching around RMB 491.9 billion by 2026[34] Corporate Governance - The company is committed to maintaining good corporate governance standards and procedures, ensuring high standards of ethics, transparency, accountability, and integrity in all business operations[67] - The audit committee, composed of three independent non-executive directors, has reviewed the unaudited interim results for the six months ending June 30, 2024, confirming compliance with applicable accounting principles and standards[68] - The company has adopted a share incentive plan on May 16, 2023, to enhance employee motivation and retention[70] - The company has also implemented a stock option plan adopted on November 11, 2022, to further incentivize its employees[70] - The company emphasizes the importance of internal control measures across all business aspects to enhance accountability and transparency to shareholders[67]

Risk Management and Compliance - The Group has established a risk control plan to strengthen the management of trade receivables and ensure effective risk control[5]. - The Group has ceased business activities in Russia after fulfilling all contractual obligations in December 2022 to mitigate compliance risks[9]. - The Company has established a dedicated team to monitor uncertainties and potential risks related to international sanctions[9]. - The Group will implement a whistleblowing mechanism to encourage reporting of irregularities among staff[9]. - The company emphasizes compliance operations and full tax payment as part of its commitment to commercial ethics[54]. ESG Initiatives and Governance - The Board is responsible for managing and supervising ESG matters, ensuring that the Company integrates sustainable development into its business[18]. - The Company has prioritized stakeholder expectations and demands, identifying important ESG issues through interviews and questionnaires[18]. - The ESG Working Group is responsible for evaluating the effectiveness of ESG initiatives and reporting to the Board[18]. - The company has established an ESG governance structure comprising a Board of Directors and an ESG Working Group to oversee ESG policies and performance[41]. - The ESG Working Group is responsible for developing and reviewing the company's ESG-related visions, goals, and strategic plans, and monitoring their implementation[21]. - The company identified a total of 22 material ESG issues relevant to its sustainable development and stakeholders' assessments[57]. - 16 issues were classified as high importance, including innovative research and development, information security, and product quality[60]. Financial Performance - Revenue increased by approximately 36.0% from RMB 323.9 million in 2022 to RMB 440.6 million in 2023[128]. - Adjusted net profit decreased to approximately RMB 36.0 million in 2023 from approximately RMB 51.0 million in 2022[128]. - The Group's gross profit for 2023 was RMB 83.8 million, down from RMB 95.6 million in 2022[125]. - Profit before tax for 2023 was RMB 34.5 million, slightly up from RMB 33.2 million in 2022[125]. - The Group's net profit for 2023 was RMB 25.5 million, down from RMB 28.5 million in 2022[164]. - The Group's total assets as of December 31, 2023, were RMB 350.8 million, a slight decrease from RMB 358.7 million in 2022[157]. Revenue Breakdown - Revenue from IoT application data transmission and processing services grew by approximately 59.7% from RMB 238.1 million in 2022 to RMB 380.3 million in 2023[138]. - Non-5G network services revenue increased strongly by approximately 98.2%, from approximately RMB172.7 million in 2022 to approximately RMB342.3 million in 2023[152]. - Revenue from private 5G network services decreased to approximately RMB38.0 million in 2023 from RMB65.4 million in 2022[175]. - Sales of telecommunication equipment decreased by approximately 29.2% from approximately RMB82.2 million in 2022 to approximately RMB58.2 million in 2023[178]. Environmental Impact and Sustainability - The Company adheres to low-carbon and sustainable development principles, focusing on energy efficiency and the use of energy-saving equipment to reduce GHG emissions[65]. - The Company complies with various environmental laws and regulations, ensuring proper waste management and disposal during the reporting period[82]. - The Company has not violated any environmental regulations during the reporting period, demonstrating commitment to sustainable development[88]. - The Company generated a total of 2.02 kg of hazardous waste, with a generation intensity of 0.005 kg per RMB million of revenue[84]. - The total non-hazardous waste generated was 9.13 kg, with a generation intensity of 0.021 kg per RMB million of revenue[84]. Research and Development - The Group aims to enhance its ability to attract, recruit, and train qualified personnel, particularly in the R&D team, to maintain competitiveness in the rapidly evolving 5G technology industry[10]. - The company aims to enhance its R&D capabilities by recruiting technology talents, with a target of expanding the R&D team by 37.2% by December 2024[37]. - The Group plans to strengthen independent research and development capabilities and actively study advanced technologies in the 5G era[139]. - The Group registered 55 utility model patents, 23 invention patents, one international PCT, and 90 copyrights in the PRC as of December 31, 2023, showcasing strong innovation capabilities[183]. Customer Relations and Market Strategy - The company aims to strengthen communication mechanisms with customers to maintain customer satisfaction[54]. - The Group aims to broaden and diversify its customer base to reduce high customer concentration over time[200]. - The average contract value of new customers increased by 49.5% from RMB4.8 million in 2022 to RMB7.1 million in 2023[179]. - The Group secured 75 new contracts in 2023, with an average contract value of approximately RMB 5.6 million, representing a 21.3% increase from 72 contracts in 2022[181].

Financial Performance - For the year ended December 31, 2023, the company reported revenue of RMB 440,550,000, an increase from RMB 323,964,000 in 2022, representing a growth of approximately 36.2%[14] - The net profit for the year was RMB 25,493,000, down from RMB 28,504,000 in the previous year, indicating a decrease of about 7.1%[4] - The adjusted net profit, calculated under non-Hong Kong Financial Reporting Standards, was RMB 36,014,000, compared to RMB 51,040,000 in 2022, reflecting a decline of approximately 29.4%[14] - The total comprehensive income for the year was RMB 25,611,000, down from RMB 29,494,000 in 2022, a decrease of about 13.0%[6] - Basic earnings per share attributable to ordinary equity holders of the parent were RMB 11.61, compared to RMB 14.93 in the previous year, a decline of approximately 22.5%[7] - The company’s gross profit was RMB 83,827,000, down from RMB 95,550,000 in 2022, reflecting a decline of about 12.3%[14] - Total revenue for the year ended December 31, 2023, was RMB 440,550,000, an increase of 36.2% from RMB 323,964,000 in 2022[44] - Revenue from customers in mainland China was RMB 433,814,000, up from RMB 305,251,000 in 2022, representing a growth of 42.0%[44] - Revenue from other countries decreased to RMB 6,736,000 from RMB 18,713,000, a decline of 64.0%[44] Expenses and Liabilities - The company incurred administrative expenses of RMB 38,112,000, reduced from RMB 47,982,000 in the prior year, showing a decrease of about 20.0%[3] - The financing costs for the year were RMB 220,000, slightly up from RMB 219,000 in 2022, indicating a marginal increase[3] - The total cost of sales increased to RMB 356.7 million in 2023 from RMB 228.4 million in 2022[166] - Research and development expenses were RMB 9.6 million in 2023, a decrease from RMB 11.3 million in 2022[166] - In 2023, the group's sales and marketing expenses remained relatively stable at approximately RMB 36 million, compared to RMB 38 million in 2022[167] - Employee costs, including share-based payment expenses, increased by approximately 23.5% to RMB 24.9 million in 2023 from the previous year's RMB 20.1 million[173] - The group’s compliance costs increased to approximately RMB 7.1 million in 2023 due to listing-related expenses[168] - Total liabilities decreased to RMB 81,465,000 from RMB 102,388,000, a reduction of 20.5%[57] Assets and Receivables - Trade receivables and notes receivable amounted to RMB 279,831,000, an increase from RMB 214,010,000 in the previous year[57] - Non-current assets totaled RMB 28,147,000, significantly up from RMB 13,034,000 in 2022[57] - Current assets decreased to RMB 322,622,000 from RMB 345,652,000, a decline of 6.7%[57] - The company reported a net asset value of RMB 241,157,000, slightly down from RMB 243,264,000 in the previous year[57] - Total trade receivables increased by approximately 35.0% from RMB 238.0 million in 2022 to approximately RMB 321.3 million in 2023[185] - Net trade receivables rose by about 30.8% from RMB 214.0 million in 2022 to approximately RMB 279.8 million in 2023[185] - The company has made significant progress in collecting overdue trade receivables, contributing to the reduction in aged receivables[200] Market and Business Strategy - The company primarily engages in providing Internet of Things (IoT) application data transmission and processing services, as well as communication equipment[19] - The company plans to enhance its industry data platform using artificial intelligence and big data, expanding its functionality to industrial IoT applications[136] - The Chinese IoT market is projected to grow at a compound annual growth rate (CAGR) of approximately 13.3%, reaching about RMB 546.6 billion by 2026[137] - The 5G-based IoT market is expected to grow at a CAGR of approximately 62.2%, reaching about RMB 491.9 billion by 2026[137] - The company aims to expand its 5G private network customer base in advanced manufacturing, transportation, environmental protection, and energy sectors[148] Compliance and Accounting Standards - The group is currently assessing the impact of the revised accounting standards on its financial statements, with an initial evaluation indicating no significant impact[27] - The revised standards clarify the classification of liabilities as current or non-current, emphasizing that the classification is not affected by the entity's ability to exercise deferral rights[27] - The group has implemented mandatory temporary exemptions related to the OECD's Pillar Two rules, which do not affect the group as it is not within the scope of these rules[25] - The revised standards require full recognition of gains or losses when assets are sold or injected into joint ventures that constitute a business[26] - The group has adopted the revised standards retroactively, ensuring compliance with the latest accounting requirements[27] Customer and Contract Information - The company secured 75 new contracts in 2023, an increase of about 21.3% compared to 72 contracts in 2022[160] - The average contract value for new customers rose by 49.5% from RMB 4.8 million in 2022 to RMB 7.1 million in 2023[158] - The group’s remaining performance obligations are expected to be recognized within one year[87] - The group recognized a net impairment loss of RMB 72,000 on contract assets at the end of the reporting period[99] Cash Flow and Financial Health - As of December 31, 2023, cash and cash equivalents totaled RMB 27,540,000, a decrease of 41.8% from RMB 47,301,000 in 2022[112] - Cash and cash equivalents decreased from approximately RMB 120.7 million in 2022 to about RMB 33.2 million in 2023, primarily due to investments and other expenses[197] - The company is focused on improving cash flow through effective management of trade receivables[200] - The overall strategy includes enhancing collection processes to minimize aged receivables and improve financial health[200]

Financial Performance - Revenue for the first half of 2023 reached RMB 176.7 million, a significant increase of approximately 109.6% compared to RMB 84.3 million in the same period of 2022[10] - Gross profit slightly decreased by 9.0% to RMB 27.2 million from RMB 29.9 million in the previous year[12] - Net profit increased by approximately 71.1% to RMB 10.3 million, up from RMB 6.0 million in the same period of 2022[12] - Adjusted net profit remained relatively stable at RMB 12.2 million compared to RMB 13.1 million in the previous year[12] - The company's revenue from non-5G network services increased by approximately 281.9% to RMB 95.6 million in the first half of 2023, compared to RMB 25.0 million in the same period of 2022[20] - Revenue from 5G private network services rose by approximately 289.9% to RMB 21.1 million in the first half of 2023, up from RMB 5.4 million in the same period of 2022[20] - Total revenue from IoT application data transmission and processing services surged by approximately 283.4% to RMB 116.6 million in the first half of 2023, compared to RMB 30.4 million in the same period of 2022[20] - The company's communication equipment sales revenue increased by approximately 10.0% to RMB 58.5 million in the first half of 2023, driven by a 13.5% growth in 5G communication equipment sales[23] - The group reported a pre-tax profit of RMB 10,291,000 for the six months ended June 30, 2023, compared to RMB 6,016,000 in 2022, marking an increase of 71%[111] Business Growth and Strategy - The company recorded a 42.8% growth in 5G business revenue, increasing from RMB 51.0 million to RMB 72.8 million[11] - Non-5G business revenue surged by approximately 212.1%, rising from RMB 33.3 million to RMB 103.9 million[11] - The company plans to upgrade and improve data transmission services and enhance its 5G private network offerings[13] - Strategic acquisitions will be selectively pursued to enrich the product portfolio and enhance market position[14] - The company aims to strengthen its R&D capabilities by expanding its talent pool and investing in R&D infrastructure[13] - Marketing capabilities will be enhanced to diversify the customer base and capture opportunities in the industrial IoT market[13] - The company continues to explore market expansion opportunities and new strategies to enhance shareholder value[71] - The company is expanding its overseas distribution network, particularly in Russia, for its vehicle-mounted antennas[141] Research and Development - The company has registered 90 utility model patents, 19 invention patents, 2 industrial design patents, and 82 copyrights as of June 30, 2023, showcasing its strong innovation and research capabilities[26] - The company is focused on research and development (R&D) to innovate new products and technologies[141] - The net proceeds from the global offering amounted to approximately HKD 47.1 million, with 37.2% allocated for recruiting technology talent to expand the R&D team[62] - The company plans to utilize the net proceeds for further R&D to improve its 5G private network services, with expected completion by December 2024[62] Financial Position and Cash Flow - The group's sales cost for the six months ended June 30, 2023, rose by approximately 174.8% to RMB 149.5 million, primarily due to a significant increase in material costs[35] - Material costs accounted for approximately 72.6% of total sales costs in 2023, up from 32.2% in 2022, reflecting a 519.4% increase year-on-year[35] - Cash and cash equivalents increased slightly from RMB 47.3 million at the end of 2022 to RMB 48.7 million at the end of June 2023[43] - For the six months ended June 30, 2023, the net cash used in operating activities was approximately RMB 32.6 million, compared to RMB 2.7 million in the same period of 2022, mainly due to an increase in trade receivables and a decrease in other payables[51] - The net cash generated from investing activities for the six months ended June 30, 2023, was approximately RMB 59.7 million, primarily from the sale of fixed deposits amounting to RMB 125.6 million[51] - The company reported a decrease in inventory from RMB 5,619,000 to RMB 3,131,000, a reduction of 44.2%[85] - The company experienced a significant increase in cash and cash equivalents, ending the period with RMB 48,684,000, up from RMB 34,248,000 as of June 30, 2022, reflecting an increase of approximately 42.3%[91] Shareholder Information and Corporate Governance - The total number of issued shares is 225,000,000[65] - Dr. Chen Ping holds a total of 130,026,676 shares, representing approximately 57.79% of the company's equity[64] - Howkingtech International Holding Ltd. owns 121,124,579 shares, accounting for 53.83% of the company's equity[69] - The company is focused on maintaining strong corporate governance and transparency in its operations[70] - The company has adopted a share award scheme on May 16, 2023, aimed at recognizing contributions and attracting suitable personnel for further development[76] - The company has implemented a stock option plan adopted on November 11, 2022, to incentivize key personnel[141] Market Trends and Industry Insights - The IoT industry in China has a compound annual growth rate (CAGR) of approximately 26.2% from 2016 to 2021, expected to further grow at a CAGR of about 13.3% from 2021 to 2026, reaching approximately RMB 5.466 trillion by 2026[16] - The 5G-based IoT market is projected to grow at a CAGR of approximately 62.2% from 2021 to 2026, reaching around RMB 491.9 billion by 2026[16] Employee and Management Information - The group had a total of 66 employees as of June 30, 2023, down from 75 employees at the end of 2022, with employee costs amounting to approximately RMB 11.0 million, a 10.1% increase year-on-year[30] - The total remuneration for key management personnel amounted to RMB 4,038,000 for the six months ended June 30, 2023, compared to RMB 2,414,000 for the same period in 2022, reflecting a significant increase[133]

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之內容概不 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。 Howkingtech International Holding Limited 濠 暻 科 技 國 際 控 股 有 限 公 司* （於開曼群島註冊成立的有限公司） （股份代號：2440） 截 至 二 零 二 三 年 六 月 三 十 日 止 六 個 月 的 中 期 業 績 公 告 財務摘要 截至六月三十日止六個月 二零二三年 二零二二年 （未經審核） （未經審核） 人民幣千元 人民幣千元 收益 176,744 84,316 銷售成本 (149,541) (54,412) 毛利 27,203 29,904 純利 10,291 6,016 經調整純利（非香港財務報告準則計量）(1) 12,178 13,106 附註： (1) 購股權開支及上市開支並未納入非香港財務報告準則計量。 ...

Revenue Growth - The company's revenue for 2022 reached approximately RMB 323.964 million, representing a growth of about 70.9% compared to RMB 189.6 million in 2021[11]. - Revenue from IoT application data transmission and processing services increased from approximately RMB 123.298 million in 2021 to about RMB 238.073 million in 2022, marking a growth rate of approximately 93.1%[7]. - Revenue from 5G business grew from approximately RMB 72.874 million in 2021 to about RMB 119.803 million in 2022, achieving a growth rate of approximately 64.4%[7]. - The group's revenue for the year ended December 31, 2022, was approximately RMB 323.96 million, representing a 70.8% increase from RMB 189.55 million in 2021[29]. - Non-5G business revenue increased approximately 75.0% to about RMB 204.2 million in 2022, up from approximately RMB 116.7 million in 2021[30]. - The group recorded a strong growth in data transmission and processing services, with revenue increasing approximately 93.1% to about RMB 238.1 million in 2022[37]. - Approximately 74.0% of the group's revenue was generated in the second half of 2022, compared to 62.0% in 2021[73]. - The company aims to leverage the growing IoT market in China to maintain its business momentum despite economic challenges[94]. Profitability - The adjusted net profit for 2022 was approximately RMB 51.04 million, up 22.2% from RMB 41.76 million in 2021[31]. - The group's net profit declined by approximately 17.1% from RMB 34.4 million in 2021 to RMB 28.5 million in 2022[81]. - The basic and diluted earnings per share for the year 2022 were RMB 14.93, compared to RMB 18.19 in 2021, indicating a decrease in profitability per share[112]. - The adjusted net profit for the year was RMB 51.04 million, reflecting a growth of approximately 22.2% compared to the previous year when excluding IPO expenses[81]. Assets and Liabilities - The total assets of the company as of December 31, 2022, amounted to RMB 358.686 million, compared to RMB 352.697 million in 2021[5]. - The total liabilities as of December 31, 2022, amounted to RMB 214,010 thousand, compared to RMB 140,751 thousand in the previous year, indicating a substantial increase in overall liabilities[146]. - The total liabilities due within one year increased to RMB 169,291 thousand in 2022 from RMB 68,857 thousand in 2021, reflecting a significant rise in short-term obligations[146]. - As of December 31, 2022, the company's debt-to-equity ratio was approximately 4.7%, an increase from about 4.1% as of December 31, 2021, due to total debt rising from approximately RMB 62 million to RMB 122 million[148]. Research and Development - Research and development expenses rose approximately 15.5% to RMB 11.3 million in 2022, up from RMB 9.8 million in 2021[42]. - The company has a strong focus on R&D, with 42 employees dedicated to this area, representing about 56.0% of the total workforce[42]. - The company plans to strengthen its R&D capabilities by recruiting more talent and investing in R&D infrastructure to support ongoing projects[57]. - The company allocated a significant portion of the funds raised from its recent IPO to research and development activities to enhance future business growth[85]. Market Position and Strategy - The company has successfully positioned itself as a notable supplier in the rapidly growing 5G private network market since its establishment in 2012[10]. - Strategic acquisitions are being considered to enrich the product portfolio and enhance the company's technology and market position[15]. - The company plans to enhance its marketing capabilities and expand its customer base by hiring more business development personnel[33]. - The company aims to upgrade its data transmission services and improve its 5G private network offerings to capture growing opportunities in the industrial IoT market[32]. International Operations - Revenue from the US market decreased by approximately 32.1% from RMB 155 million in 2021 to RMB 105 million in 2022, primarily due to global chip shortages affecting US customers' procurement orders[47]. - Revenue from the Russian market significantly dropped by approximately 66.4% from RMB 243 million in 2021 to RMB 82 million in 2022, as the company ceased sales to Russian distributors to avoid international sanctions[47]. - The company ceased operations in Russia by the end of 2022 due to international sanctions, fulfilling all existing contractual obligations[101]. Financial Management - The company's gross profit increased by approximately 21.3% from RMB 788 million in 2021 to RMB 956 million in 2022, although the gross margin declined from approximately 41.6% to 29.5%[52]. - The sales cost increased by approximately 106.2% from RMB 110.8 million in 2021 to RMB 228.4 million in 2022, primarily due to changes in revenue structure[74]. - Administrative expenses rose by approximately 69.8% to RMB 48,000 thousand in 2022, primarily due to increased R&D spending and listing expenses[99]. - The company reported a decrease in financing costs to RMB 219 thousand from RMB 500 thousand in the previous year, indicating improved financial management[112]. Future Outlook - The company plans to continue expanding its market presence and investing in new product development to drive future growth[112]. - The company aims to achieve high-quality business development in 2023, leveraging recent government measures to stimulate economic growth in China[56]. - New product launches are anticipated to contribute an additional D million in revenue, with a focus on innovative technology solutions[172]. - The company is investing in R&D, allocating G% of its budget to develop new technologies and improve existing products[172].