Group 1 - The company, Mistral (02440), announced a rights issue to issue 123 million shares based on a non-underwritten basis [1] - The rights issue is structured such that for every 2 existing shares held, shareholders will receive 1 new share [1] - The record date for the rights issue is set for July 4, 2025, as defined in the company's rights issue prospectus [1]

FF305 翌日披露報表 (股份發行人 ── 已發行股份或庫存股份變動、股份購回及/或在場内出售庫存股份) 表格類別： 股票 狀態： 新提交 公司名稱： 迷策略 呈交日期： 2025年8月8日 如上市發行人的已發行股份或庫存股份出現變動而須根據《香港聯合交易所有限公司（「香港聯交所」）證券上市規則》(「《主板上市規則》」)第13.25A條 / 《香港聯合交易所有限公司GEM證券 上市規則》(「《GEM上市規則》」)第17.27A條作出披露，必須填妥第一章節 。 | 第一章節 | | | | | | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | | 1. 股份分類 | 普通股 | 股份類別 | 不適用 | | 於香港聯交所上市 | 是 | | | | 證券代號 (如上市) | 02440 | 說明 | 不適用 | | | | | | | A. 已發行股份或庫存股份變動 | | | | | | | | | | | | | 已發行股份（不包括庫存股份）變動 | | 庫存股份變動 | | | | | 事件 | | 已發行股份（不包括庫存股份 ...

股 東 特 別 大 會 的 投 票 表 決 結 果； 及 香港交易及結算所有限公司及香港聯合交易所有限公司對本公告的內容概不 負 責，對 其 準 確 性 或 完 整 性 亦 不 發 表 任 何 聲 明，並 明 確 表 示 概 不 就 因 本 公 告 全 部或任何部分內容而產生或因倚賴該等內容而引致的任何損失承擔任何責任。 MemeStrategy, Inc. 迷策略 （於 開 曼 群 島 註 冊 成 立 的 有 限 公 司） （股份代號：2440） 於二零二五年八月七日舉行的 於 股 東 特 別 大 會 上 有 關 決 議 案 之 投 票 表 決 結 果 載 列 如 下： | 普通決議案 | | | | | | 所投票數（概 | 約 | ） % | | | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | | | | | | 贊成 | | 反對 | | | | | | | 將本公司法定股本由3,000,000美 「動 元 | 議 | | | | | 157,916,40 ...

股份發行人及根據《上市規則》第十九B章上市的香港預託證券發行人的證券變動月報表 | 截至月份: | 2025年7月31日 | | | | 狀態: | 新提交 | | --- | --- | --- | --- | --- | --- | --- | | 致：香港交易及結算所有限公司 | | | | | | | | 公司名稱: | 迷策略 | | | | | | | 呈交日期: | 2025年8月4日 | | | | | | | I. 法定/註冊股本變動 | | | | | | | | 1. 股份分類 | 普通股 | 股份類別 | 不適用 | 於香港聯交所上市 (註1) | 是 | | | 證券代號 (如上市) | 02440 | 說明 | | | | | | | | 法定/註冊股份數目 | | 面值 | | 法定/註冊股本 | | 1. 股份分類 | 普通股 | 股份類別 | 不適用 | | 於香港聯交所上市 (註1) | | 是 | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | | 證券代號 (如上市) | 02440 | 說明 | | ...

【环球网财经综合报道】根据市场研究公司CoreData Research公布的一项调查结果，许多机构投资者已经开始部 署防范市场低迷的策略。 数据显示，由于美国贸易政策引发的波动，大约每10个机构投资者中就有8个正在采取战术性或较长期的战略转 变。 值得一提的是，在特朗普本月与日本和欧盟达成贸易协议之际，各机构普遍呈现出谨慎的心态。CoreData Research发现，69%的大型投资者担心贸易政策将导致全球资金从美国国债和美元转移。 且尽管特朗普声称其关税政策将使美国经济受益，但64%的受访者表示担心，关税政策将导致结构性通胀上升和 经济增长放缓。 CoreData Research美国负责人Michael Morley指出，鉴于"各种各样的经济情景"仍在市场发展中发挥重要作用，金 融机构目前正专注于降低风险，提高投资组合的弹性。"研究表明，机构投资者对全球最重要贸易谈判的任何乐观 情绪，都掩盖了一种感觉，即全球贸易已经发生了不可逆转的变化，因此，投资组合结构必须适应新的现实。" Morley认为，在战略配置方面，机构投资者的举动体现出比以往市场周期中更加灵活的反应功能。这些策略包括 转向价值型股票和/或 ...

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].

[Corporate Information](index=2&type=section&id=Corporate%20Information) This section provides core corporate information including the company's basic registration details, board and committee members, principal places of business, legal advisors, auditors, and principal bankers - The Chairman of the Board is Dr. Chen Ping, with executive directors including Ms. Wang Zishi, Mr. Feng Yijing, and Mr. Wang Jun[3](index=3&type=chunk) - The company's auditor is Ernst & Young[5](index=5&type=chunk) - The company's principal places of business are located in Nanjing, China, and Hong Kong[4](index=4&type=chunk) [Management Discussion and Analysis](index=5&type=section&id=Management%20Discussion%20and%20Analysis) [Business Overview & Highlights](index=5&type=section&id=Business%20Overview%20%26%20Highlights) The company, a Chinese IoT data transmission and communication equipment provider, experienced a significant performance decline in H1 2024, with revenue plummeting 82.4% to RMB 31.1 million and a net loss of RMB 30.7 million, primarily due to project delays and lack of communication equipment sales | Metric | H1 2024 (Unaudited) | H1 2023 (Unaudited) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | **Revenue** | RMB 31.1 million | RMB 176.7 million | -82.4% | | **Gross Profit** | RMB 1.3 million | RMB 27.2 million | -95.1% | | **(Net Loss)/Profit** | (RMB 30.7 million) | RMB 10.3 million | Turn from Profit to Loss | | **Adjusted (Net Loss)/Profit** | (RMB 25.9 million) | RMB 12.2 million | Turn from Profit to Loss | - Key reasons for revenue decline include: (i) IoT industry clients delaying projects due to cash flow concerns and macroeconomic uncertainty; and (ii) no communication equipment sales during the reporting period due to insufficient client demand[8](index=8&type=chunk) - In terms of business structure, non-5G business revenue decreased by **70.1%** year-on-year to **RMB 31.1 million**, while 5G business revenue dropped from **RMB 72.8 million** in the same period last year to zero[10](index=10&type=chunk)[12](index=12&type=chunk) [Outlook](index=7&type=section&id=Outlook) Facing a complex macroeconomic environment and intense industry competition, the Group plans to implement multiple measures in 2024 to ensure sustainable development, focusing on client diversification, technology upgrades, and risk management - The company plans to address challenges through: **Client Diversification**: Expanding 5G private network business to advanced manufacturing, transportation, environmental protection, and energy sectors to broaden the client base; **Technology Upgrades**: Leveraging AI and big data to enhance its Universal IoT Platform, extending its application in industrial IoT; **Risk Management**: Strengthening trade receivables collection, monitoring credit risk, and implementing prudent cost control measures to ensure sufficient operating cash flow[15](index=15&type=chunk) [Business Performance](index=8&type=section&id=Business%20Performance) This section details the IoT industry outlook, the company's competitive advantages, and reviews the performance of its data transmission and processing services and communication equipment sales, noting that all revenue came from data transmission services with zero equipment sales, and analyzes client concentration, new contracts, and R&D investment [Industry and Strengths](index=8&type=section&id=Industry%20and%20Strengths) China's IoT market, particularly 5G applications, is projected to grow, and despite intense competition, the company is confident in seizing opportunities through its focus on network connectivity and platform layers, one-stop solutions, and R&D capabilities - According to Frost & Sullivan, China's 5G private network market is expected to grow at a CAGR of approximately **62.2%** between 2021 and 2026, with the market size projected to reach approximately **RMB 491.9 billion** by 2026[15](index=15&type=chunk) - The company is positioned as an IoT solution provider focused on the network connectivity and platform layers, operating in a competitive market with over **30,000** participants[16](index=16&type=chunk)[17](index=17&type=chunk) [Data Transmission and Processing Services](index=10&type=section&id=Data%20Transmission%20and%20Processing%20Services) As the sole revenue source during the reporting period, data transmission and processing services revenue decreased by 73.4% to RMB 31.1 million, with non-5G network services revenue down 67.5% and 5G private network services revenue plummeting to zero, indicating clients opted for more basic network solutions amid economic uncertainty | Service Type | H1 2024 (RMB '000) | H1 2023 (RMB '000) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Non-5G Network Services | 31,050 | 95,552 | -67.5% | | 5G Private Network Services | 0 | 21,061 | -100.0% | | **Total** | **31,050** | **116,613** | **-73.4%** | [Sales of Telecommunication Equipment](index=11&type=section&id=Sales%20of%20Telecommunication%20Equipment) Due to insufficient client demand, the telecommunication equipment sales business generated no revenue in H1 2024, compared to RMB 58.5 million in the prior year period - Revenue from telecommunication equipment sales decreased from **RMB 58.5 million** in H1 2023 to zero in H1 2024, primarily due to insufficient client demand[23](index=23&type=chunk)[24](index=24&type=chunk) [Customers, Contracts, and R&D](index=12&type=section&id=Customers%2C%20Contracts%2C%20and%20R%26D) The company exhibits high client concentration, with its top five clients accounting for 97.2% of total revenue; in H1 2024, it secured 12 new contracts averaging RMB 2.5 million each, and continues to invest in R&D, holding 38 utility model patents, 21 invention patents, and 90 copyrights in China - Revenue from the top five clients increased from **85.2%** in the same period of 2023 to **97.2%** in H1 2024, indicating further increased client concentration[25](index=25&type=chunk) - As of June 30, 2024, the Group held **38** utility model patents, **21** invention patents, and **90** copyrights in China[26](index=26&type=chunk) [Financial Review](index=14&type=section&id=Financial%20Review) This section provides an in-depth analysis of the company's H1 2024 financial performance, covering revenue, costs, profitability, financial position, and cash flow, highlighting significant declines in revenue and gross margin, increased administrative expenses due to R&D, and net cash outflow from operating activities [Revenue Analysis](index=14&type=section&id=Revenue%20Analysis) Total revenue for H1 2024 was RMB 31.1 million, a year-on-year decrease of 82.4%, with all revenue derived from non-5G business in the Chinese market, as data transmission services revenue fell by 73.4% and equipment sales revenue dropped to zero | Revenue Source | H1 2024 (RMB '000) | H1 2023 (RMB '000) | | :--- | :--- | :--- | | **By Business Segment** | | | | Data Transmission and Processing Services | 31,050 | 116,613 | | Sales of Equipment | 0 | 58,524 | | **By Technology** | | | | 5G Business | 0 | 72,830 | | Non-5G Business | 31,050 | 103,914 | | **Total** | **31,050** | **176,744** | [Costs and Expenses](index=16&type=section&id=Costs%20and%20Expenses) Cost of sales decreased by 80.1% in line with revenue, but administrative expenses surged 86.9% to RMB 26.0 million due to increased R&D spending (from RMB 4.5 million to RMB 12.5 million) and higher staff costs from equity-settled share options and severance, while impairment losses on financial assets expanded from RMB 1.7 million to RMB 6.5 million - Administrative expenses increased by **86.9%** year-on-year, primarily due to: (i) R&D expenses increasing to **RMB 12.5 million** (H1 2023: RMB 4.5 million); and (ii) higher staff costs from equity-settled share option expenses and severance payments[34](index=34&type=chunk)[35](index=35&type=chunk) - Impairment losses on financial assets increased from **RMB 1.7 million** in the same period last year to **RMB 6.5 million**, mainly due to an increase in trade receivables overdue for more than one year[37](index=37&type=chunk) [Profitability Analysis](index=17&type=section&id=Profitability%20Analysis) Due to declining revenue and gross margin, the company's gross profit plummeted 95.1% to RMB 1.3 million, with gross margin narrowing from 15.4% to 4.3%, resulting in a pre-tax and net loss of RMB 30.7 million, and an adjusted net loss of RMB 25.9 million, a reversal from profitability in the prior year | Metric | H1 2024 | H1 2023 | | :--- | :--- | :--- | | **Gross Profit** | RMB 1.3 million | RMB 27.2 million | | **Gross Margin** | 4.3% | 15.4% | | **(Net Loss)/Profit** | (RMB 30.7 million) | RMB 10.3 million | - The decline in gross margin was primarily attributable to: (i) intensified market competition; (ii) absence of high-margin US IoT antenna export business; and (iii) lower cooperation prices adopted to develop new clients[38](index=38&type=chunk) | Item (RMB '000) | H1 2024 | H1 2023 | | :--- | :--- | :--- | | **(Loss)/Profit for the period** | (30,742) | 10,291 | | Add: Equity-settled share option expenses | 4,809 | 1,887 | | **Adjusted (Net Loss)/Profit for the period** | **(25,933)** | **12,178** | [Financial Position and Liquidity](index=19&type=section&id=Financial%20Position%20and%20Liquidity) As of June 30, 2024, cash and cash equivalents decreased to RMB 14.1 million, mainly due to a net cash outflow of RMB 18.1 million from operating activities; total trade receivables slightly declined, but impairment provisions grew 15.2% to RMB 49.3 million, while the gearing ratio remained stable at 2.6% and capital expenditure dropped to zero - Cash and cash equivalents decreased from **RMB 33.2 million** at the end of 2023 to **RMB 14.1 million** at the end of the reporting period, primarily due to a net cash outflow of approximately **RMB 18.1 million** from operating activities[40](index=40&type=chunk)[47](index=47&type=chunk) | Trade and Bills Receivables (RMB '000) | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Gross Trade Receivables | 312,636 | 321,254 | | Impairment | (49,279) | (42,785) | | **Net** | **263,357** | **279,831** | - The gearing ratio (total debt/total equity) remained stable at **2.6%**, consistent with the end of 2023[44](index=44&type=chunk) [Corporate Governance and Other Information](index=23&type=section&id=Corporate%20Governance%20and%20Other%20Information) [Corporate Governance Practices](index=23&type=section&id=Corporate%20Governance%20Practices) The company is committed to maintaining good corporate governance but deviated from the Corporate Governance Code's requirement for separation of Chairman and CEO roles, with Dr. Chen Ping currently holding both positions, which the Board believes ensures leadership unity and decision-making efficiency - The company deviated from Corporate Governance Code provision C.2.1, as the roles of Chairman and Chief Executive Officer are not separated, both held by Dr. Chen Ping[49](index=49&type=chunk) [Use of Proceeds from the Global Offering](index=25&type=section&id=Use%20of%20Proceeds%20from%20the%20Global%20Offering) The company disclosed the use of HKD 47.1 million net proceeds from its December 2022 global offering, with HKD 31.6 million utilized and HKD 15.5 million remaining unutilized as of June 30, 2024, primarily for R&D, business development, and working capital, with no significant changes or delays | Use | Net Proceeds Allocated (HKD million) | Utilized During Reporting Period (HKD million) | Unutilized as of Period End (HKD million) | | :--- | :--- | :--- | :--- | | Further R&D | 17.5 | 4.8 | 10.9 | | R&D of Industrial-grade Wireless LAN | 5.5 | 2.4 | - | | Development of Digital Foundation | 7.4 | 5.7 | - | | Upgrading R&D Infrastructure | 4.1 | - | 3.0 | | Enhancing Business Development Capabilities | 3.5 | 0.2 | 1.6 | | Additional Working Capital | 4.7 | 4.4 | - | | **Total** | **47.1** | **17.5** | **15.5** | [Directors' and Shareholders' Interests](index=26&type=section&id=Directors%27%20and%20Shareholders%27%20Interests) This section discloses the interests of the company's directors, chief executives, and substantial shareholders in the company's shares as of June 30, 2024, as required by the Securities and Futures Ordinance, highlighting Executive Director Dr. Chen Ping (through his spouse Ms. Wang Zishi) and Ms. Wang Zishi as key shareholding directors - Executive Director Dr. Chen Ping is deemed to be interested in **130,026,676** shares, representing **57.79%** of the company's issued share capital, derived from his spouse Ms. Wang Zishi's holdings[54](index=54&type=chunk)[59](index=59&type=chunk) - Substantial shareholder Howkingtech Holding Limited holds **121,124,579** shares, representing **53.83%** of the company's issued share capital[61](index=61&type=chunk) [Share Option and Award Schemes](index=30&type=section&id=Share%20Option%20and%20Award%20Schemes) The company operates a Share Option Scheme and a Share Award Scheme; as of the reporting period, 22,500,000 share options remained unexercised under the Share Option Scheme at an exercise price of HKD 1.56, while no award shares were granted under the Share Award Scheme, though the company held 10,656,973 treasury shares for the plan - As of June 30, 2024, **22,500,000** share options remained unexercised under the Share Option Scheme, with an exercise price of **HKD 1.56** per share, and no options were exercised, cancelled, or lapsed[69](index=69&type=chunk)[124](index=124&type=chunk) - During the reporting period, no award shares were granted, vested, cancelled, or lapsed under the Share Award Scheme; as of the period end, the number of treasury shares held for the scheme was **10,656,973** shares[71](index=71&type=chunk)[132](index=132&type=chunk) [Other Information](index=32&type=section&id=Other%20Information) The Board resolved not to declare an interim dividend for 2024, the Audit Committee reviewed the unaudited interim results, and no significant events occurred after the reporting period - The Board resolved not to declare any interim dividend for the six months ended June 30, 2024[71](index=71&type=chunk) [Interim Financial Statements](index=33&type=section&id=Interim%20Financial%20Statements) [Interim Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=33&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) The financial statements show the company recorded revenue of RMB 31.1 million and a net loss of RMB 30.7 million for the six months ended June 30, 2024, compared to RMB 176.7 million revenue and RMB 10.3 million net profit in the prior year period, resulting in a basic loss per share of RMB 14.34 cents | Item (RMB '000) | H1 2024 (Unaudited) | H1 2023 (Unaudited) | | :--- | :--- | :--- | | Revenue | 31,050 | 176,744 | | Gross Profit | 1,325 | 27,203 | | (Loss)/Profit before tax | (30,742) | 12,049 | | **(Loss)/Profit for the period** | **(30,742)** | **10,291** | | Total comprehensive (loss)/income | (31,356) | 9,797 | | Basic (loss)/earnings per share | (RMB 14.34 cents) | RMB 4.58 cents | [Interim Condensed Consolidated Statement of Financial Position](index=34&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2024, the company's total assets were RMB 312.6 million, total liabilities RMB 70.7 million, and net assets RMB 241.8 million, with net current assets at RMB 217.4 million, and trade and bills receivables (net) of RMB 263.4 million being the primary asset | Item (RMB '000) | June 30, 2024 (Unaudited) | December 31, 2023 (Audited) | | :--- | :--- | :--- | | Total Non-current Assets | 24,860 | 28,147 | | Total Current Assets | 287,710 | 322,622 | | **Total Assets** | **312,570** | **350,769** | | Total Current Liabilities | 70,274 | 81,465 | | Total Non-current Liabilities | 466 | 927 | | **Total Liabilities** | **70,740** | **82,392** | | **Net Assets** | **241,830** | **268,377** | | **Total Equity** | **241,830** | **268,377** | [Interim Condensed Consolidated Statement of Changes in Equity](index=36&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity) As of June 30, 2024, total shareholders' equity decreased from RMB 268.4 million at the beginning of the year to RMB 241.8 million, primarily due to a net loss of RMB 30.7 million for the period, partially offset by RMB 4.8 million in equity-settled share option expenses - Total shareholders' equity decreased from **RMB 268,377 thousand** at the end of 2023 to **RMB 241,830 thousand** as of June 30, 2024, with a net change of **-RMB 26,547 thousand**[77](index=77&type=chunk) - The primary item leading to the decrease in equity was a loss for the period of **RMB 30,742 thousand**, while equity-settled share option expenses increased equity by **RMB 4,809 thousand**[77](index=77&type=chunk) [Interim Condensed Consolidated Statement of Cash Flows](index=38&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) In H1 2024, the company experienced a net cash outflow of RMB 18.1 million from operating activities, a net cash inflow of RMB 5.9 million from investing activities, and a net cash outflow of RMB 0.7 million from financing activities, resulting in a net decrease in cash and cash equivalents of RMB 12.9 million, with an ending balance of RMB 14.1 million | Item (RMB '000) | H1 2024 (Unaudited) | H1 2023 (Unaudited) | | :--- | :--- | :--- | | Net cash flows from operating activities | (18,134) | (32,551) | | Net cash flows from investing activities | 5,923 | 59,729 | | Net cash flows from financing activities | (665) | (26,896) | | **Net (decrease)/increase in cash and cash equivalents** | **(12,876)** | **282** | | Cash and cash equivalents at beginning of period | 27,540 | 47,301 | | **Cash and cash equivalents at end of period** | **14,098** | **48,684** | [Notes to the Interim Condensed Consolidated Financial Statements](index=40&type=section&id=Notes%20to%20the%20Interim%20Condensed%20Consolidated%20Financial%20Statements) This section provides supplementary information to the financial statements, including accounting policies, segment information, detailed revenue and client breakdowns, aging analysis of key assets and liabilities, and related party transactions, highlighting that all revenue originated from mainland China, trade receivables aging deteriorated, and significant equity-settled share option expenses were included in key management personnel compensation - All revenue was derived from clients in mainland China and recognized at a point in time as "IoT application data transmission and processing services"[89](index=89&type=chunk)[96](index=96&type=chunk)[97](index=97&type=chunk) | Aging Analysis of Trade and Bills Receivables (Net) | June 30, 2024 (RMB '000) | December 31, 2023 (RMB '000) | | :--- | :--- | :--- | | Within 1 year | 147,569 | 191,340 | | 1 to 2 years | 82,215 | 71,072 | | 2 to 3 years | 27,577 | 11,205 | | Over 3 years | 5,996 | 6,214 | | **Total** | **263,357** | **279,831** | - Total remuneration paid to key management personnel was **RMB 6.709 million**, including **RMB 4.697 million** in equity-settled share option expenses[134](index=134&type=chunk) [Definitions](index=62&type=section&id=Definitions) [Definitions](index=62&type=section&id=Definitions) This section provides clear definitions for specific terms and abbreviations used throughout the report to ensure accurate reader comprehension, covering technical terms like "5G" and "IoT," company-specific terms such as "Universal IoT Platform," and regulatory and financial terms like "Corporate Governance Code" and "Share Option Scheme" - **Universal IoT Platform** is defined as the Group's self-developed centralized data platform for IoT solutions, providing infrastructure functions for upper-layer applications[146](index=146&type=chunk) - **Share Option Scheme** refers to the share option scheme adopted by the company on November 11, 2022[146](index=146&type=chunk) - **Share Award Scheme** refers to the Howkingtech Share Award Scheme adopted by the company on May 16, 2023[146](index=146&type=chunk)

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]