Financial Performance - In 2023, FOLANGSI CO., LTD reported a revenue of RMB 1,371,805,000, representing an increase of 14.9% compared to RMB 1,194,209,000 in 2022[6]. - The gross profit for 2023 was RMB 417,399,000, which is a 15.4% increase from RMB 361,664,000 in the previous year[6]. - Profit for the year decreased to RMB 31,220,000 in 2023, down from RMB 35,401,000 in 2022, reflecting a decline of 11.5%[6]. - Basic and diluted earnings per share for 2023 were RMB 0.09, a decrease from RMB 0.11 in 2022[6]. - The company achieved double-digit growth in performance for the entire year of 2023, with the intralogistics equipment fleet exceeding 45,000 units as of December 31, 2023[11]. - In 2023, the revenue from intralogistics equipment subscription services was RMB 766,811,000, representing a year-on-year increase of 3.9%[37]. - Maintenance and repair services generated revenue of RMB 185,818,000, reflecting a significant year-on-year growth of 31.8%[37]. - Sales of intralogistics equipment and parts amounted to RMB 419,176,000, with a year-on-year increase of 33.0%[37]. - The Group's total share capital as of December 31, 2023, was RMB87,005,704, divided into 348,022,816 shares with a par value of RMB0.25 each[104]. Assets and Liabilities - Non-current assets increased to RMB 2,301,269,000 in 2023, up from RMB 2,026,436,000 in 2022, indicating a growth of 13.5%[7]. - Current assets rose to RMB 846,502,000 in 2023, compared to RMB 636,054,000 in 2022, marking a significant increase of 33.0%[7]. - Current liabilities increased to RMB 1,117,290,000 in 2023, up from RMB 903,435,000 in 2022, reflecting a rise of 23.7%[7]. - The Group's current ratio improved to 0.76 as of December 31, 2023, compared to 0.70 as of December 31, 2022[47]. - The Group's cash and cash equivalents increased to approximately RMB200.8 million as of December 31, 2023, up from RMB120.6 million as of December 31, 2022[47]. - The Group's bank and other borrowings amounted to approximately RMB1,582.9 million as of December 31, 2023, compared to RMB1,367.2 million in 2022, reflecting a rise of approximately 15.7%[63]. Market and Growth Potential - The intralogistics equipment solution market in China is expected to grow to RMB34.9 billion by 2027, driven by the development of manufacturing and logistics industries[20]. - The penetration rate of intralogistics equipment solutions in China was approximately 3.7% in 2022 and is projected to increase to 5.9% by 2027, indicating significant growth potential[19]. - The logistics and manufacturing industries in China are expected to see the added value increase to RMB47.4 trillion and the total cost of social logistics to RMB22.9 trillion by 2027[20]. - Intralogistics equipment solutions can help enterprises reduce operating costs by approximately 20% throughout the equipment's lifecycle compared to traditional procurement methods[20]. Strategic Initiatives - The company aims to leverage its recent listing to drive future growth and technological innovation[9]. - The company plans to expand its offline service network to 1,000 service outlets by 2024 through organic growth, mergers and acquisitions, and partnerships[13]. - The company aims to diversify its service offerings by expanding subscription services for other intralogistics and industrial equipment, in addition to forklifts[15]. - The company emphasizes improving asset utilization and saving social resources as part of its mission, advocating for sustainable development and a sharing economy[16]. - The company aims to optimize the supply, allocation, and full lifecycle management of assets to enhance efficiency and quality in the intralogistics sector[28]. Corporate Governance and Management - The Company has adopted the CG Code as its own code of corporate governance and has complied with all applicable principles since the Listing Date[149]. - The Board consists of nine Directors, including four executive Directors, two non-executive Directors, and three independent non-executive Directors[180]. - The Company has established both the Audit Committee and Remuneration Committee in compliance with the Listing Rules[195]. - The Company has received confirmations of independence from all independent non-executive Directors, confirming their independence as per Listing Rules[118]. - The Company has maintained compliance with the CG Code, ensuring the appointment of at least three independent non-executive directors, representing not less than one-third of the Board[188]. Employee and Labor Relations - As of December 31, 2023, the Group had 1,733 full-time employees, an increase from 1,622 employees as of December 31, 2022, representing a growth of approximately 6.8%[58]. - Total employee benefit expenses for the year ended December 31, 2023, were RMB222.6 million, up from RMB215.1 million in 2022, indicating an increase of about 3.5%[58]. - The Group did not experience any strikes or labor disputes during the reporting period, indicating stable employee relations[59]. - The Group is committed to equal employment opportunities and employee diversity, ensuring no discrimination based on various factors[59]. Risks and Compliance - Major risks include the demand for services in China and potential adverse effects from economic slowdowns[109]. - The company has complied with all relevant laws and regulations relating to environmental protection during its operations[112]. - There were no material breaches or non-compliance with applicable laws and regulations during the reporting period[112]. - The company may face adverse effects from sales made to customers in countries subject to sanctions administered by the U.S., EU, UN, Australia, and other relevant authorities[110]. Use of Proceeds and Future Plans - The net proceeds from the Global Offering amounted to approximately HK$116.3 million, with no utilization as of December 31, 2023[140]. - The company plans to utilize approximately HK$52.3 million (45% of the GO Net Proceeds) to enhance service capabilities and expand intralogistics equipment categories by the end of 2025[145]. - The expected timetable for the unutilized GO Net Proceeds is set for completion by the end of 2025[143]. - The overall strategy is designed to ensure better business performance and align with shareholder interests[148].

Investment Rating - The report maintains an "Outperform" rating for the company [3][7]. Core Insights - The company has achieved a stable increase in revenue and a doubling of net profit in 2023, with a revenue of RMB 1.372 billion, representing a year-on-year growth of 14.9% [4][12]. - The company is transitioning from a heavy asset equipment operation model to a light asset intelligent operation platform, marked by the introduction of an entrusted asset management model [4][12]. - The net profit for 2023 was RMB 31 million, with an adjusted net profit of RMB 70.4 million, reflecting a year-on-year growth of 98.9% [4][12]. Financial Performance - Revenue projections for 2024-2026 are RMB 1.673 billion (-1.8%), RMB 2.118 billion (-3.5%), and RMB 2.718 billion, respectively [7][12]. - Net profit estimates for the same period are RMB 118 million (+9.3%), RMB 194 million (+11.5%), and RMB 302 million [7][12]. - The company's gross profit margin for 2023 was 30.4%, slightly higher than in 2022 [4][12]. Business Model Transformation - The entrusted asset management model allows the company to manage equipment without owning it, reducing fixed assets and liabilities over time [6][12]. - The company is also implementing a "Partner Empowerment" plan to enhance collaboration with smaller peers, aiming to maximize asset utilization and operational efficiency [6][12]. - The report highlights the potential for significant growth in the light asset operation model, with expectations for improved gross and net profit margins as well as balance sheet enhancements [6][12].

Financial Performance - The company's revenue increased by 14.9% from approximately RMB 1,194.2 million for the year ended December 31, 2022, to approximately RMB 1,371.8 million for the year ended December 31, 2023[2]. - Net profit decreased by 11.9% from approximately RMB 35.4 million for the year ended December 31, 2022, to approximately RMB 31.2 million for the year ended December 31, 2023[2]. - Adjusted net profit surged by 98.9% from approximately RMB 35.4 million for the year ended December 31, 2022, to approximately RMB 70.4 million for the year ended December 31, 2023[2]. - Gross profit increased by 15.4% from approximately RMB 361.7 million in 2022 to approximately RMB 417.4 million in 2023, with a stable overall gross margin[15]. - The group’s annual profit decreased by 11.9% from approximately RMB 354 million for the year ended December 31, 2022, to approximately RMB 312 million for the year ended December 31, 2023[21]. - The adjusted net profit for the year ended December 31, 2023, was approximately RMB 704 million, an increase of 98.9% compared to approximately RMB 354 million for the year ended December 31, 2022, primarily due to business expansion and increased operational capacity[22]. - Total revenue for the year ended December 31, 2023, was RMB 1,371,805 thousand, an increase from RMB 1,194,209 thousand in 2022, representing a growth of approximately 14.9%[33]. - Total pre-tax profit for 2023 was RMB 30,633,000, down from RMB 35,421,000 in 2022, reflecting a decrease of 13.5%[56]. - The company reported a net profit attributable to ordinary shareholders of RMB 31,220,000 for 2023, compared to RMB 35,401,000 in 2022, indicating a decline of 11.5%[58]. Revenue Breakdown - Revenue from in-house logistics equipment subscription services rose by 3.9% to approximately RMB 766.8 million, driven by business expansion and increased equipment usage[12]. - Maintenance and repair service revenue surged by 31.8% to approximately RMB 185.8 million, attributed to the success of the "Repair and Maintenance Plan" and expanded service coverage[12]. - Sales revenue of in-house logistics equipment and accessories grew by 33.0% to approximately RMB 419.2 million, due to new customer acquisitions in domestic and international markets[13]. - Customer contract revenue totaled RMB 778,651 thousand in 2023, up 25.7% from RMB 619,482 thousand in 2022[48]. - Revenue from in-house logistics equipment subscription services was RMB 766,811 thousand, compared to RMB 738,001 thousand in 2022, reflecting a growth of 3.5%[47]. - Revenue from maintenance services increased to RMB 185,818 thousand in 2023, up 31.7% from RMB 140,987 thousand in 2022[48]. Market and Growth Potential - The penetration rate of in-house logistics equipment solutions in China is expected to grow from approximately 3.7% in 2022 to 5.9% by 2027, indicating significant market growth potential[3]. - The in-house logistics equipment solutions market in China is projected to reach RMB 34.9 billion by 2027, driven by the rapid development of the manufacturing and logistics industries[3]. - The company aims to expand its offline service network to 1,000 service points by 2024 through organic growth, mergers, and partnerships[10]. - The company aims to optimize asset supply and lifecycle management to drive efficiency and quality improvements in the logistics equipment sector[7]. - The company is investing in the development of a smart asset operation management system to enhance operational efficiency and customer experience[8]. Financial Position and Assets - Current assets as of December 31, 2023, were approximately RMB 846.5 million, a 33.1% increase from approximately RMB 636.1 million as of December 31, 2022, mainly due to funds raised from a successful IPO[23]. - Current liabilities increased by 23.7% to approximately RMB 1,117.3 million as of December 31, 2023, compared to approximately RMB 903.4 million as of December 31, 2022, driven by increased bank and other borrowings to support business development[23]. - Cash and cash equivalents as of December 31, 2023, were approximately RMB 200.8 million, up from RMB 120.6 million as of December 31, 2022, primarily from funds raised during the IPO and operational income[23]. - The group has pledged assets of approximately RMB 418.8 million as collateral for bank loans or other financing activities, an increase of 32.2% from approximately RMB 316.8 million as of December 31, 2022[25]. - Total non-current assets increased to RMB 2,301.3 million in 2023 from RMB 2,026.4 million in 2022, representing a growth of approximately 13.5%[34]. - Net assets increased to RMB 1,076.8 million in 2023 from RMB 899.5 million in 2022, reflecting a growth of around 19.7%[34]. - The company reported a significant increase in cash and cash equivalents, which rose to RMB 200.8 million in 2023 from RMB 120.6 million in 2022, an increase of approximately 66.5%[34]. Expenses and Liabilities - Management expenses rose by 8.0% to approximately RMB 169.5 million, mainly due to an expanded management team and increased costs from a new remanufacturing facility[17]. - Other expenses increased significantly by 1,514.3% to approximately RMB 45.2 million, primarily due to listing costs[18]. - Financial expenses rose by 1.8% to approximately RMB 85.1 million, driven by interest from new bank loans and borrowings to support business development[19]. - The total liabilities, including current and non-current, reached RMB 1,582,858,000 in 2023, compared to RMB 1,367,187,000 in 2022, which is an increase of about 15.7%[64]. Corporate Governance and Listing - The company successfully listed on the main board of the Hong Kong Stock Exchange on November 10, 2023, enhancing its capital resources for future growth[5]. - The company has committed to high standards of corporate governance to protect shareholder interests, adhering to the corporate governance code since its listing[69]. - The company is committed to adhering to corporate governance codes as per the listing rules[79]. - The independent auditor confirmed that the preliminary financial results align with the consolidated financial statements for the year ending December 31, 2023[75]. Future Plans and Investments - The company plans to allocate approximately HKD 52.3 million (45% of net proceeds) to enhance service capabilities and expand logistics equipment categories by 2025[29]. - An investment of about HKD 23.3 million (20% of net proceeds) is intended for upgrading supply chain infrastructure, including new bases in Jiangsu, Hubei, Liaoning, and Sichuan by 2025[29]. - The company aims to invest around HKD 17.4 million (15% of net proceeds) to improve technical capabilities and infrastructure by 2025[29]. - The company will continue to evaluate the proposed uses of net proceeds and may revise them as necessary to adapt to changing market conditions[30].