Stock Options and Share Awards - The company has not granted any new stock options during the reporting period[5]. - The stock option exercise price is determined based on the highest of three values, with the share price on the grant date being HKD 6.33[8]. - The maximum number of restricted shares that can be awarded under the share award plan is capped at 5% of the total issued shares as of June 8, 2020, which amounts to 20,000,000 shares[11]. - The remaining duration of the share award plan as of December 31, 2023, is approximately six years and five months[14]. - The stock options granted to employees are subject to performance conditions, including financial performance targets and individual key performance indicators[6]. - The company aims to retain existing employees and recruit additional staff through the stock option and share award plans[3]. Employee Recruitment and Retention - The company has not experienced any significant issues with employee recruitment or retention during the reporting period[2]. - The company has not encountered any labor disputes that would disrupt operations during the reporting period[2]. Revenue and Customer Concentration - The company generated revenue from its top five customers, accounting for 43.8% of total revenue, with the largest customer contributing 12.1%[28]. Shareholder and Ownership Structure - The company holds 104,000,000 shares, representing approximately 15.74% of total shares, owned by Treasure Tree Asia Holdings Co. LTD[24]. - The company’s major shareholders include individuals and entities with significant stakes, such as 10.59% held by Wang Donglin and related entities[24]. Financial Performance and Proceeds - The net proceeds from the share issuance in December 2019 amounted to approximately HKD 104.0 million after deducting listing expenses[29]. - The company plans to extend the timeline for utilizing the remaining net proceeds of approximately HKD 3.5 million for the development of a financial AI laboratory and office facilities until March 31, 2024[30]. Corporate Governance - The company’s board of directors has been restructured to comply with listing rules, ensuring at least three independent non-executive directors are present[37]. - The company has adopted corporate governance standards to maintain shareholder interests and enhance corporate value[65]. - The board believes that good corporate governance standards are crucial for maintaining transparency and accountability[65]. - The company has adopted the standard code of conduct for securities trading as per the listing rules[38]. - The board consists of 11% female members and 89% male members as of the report date, with a target of 22% female representation by December 31, 2023[121]. Audit and Compliance - The company’s audit committee has reviewed the annual performance and financial statements, confirming compliance with applicable accounting standards[32]. - The audit committee currently consists of three independent non-executive directors, with Mr. Yang Haifeng serving as the chairman[53]. - The audit committee held three meetings during the reporting period to review financial performance and compliance matters[80]. - The company incurred audit service fees of HKD 1,880,000 and non-audit service fees of HKD 250,000, totaling HKD 2,130,000[128]. - The company has a robust internal audit function that evaluates the effectiveness of risk management and internal control systems at least annually[124]. - The board reviewed the effectiveness of the internal control and risk management systems, confirming their adequacy throughout the reporting period[125]. ESG Strategies and Reporting - The board is responsible for the overall governance of the company's ESG strategies and risk management, regularly reviewing performance and objectives[141]. - The ESG report details the company's efforts and achievements in sustainable development and social responsibility, highlighting its commitment to environmental and social policies[168]. - The company reported direct emissions of 19.3 tons from vehicle fuel consumption for the year ending December 31, 2023[191]. - Indirect emissions included 0.9 tons from paper usage and 55.8 tons from business travel by air[192]. - The company aims to integrate ESG factors into decision-making processes and daily operations[169]. - The ESG working group meets regularly to discuss and review ESG-related issues, including policies and performance[170]. Communication and Stakeholder Engagement - The company has established a shareholder communication policy to ensure effective engagement with stakeholders and to address their concerns appropriately[139]. - The company emphasizes the importance of effective communication with shareholders to enhance investor relations and understanding of business performance and strategies[165]. Board Diversity and Composition - The company has adopted a board diversity policy aimed at achieving a balance in skills, experience, and perspectives among board members[91]. - The nomination committee reviews the board diversity policy to ensure its effectiveness[95]. - The company has established measurable goals to implement its board diversity policy and will review these goals periodically[120]. - The company has a total workforce of 140 females and 368 males, resulting in a gender distribution of 28% female and 72% male[121]. Significant Events and Changes - The board of directors has undergone significant changes, with new appointments including Mr. Xue Shouguang as Chairman and CEO, and Ms. Zhao Yiqing as a director, both appointed on July 18, 2023[133]. - The company held two shareholder meetings during the reporting period, including the annual general meeting on May 25, 2023, and a special meeting on October 24, 2023[159]. - There were no significant events affecting the group after December 31, 2023, and up to the date of this report[60].

Financial Performance - The company's revenue for the year ended December 31, 2023, was approximately RMB 367,945,000, a decrease of about 2.4% or RMB 9,181,000 compared to 2022[3]. - The gross profit for the reporting period was approximately RMB 47,127,000, a decrease of about 47.2% compared to 2022, with a gross margin of approximately 12.8%, down 10.9% from 23.7% in 2022[4]. - The net loss for the reporting period was approximately RMB 109,009,000, a reduction of about 12.1% compared to a net loss of RMB 124,022,000 in 2022[4]. - Basic and diluted loss per share for the reporting period was approximately RMB 0.188, compared to RMB 0.309 in 2022, representing a 39% reduction in loss per share[11]. - The company reported a total revenue of RMB 367,945,000 for the year ended December 31, 2023, a decrease of approximately 2.4% or RMB 9,181,000 compared to 2022[151]. - The net loss for the year was RMB 109,009 million, compared to a loss of RMB 124,022 million in 2022[66]. Revenue Breakdown - The integrated service revenue from hardware and software sales increased by approximately 85.7% or RMB 66,739,000 during the reporting period[3]. - Data solutions revenue decreased by approximately 37.6% or RMB 100,574,000, while IT maintenance and support service revenue fell by approximately 46.2% or RMB 14,598,000[4]. - Revenue from integrated software and hardware sales and related services increased by approximately 85.7% or RMB 66,739,000 during the reporting period[153]. - Revenue from data solutions decreased by approximately 37.6% or RMB 100,574,000 due to tightening IT and marketing budgets among large financial institutions[153]. Operational Efficiency and Cost Management - The company has implemented a management restructuring and adopted an Amiba business management model, resulting in significant operational cost reductions[11]. - Human resources costs averaged approximately RMB 16.88 million per month from January to September 2023, decreasing to approximately RMB 12 million per month from October to December, a reduction of 29% year-on-year[11]. - The company aims to enhance operational efficiency through continuous cost reduction and efficiency improvement strategies[14]. - Administrative expenses were approximately RMB 55,597,000, a decrease of about RMB 44,009,000, primarily due to reduced share-based payment expenses and optimized management team costs[158]. Strategic Initiatives and Future Outlook - The company plans to leverage its advantages in big data and AI technology to explore new business models and enhance data asset applications in various industries[6]. - The company aims to strengthen its core competitive advantages through deep collaboration with ecosystem partners and enhance its data technology capabilities[6]. - The company plans to expand into overseas markets, particularly in Southeast Asia, to seek new growth opportunities[59]. - The outlook for 2024 indicates strong demand for digital transformation and innovation in the context of national policies supporting technology and data asset management[52]. Market Position and Recognition - The group has been recognized as a "Little Giant" enterprise with national-level specialized qualifications and ranked first in the banking industry's smart marketing solutions market by IDC[13]. - The company holds the number one market share in the "Intelligent Marketing Solutions Market" according to IDC's report on the Chinese banking IT solutions market[27]. - The company has achieved CMMI Level 5 certification, indicating its software development processes meet the highest global standards[34]. Research and Development - The company continues to enhance its core products, including intelligent marketing and big data applications, to meet customer needs and improve user experience[34]. - The company will continue to invest in R&D for data analysis and intelligent marketing solutions to enhance its competitive edge[60]. Financial Position and Assets - The total equity increased to RMB 117.307 million in 2023 from RMB 103.513 million in 2022[73]. - The company's total assets increased to RMB 444,148,000 in 2023 from RMB 410,883,000 in 2022, representing a growth of approximately 8.1%[74]. - Current assets rose significantly to RMB 302,629,000 in 2023, compared to RMB 236,420,000 in 2022, marking an increase of about 27.9%[74]. - The total liabilities increased to RMB 326,841,000 in 2023 from RMB 307,370,000 in 2022, reflecting a rise of approximately 6.4%[80]. Credit and Receivables Management - The company has identified a credit risk provision of RMB 32,095,000 for contract assets, compared to RMB 18,932,000 in 2022, reflecting an increase of approximately 69.5%[89]. - The expected credit loss provision for trade receivables and notes receivable increased to RMB 62,311 thousand as of December 31, 2023, compared to RMB 47,660 thousand in 2022, reflecting a rise of 30.7%[99]. - The total trade receivables and notes receivable as of December 31, 2023, amounted to RMB 166,596 thousand, an increase from RMB 129,982 thousand in 2022, representing a growth of approximately 28.1%[98]. Corporate Governance and Compliance - The company has adopted the corporate governance code as a basis for its governance practices and has complied with the relevant rules during the reporting period[191]. - The audit committee, consisting of independent non-executive directors, has reviewed the group's annual performance and audited consolidated financial statements[200]. - The audit committee confirmed that the consolidated financial statements fairly present the group's financial position and performance during the reporting period[200].

Financial Performance - The company's revenue for the six months ended June 30, 2023, was approximately RMB 121.13 million, a decrease of about 29.7% or RMB 51.11 million compared to the same period in 2022[75]. - Gross profit for the same period was approximately RMB 25.30 million, down about 41.7% due to reduced market orders and intensified competition[75]. - The net loss for the period was approximately RMB 63.18 million, an increase of about 68.5% compared to the previous year, primarily due to tightened IT budgets and increased competition[75]. - Basic and diluted loss per share for the period was approximately RMB 12.40, compared to RMB 9.12 and RMB 9.14 for the same period in 2022[76]. - Total revenue for the period was approximately RMB 121,126,000, a decrease of about 29.7% or RMB 51,112,000 compared to the first half of 2022[153]. - Revenue from data solution services was approximately RMB 88,885,000, accounting for about 73.3% of total revenue, down approximately 32.2% or RMB 42,251,000 from the previous year[153]. - The company's gross profit margin declined due to reduced market orders and increased competition, leading to a gross profit decrease of approximately RMB 18,130,000 compared to the first half of 2022[154][158]. Cash Flow and Financing - Cash outflow from operating activities was approximately RMB 51,588,000, a decrease of about RMB 27,144,000 compared to the first half of 2022[159]. - Cash inflow from financing activities was approximately RMB 106,448,000, slightly down from RMB 110,410,000 in the previous year[160]. - The company has entered into a loan agreement with an independent third party for a principal amount of RMB 20,000,000 at an annual interest rate of 6%, to be repaid by the end of September 2023[30]. - The company is exploring multiple financing channels to optimize its shareholder structure and ensure a smooth cash flow[134]. - As of June 30, 2023, the company's debt-to-equity ratio was approximately 82.7%, down from 143.6% as of December 31, 2022, primarily due to a reduction in bank and other borrowings by approximately RMB 13,342,000 and an increase in total equity by approximately RMB 60,147,000[183]. Share Capital and Equity - The company issued 193,800,000 new shares on January 15, 2023, raising approximately RMB 30,384,000, and an additional 143,000,000 shares on June 29, 2023, raising approximately RMB 100,779,000[12]. - The company’s issued and fully paid ordinary shares increased to 660,868,036 as of June 30, 2023, from 467,068,036 as of January 1, 2023, marking an increase of approximately 41.4%[11]. - The company authorized a total of 38,143,167 share options under its share option and incentive plans as of June 30, 2023[179]. - The potential number of shares to be issued under the share option plan for the six months ended June 30, 2023, was 0.1% of the weighted average number of shares issued during that period[180]. - The company aims to retain existing employees and attract new talent through its share option and incentive plans, which were adopted at the annual general meeting on June 8, 2020[178]. Assets and Liabilities - As of June 30, 2023, trade receivables amounted to RMB 50,135,000, an increase from RMB 36,323,000 as of December 31, 2022, representing a growth of approximately 38.1%[3]. - Trade payables decreased to RMB 38,722,000 as of June 30, 2023, from RMB 74,320,000 as of December 31, 2022, reflecting a reduction of approximately 47.9%[14]. - The company’s total liabilities related to accrued expenses and other payables decreased to RMB 39,480,000 as of June 30, 2023, from RMB 70,360,000 as of December 31, 2022, a decline of approximately 43.9%[15]. - The company’s other receivables rose to RMB 4,518,000 as of June 30, 2023, compared to RMB 1,728,000 as of December 31, 2022, representing an increase of approximately 161.5%[9]. - The company had short-term bank borrowings of approximately RMB 59,214,000 and other short-term borrowings of RMB 25,297,000 as of June 30, 2023[144]. Research and Development - Research and development expenses increased by approximately 4.4% to RMB 22,934,000, representing about 18.9% of total revenue, compared to 12.8% in the previous year[156]. - The company aims to leverage AI big data technology to expand its product offerings and solutions, aiming to capture opportunities in domestic substitution and digital transformation[118]. - The company is focused on expanding its market presence and enhancing collaboration with clients, leading to steady business growth in the first half of 2023[42]. - The company aims to strengthen its core competitiveness in AI big data product development, increasing investment in R&D and enhancing the application of AI large model technology[45]. Market Position and Strategy - The company is positioned as the "first financial AI stock in the Hong Kong market," focusing on providing domestic alternatives in big data, AI, and digital marketing solutions[84]. - The company has established a deep collaboration with Huawei to launch an intelligent marketing label platform solution, enhancing its capabilities in the financial technology sector[49]. - The company has become one of the first ecosystem partners of Baidu's "Wenxin Yiyan," integrating advanced AI dialogue technology into its financial technology applications[49]. - The company anticipates significant market opportunities in the "Xin Chuang" (information technology application innovation) sector, with projections indicating the market could exceed RMB 2 trillion by 2025[84]. - The company is adapting its business strategy in response to global economic trends and competitive pressures, including asset impairments totaling approximately RMB 17.80 million[75]. Employee and Talent Management - The company had a total of 688 employees in mainland China and Hong Kong as of June 30, 2023, providing competitive compensation and training programs[176]. - The company aims to optimize its talent structure by attracting high-end professionals and enhancing the training of technical personnel[134]. - The company has a strong talent pool and solid customer base, which has fostered continuous trust and business cooperation from clients[89]. - The company has not experienced any significant labor disputes or operational disruptions during the reporting period, indicating stable employee relations[195]. Innovation and Technology - The company has accumulated 35 national invention patents and 145 software copyright certificates as of June 30, 2023, indicating strong innovation capabilities[103]. - The company has established a comprehensive technology and service system from data platform to data operation, enhancing its solution service capabilities[92]. - The company focuses on AI big data and digital transformation, leveraging its technical advantages in customer analysis and smart marketing[91]. - The company has launched high-quality products and solutions to support the development of the digital economy and the Xinchuang industry[89]. - The company has partnered with major cloud service providers like Huawei Cloud and Alibaba Cloud to provide digital transformation solutions across various industries[100].

Performance Summary [Performance Summary](index=1&type=section&id=%E6%A5%AD%E7%B8%BE%E6%A6%82%E8%A6%81) In the first half of 2023, the company faced performance challenges, with total revenue decreasing by 29.7% year-on-year and net loss widening by 68.5%, primarily due to tightened IT budgets from financial institutions, increased market competition, and significant asset impairment provisions Key Performance Indicators for H1 2023 | Indicator | H1 2023 | H1 2022 | YoY Change | | :--- | :--- | :--- | :--- | | Revenue (RMB million) | Approx. 121.0 | Approx. 172.0 | -29.7% | | Gross Profit (RMB million) | Approx. 25.3 | Approx. 43.43 | -41.7% | | Net Loss (RMB million) | Approx. 63.18 | Approx. 37.48 | +68.5% | | Basic Loss Per Share (RMB cents) | 12.40 | 9.12 | - | | Diluted Loss Per Share (RMB cents) | 12.40 | 9.14 | - | - The performance decline was primarily due to: (1) tightened IT and marketing budgets from financial institutions and increased market competition leading to lower gross profit; (2) asset impairment of approximately **RMB 17.8 million** on property, equipment, intangible assets, and right-of-use assets due to business strategy adjustments; and (3) impairment provisions of approximately **RMB 9.92 million** for financial and contract assets[13](index=13&type=chunk) Financial Statements [Interim Condensed Consolidated Statement of Comprehensive Income](index=2&type=section&id=%E4%B8%AD%E6%9C%9F%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E5%85%A8%E9%9D%A2%E6%94%B6%E7%9B%8A%E8%A1%A8) During the reporting period, the company recorded total revenue of **RMB 121.13 million**, a 29.7% year-on-year decrease, with operating loss expanding to **RMB 60.74 million** and net loss for the period significantly increasing to **RMB 63.18 million** Consolidated Statement of Comprehensive Income for H1 2023 (RMB in thousands) | Item | H1 2023 (Unaudited) | H1 2022 (Unaudited) | | :--- | :--- | :--- | | Revenue | 121,126 | 172,238 | | Gross Profit | 25,302 | 43,432 | | Operating Loss | (60,742) | (32,223) | | Loss Before Income Tax | (64,628) | (37,555) | | Loss for the Period | (63,176) | (37,484) | | Loss Attributable to Owners of the Company | (62,141) | (36,765) | [Interim Condensed Consolidated Statement of Financial Position](index=4&type=section&id=%E4%B8%AD%E6%9C%9F%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E7%8B%80%E6%B3%81%E8%A1%A8) As of June 30, 2023, total assets decreased to **RMB 387.15 million**, total liabilities reduced to **RMB 223.49 million**, and total equity increased to **RMB 163.66 million**, with net current assets improving from negative to positive Key Items from Statement of Financial Position (RMB in thousands) | Item | June 30, 2023 (Unaudited) | December 31, 2022 (Audited) | | :--- | :--- | :--- | | **Assets** | | | | Non-current Assets | 140,315 | 174,463 | | Current Assets | 246,831 | 236,420 | | **Total Assets** | **387,146** | **410,883** | | **Liabilities and Equity** | | | | Non-current Liabilities | 14,214 | 7,706 | | Current Liabilities | 209,272 | 299,664 | | **Total Liabilities** | **223,486** | **307,370** | | **Total Equity** | **163,660** | **103,513** | | Net Current Assets | 37,559 | (63,244) | [Notes to the Financial Statements](index=6&type=section&id=%E4%B8%AD%E6%9C%9F%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E5%A0%B1%E8%A1%A8%E9%99%84%E8%A8%BB) The notes detail accounting policies, account breakdowns, and changes, including revenue by business line, significant asset impairment, increased expected credit loss provisions for trade and contract assets, and the composition and collateral of bank borrowings [Note 4: Revenue and Segment Information](index=7&type=section&id=4%20%E6%94%B6%E7%9B%8A%E5%8F%8A%E5%88%86%E9%83%A8%E8%B3%87%E6%96%99) The company operates as a single segment, with total revenue of **RMB 121.13 million** in H1 2023, entirely from mainland China, where data solutions, the primary revenue source, decreased by 32.2% Revenue by Business Segment (RMB in thousands) | Business Segment | H1 2023 | H1 2022 | | :--- | :--- | :--- | | Data Solutions | 88,885 | 131,136 | | Sales of Software, Hardware and Related Services | 21,771 | 24,589 | | IT Maintenance and Support Services | 10,470 | 16,513 | | **Total** | **121,126** | **172,238** | [Note 9: Property, Equipment, Intangible Assets and Right-of-Use Assets](index=11&type=section&id=9%20%E7%89%A9%E6%A5%AD%E5%8F%8A%E8%A8%AD%E5%82%99%E3%80%81%E7%84%A1%E5%BD%A2%E8%B3%87%E7%94%A2%E5%8F%8A%E4%BD%BF%E7%94%A8%E6%AC%8A%E8%B3%87%E7%94%A2) Due to deteriorating performance of certain cash-generating units, the company recognized a total impairment loss of **RMB 17.8 million** in H1 2023, including **RMB 12 million** for intangible assets, **RMB 3.1 million** for property and equipment, and **RMB 2.7 million** for right-of-use assets Asset Impairment Losses for H1 2023 (RMB in thousands) | Asset Category | Impairment Loss | | :--- | :--- | | Property and Equipment | 3,100 | | Intangible Assets | 12,000 | | Right-of-Use Assets | 2,700 | | **Total** | **17,800** | [Note 10: Trade Receivables](index=12&type=section&id=10%20%E8%B2%BF%E6%98%93%E6%87%89%E6%94%B6%E6%AC%BE%E9%A0%85) As of June 30, 2023, net trade receivables decreased to **RMB 67.54 million** from **RMB 82.32 million** at the beginning of the period, while the allowance for expected credit losses increased to **RMB 51.43 million**, indicating higher collection risk Trade Receivables and Provisions (RMB in thousands) | Item | June 30, 2023 | December 31, 2022 | | :--- | :--- | :--- | | Gross Trade Receivables | 118,970 | 129,982 | | Less: Provisions | (51,429) | (47,660) | | **Net Carrying Amount** | **67,541** | **82,322** | [Note 13: Bank and Other Borrowings](index=14&type=section&id=13%20%E9%8A%80%E8%A1%8C%E5%8F%8A%E5%85%B6%E4%BB%96%E5%80%9F%E8%B2%B8) As of June 30, 2023, total bank and other borrowings increased to **RMB 94.51 million**, with **RMB 84.51 million** being current, primarily secured by company properties, trade receivables, pledged deposits, and director guarantees Composition of Bank and Other Borrowings (RMB in thousands) | Category | June 30, 2023 | December 31, 2022 | | :--- | :--- | :--- | | Non-current | 10,000 | 2,461 | | Current | 84,511 | 79,130 | | **Total** | **94,511** | **81,591** | - Bank financing is supported by various asset pledges and personal guarantees, including properties (approx. **RMB 9.76 million**), trade receivables from specific customers (approx. **RMB 50.14 million**), pledged bank deposits (approx. **RMB 1.01 million**), and personal guarantees from directors and related parties[68](index=68&type=chunk)[91](index=91&type=chunk) Management Discussion and Analysis [Industry Background Analysis](index=18&type=section&id=%E4%B8%80%E3%80%81%20%E8%A1%8C%E6%A5%AD%E8%83%8C%E6%99%AF%E5%88%86%E6%9E%90) In H1 2023, supportive government policies for data, AI, and Xinchuang (IT Application Innovation) development, particularly in finance and government sectors, created a favorable macro environment and significant opportunities for the company - The Chinese government issued the 'Overall Layout Plan for Building a Digital China,' promoting deep integration of digital technology with the real economy and establishing the National Data Bureau to coordinate data resource development and utilization, providing top-level design support for industry growth[130](index=130&type=chunk) - The Xinchuang (Information Technology Application Innovation) industry received favorable policies, with the State-owned Assets Supervision and Administration Commission requiring **100%** Xinchuang replacement by state-owned enterprises by **2027**, significantly boosting market potential[131](index=131&type=chunk) - Cities like Beijing, Shanghai, and Shenzhen introduced policies to accelerate AI scenario development and 'AI+Industries' applications, creating market opportunities for the company's AI solutions in sectors such as finance[75](index=75&type=chunk) [H1 2023 Performance Review](index=20&type=section&id=%E4%BA%8C%E3%80%81%20%E4%BA%8C%E9%9B%B6%E4%BA%8C%E4%B8%89%E5%B9%B4%E4%B8%8A%E5%8D%8A%E5%B9%B4%E6%A5%AD%E7%B8%BE%E5%9B%9E%E9%A1%A7) Despite a challenging market, the company expanded its client base, maintained **100%** client retention, enhanced R&D with **35** patents and **145** software copyrights, and strengthened its Xinchuang competitiveness through strategic partnerships with industry leaders - Market Expansion: Added a new state-owned large bank client, secured a traffic operation model project with a national joint-stock bank, and maintained a **100%** renewal rate with key clients[134](index=134&type=chunk)[135](index=135&type=chunk) - Independent Innovation: Accumulated **35** national invention patents and **145** computer software copyrights, with a subsidiary recognized as a national 'Little Giant' enterprise specializing in niche sectors[104](index=104&type=chunk)[105](index=105&type=chunk) - Ecosystem Collaboration: Jointly launched intelligent marketing solutions with Huawei, became one of the first ecosystem partners for Baidu's 'Wenxin Yiyan,' and collaborated with Kylinsoft and GBase to develop financial Xinchuang solutions[138](index=138&type=chunk)[139](index=139&type=chunk)[108](index=108&type=chunk) [Future Outlook](index=24&type=section&id=%E4%B8%89%E3%80%81%20%E6%9C%AA%E4%BE%86%E5%B1%95%E6%9C%9B) The company plans to capitalize on increased bank IT spending and Xinchuang localization by focusing on AI big data product R&D, expanding solution offerings, securing multi-channel financing, and deepening ecosystem partnerships with tech giants like Huawei and Alibaba - Product R&D: Focus on AI big data products, increase R&D investment, apply AI large model technology, and build technological barriers[112](index=112&type=chunk) - Market Expansion: Seize opportunities from Xinchuang localization and digital transformation, provide integrated software, hardware, and service solutions, and achieve scale expansion[144](index=144&type=chunk) - Financing Development: Plan to optimize shareholder structure and secure funding through multi-channel financing, including external funding and strategic investors[115](index=115&type=chunk) - Ecosystem Collaboration: Continuously strengthen cooperation with tech giants like Huawei and Alibaba to jointly build a diversified ecosystem[116](index=116&type=chunk) [Financial Review](index=26&type=section&id=%E8%B2%A1%E5%8B%99%E5%9B%9E%E9%A1%A7) This section analyzes H1 2023 financial performance, detailing revenue and gross profit declines, changes in operating expenses, the impact of asset impairments on net loss, cash flow stability through financing, and a significant reduction in the gearing ratio [Revenue Analysis](index=26&type=section&id=1.%20%E6%94%B6%E5%85%A5) Revenue for the period was **RMB 121.13 million**, a 29.7% year-on-year decrease, with all business segments declining, notably the core data solutions business by 32.2% due to tightened IT and marketing budgets from financial institutions Revenue by Business Segment and Change (RMB in thousands) | Business Segment | H1 2023 | H1 2022 | YoY Change | | :--- | :--- | :--- | :--- | | Data Solutions | 88,885 | 131,136 | -32.2% | | Sales of Software, Hardware and Related Services | 21,771 | 24,589 | -11.5% | | IT Maintenance and Support Services | 10,470 | 16,513 | -36.6% | | **Total** | **121,126** | **172,238** | **-29.7%** | [Gross Profit and Gross Margin Analysis](index=27&type=section&id=2.%20%E6%AF%9B%E5%88%A9%E5%8F%8A%E6%AF%9B%E5%88%A9%E7%8E%87) Gross profit decreased by 41.7% to **RMB 25.3 million**, with gross margin falling from **25.2%** to **20.9%**, primarily due to fewer market orders and lower margins on newly acquired projects amidst increased competition - Gross profit was approximately **RMB 25.3 million**, a **41.7%** year-on-year decrease[149](index=149&type=chunk) - Gross margin was **20.9%**, compared to **25.2%** in the same period last year[149](index=149&type=chunk) [Loss for the Period Analysis](index=28&type=section&id=7.%20%E6%9C%9F%E5%85%A7%E8%99%A7%E6%90%8D) Net loss for the period increased by 68.5% to approximately **RMB 63.18 million**, mainly driven by a **RMB 18.13 million** decline in gross profit, **RMB 17.8 million** in asset impairment, and **RMB 9.92 million** in financial and contract asset provisions - The increase in loss was primarily due to: (1) a decrease in gross profit of approximately **RMB 18.13 million**; (2) impairment of property, equipment, intangible assets, and right-of-use assets totaling approximately **RMB 17.8 million**; and (3) impairment provisions for financial and contract assets of approximately **RMB 9.92 million**[153](index=153&type=chunk) [Liquidity and Financial Resources](index=29&type=section&id=10.%20%E6%B5%81%E5%8B%95%E8%B3%87%E9%87%91%E5%8F%8A%E8%B2%A1%E6%94%BF%E4%BE%86%E6%BA%90) Net cash outflow from operating activities decreased to **RMB 51.59 million**, while net cash outflow from investing activities significantly reduced, and net cash inflow from financing activities of **RMB 106.45 million**, mainly from share issuance, effectively bolstered the company's liquidity Cash Flow Statement Summary (RMB in thousands) | Item | H1 2023 | H1 2022 | | :--- | :--- | :--- | | Net Cash from Operating Activities | (51,588) | (78,732) | | Net Cash from Investing Activities | (698) | (24,155) | | Net Cash from Financing Activities | 106,448 | 110,410 | [Gearing Ratio](index=30&type=section&id=E.%20%E8%B3%87%E7%94%A2%E8%B2%A0%E5%80%B5%E7%8E%87) The gearing ratio (total borrowings/total equity) significantly decreased from **143.6%** at the end of 2022 to **82.7%** as of June 30, 2023, primarily due to an increase in total equity and a reduction in certain liabilities during the period - As of June 30, 2023, the gearing ratio was approximately **82.7%**, a significant decrease from **143.6%** as of December 31, 2022[186](index=186&type=chunk) Other Information [Remuneration Policy and Employee Benefits](index=33&type=section&id=%E8%96%AA%E9%85%AC%E6%94%BF%E7%AD%96%E5%8F%8A%E5%83%B1%E5%93%A1%E7%A6%8F%E5%88%A9) As of June 30, 2023, the Group had **688** employees and offered competitive remuneration and discretionary bonuses based on performance, maintaining stable labor relations during the reporting period - As of June 30, 2023, the Group had **688** employees in mainland China and Hong Kong[4](index=4&type=chunk) [Use of Net Proceeds from Share Offer](index=34&type=section&id=%E8%82%A1%E4%BB%BD%E7%99%BC%E5%94%AE%E6%89%80%E5%BE%97%E6%AC%BE%E9%A0%8D%E4%B9%8B%E7%94%A8%E9%80%94) The company's 2019 IPO generated approximately **HKD 104 million** in net proceeds, mostly utilized as planned, with **HKD 3.5 million** remaining for AI lab and office facilities, extended for use until June 30, 2024 Use of Net Proceeds (HKD in millions) | Purpose | Allocated Amount | Amount Utilized | Unutilized Amount | | :--- | :--- | :--- | :--- | | Enhance Data Solutions Portfolio | 20.8 | 20.8 | – | | Enhance Sales and Marketing | 20.8 | 20.8 | – | | Develop Financial AI Lab, etc. | 36.4 | 32.9 | 3.5 | | Potential Strategic Acquisitions | 6.6 | 6.6 | – | | Working Capital and Others | 19.4 | 19.4 | – | | **Total** | **104.0** | **100.5** | **3.5** | [Interim Dividend](index=35&type=section&id=%E4%B8%AD%E6%9C%9F%E8%82%A1%E6%81%AF) The Board of Directors does not recommend an interim dividend for the six months ended June 30, 2023, consistent with the prior year - The Board does not recommend an interim dividend for the reporting period (H1 2022: nil)[5](index=5&type=chunk)

Financial Performance - The company's revenue for the reporting period was approximately RMB 377,126,000, a decrease of about 5.1% or approximately RMB 20,246,000 compared to 2021[7]. - The gross profit for the reporting period was approximately RMB 89,339,000, a decrease of about 30.9% compared to the previous year[8]. - The company reported a net loss attributable to owners of approximately RMB 128,192,000 for the reporting period, compared to a loss of approximately RMB 76,238,000 in 2021[13]. - The gross profit margin for the reporting period was approximately 23.7%, down about 8.8% from 32.5% in the previous year[117]. - The company's basic and diluted loss per share for the reporting period was RMB 0.309, compared to RMB 0.190 in the previous year[125]. - The company's financial and contract asset impairment provisions amounted to approximately RMB 24,397,000[119]. - The company incurred share-based payment expenses of approximately RMB 20,536,000 for stock options and reward shares, compared to RMB 5,772,000 in the previous year[118]. Revenue Breakdown - The decline in revenue was primarily due to a strategic optimization of the business structure, leading to a 16.0% decrease in integrated service revenue and a 32.5% decrease in IT maintenance and support service revenue[7]. - The data solution business experienced a growth of approximately 3.8% or about RMB 9,848,000 compared to 2021, despite the ongoing impact of the COVID-19 pandemic[7]. - Revenue from the core data business grew from RMB 166 million in 2019 to RMB 268 million in 2022, representing a compound annual growth rate of 35.9%[133]. - In 2022, the company's total revenue was approximately RMB 377 million, with the core data solutions business contributing about RMB 268 million, a year-on-year increase of 3.8%[139]. - The proportion of revenue from the core data solutions business increased from 64.9% to 71.0% of total revenue[139]. Strategic Initiatives - The company plans to enhance its leadership position in the data intelligence and marketing technology sectors in China through various proactive measures[6]. - The company will focus on developing a smart operations division to explore new customer collaboration models and drive business growth[4]. - The company aims to leverage ecosystem partnerships to expand its influence and customer coverage in the industry[2]. - The company is committed to creating more benchmark cases in the industry and applying successful experiences across various fields and institutions[2]. - The company plans to enhance its research in natural language processing and deep learning through a newly established post-doctoral innovation practice base[127]. - The company is focusing on enhancing its product innovation capabilities and optimizing its product portfolio to support clients' digital transformation[162]. - The company is entering the regulatory technology field with the launch of the "Lingju Panoramic Regulatory Compliance Platform," which has already been implemented in several banks[163]. Challenges and Risks - The company anticipates continued challenges due to the COVID-19 pandemic, which has extended project completion cycles and increased operational costs by approximately RMB 19,611,000[12]. - The company’s financial condition and operating performance may be affected by risks and uncertainties related to its business[30]. - Failure to secure new contracts from existing or new customers could adversely impact the company's operating and financial performance[31]. - The company faced potential quality issues with its solutions and products, which could significantly impact its reputation and customer relationships, negatively affecting revenue and profitability[50]. Capital and Financing - The company issued a total of 30,931,598 shares to 37 general authorized subscribers at a net subscription price of approximately HKD 1.039 per share[35]. - The company believes the subscription will align the interests of subscribers with shareholders and enhance long-term business development[35]. - The company aims to expand its capital base and shareholder base through the subscription[35]. - The company secured a RMB 100 million convertible loan from Financial Street Capital for technology development and market expansion[143]. - The company received an investment of RMB 100 million from Beijing Financial Street Capital Operation Group, aimed at technology R&D, market expansion, and acquiring quality financial big data technology companies[198]. - The company is actively seeking diversified financing channels to strengthen support for future development[198]. Market Position and Recognition - The company was recognized as the top provider in the smart marketing solutions market for the banking sector, with a market share of 32.28%[122]. - The company was recognized as one of the "Top 50 Digital Transformation Pioneers in China's Financial Industry" by CCID Consulting in November 2022[145]. - The company ranked first in the "Intelligent Marketing Solutions" market in China's banking industry, with a market share exceeding that of the next three competitors combined[157]. - The company has established partnerships with over 80% of leading banks and accumulated hundreds of case studies in the financial sector[150]. Operational Efficiency - The company reduced sales expenses by 31.2%, approximately RMB 11.27 million, through optimization of the sales and pre-sales teams[141]. - The company has implemented effective management policies to monitor foreign exchange risks due to its business transactions being primarily denominated in the functional currencies of its entities[84]. - The management closely monitors the liquidity position to ensure that the liquidity structure of its assets, liabilities, and other commitments meets its funding needs[95]. - The company has established a joint data modeling and operation cooperation model with a joint-stock bank to enhance customer operations and promote inclusive financial services[159]. Human Resources - The company emphasizes the importance of talent, implementing a stock incentive plan to attract and retain key personnel, even during challenging times[192]. - As of the reporting period, the proportion of technical personnel in the company reached 88.1%, with data-related personnel accounting for 72.7%[192].

Financial Performance - The company reported a loss of approximately RMB 124,022,000 for the year ended December 31, 2022, compared to a loss of RMB 79,472,000 for the previous year[8]. - The company's revenue for the reporting period was approximately RMB 377,126,000, a decrease of about 5.1% compared to 2021, primarily due to a 16.0% decline in integrated service sales and a 32.5% decrease in IT maintenance and support services[28]. - Gross profit for the reporting period was approximately RMB 89,339,000, a decrease of about 30.9% year-on-year, attributed to increased operational costs and a decline in revenue[28]. - The total comprehensive loss for the year was RMB 122,998,000, compared to a loss of RMB 76,316,000 in the previous year[138]. - The net loss for the reporting period was approximately RMB 124,022,000, compared to a net loss of RMB 75,987,000 in the previous year, representing an increase in loss of 63.1%[163]. Assets and Liabilities - As of December 31, 2022, the company recorded a net current liability of approximately RMB 63,244,000, indicating significant uncertainty regarding its ability to continue as a going concern[8]. - Total liabilities amounted to RMB 307,370,000, with total equity and liabilities at RMB 410,883,000[32]. - The debt-to-asset ratio was approximately 143.6%, an increase from 67.8% in 2021, attributed to an increase in bank and other borrowings by approximately RMB 31,283,000 and financial borrowings by approximately RMB 41,981,000[131]. - The total assets decreased to RMB 410,883,000 from RMB 473,692,000, a reduction of 13.3%[166]. Revenue Breakdown - Revenue from data solutions was RMB 267,589,000, an increase from RMB 257,741,000 in the previous year, while revenue from integrated services decreased to RMB 77,914,000 from RMB 92,783,000[38]. - The proportion of revenue from the core data solution business increased from 64.9% to 71.0% of total revenue[58]. - Revenue from mainland China for the year was RMB 377,126,000, a decrease from RMB 392,412,000 in 2021[149]. Operational Costs - The company reported an increase in operational costs by approximately RMB 19,611,000 due to project completion delays caused by COVID-19 restrictions[77]. - Employee benefits expenses, including director remuneration, increased to RMB 267,880,000 from RMB 243,376,000 in the previous year[41]. - The main reasons for the loss included increased operational costs of approximately RMB 19,611,000 due to COVID-19 restrictions, and share-based payment expenses of approximately RMB 20,536,000, up from RMB 5,772,000 in the previous year[163]. Credit and Receivables - Trade receivables increased from RMB 35,344,000 at the beginning of the year to RMB 47,660,000 at year-end, with expected credit loss provisions rising from RMB 19,332,000 to RMB 12,316,000[22]. - The expected credit loss provision for trade receivables increased to RMB 22.54 million by the end of 2022, compared to RMB 10.46 million at the end of 2021[51]. - The weighted average expected loss rates for trade receivables decreased from 7% to 2% for current receivables from 2021 to 2022, indicating improved credit quality[80]. Investments and Financing - The company expects to raise up to approximately HKD 133,380,000 through the issuance of new shares at a subscription price of HKD 0.76 per share, pending shareholder approval[36]. - The net cash generated from financing activities was approximately RMB 65,273,000, mainly due to share issuance, convertible loans, and financing from banks and other financial institutions[127]. - The company received an investment of RMB 100 million from Beijing Financial Street Capital Operation Group to support technology R&D, market expansion, and acquisitions of quality financial big data technology companies[96]. Strategic Initiatives - The company has established a joint data modeling and operation cooperation model with a joint-stock bank to enhance customer operations and promote inclusive financial services[62]. - The company aims to strengthen its talent structure by attracting high-level professionals and optimizing its composite talent structure to drive development[72]. - The company plans to continue focusing on data intelligence and marketing technology, leveraging its end-to-end data capabilities and rich experience serving top banks[69]. Research and Development - Research and development expenses were approximately RMB 39,580,000, a decrease of about 35.6% or approximately RMB 21,882,000 compared to 2021, accounting for about 10.5% of the revenue[120]. - The company is committed to enhancing its R&D capabilities to deliver high-quality products and solutions[195]. Market Position - The company ranked first in the "Smart Marketing Solutions" market in the Chinese banking sector with a market share exceeding the combined total of the next three competitors[90]. - The company has engaged in business with 15 out of the 18 major banks in China, which invested approximately RMB 170.45 billion in fintech in 2021[63]. - The company is actively engaged in smart marketing projects with multiple banks, enhancing its market position in the banking sector[198].

Revenue and Growth - For the six months ended June 30, 2022, revenue was approximately RMB 172,238,000, an increase of about 19.1% or RMB 27,636,000 compared to the same period in 2021[8]. - Revenue from core business data solutions was approximately RMB 131,136,000, accounting for about 76.1% of total revenue, representing an increase of approximately 75.3% year-on-year[8]. - The company's total revenue for the first half of 2022 was approximately RMB 172,238,000, representing a year-on-year growth of 19.1%[17]. - Revenue from data solutions was approximately RMB 131.14 million, accounting for about 76.1% of total revenue, and increased by approximately 75.3% or RMB 56.33 million year-on-year[38]. - Total revenue for the six months ended June 30, 2022, was RMB 172,238,000, up 19% from RMB 144,602,000 in the same period last year[161]. Profitability and Loss - Gross profit for the reporting period was approximately RMB 43,432,000, a decrease of about 14.6% compared to the same period in 2021, primarily due to extended testing and delivery cycles caused by COVID-19[8]. - Net loss for the reporting period was approximately RMB 37,484,000, a decrease of about 9.3% compared to the same period in 2021, while net loss excluding share-based payment expenses was approximately RMB 23,074,000, a reduction of about 44.1%[9]. - Basic loss per share for the reporting period was approximately RMB 0.0912, and diluted loss per share was approximately RMB 0.0914, compared to RMB 0.1036 in the same period of 2021[9]. - The company reported a gross profit for the same period of RMB 43,432,000, down from RMB 50,836,000 in 2021, indicating a decrease of about 14.5%[120]. - The company incurred a net loss of RMB 37,484,000 for the six months ended June 30, 2022, compared to a net loss of RMB 41,306,000 in 2021, reflecting an improvement of approximately 9.8%[120]. Operational Efficiency and Challenges - The ongoing pandemic has posed challenges, particularly in major cities like Shenzhen, Shanghai, and Beijing, affecting operational efficiency and revenue[16]. - The company has reduced marketing expenses by approximately RMB 4,760,000 by shifting some activities from offline to online[9]. - The company has successfully transformed its R&D technology into intangible assets valued at approximately RMB 17,160,000, leading to a reduction in R&D expenses during the reporting period[9]. - Sales expenses decreased by approximately 40.0% or RMB 6.89 million, accounting for about 6.0% of revenue during the reporting period[42]. - Administrative expenses increased by approximately 53.3% to RMB 18,364,000, primarily due to an increase in management personnel and related compensation expenses of about RMB 1,817,000[44]. Market Position and Strategy - The company achieved a market share of 32.28% in the banking sector's intelligent marketing solutions, ranking first in the market[17]. - The company maintains a 100% renewal rate with major clients, ensuring sustainable business growth[19]. - The company is positioned to benefit from favorable policies promoting financial technology and digital transformation in the financial sector[15]. - The company aims to strengthen its market presence in data intelligence and marketing technology, maintaining its leading position in the banking sector's smart marketing market[33]. - The company is actively exploring new business models, including joint data modeling and operations with banks for precise marketing[20]. Financial Position and Cash Flow - Net cash outflow from operating activities was approximately RMB 78,732,000, an increase of about RMB 17,737,000 compared to RMB 60,995,000 in the same period last year[52]. - Net cash outflow from investing activities was approximately RMB 24,155,000, an increase of about RMB 5,301,000 compared to RMB 18,854,000 in the same period last year[54]. - Net cash inflow from financing activities was approximately RMB 110,410,000, significantly up from RMB 26,768,000 in the same period last year[55]. - The company's leverage ratio increased to approximately 171.2% from 67.8% at the end of the previous year, primarily due to an increase in bank and other borrowings[60]. - The company plans to use the net proceeds of approximately HKD 71,995,250 from the subscription agreements for debt repayment and general corporate purposes[113]. Investments and R&D - The company has signed an investment agreement with Beijing Financial Street Capital Operation Group, securing RMB 100 million for technology R&D, market expansion, and strategic acquisitions[28]. - The company plans to enhance R&D investment and establish a comprehensive R&D system to meet evolving customer needs and improve product competitiveness[34]. - The company has applied for 100 patents, including 76 invention patents, and has obtained 135 software copyrights as of June 30, 2022[21]. - The company has established partnerships with Alibaba Cloud and Huawei to provide integrated cloud computing and big data solutions[24]. - The company has set up a postdoctoral innovation practice base to enhance talent cultivation in key areas like natural language processing and deep learning[27]. Shareholder and Management Information - As of June 30, 2022, Mr. Song holds 75,003,840 shares, representing an 18.34% ownership stake in the company[72]. - Major shareholders include Mindas Touch with 70,003,840 shares (17.12%) and Li Hai Holdings with 60,550,000 shares (14.81%) as of June 30, 2022[76]. - The company’s executive compensation policy aims to retain and motivate executives by linking their pay to performance[84]. - The board of directors includes four executive directors and three independent non-executive directors as of the report date[101]. - The company has implemented effective management policies to monitor foreign exchange risks and will consider hedging significant foreign exchange risks when necessary[68]. Credit and Financial Risk Management - Credit risk is primarily from bank cash, pledged bank deposits, trade receivables, and contract assets, with management policies in place to assess credit quality continuously[145]. - The group maintains a cautious liquidity risk management strategy, ensuring sufficient cash and cash equivalents to meet financial obligations[148]. - The group’s financial risk management approach focuses on minimizing potential adverse impacts on financial performance due to market unpredictability[143]. - The group has not experienced any defaults from reputable financial institutions it transacts with, both domestically and internationally[145]. - The provision for expected credit losses increased by RMB 3,706,000 during the first half of 2022, compared to an increase of only RMB 270,000 in the same period of 2021[189].

Financial Performance - The company's revenue for the reporting period was approximately RMB 397,372,000, representing a growth of about 20.3% or RMB 67,082,000 compared to 2020[28]. - Gross profit for the reporting period was approximately RMB 129,196,000, an increase of about 9.9% compared to 2020, with a gross margin of approximately 32.5%, down about 3.1% from the previous year[28]. - The net loss for the reporting period was approximately RMB 75,987,000, an increase from a net loss of RMB 12,712,000 in 2020, primarily due to increased sales expenses and operational costs[28]. - Basic and diluted loss per share for the reporting period was RMB 0.19, compared to a loss of RMB 0.033 per share in 2020[29]. - The company's operating revenue for 2021 was RMB 397 million, representing a growth of approximately 20.3% compared to 2020; the revenue from the main data solution business was RMB 258 million, growing about 30.9% year-over-year[61]. - The company reported a net profit margin of K%, reflecting strong cost management and operational performance[139]. Revenue Drivers - Revenue growth was primarily driven by a significant increase of approximately 89.9% or RMB 50,236,000 from the North China region, and a stable growth of about 15.3% or RMB 31,727,000 from the South China region[28]. - In 2021, the company achieved a total revenue growth of approximately 20.3%, with core business data solutions revenue increasing by about 30.9%[52]. - The revenue of the subsidiary Yinxing Smart increased by about 76%, exceeding the set targets[52]. - Revenue from data solutions was approximately RMB 257,741,000, an increase of about 30.9% or RMB 60,817,000 year-over-year, driven by stable growth in orders from financial banking clients[94]. Research and Development - Research and development expenses increased by approximately RMB 19,310,000, with the number of R&D personnel rising from 145 in 2020 to 204 during the reporting period[28]. - Research and development expenses increased to approximately RMB 61,462,000, a rise of about 45.8% or RMB 19,310,000 year-over-year, accounting for about 15.5% of total revenue[100]. - The company launched the "Federated Learning" AI solution in January 2021, aimed at enhancing data privacy protection for financial institutions[32]. - The company established a data platform division in May 2021 to enhance its data platform construction and operational service capabilities[37]. Market Expansion - In February 2021, the company established a branch in Chengdu, marking its entry into the Southwest market and expanding its strategic layout across four major regions[33]. - The company has established a presence in major markets across the country, with new branches and significant clients in Northeast and Southwest regions[67]. - The company plans to focus on expanding its market presence among major financial clients and small to medium-sized financial institutions, enhancing digital transformation capabilities[88]. - The company is expanding its market presence in regions E and F, aiming for a market share increase of G% by the end of the fiscal year[139]. Strategic Initiatives - The company plans to focus on strategic cooperation with top financial clients and actively engage in inclusive finance and green finance markets in the coming years[53]. - The company intends to accelerate integration through investments and acquisitions to support overall business development[88]. - The management team emphasized a strategic shift towards digital transformation, aiming for a J% improvement in operational efficiency[139]. - The company plans to enhance its customer engagement strategies, targeting a 20% increase in customer retention rates[154]. Financial Health - The company's debt-to-asset ratio increased to approximately 67.8% from 40.5% in 2020, mainly due to an increase in bank and other borrowings by approximately RMB 17,205,000[120]. - The net cash outflow from operating activities for the year was approximately RMB 12,039,000, a decrease of about 86.6% from RMB 89,592,000 in 2020, primarily due to reduced increases in receivables and contract assets[113]. - The net cash outflow from investing activities was approximately RMB 50,033,000, mainly due to the acquisition of equipment, intangible assets, and other long-term assets[114]. - As of December 31, 2021, the company's cash and cash equivalents amounted to approximately RMB 21,955,000, a decrease of about RMB 52,229,000 compared to the previous year[110]. Awards and Recognition - The company was recognized as a member of the National Big Data Standard Working Group in April 2021, participating in the construction of the big data standard system[37]. - The company was listed in the "2021 IDC China FinTech 50" and ranked second in the banking customer resource management solutions market[47]. - The company received over 20 awards in 2021, enhancing its reputation and influence, including the "Best Data Analysis Technology Award" from Asia Banker magazine[79]. Challenges and Risks - Key risks include the inability to keep up with technological advancements in the big data and AI solutions industry[175]. - The group has faced challenges in expanding its solution and product range to meet complex customer demands[176]. - The company has not entered into long-term contracts that could expose its revenue to uncertainty and potential volatility[176]. Corporate Governance - The board does not recommend any final dividend for the reporting period[180]. - The group has adopted a dividend policy, but there is no predetermined dividend payout ratio[181]. - The board of directors has confirmed the independence of all independent non-executive directors according to the relevant regulations[195].

Financial Performance - For the six months ended June 30, 2021, the revenue was RMB 144,602,000, an increase of RMB 15,090,000 or 11.7% compared to the same period in 2020[18]. - The gross profit for the reporting period was approximately RMB 50,836,000, representing a growth of RMB 13,086,000 or 34.7% compared to the first half of 2020[18]. - The net loss for the reporting period was approximately RMB 41,306,000, an increase of about 693.3% compared to the net loss of approximately RMB 5,207,000 in the first half of 2020[18]. - The basic and diluted loss per share was approximately RMB 10.36, compared to a loss of approximately RMB 1.30 per share in the first half of 2020[18]. - The company reported a net loss attributable to owners of RMB (41,676,000) for the six months ended June 30, 2021, compared to a loss of RMB (5,207,000) in 2020, indicating a deterioration in performance[162]. - Operating loss widened to RMB 38,787 thousand from RMB 3,058 thousand in the previous year, reflecting a deterioration in operational performance[108]. Revenue Breakdown - Data solutions revenue was approximately RMB 74,805,000, a decrease of about 12.1% or RMB 10,316,000 year-on-year, primarily due to the absence of a major client's data infrastructure service in the current period[44]. - Integrated hardware and software sales and related services revenue increased by approximately 61.6% or RMB 17,159,000 to RMB 45,008,000 compared to the same period in 2020[44]. - Revenue from data solutions and integrated services was RMB 74,805,000, compared to RMB 45,008,000 in 2020, indicating a significant increase of 66.3%[143]. - Revenue from mainland China reached RMB 142,904,000, up from RMB 70,539,000 in 2020, reflecting a growth of 102.5%[148]. Market Expansion and Client Relationships - The company achieved a 131% increase in the total contract value of new contracts signed compared to the first half of 2020[22]. - The core business's new contract value for data solutions increased by 320% compared to the first half of 2020, laying a strong foundation for revenue growth in the second half of 2021[22]. - The company maintained a 100% renewal rate with major clients, ensuring high growth and sustainability of revenue[23]. - The company established different market expansion strategies targeting large banks and accelerating the expansion into small and medium financial institutions[23]. - Significant breakthroughs were achieved in market expansion, including new high-value service contracts with major banks[23]. - The company expanded its client base by signing contracts with two major joint-stock banks, enhancing data analysis and digital operation consulting services[25]. Research and Development - Research and development investment increased by 206.4% compared to the first half of 2020, with a total of 74 patents applied for and 93 software copyrights registered by June 30, 2021[27]. - The company upgraded its Lingxi integrated smart marketing platform, winning multiple projects from small and medium-sized banks and securities institutions[29]. - A new data platform division was established, recruiting nearly 100 professionals from leading global data companies to enhance data platform construction and application services[31]. - Continuous investment in product innovation and optimization of product capabilities is a key strategy for the company moving forward[38]. Employee and Operational Metrics - The total number of employees increased by 67.2% compared to the first half of 2020, with AI and big data personnel growing by 94%[33]. - The company aims to enhance operational efficiency and value through modular and integrated data intelligence services, responding to the growing demand for digital transformation[34]. - The company has established strong competitive advantages through a high-level talent team and rich case accumulation, collaborating with 80% of top domestic banks[35]. Cash Flow and Financing - The net cash outflow from operating activities was approximately RMB 60,995,000, a decrease of about RMB 18,253,000 compared to the first half of 2020, mainly due to improved collection of trade receivables[55]. - The net cash outflow from investing activities was approximately RMB 18,854,000, a decrease of about RMB 14,374,000 compared to the first half of 2020, attributed to increased procurement of fixed and intangible assets[56]. - The net cash inflow from financing activities was approximately RMB 26,768,000, significantly up from RMB 4,018,000 in the first half of 2020, due to additional financing support from a director[57]. - The leverage ratio increased to approximately 66.9% as of June 30, 2021, up from 40.5% at the end of 2020, primarily due to an increase in bank and other borrowings by approximately RMB 35,243,000 or about 40.4%[60]. Shareholder Information - As of June 30, 2021, Mr. Song holds 136,080,000 shares (33.84%) in a controlled corporation and an additional 5,000,000 shares (1.24%) as a beneficial owner, totaling 141,080,000 shares (35.08%)[72]. - Major shareholders include Mindas Touch with 136,080,000 shares (33.84%) and Li Hai Holdings with 60,550,000 shares (15.06%)[76]. - The company has a total of 40,000,000 shares available for the stock option plan, representing approximately 9.95% of the total issued shares as of June 30, 2021[86]. - The stock reward plan has 20,000,000 shares available for issuance, accounting for about 4.97% of the total issued shares as of June 30, 2021[86]. Compliance and Regulatory Issues - The company failed to comply with the listing rules regarding timely financial reporting, including the announcement of the annual results for the year ended December 31, 2020[102]. - The company's shares have been suspended from trading since April 1, 2021, and will remain suspended until compliance with the resumption guidance[105]. - The audit committee reviewed the unaudited interim financial information for the reporting period and confirmed it was prepared in accordance with applicable accounting standards[99]. - The company has not identified any significant non-compliance issues with laws and regulations that could materially affect its business and operations during the reporting period[102].

Financial Performance - The company's revenue for the reporting period was approximately RMB 330,290,000, representing a growth of about 28.1% or approximately RMB 72,375,000 compared to 2019[23]. - Gross profit for the reporting period was approximately RMB 117,592,000, an increase of about 28.4% compared to 2019, with a stable gross margin of approximately 35.6%[23]. - The company reported a net loss of approximately RMB 12,712,000 for the reporting period, compared to a net profit of RMB 4,124,000 in 2019[24]. - Revenue for the fiscal year reached $500 million, representing a 15% increase compared to the previous year[134]. - The company has set a future outlook with a revenue guidance of $600 million for the next fiscal year, indicating a projected growth of 20%[134]. - Revenue from data solutions was approximately RMB 196.92 million, an increase of about 18.3% or RMB 30.48 million from 2019, driven by the addition of two major bank clients[77]. - Revenue from integrated hardware and software sales and related services was approximately RMB 97.20 million, up 77.6% or RMB 42.46 million from 2019, primarily due to a 71.0% increase in core product sales[77]. Research and Development - The number of R&D personnel increased from 47 in 2019 to 145 during the reporting period, leading to an increase in R&D personnel costs of approximately RMB 18,560,000[24]. - R&D investment during the reporting period was 270% of the previous year's amount, reflecting the company's commitment to technological advancement[37]. - R&D investment grew by 140.9% year-on-year, focusing on cutting-edge big data and AI technologies, resulting in the development of 6 products in the Lingxi series and 7 products in the model factory series[47]. - The AI innovation center introduced several senior talents, enhancing research in machine learning and natural language processing, which improved data processing efficiency by 400 times and model accuracy by 20% to 40%[48]. - The R&D budget has been increased by 40% to support the development of new technologies and products[134]. Market Expansion and Strategic Initiatives - The company established a new branch in Shanghai in January 2020, enhancing its strategic layout across North, South, and East China markets[27]. - The company successfully won a financial technology project with SPD Bank, marking a significant milestone in the East China region[32]. - The company acquired YinXing Intelligent in December 2020, further expanding its presence in the big data segment[33]. - The company successfully expanded into the securities, insurance, and financial control sectors, winning a smart marketing platform project for a major securities company[46]. - The company aims to enhance digital financial services capabilities, leveraging its leading big data and AI technologies to capture more market opportunities in 2021[57]. - The company is expanding its market presence in Southeast Asia, targeting a 30% market share by 2025[134]. - A strategic acquisition of a tech startup was completed for $100 million, aimed at enhancing the company's data analytics capabilities[134]. Personnel and Operational Changes - Employee count increased by over 50% in 2020, with the AI big data team growing by 101%[53]. - The company expanded its sales and pre-sales staff from 27 in 2019 to 51 during the reporting period, resulting in an increase in marketing personnel costs of approximately RMB 7,309,000[24]. - The administrative expenses increased by approximately 16.5% or RMB 7.95 million, mainly due to the expansion of the administrative team from 53 to 76 members[84]. - The company has a dedicated team for human resources management, contributing to its operational efficiency and employee development[128]. - As of December 31, 2020, the company employed 704 staff members in mainland China and Hong Kong, providing competitive salaries and benefits[189]. Corporate Governance and Financial Management - The company did not recommend any final dividends for the reporting period, indicating a cautious approach to cash distribution[163]. - The company has adopted a dividend policy, but there is no predetermined payout ratio, with dividends being at the discretion of the board[164]. - The company has not issued any debt securities during the reporting period, reflecting a conservative financing strategy[166]. - The company has established a retirement benefits plan, contributing a specific percentage of employees' total wages to the plan, without exceeding regulatory limits[192]. - The independent directors play a crucial role in overseeing the company's management and ensuring compliance with governance standards[129]. Social Responsibility and Environmental Commitment - The company made donations totaling RMB 83,600 during the reporting period, demonstrating its commitment to social responsibility[173]. - The company emphasizes environmental protection and has implemented measures to reduce energy consumption and waste[155]. Risks and Challenges - The company faces significant risks related to technological advancements in the big data and AI industry, which could adversely affect its financial performance[157]. - The management team has emphasized the importance of risk management, with new protocols being introduced to mitigate financial risks[134].