Group 1 - Semiconductor stocks in Hong Kong strengthened in the afternoon session, with Macro Semiconductor rising over 10% [1] - Hua Hong Semiconductor increased by more than 5% [1] - Jingmen Semiconductor and SMIC both saw gains of over 3% [1] Group 2 - Investors can buy Hong Kong stocks using A-share accounts without the need for the Hong Kong Stock Connect, allowing for T+0 trading [1]

Financial Performance - The total revenue for HG Semiconductor Limited in 2024 was approximately RMB 753 million, representing a decrease of about 15% compared to the previous year[11]. - The net loss attributable to shareholders for the year expanded to approximately RMB 1.568 billion, primarily due to impairment losses on assets classified as held for sale, intangible assets, and property, plant, and equipment[11]. - The company's revenue for the year was approximately RMB 75.3 million, a decrease of about 15% compared to last year's RMB 88.6 million[24]. - The gross profit declined by approximately 9% to about RMB 7.8 million[23]. - Revenue from LED products was approximately RMB 739 million, accounting for 98.2% of total revenue, while revenue from GaN and other semiconductor products was approximately RMB 1.4 million, accounting for 1.8%[37]. - The sales cost decreased by approximately 15.7% to about RMB 675 million, reflecting a reduction in material costs due to decreased sales volume of LED products[38]. - Gross profit decreased from approximately RMB 85.3 million to RMB 78.8 million, with a gross margin increase from about 9.6% to 10.3%[39]. - Other income and gains increased by approximately 68.8% to about RMB 81 million, mainly due to increased government subsidies[40]. - The company reported a loss attributable to shareholders of approximately RMB 156.8 million for the year[24]. - The group recorded a loss of approximately RMB 1,831 million, compared to a loss of RMB 1,576 million in the previous year, primarily due to an increase in expected credit loss provisions[46]. - The net profit margin worsened to approximately -243.2% from -177.8% in the previous year, mainly due to the increase in expected credit loss provisions[47]. - The cash used in operating activities increased to RMB 697 million from RMB 232 million, primarily due to an increase in inventory[49]. - As of December 31, 2024, the group's current assets net value was approximately RMB 2,035 million, down from RMB 2,844 million the previous year[51]. - The return on equity decreased from approximately -21.9% to -31.7% due to increased expected credit loss provisions[52]. Production and Technology - The company installed two production lines at its semiconductor factory in Xuzhou, Jiangsu Province, to produce high-quality third-generation semiconductor products[12]. - The company successfully produced its own 6-inch GaN power device epitaxial wafers, achieving yield rates that meet international standards[12]. - The company has completed the installation and debugging of two production lines for GaN-related products at its semiconductor factory in Xuzhou, Jiangsu Province, which spans over 7,000 square meters[25]. - The company is preparing to produce its own 6-inch GaN power device epitaxial wafers and is working on an 8-inch GaN power device epitaxial wafer project expected to achieve technical validation in the second half of 2025[26]. - The company has successfully installed production lines for GaN-related products and is actively exploring sales channels with customers[29]. - The company anticipates that GaN chip products will enter the tape-out phase in Q4 2024 and expects to pass reliability testing and launch in 2025[29]. - The global market for GaN power devices is continuously growing, with significant potential in sectors such as electric vehicles, wireless charging, and 5G infrastructure[13]. - The semiconductor industry in China is experiencing rapid growth, driven by government support and increasing investments in new energy and electric vehicles[21]. Research and Development - HG Semiconductor has obtained a total of 17 patents, including four related to LED technology, with several more invention patents currently under review[12]. - HG Semiconductor plans to enhance its existing LED business while accelerating the research and production of GaN-related products to further develop its third-generation semiconductor industry chain[13]. - The company aims to build a strong research and development team by attracting top talent in the third-generation semiconductor field[13]. - The company aims to enhance its R&D capabilities and seeks strategic partnerships to upgrade its industry chain, focusing on becoming a comprehensive IDM enterprise in the GaN sector[32]. - Research and development costs increased to RMB 240 million from RMB 196 million[43]. Corporate Governance - The company has adopted the corporate governance code as its own governance guidelines and believes it has complied with these guidelines for the year ending December 31, 2024[89]. - The board consists of four executive directors and three independent non-executive directors as of December 31, 2024[91]. - The board is responsible for leading and monitoring the group, focusing on overall strategy, approving development plans and budgets, and overseeing financial and operational performance[92]. - The independent non-executive directors provide strategic direction and independent judgment on matters such as policy, development, performance, and risk management[93]. - The company has a commitment to maintaining good corporate governance standards to enhance transparency and accountability to shareholders and creditors[89]. - The board regularly reviews its functions to ensure they meet the group's needs[92]. - The company has established communication channels with shareholders and stakeholders, including annual general meetings and reports[137]. Environmental, Social, and Governance (ESG) - The environmental, social, and governance (ESG) report covers the company's operations in China, focusing on semiconductor product design, development, and sales[146]. - The company aims to reduce its benzene emissions by 5% by 2040, using 2020 as the baseline for measurement[156]. - The total greenhouse gas emissions increased by 145% from 2,441 tons of CO2 equivalent in 2023 to 5,975 tons in 2024[158]. - The company has achieved ISO 14001:2015 certification for its Zhuhai manufacturing facility, indicating compliance with international environmental management standards[153]. - The company has installed gas purification systems to control air pollutant emissions from its production activities[156]. - The company has implemented a waste management guideline to minimize the environmental impact of hazardous waste disposal[162]. - The company has established emergency plans to mitigate environmental impacts in case of pollution incidents[168]. - The company is committed to monitoring its carbon footprint and exploring additional methods to reduce environmental impact[172]. Employee and Workforce Management - The company employed 161 employees as of December 31, 2024, with total employee costs amounting to approximately RMB 59.4 million, an increase from RMB 35.0 million in the previous year[71]. - The total employee count in 2024 is 161, a 1.9% increase from 158 in 2023[174]. - Overall employee turnover rate is approximately 25%, with male turnover increasing by 36% to 19% and female turnover decreasing by 40% to 6%[178]. - The percentage of employees receiving training is 89%, with an average training duration of 23.3 hours per employee[180]. - The company has a commitment to maintaining a safe working environment, with no reported work-related fatalities or significant safety non-compliance cases in the past three reporting periods[179]. - The company emphasizes a balanced work-life approach to enhance overall productivity and employee well-being[175]. Strategic Partnerships and Future Plans - HG Semiconductor will actively seek strategic partnerships with other leading companies to achieve complementary advantages and mutual benefits[13]. - The company aims to explore market expansion opportunities through strategic partnerships and potential acquisitions[82]. - The company plans to conduct a rights issue in November 2024, offering shares at a subscription price of HKD 0.48 per share, aiming to raise approximately HKD 87.8 million[72]. - The company completed a placement in June 2023, raising a net amount of approximately HKD 35.1 million, fully utilized for enhancing R&D capabilities and general working capital[73].

Financial Performance - Revenue for the year ended December 31, 2024, was RMB 75,282,000, a decrease of 15.0% compared to RMB 88,600,000 in 2023[3] - Gross profit decreased to RMB 7,791,000, down 8.7% from RMB 8,532,000 in the previous year[3] - Net loss for the year was RMB 183,076,000, representing an increase of 16.2% from RMB 157,573,000 in 2023[3] - The company reported a comprehensive loss of RMB 203,255,000 for the year, compared to RMB 134,073,000 in 2023[4] - The group reported a loss before income tax of RMB 178,477,000 for the year ending December 31, 2024, compared to a loss of RMB 160,509,000 in 2023, representing a 11.6% increase in losses year-over-year[30] - The company recorded a loss of approximately RMB 183.1 million for the year, compared to a loss of RMB 157.6 million in the previous year[80] - The net profit margin was approximately -243.2%, worsening from -177.8% in the previous year due to increased provisions for expected credit losses[81] Assets and Liabilities - Total assets decreased by 17.7% to RMB 629,614,000 from RMB 764,886,000 in 2023[3] - Total liabilities increased to RMB 51,825,000 in 2024 from RMB 44,276,000 in 2023, marking a rise of 17.4%[20] - Total equity fell by 19.8% to RMB 577,789,000 compared to RMB 720,610,000 in the previous year[3] - The current ratio decreased to 5.2 from 8.2 in the previous year, indicating a decline in liquidity[3] - The group’s trade receivables decreased to RMB 54,267,000 in 2024 from RMB 61,529,000 in 2023, a decline of 11.9%[33] Revenue Breakdown - Revenue from LED products was RMB 73,922,000, down 13.7% from RMB 85,646,000 in the previous year[24] - Revenue from GaN and fast charging products was RMB 1,360,000, a decline of 54.0% compared to RMB 2,954,000 in 2023[24] - Revenue from LED products was approximately RMB 73.9 million, accounting for about 98.2% of total revenue, down from 96.7% in the previous year[70] - Revenue from GaN and other semiconductor products was approximately RMB 1.4 million, representing about 1.8% of total revenue, down from 3.3% in the previous year[71] Research and Development - Research and development costs increased to RMB 23,961,000 in 2024 from RMB 19,620,000 in 2023, reflecting a growth of 22.4%[25] - Research and development costs for the year were approximately RMB 24.0 million, up from RMB 19.6 million in the previous year[77] - The company has successfully installed two production lines for GaN-related products in its Xuzhou factory, which spans over 7,000 square meters[60] - The company has achieved significant progress in the development of GaN power devices, with the production of 6-inch GaN epitaxial wafers now ready for mass production[61] - The company has obtained seven new utility model and design patents this year, including patents for GaN-based inverters and power components[62] Cost Management - The group’s employee costs, including directors' remuneration, decreased from RMB 28,436,000 in 2023 to RMB 21,574,000 in 2024, a reduction of 24.3%[25] - The financial costs decreased significantly from RMB 8,171,000 in 2023 to RMB 1,088,000 in 2024, a reduction of 86.7%[26] - The group’s inventory cost of goods sold decreased to RMB 53,429,000 in 2024 from RMB 66,888,000 in 2023, a decrease of 20.2%[25] - Administrative and other expenses rose by approximately 18.9% to RMB 114.9 million, primarily due to increased share-based payment expenses[76] Investments and Acquisitions - The company invested approximately $5 million to acquire 349,992 shares of E-series preferred stock in VisIC, followed by an additional $20 million for 1,399,969 shares, totaling an investment of $25 million, representing about 17.38% of VisIC's expanded issued share capital as of December 31, 2024[88] - The fair value of the investment in VisIC is approximately RMB 181.9 million, accounting for about 28.9% of the company's total consolidated assets as of December 31, 2024[88] - The company invested RMB 15 million for a 10% stake in Beijing Hongzhi, with a fair value loss of approximately RMB 10.6 million recognized in the current year[89] - Fast Semi acquired 206,367 shares of GaN Systems for approximately $1.75 million, representing about 0.37% of the total issued share capital as of December 31, 2023[90] - Fast Semi sold the shares of GaN Systems for approximately $2.4 million in March 2024, recognizing a fair value gain of approximately RMB 103,000[90] Market Outlook - The global semiconductor market is projected to grow by 19.0% in 2024, with an estimated market value of $627 billion[55] - The demand for third-generation semiconductor materials, particularly GaN, is expected to increase significantly due to the rapid growth in the new energy vehicle market[57] - The investment in new energy is expected to grow by over 20% year-on-year in 2024[57] - The semiconductor industry in China is entering a high-speed development phase, driven by increased investment in research and development[56] - The company aims to become a leading supplier of third-generation semiconductors in the Greater China region, focusing on semiconductor design and manufacturing[53] Corporate Governance - The audit committee consists of three independent non-executive directors, ensuring compliance with listing rules[114] - The company's financial statements have been verified by Hong Kong Lixin Dehao Certified Public Accountants Limited, confirming consistency with the audited financial reports for the year[115] - The group has not hedged any foreign exchange risks, as most transactions are settled in RMB[101]

Valuation Methodology - The valuation of Fast Charging Limited was based on the income approach, specifically the discounted cash flow method, to account for future growth potential[1] - Key assumptions for the valuation included the accuracy of financial and operational information provided by management, and the expectation of continued operational efficiency for Fast Charging Limited[2] - The financial forecasts outlined in the valuation are deemed reasonable and reflective of market conditions and economic fundamentals[2]

Financial Performance - For the six months ended June 30, 2024, HG Semiconductor Limited reported revenue of RMB 34,252,000, a decrease from RMB 45,905,000 in the same period of 2023, representing a decline of approximately 25.5%[10] - The gross profit for the same period was RMB 2,718,000, down from RMB 3,039,000 in 2023, indicating a decrease of about 10.6%[10] - The company incurred a loss of RMB 57,205,000 for the six months ended June 30, 2024, compared to a loss of RMB 51,939,000 in the prior year, reflecting an increase in loss of approximately 10.5%[10] - Total comprehensive loss for the period was RMB 115,180,000, significantly higher than RMB 53,830,000 in the previous year, marking an increase of around 114.3%[10] - Basic and diluted loss per share was RMB 7.22, compared to RMB 8.39 in the same period last year, showing an improvement in loss per share by approximately 13.9%[10] - The company reported a loss before tax of RMB 57,205,000 for the six months ended June 30, 2024, compared to a loss of RMB 50,130,000 in the same period of 2023[30] - The company reported a loss attributable to shareholders of approximately RMB 54.2 million for the first half of 2024[91] Revenue Breakdown - Revenue from LED products for the six months ended June 30, 2024, was RMB 33,220,000, a decrease of 25% from RMB 44,310,000 in the same period of 2023[30] - Revenue from GaN and other semiconductor products was RMB 1,032,000, down 35% from RMB 1,595,000 year-over-year[30] - Revenue from LED products was approximately RMB 33.2 million, accounting for about 97.0% of total revenue, down from RMB 44.3 million and 96.5% in the previous period[102] - Revenue from GaN and other semiconductor products was approximately RMB 1.0 million, representing about 3.0% of total revenue, down from RMB 1.6 million and 3.5% in the previous period[102] Expenses and Costs - Sales and distribution expenses for the period were RMB 6,785,000, up from RMB 1,036,000 in 2023, representing a significant increase of approximately 553.5%[10] - Administrative and other expenses totaled RMB 62,949,000, compared to RMB 46,994,000 in the previous year, reflecting an increase of about 33.9%[10] - Financial costs for the six months ended June 30, 2024, were RMB 2,164,000, down from RMB 6,273,000 in the previous year, indicating a reduction of approximately 65%[31] - Share-based payment expenses for the period amounted to RMB 29.8 million, a significant increase from RMB 3.7 million in the previous period, mainly due to the employee share incentive plan[108] Assets and Liabilities - Total assets as of June 30, 2024, amounted to RMB 1,031,080 thousand, a decrease from RMB 1,064,886 thousand as of December 31, 2023, representing a decline of approximately 3.2%[11] - Non-current assets decreased from RMB 441,070 thousand to RMB 365,497 thousand, a reduction of about 17.1%[11] - Current assets increased to RMB 331,583 thousand from RMB 323,816 thousand, reflecting a growth of approximately 2.3%[11] - Total liabilities decreased from RMB 39,448 thousand to RMB 32,166 thousand, a decline of around 18.6%[11] - Net asset value as of June 30, 2024, was RMB 660,778 thousand, down from RMB 720,610 thousand, indicating a decrease of about 8.3%[11] - The equity attributable to owners of the company decreased from RMB 677,066 thousand to RMB 590,895 thousand, a drop of approximately 12.7%[11] Cash Flow and Liquidity - Operating cash flow for the six months ended June 30, 2024, was a net outflow of RMB 34,679 thousand, compared to a net outflow of RMB 24,425 thousand for the same period in 2023, representing a 42% increase in cash used[15] - The company reported a cash and cash equivalents balance of RMB 21,691 thousand, down from RMB 49,287 thousand, a decrease of about 56.0%[11] - The company’s total cash and cash equivalents at the end of the first half of 2024 stood at RMB 21,691 thousand, down from RMB 52,005 thousand at the end of the same period in 2023, indicating a liquidity challenge[16] Market and Industry Insights - The LED lighting industry faced ongoing negative impacts due to a sluggish real estate market and weak consumer demand for electronic products in the first half of 2024[86] - The global semiconductor market is projected to grow by 16.0% in 2024, with an estimated valuation of USD 611 billion[88] - The demand for third-generation semiconductor materials, particularly GaN, is expected to increase significantly, driven by the growth in the new energy and electric vehicle sectors[89] - The GaN power device market is projected to grow from USD 46 million in 2020 to USD 1.1 billion by 2026, with a compound annual growth rate of 70%[97] Strategic Initiatives - The company plans to continue its market expansion and product development strategies in the upcoming quarters[12] - The company aims to become a leading supplier of third-generation semiconductors in the Greater China region by accelerating the R&D and application of GaN technology[85] - The company has successfully installed two production lines for GaN-related products at its semiconductor factory in Xuzhou, Jiangsu Province[92] - The company plans to complete the front-end process of power chips by the fourth quarter of 2024 and aims for mass production within the year[94] Shareholder and Governance Matters - The company did not declare or pay any dividends for the six months ended June 30, 2024[35] - The board did not recommend the payment of an interim dividend for the period, consistent with the previous period[114] - The company adopted the corporate governance code and confirmed compliance during the period[159] - The board composition was adjusted to meet listing rules, with three independent non-executive directors as of May 8, 2024[161] Employee and Stock Option Plans - The employee stock incentive plan resulted in a share reward expense of approximately RMB 24.8 million during the period[12] - The company has a stock option plan that granted 34,510,000 options to 26 participants at a price of HKD 1 each on June 17, 2021, and 7,890,000 options to 48 participants at the same price on July 28, 2023[68] - The company recognized an expense of approximately RMB 3.0 million related to the stock option plan, compared to RMB 3.7 million for the same period ended June 30, 2023[77] - The company adopted the 2023 Share Award Plan on December 29, 2023, with a validity period of 10 years, allowing for a maximum of 10% of the issued shares (751,054,785 shares) to be granted as rewards[78]

Financial Performance - For the six months ended June 30, 2024, the company's revenue was approximately RMB 34.3 million, a decrease of about 25.3% compared to RMB 45.9 million for the same period in 2023[1][2]. - The gross profit for the same period was approximately RMB 2.7 million, reflecting a decline of about 10.0% from RMB 3.0 million in the previous period[1][2]. - The net loss for the six months ended June 30, 2024, was approximately RMB 57.2 million, compared to a net loss of RMB 51.9 million in the same period last year[1][2]. - The loss per share for the current period was approximately RMB 7.22, compared to RMB 8.39 in the previous period[1][3]. - Total comprehensive loss for the six months ended June 30, 2024, amounted to approximately RMB 115.2 million, compared to RMB 53.8 million in the same period of 2023[2][3]. - The company reported a total comprehensive loss of RMB 115,180,000 for the six months ended June 30, 2024, compared to a loss of RMB 51,005,000 in the same period last year[6]. - The group reported a loss before tax of RMB 57,205,000 for the six months ended June 30, 2024, compared to a loss of RMB 52,077,000 for the same period in 2023[10]. - The company incurred a loss of RMB 54,246,000 during the period, reflecting a significant increase compared to the previous year's loss[6]. - The company reported a loss attributable to equity holders of RMB 54,246,000 for the six months ended June 30, 2024, compared to a loss of RMB 49,114,000 for the same period in 2023[18]. Assets and Liabilities - Non-current assets as of June 30, 2024, totaled approximately RMB 365.5 million, down from RMB 441.1 million as of December 31, 2023[4]. - Current assets increased to approximately RMB 315.0 million as of June 30, 2024, compared to RMB 307.3 million as of December 31, 2023[4]. - The company's total equity as of June 30, 2024, was approximately RMB 660.8 million, a decrease from RMB 720.6 million as of December 31, 2023[5]. - The company’s cash and cash equivalents decreased to approximately RMB 21.7 million as of June 30, 2024, down from RMB 49.3 million as of December 31, 2023[4]. - The company reported a fair value change of financial assets amounting to a loss of RMB 66,283,000 during the period[6]. - The company’s total liabilities increased, contributing to a net loss for the period[6]. - As of June 30, 2024, the company's current assets net value was approximately RMB 299.4 million, with a current ratio of about 10.3[66]. - The debt-to-equity ratio was approximately 1.5% as of June 30, 2024, compared to 1.4% at the end of the previous period[67]. Revenue Breakdown - For the six months ended June 30, 2024, the revenue from LED products was RMB 33,220,000, a decrease of 25% compared to RMB 44,310,000 for the same period in 2023[14]. - Revenue from GaN and fast charging products was RMB 1,032,000, down 35% from RMB 1,595,000 in the previous year[14]. - Total revenue for the six months ended June 30, 2024, was RMB 34,252,000, representing a decline of 25% from RMB 45,905,000 in the same period of 2023[14]. - Revenue from GaN and other semiconductor products was approximately RMB 1.0 million, accounting for about 3.0% of total revenue, down from RMB 1.6 million and 3.5% in the previous period[57]. - Revenue from LED products was approximately RMB 332.2 million, accounting for about 97.0% of total revenue, down from RMB 443.1 million (96.5%) in the previous period[56]. Expenses and Costs - Financial costs for the six months ended June 30, 2024, were RMB 2,164,000, significantly reduced from RMB 6,273,000 in the previous year[15]. - Other income and gains increased to RMB 6,785,000 for the six months ended June 30, 2024, compared to RMB 1,036,000 in the same period of 2023[14]. - The group received government grants amounting to RMB 4,310,000 during the reporting period, a substantial increase from RMB 966,000 in the previous year[14]. - Selling and distribution expenses decreased by approximately 30.4% to RMB 1.6 million from RMB 2.3 million in the previous period[62]. - Administrative and other expenses increased by approximately 33.8% to RMB 62.9 million, mainly due to an increase in share-based payment expenses[63]. - Sales cost decreased by approximately 26.6% to RMB 31.5 million from RMB 42.9 million in the previous period, reflecting a reduction in material costs due to decreased LED product sales[58]. Shareholder and Equity Information - The company did not declare or pay any dividends during the reporting period, consistent with the previous year[17]. - The company has 751,054,785 shares issued as of June 30, 2024[71]. - Jovial Star International Limited, owned by Mr. Chan Hoi Lee, holds 129,453,785 shares, representing 17.24% of total shares[70]. - Wide Yield Investment Holding Limited, owned by Ms. Qin Anqi, holds 100,500,000 shares, representing 13.38% of total shares[70]. - First Global Limited, owned by Mr. Zhao Yiwen, holds 56,500,000 shares, representing 7.52% of total shares[70]. - GSR Capital Special Opportunity Fund L.P. holds 56,000,000 shares, representing 7.46% of total shares[70]. Employee Incentive Plans - The employee share incentive plan resulted in share-based payment expenses of approximately RMB 24.8 million during the period[6]. - The company plans to continue expanding its employee share incentive program to enhance employee engagement and retention[6]. - A total of 7,540,000 reward shares were granted to 25 employee participants under the 2023 Share Incentive Plan on January 31, 2024[41]. - The estimated fair value of the reward shares granted on January 31, 2024, was approximately RMB 5.0 million, with a closing price of HKD 0.69 per share on the grant date[41]. - The employee share incentive plan has granted 99% partnership interests to selected participants, reflecting the company's commitment to employee contributions[43]. Market and Industry Insights - The semiconductor market in China is projected to grow by 16.0% year-on-year in 2024, with an estimated market value of USD 611 billion[46]. - The demand for third-generation semiconductor materials, particularly GaN, is expected to increase significantly, driven by the rapid growth of the new energy vehicle market, which saw production and sales of 9.587 million and 9.495 million units respectively in 2023, representing year-on-year growth of 35.8% and 37.9%[47]. - The GaN power device market is projected to grow from USD 46 million in 2020 to USD 1.1 billion by 2026, with a compound annual growth rate of 70%[54]. - The domestic electric vehicle market, where local brands hold over 80% market share, is a major growth driver for GaN power products[55]. Corporate Governance and Compliance - The company has adopted the corporate governance code as per the Listing Rules Appendix C1 and believes it has complied during the period[98]. - The company failed to comply with Listing Rules due to the reappointment of Mr. Li Yang as an executive director, affecting the required number of independent non-executive directors[99]. - Following the appointment of Ms. Liu Wanwen as an independent non-executive director on May 8, 2024, the company now has three independent non-executive directors, meeting the required one-third representation on the board[99]. - The audit committee has reviewed and discussed the unaudited consolidated financial statements for the period, confirming compliance with applicable accounting standards[100].

Stock Options - As of January 1, 2023, the number of stock options available for grant under the stock option plan was 5,490,000, and by December 31, 2023, there were no stock options available for grant under the plan[2] - The number of shares that can be issued under the stock options granted as of December 31, 2023, was 33,547,000, representing approximately 5.26% of the weighted average number of shares issued for the year ended December 31, 2023[2] Share Award Plan - The company adopted a share award plan starting December 29, 2023, with no authorized limit for grants as of January 1, 2023[3] - As of December 31, 2023, the number of shares available for grant under the share award plan was 75,105,478, and the limit for service providers was 7,510,547 shares[3] Annual Report Information - The additional information provided does not affect any other information contained in the 2023 annual report, which remains unchanged[4]

Financial Performance - The total revenue for the year 2023 was approximately RMB 886 million, representing a slight increase of about 1.2% compared to the previous year[174]. - The net loss attributable to the company's owners for the year widened to approximately RMB 157.6 million, primarily due to impairment losses on intangible assets and property, plant, and equipment[174]. - In 2023, total revenue was approximately RMB 88.6 million, an increase of about 1.2% compared to RMB 87.5 million in 2022, primarily driven by sales growth in GaN and other semiconductor products[189]. - Revenue from LED products was approximately RMB 85.6 million, accounting for about 96.7% of total revenue, despite a decline from RMB 87.2 million in 2022[190]. - The gross profit decreased from approximately RMB 16.4 million in the previous year to about RMB 8.5 million, with the gross profit margin dropping from approximately 18.8% to about 9.6%[192]. Employee and Management - As of December 31, 2023, the company employed 158 full-time employees in China and Hong Kong[26]. - The overall employee turnover rate during the reporting period was approximately 11%[28]. - The company recognizes employees as valuable assets and maintains a work environment compliant with Chinese labor laws[26]. - The group aims to create a harmonious work environment with competitive compensation, conducting annual performance reviews for salary adjustments[59]. - The company regularly reviews employee compensation to ensure it remains competitive and aligns with market standards[81]. - The company emphasizes the importance of employees as valuable assets and provides competitive compensation to attract and motivate them[81]. - The company has a strong management team with over 20 years of experience in investment activities and business management, particularly in fashion and information technology sectors[134]. - The management team has a combined experience of over 25 years in general management, business, banking, finance, and real estate development, enhancing the company's strategic direction[141]. Environmental and Social Responsibility - The company has identified significant environmental, social, and governance issues for inclusion in its reports, focusing on compliance with laws and regulations[12]. - The company will continue to monitor greenhouse gas emissions and set targets to reduce methane consumption to achieve carbon neutrality[17]. - The company has not reported any significant non-compliance cases related to environmental laws in Hong Kong and China during the reporting period[14]. - The company aims to improve energy efficiency and resource recycling as part of its commitment to sustainable development[20]. - The company has obtained ISO 14001:2015 certification, an internationally recognized standard for environmental management systems[80]. - The company is actively involved in public affairs and charitable activities, reflecting its commitment to community engagement and corporate social responsibility[141]. Research and Development - The group has invested in R&D to upgrade existing technology platforms, ensuring market competitiveness[47]. - The company is committed to accelerating the development and application of GaN technology to provide more energy-efficient and competitive solutions[178]. - The company is actively expanding its third-generation semiconductor business, which is expected to gradually enter a strategic harvest phase[175]. - The company aims to enhance its third-generation semiconductor GaN industry chain through strategic collaborations with outstanding enterprises[200]. - The company plans to leverage existing production facilities and continuously invest in advanced production equipment to accelerate the R&D and production of GaN-related products[200]. Corporate Governance - The group has established an internal monitoring system to reduce the risk of fraud, with 2 directors and 57 employees receiving 2 hours of anti-corruption training, representing 37% of total employees[36]. - The board of directors has established a compensation committee to review the company's compensation policies and structures for all directors and senior management[90]. - The company has received annual confirmation letters regarding the independence of all independent non-executive directors as per the independence standards outlined in the listing rules[116]. - The management team emphasizes the importance of maintaining high standards of governance and transparency in all operations[139]. Market and Competitive Landscape - The company faces intense competition in recruiting skilled and experienced workers, which could impact business development and performance if not addressed[78]. - The semiconductor industry is considered a strategic industry for economic and social development in China, with government policies supporting semiconductor enterprises in various aspects[107]. - The company is focused on achieving chip manufacturing and capacity realization as part of its overall business development strategy[176]. - The company aims to solidify its existing LED business while expanding into the GaN market[200]. - The global GaN power device market is continuously growing, and the company expresses strong confidence in the development of China's third-generation semiconductor industry[200]. Strategic Initiatives - The company has a strong focus on expanding its market presence and enhancing its operational capabilities through strategic investments in R&D and working capital[126]. - Future outlook includes strategic acquisitions and partnerships to bolster growth and expand market reach[140]. - The company aims to leverage its strong financial background to navigate market challenges and capitalize on emerging opportunities[136]. - The company is exploring new product development and technological advancements to enhance its market position and competitiveness[140]. - The company has installed two production lines for GaN-related products at its semiconductor factory in Xuzhou, Jiangsu Province, which spans over 7,000 square meters[183]. Financial Strategy and Capital Management - The company reported a total of HKD 34.51 million in net proceeds, with HKD 7.89 million utilized and HKD 26.63 million remaining unutilized[126]. - The company plans to strengthen its R&D capabilities with an allocation of HKD 17.55 million, of which HKD 10.92 million has been utilized and HKD 6.63 million is expected to be utilized by December 31, 2024[126]. - The company has allocated HKD 17.55 million for general working capital, which has been fully utilized[126]. - The total unutilized proceeds amount to HKD 6.63 million, which is expected to be utilized by the end of 2024[126]. - The company’s financial strategy includes a clear timeline for the utilization of unutilized proceeds based on market conditions[126].

Financial Performance - The company reported a total comprehensive loss attributable to owners of RMB 126,278 thousand for the year ended December 31, 2023, compared to a loss of RMB 85,490 thousand in 2022, representing a year-over-year increase of 47.7%[4]. - The company reported a basic loss attributable to owners of RMB 150,723,000 for the year, compared to RMB 101,287,000 in the previous year, indicating a significant increase in losses[57]. - The net loss for the year was approximately RMB 157.6 million, compared to a loss of about RMB 101.3 million in the previous year, primarily due to impairment losses on intangible assets and property, plant, and equipment[91]. - The company incurred a loss before tax of RMB 160,509 thousand for the year, compared to a loss of RMB 101,646 thousand in the previous year, indicating a significant increase in losses[176]. - The net profit margin for the year was approximately -177.8%, worsening from -115.7% in the previous year, mainly due to impairment losses and the issuance of new shares for debt capitalization[92]. Revenue and Sales - Revenue from LED products for 2023 was RMB 88,600 thousand, a slight increase of 1.2% from RMB 87,518 thousand in 2022[13]. - The total revenue for the fiscal year ending December 31, 2023, was approximately RMB 88.6 million, representing a slight increase of about 1.2% compared to the previous year[76]. - Revenue from GaN and other semiconductor products was approximately RMB 3.0 million, accounting for about 3.3% of total revenue, compared to RMB 0.3 million and 0.4% in the previous year[85]. - Sales of GaN and fast-charging products surged to RMB 2,954 thousand in 2023, up from RMB 333 thousand in 2022, marking a significant increase of 786.2%[13]. - Revenue from LED products for the year was approximately RMB 85.6 million, accounting for about 96.7% of total revenue, compared to RMB 87.2 million and 99.6% in the previous year[108]. Costs and Expenses - The cost of goods sold increased to RMB 66,888 thousand in 2023 from RMB 58,826 thousand in 2022, reflecting a rise of 13.4%[26]. - The cost of sales increased by approximately 12.7% to about RMB 80.1 million, mainly due to higher material costs from the use of more advanced raw materials[86]. - Selling and distribution expenses increased by approximately 73.3% to RMB 5.2 million, primarily due to higher employee costs and travel expenses[113]. - Administrative and other expenses decreased by approximately 14.3% to RMB 96.6 million, mainly due to reduced share-based payment expenses and R&D costs[113]. - Research and development costs amounted to RMB 19,620 thousand in 2023, down from RMB 28,472 thousand in 2022, indicating a decrease of 30.9%[26]. Assets and Liabilities - Total assets as of December 31, 2023, were RMB 764,886 thousand, an increase from RMB 718,308 thousand in 2022, representing a growth of 6.5%[23]. - The company’s total liabilities decreased to RMB 44,276 thousand in 2023 from RMB 108,363 thousand in 2022, a reduction of 59.1%[23]. - The company’s total equity increased by 18.1% to RMB 720.6 million from RMB 609.9 million in 2022[157]. - The group’s asset-liability ratio was approximately 1.4% as of December 31, 2023, down from 6.7% in the previous year[134]. - As of December 31, 2023, the group's net current assets were approximately RMB 284.4 million, compared to RMB 189.2 million in the previous year[117]. Government Grants and Subsidies - The company received government grants totaling RMB 3,037 thousand in 2023, significantly higher than RMB 777 thousand in 2022, reflecting an increase of 289.5%[13]. - Other income and gains increased by approximately 300% to about RMB 4.8 million, mainly due to increased government subsidies[88]. - The company received various government subsidies related to its business operations, which do not have any unmet conditions or contingencies[179]. Strategic Initiatives and Market Position - The company aims to expand its market presence in China, focusing on the design, development, and manufacturing of semiconductor products, including LED and GaN devices[24]. - The company aims to become a leading supplier of third-generation semiconductors in the Greater China region by focusing on energy-efficient solutions[73]. - The strategic partnership with a new investor has enhanced funding resources for the GaN business, facilitating faster integration into the new energy and new energy vehicle supply chains[79]. - The company has optimized its organizational structure for its GaN business, establishing Shenzhen GaHong Semiconductor as the headquarters for its GaN operations in China[78]. - The company plans to enhance its R&D capabilities and seek strategic partnerships to upgrade its industry chain, focusing on GaN-related products and applications[106]. Production and Operations - The company has successfully installed two production lines for GaN-related products at its semiconductor factory in Xuzhou, Jiangsu Province, which spans over 7,000 square meters[53]. - The company completed the production debugging of GaN epitaxial wafer equipment and established a chip production line, marking significant progress in its third-generation semiconductor business[76]. - The company plans to complete the sale of Fast Charging Limited, which holds technology assets valued at approximately RMB 59.42 million, by the first half of 2024[71]. Shareholder Information - The average number of ordinary shares for calculating diluted loss per share increased to 637,195,914 in 2023 from 568,597,433 in 2022[30]. - The company issued 129,453,785 new shares at a price of HKD 0.80 per share to settle debts amounting to approximately HKD 103,563,000 (equivalent to RMB 95,899,000)[46]. - The group did not recommend a final dividend for the year, consistent with the previous year[116]. - The company has not declared or paid any dividends for the years ended December 31, 2023, and December 31, 2022[186].

Financial Performance - For the six months ended June 30, 2023, the total assets amounted to RMB 470,539 thousand, an increase from RMB 431,924 thousand as of December 31, 2022, representing a growth of approximately 8.9%[21] - The company reported a net cash inflow from financing activities of RMB 80,060 thousand for the six months ended June 30, 2023, compared to a net cash outflow of RMB 1,406 thousand in the same period of 2022[9] - Cash and cash equivalents increased to RMB 52,005 thousand as of June 30, 2023, up from RMB 35,722 thousand at the end of 2022, reflecting a growth of approximately 45.5%[9] - The total equity as of June 30, 2023, was RMB 616,977 thousand, slightly up from RMB 609,945 thousand as of December 31, 2022, indicating a marginal increase of about 1.7%[21] - The company reported a loss attributable to owners of the company of RMB (49,114,000) for the six months ended June 30, 2023, compared to a loss of RMB (51,515,000) in the same period of 2022, reflecting an improvement of about 5%[58] - The company incurred a loss of RMB (51,939,000) for the period, slightly higher than the loss of RMB (51,515,000) in the same period last year, representing an increase of 0.8%[118] - The total comprehensive loss for the period was RMB (53,830,000), compared to RMB (41,125,000) in the previous year, indicating an increase of 30.8%[118] - The company reported a basic and diluted loss per share of RMB (8.39), an improvement from RMB (9.14) in the previous year, reflecting a decrease of 8.2%[118] Revenue and Sales - The company’s total revenue for the six months ended June 30, 2023, was not explicitly stated in the provided content, but the financial performance indicates a focus on growth and expansion strategies moving forward[21] - For the six months ended June 30, 2023, the revenue from LED products was RMB 44,310,000, an increase from RMB 43,437,000 in the same period of 2022, representing a growth of approximately 2%[31] - Revenue for the six months ended June 30, 2023, was RMB 45,905,000, compared to RMB 43,437,000 for the same period in 2022, representing an increase of approximately 5.7%[127] - Revenue from GaN and other semiconductor products was approximately RMB 1.6 million, accounting for about 3.5% of total revenue[193] Assets and Liabilities - The company’s non-current assets totaled RMB 470,539 thousand as of June 30, 2023, compared to RMB 431,924 thousand at the end of 2022, marking an increase of approximately 8.9%[21] - The company’s current liabilities totaled RMB 159,777 thousand as of June 30, 2023, compared to RMB 97,168 thousand at the end of 2022, reflecting an increase of approximately 64.3%[21] - The company’s trade receivables as of June 30, 2023, were RMB 85,867,000, an increase from RMB 72,476,000 as of December 31, 2022, indicating a growth of approximately 18%[39] - As of June 30, 2023, the carrying amount of intangible assets, including patents, was approximately RMB 59.4 million, down from RMB 63.7 million as of December 31, 2022[135] Investments and Financing - The company issued 40,000,000 new shares at a price of HKD 0.90 per share on June 13, 2023, raising a total of RMB 33,001 thousand[22] - The company’s total borrowings, including bank and other borrowings, increased significantly to RMB 5,596,000 for the six months ended June 30, 2023, compared to RMB 142,000 in the same period of 2022[32] - The group entered into a debt settlement agreement with Jovial Star International Limited, agreeing to issue 129,453,785 shares at HKD 0.80 per share to settle outstanding loans[71] Operational Efficiency - The company has seen a significant reduction in inventory, with a decrease of RMB 10,199,000 compared to an increase of RMB (18,217,000) in the previous year, showing improved inventory management[102] - Administrative and other expenses decreased by approximately 16.2% to about RMB 47.0 million, down from RMB 56.1 million in the previous period[176] - The financial costs increased to RMB 6,273,000 from RMB 997,000 in the previous year, indicating a substantial rise in financing expenses[102] Research and Development - The company is focused on the design, development, manufacturing, and sales of semiconductor products, including LED chips and GaN devices, indicating ongoing investment in technology[104] - The company has successfully obtained seven new utility model and design patents during the period, enhancing its intellectual property portfolio[181] - R&D expenses for the period were approximately RMB 12.1 million, down from approximately RMB 16.9 million in the previous period[198] Market Outlook - The global semiconductor market is projected to reach $515 billion in 2023, a decline of 10.3%, but is expected to rebound with a growth rate of 11.8% in 2024, reaching $576 billion[153] - The domestic charging pile market is expected to grow by over 80% year-on-year in 2023, with a compound annual growth rate of 60.7% from 2021 to 2025[155] - The GaN semiconductor device market is expected to reach $253 million by 2025, indicating strong growth potential for the company's third-generation semiconductor business[187] Strategic Initiatives - The company aims to enhance its core competitiveness and expand production capacity through strategic investments and partnerships in the third-generation semiconductor industry[163] - The company plans to leverage its expertise in high-voltage GaN design and advanced EV inverter technology to accelerate its layout in the new energy vehicle sector[168] - The company is committed to becoming a comprehensive IDM enterprise in the GaN industry chain, integrating research and development, manufacturing, packaging, and sales[170]