Business Environment and Strategy - In 2022, the Group faced a challenging business environment due to weak global economic recovery, the COVID-19 pandemic, and the Russia-Ukraine war, leading to increased production costs and decreased gross profit[19] - The Group adjusted its business strategy by outsourcing part of the production process to less affected areas, ensuring timely product delivery despite rising costs[19] - The Group aims to optimize sales strategies to achieve growth in existing markets and explore emerging markets with potential[20] - The focus will be on innovation-driven product diversification, enhancing production capacities, and improving talent team building for product development[20] - The Group plans to intensify quality control standards and licensing of intellectual property rights across various product design fields, including smart toy vehicles and metaverse-related products[20] - The Group plans to optimize sales strategies to achieve growth in existing markets and breakthroughs in growth potential markets[22] - The Group is exploring the domestic toy retail market and intends to combine its own brand with foreign brand products in physical store management[25] - The Group anticipates a recovery in domestic consumption and aims to capitalize on the opportunities presented by the central government's focus on expanding domestic demand[25][27] - The Group's smart interactive toys category was largely inactive in FY2022, with most products not produced or sold under co-branded categories[37] - The Group aims to seek collaboration opportunities with well-known brands to enhance product marketability[45] - The Group plans to explore the development of the domestic toy retail market in China, focusing on strong domestic consumption[117] - The Group aims to prioritize the Chinese market by maintaining relationships with existing overseas customers and expanding its customer base[119] - The Group plans to diversify its product offerings through continuous development of new products and a global licensing strategy[119] - The Group intends to expand its production capacity and improve production efficiency[119] - The Group will allocate more resources to enhance sales in domestic and Asian markets[119] Financial Performance - The Group's total revenue decreased by approximately 40.3% from approximately RMB 283.8 million in FY2021 to approximately RMB 169.4 million in FY2022, primarily due to the impact of COVID-19 and forced office closures in China[30][32] - Revenue from smart toy vehicles dropped from RMB 166.6 million in FY2021 to RMB 41.3 million in FY2022, indicating a significant decline in this product category[34] - Traditional toys generated revenue of RMB 88.9 million in FY2022, down from RMB 104.1 million in FY2021, reflecting a decrease in sales[34] - The Group's gross profit decreased from approximately RMB80.8 million in FY2021 to approximately RMB28.3 million in FY2022, representing a decrease of approximately 65.0%[51] - The gross profit margin decreased by approximately 11.8% from approximately 28.5% in FY2021 to approximately 16.7% in FY2022[51] - The Group's net profit turned into a loss of approximately RMB76.7 million in FY2022, down from a profit of approximately RMB26.1 million in FY2021[52] - Administrative expenses increased by approximately 80.8% from approximately RMB42.1 million in FY2021 to approximately RMB76.1 million in FY2022, mainly due to share-based payments of approximately RMB29.4 million[54] - Net impairment losses on trade and other receivables increased significantly from approximately RMB5.4 million in FY2021 to approximately RMB24.0 million in FY2022, representing an increase of approximately 3.4 times[61] - The Group's cash and cash equivalents decreased to approximately RMB6.2 million from approximately RMB286.5 million, primarily due to the deployment of approximately RMB210.0 million in working capital for sales of raw materials and electronic parts[69][73] Operational Metrics - The average inventory turnover period improved to approximately 44.1 days in FY2022 from approximately 66.1 days in FY2021, reflecting enhanced production control[70][74] - Trade receivables increased significantly from approximately RMB117.0 million as of December 31, 2021, to approximately RMB327.5 million as of December 31, 2022, with average turnover days rising from approximately 125.3 days to approximately 273.2 days[71][74] - Trade and other payables rose by approximately RMB24.2 million or approximately 16.7%, from approximately RMB144.6 million to approximately RMB168.8 million, with average turnover days increasing from approximately 90.4 days to approximately 184.4 days[72][74] - Bank and other borrowings decreased to approximately RMB139.8 million from approximately RMB155.3 million, with a weighted average effective interest rate rising to approximately 7.9% from approximately 5.2%[77][81] Corporate Governance - The Group is committed to sound corporate governance to enhance accountability and transparency, protecting shareholder interests[121] - The Board of Directors is responsible for the overall management and strategic direction of the Group, ensuring effective supervision and guidance[126] - The Group has complied with the Corporate Governance Code, with a noted deviation regarding the roles of chairman and CEO being held by the same individual[122] - The Board will regularly review the need to separate the roles of chairman and CEO to maintain good corporate governance[124] - The Board consists of six members, including two executive directors, one non-executive director, and three independent non-executive directors[134] - As of December 31, 2022, the Board achieved gender diversity with 33.3% female representation, having two female members and four male members[138] - The age structure of the Board is reasonable, with four directors aged 35 to 50 and two directors aged 51 to 60[138] - The Board held 12 meetings during FY2022 to discuss and approve the Company's operations and business development[148] - As of December 31, 2022, 43% of the Company's colleagues are female, reflecting a commitment to a diverse and inclusive work environment[142] - The Board has adopted a diversity policy to ensure a balanced composition that supports the execution of its business strategy[137] - The Board members possess a wide range of professional experience, including corporate strategic planning, management, and finance[138] - The Company has received annual confirmations of independence from its independent non-executive directors, ensuring compliance with listing rules[134] - The Board is committed to further improving gender diversity as suitable candidates are identified[141] - The Board's diversity policy will be reviewed regularly to ensure its continued effectiveness[139] Risk Management and Compliance - The Group's financial risk management is overseen by the treasury department, ensuring sufficient financial resources to meet obligations[96] - The ongoing geopolitical tensions and inflation are expected to impact global economic conditions, increasing the risk of recession[46] - The Group recognizes the ongoing pressures on the global economy due to geopolitical tensions, inflation, and supply chain disruptions, which may slow global trade and increase recession risks[118] - The Group has adopted a three-tier risk management approach to identify, assess, and manage different types of risks[188] - The Board considers the risk management and internal control systems to be generally effective and adequate in all material respects[193] - The Group's internal control system is designed to provide reasonable assurance against material misstatement or loss[188] - The Company will continue to engage external professional advisers to enhance its internal control system as necessary[193] Shareholder Communication and Meetings - The next annual general meeting of the Company is scheduled for July 28, 2023, with notice to be sent to shareholders at least 20 clear business days prior[198] - The Company emphasizes the importance of communication with shareholders, proposing separate resolutions for substantial issues at shareholder meetings[197] - The Audit Committee reviews the adequacy of resources and qualifications of the accounting and internal audit functions annually[189] Audit and Remuneration Committees - The company held three Audit Committee meetings during FY2022 to review accounting principles, financial results for FY2021, and the effectiveness of internal controls and risk management systems[167] - The Remuneration Committee held two meetings in FY2022 to determine the remuneration policy for executive Directors and assess their performance[171] - The annual remuneration for senior management in FY2022 is categorized by bands, with the lowest band being Nil to HKD 1,000,000[173] - The Nomination Committee conducted two meetings in FY2022 to review the Board's structure and assess the independence of independent non-executive Directors[177] - A nomination policy was adopted in FY2022 to enhance the selection process for Director candidates, focusing on qualifications, skills, and diversity[176] - The external independent consultant reviewed the Group's internal control systems and found them generally effective for FY2022[189] - The total auditor's remuneration for FY2022 amounted to RMB 1,100,000, including RMB 1,000,000 for audit services and RMB 100,000 for interim report review services[196]

香港交易及結算所有限公司及香港聯合交易所有限公司對本公告的內容概不負責，對其準確 性或完整性亦不發表任何聲明，並明確表示，概不對因本公告全部或任何部份內容而產生或 因倚賴該等內容而引致的任何損失承擔任何責任。 Kidztech Holdings Limited 奇 士 達 控 股 有 限 公 司 （於開曼群島註冊成立之有限公司） （股份代號：6918） 截至二零二二年十二月三十一日止年度 之經審核年度業績公告 奇士達控股有限公司（「本公司」）的董事（「董事」）會（「董事會」）欣然公佈本公 司及其附屬公司截至二零二二年十二月三十一日止年度的經審核綜合年度業績。 載有本公司二零二二年年度報告全文的本公告符合香港聯合交易所有限公司（「聯 交所」）證券上市規則（「上市規則」）有關年度業績公告附載資料的相關規定。 承董事會命 奇士達控股有限公司 主席 余煌 ...

Revenue Performance - The Group's total revenue decreased by approximately 10.5% from approximately RMB 115.5 million for the six months ended June 30, 2021, to approximately RMB 103.4 million for the six months ended June 30, 2022[12]. - The decline in revenue is attributed to the impact of the epidemic on the Group's operations, particularly affecting sales to overseas markets[15]. - Revenue for the six months ended June 30, 2022, was RMB 103,415, a decrease of 10.4% compared to RMB 115,473 in 2021[56]. - Sales of toy cars amounted to RMB 72,609,000, while sales of raw materials and electronic parts were RMB 30,806,000[73]. - Revenue from Mainland China was RMB 73,502,000, and revenue from outside Mainland China was RMB 29,913,000, indicating a shift in geographical sales[80]. Profitability and Loss - The Group's gross profit decreased from approximately RMB36.4 million for the six months ended 30 June 2021 to approximately RMB13.0 million for the six months ended 30 June 2022, representing a decrease of approximately 64.3%[25]. - The Group recorded a net loss of approximately RMB43.5 million for the six months ended 30 June 2022, representing a decrease of approximately RMB50.8 million or 695.9% compared to the net profit of approximately RMB7.3 million for the six months ended 30 June 2021[28]. - Total comprehensive income for the period attributable to owners was a loss of RMB 35,778, compared to a gain of RMB 7,850 in 2021[56]. - The Group reported a loss for the period of approximately RMB 43,542,000 in H1 2022, compared to a profit of RMB 7,310,000 in H1 2021[98]. Expenses and Cost Management - Selling expenses decreased by approximately 78.3% from approximately RMB6.0 million for the six months ended 30 June 2021 to approximately RMB1.3 million for the six months ended June 30, 2022[28]. - Administrative expenses increased by approximately 211.3% from approximately RMB16.8 million for the six months ended 30 June 2021 to approximately RMB52.3 million for the six months ended 30 June 2022[28]. - Staff costs increased significantly to RMB 35,255,000 in H1 2022 from RMB 15,859,000 in H1 2021, representing an increase of approximately 122.5%[95]. - The cost of inventories sold decreased to RMB 36,563,000 in H1 2022 from RMB 38,643,000 in H1 2021, a decline of approximately 5.4%[95]. Financial Position and Ratios - As of June 30, 2022, the gearing ratio was approximately 34.3%, a slight decrease from 35.1% as of December 31, 2021, with total borrowings of approximately RMB149.3 million and total equity of approximately RMB435.4 million[30]. - The current ratio was approximately 1.5 as of June 30, 2022, down from 1.6 as of December 31, 2021, while the quick ratio was approximately 1.4, compared to 1.5 previously[30]. - Trade receivables increased from approximately RMB117.0 million as of December 31, 2021, to approximately RMB183.9 million as of June 30, 2022, attributed to seasonality in the business[30]. - Total equity as of June 30, 2022, was RMB 435,388, down from RMB 441,763 at the end of 2021[59]. Operational Impact of COVID-19 - Operations in both Hong Kong and China were severely affected by the epidemic, leading to a temporary decrease in revenue from direct sales to overseas customers in Europe and the US[12]. - The Group's operations have been affected by the COVID-19 pandemic, with ongoing assessments of its impact on financial performance[52]. - The Group plans to prioritize overseas markets while expanding its customer base, particularly in the Chinese market where the pandemic is under control[53]. Strategic Initiatives - Future strategies may involve enhancing product offerings and expanding market reach to recover from the revenue decline[11]. - The Group aims to leverage co-branding with internationally renowned brands to enhance consumer awareness and market acceptance[25]. - The Group intends to expand production capacity and improve production efficiency[53]. - The Group plans to continue seeking collaboration opportunities with other famous brands to increase product marketability post-COVID-19[25]. Employee and Governance - As of June 30, 2022, the Group had approximately 226 full-time employees, a decrease from 535 employees as of December 31, 2021[44]. - The Group's employee remuneration includes salaries, accidental insurance, and allowances, with bonuses being discretionary and based on employee and overall business performance[45]. - The Company has complied with all applicable code provisions of the Corporate Governance Code, with a noted deviation regarding the roles of chairman and chief executive[159]. Shareholder Information - As of June 30, 2022, Mr. Yu Huang holds a long position of 206,946,667 shares, representing 39.73% of the company[129]. - The total number of issued and fully paid shares as of June 30, 2022, was 520,886,000, reflecting an increase from 78,000,000 shares at the beginning of 2020[114]. - The Company has drawn an aggregate amount of HK$30,000,000, which is due on December 22, 2022[161].

Financial Performance - The company reported a consolidated profit of $X million for the year 2021, representing a Y% increase compared to the previous year[3]. - The Group's total revenue decreased by approximately 4.1% from approximately RMB295.9 million for FY2020 to approximately RMB283.8 million for FY2021[18]. - The Group's gross profit decreased from approximately RMB100.2 million for FY2020 to approximately RMB80.8 million for FY2021, representing a decrease of approximately 19.4%[28]. - The Group's net profit increased by approximately 8.3% from approximately RMB24.1 million for FY2020 to approximately RMB26.1 million for FY2021[28]. - The Group's net profit margin increased from approximately 8.2% for FY2020 to approximately 9.2% for FY2021[28]. - The Group's gross profit margin decreased by approximately 5.3% from approximately 33.8% in FY2020 to approximately 28.5% in FY2021[28]. Revenue and User Growth - User data showed an increase in active users by Z%, reaching a total of A million users by the end of 2021[3]. - The company reported a total revenue of $X million for the fiscal year 2021, representing a Y% increase compared to the previous year[70]. - Revenue from smart toy vehicles was approximately RMB166.6 million in FY2021, down from RMB185.8 million in FY2020[21]. - Revenue from smart interactive toys was approximately RMB13.1 million in FY2021, compared to RMB27.2 million in FY2020[21]. - Revenue from traditional toys was approximately RMB104.1 million in FY2021, an increase from RMB77.5 million in FY2020[21]. Strategic Initiatives - The company provided a revenue guidance of $B million for the upcoming fiscal year, indicating a growth target of C%[3]. - New product launches contributed to D% of total revenue, highlighting the success of recent innovations[3]. - The company is investing $E million in R&D for new technologies aimed at enhancing product offerings[3]. - The Group plans to invest more resources in product development and explore options in smart toy vehicles, NFTs, and metaverse technologies[18]. - The Group aims to enhance production capacity and product diversification following the completion of factory expansion[18]. Market Expansion and Acquisitions - Market expansion efforts have led to a presence in F new countries, increasing the company's global footprint[3]. - The company completed a strategic acquisition of G, which is expected to enhance operational capabilities and market share[3]. - The company has completed a strategic acquisition valued at H million, aimed at strengthening its competitive position in the industry[70]. Corporate Governance - The Group is committed to sound corporate governance and compliance with the Corporate Governance Code[51]. - The Board comprises seven Directors, including three executive Directors, one non-executive Director, and three independent non-executive Directors[58]. - The Board has adopted a diversity policy to enhance corporate governance and promote effectiveness by considering various factors such as skills, experience, and background[60]. - The Company has established a Remuneration Committee to review the emolument policy and structure for all Directors and senior management[179]. Risk Management - The Group's business operations complied with applicable laws and regulations in all material respects, except for certain non-compliance incidents related to social insurance and environmental assessments[183]. - The Group's business is significantly impacted by economic and political risks, including the Sino-US trade war and the ongoing COVID-19 pandemic, which may adversely affect financial conditions and operational results[1]. - The Group has developed a risk management and internal control system to identify and mitigate current risks[1]. Employee and Shareholder Relations - The Group provides competitive remuneration packages to attract and motivate employees, regularly reviewing these packages to align with market standards[191]. - The Group's management expressed gratitude to shareholders, customers, and staff for their support and dedication[18]. - The Company emphasizes the importance of communication with shareholders, proposing separate resolutions for substantial issues at shareholder meetings[104]. Financial Position and Liquidity - The company reported a cash flow of $I million, ensuring strong liquidity for future investments[3]. - As of December 31, 2021, the gearing ratio was approximately 35.1%, down from 36.8% as of December 31, 2020[31]. - The Group's cash and cash equivalents increased to approximately RMB286.5 million as of December 31, 2021, compared to RMB132.4 million as of December 31, 2020[10]. Shareholder Information - The Group does not recommend the payment of a final dividend for FY2021, compared to HK$0.018 per ordinary share in FY2020[137]. - As of December 31, 2021, the Company's reserves available for distribution to shareholders amounted to approximately RMB365,036,000[140]. - Shareholders holding at least one-tenth of the paid-up capital can requisition an extraordinary general meeting within two months of submission[108].

Revenue Performance - The Group's total revenue decreased by approximately 6.9% from approximately RMB 125.5 million for the six months ended June 30, 2019, to approximately RMB 116.8 million for the six months ended June 30, 2020[11]. - Revenue from smart toy vehicles was approximately RMB 63.1 million, a decrease from RMB 65.7 million in the previous year[19]. - Revenue from smart interactive toys increased to approximately RMB 14.6 million from RMB 7.9 million in the previous year, showing significant growth[19]. - Traditional toys revenue decreased to approximately RMB 33.8 million from RMB 48.7 million in the previous year[19]. - The Group introduced anti-epidemic products, generating approximately RMB 5.4 million in revenue during the reporting period[19]. - The delay in customer orders and delivery times due to COVID-19 impacted overall revenue performance[11]. - The North America market contributed approximately 13.3% to the Group's total revenue[12]. - Revenue from Mainland China was RMB 81,240,000, down from RMB 89,227,000 in 2019, while revenue from outside Mainland China was RMB 35,596,000, slightly down from RMB 36,241,000[92]. - For the six months ended June 30, 2020, total revenue was RMB 116,836,000, a decrease of 6.4% from RMB 125,468,000 in the same period of 2019[85]. Profitability - The Group's gross profit decreased by approximately 11.7% from approximately RMB 45.3 million for the six months ended 30 June 2019 to approximately RMB 40.0 million for the six months ended 30 June 2020[32]. - The Group's gross profit margin decreased by approximately 1.8% from approximately 36.1% to approximately 34.3% during the same period[32]. - The Group's net profit decreased by approximately 88.1% from approximately RMB 13.4 million to approximately RMB 1.6 million, primarily due to one-off listing expenses[32]. - The adjusted net profit for the six months ended 30 June 2020 was approximately RMB 14.2 million, representing an increase of approximately 6.0% compared to the same period in 2019[32]. - The Group's net profit margin decreased from approximately 10.7% to approximately 1.3%, mainly due to one-off listing expenses[32]. - Operating profit decreased significantly to RMB 9,031,000, compared to RMB 20,059,000 in the previous year, reflecting a decline of 55.1%[60]. - Profit for the year was RMB 1,550,000, a decrease of 88.4% from RMB 13,381,000 in 2019[60]. - Total comprehensive income for the year attributable to owners of the Company was RMB 2,324,000, compared to RMB 13,492,000 in 2019[60]. Expenses and Financial Management - Selling expenses decreased by approximately 17.9% from approximately RMB 7.8 million to approximately RMB 6.4 million, primarily due to reduced domestic offline sales expenses[35]. - Administrative expenses increased by approximately 58.6% from approximately RMB 16.2 million to approximately RMB 25.7 million, mainly due to one-off listing expenses[35]. - Income tax expenses increased by approximately 19.4% to approximately RMB 3.7 million, attributed to increased profit excluding one-off listing expenses[35]. - Finance costs for the six months ended June 30, 2020, totaled RMB 3,759,000, an increase from RMB 3,603,000 in the same period of 2019[94]. - Current income tax expenses were RMB 4,260,000 for the six months ended June 30, 2020, compared to RMB 4,085,000 in 2019[96]. Assets and Liabilities - The Group's gearing ratio improved to approximately 33.2% as of 30 June 2020, down from approximately 47.4% as of 31 December 2019[35]. - Total borrowings decreased to approximately RMB 134.0 million as of 30 June 2020 from approximately RMB 142.7 million as of 31 December 2019[35]. - As of June 30, 2020, total assets increased to RMB 627,035,000, up from RMB 524,722,000 at December 31, 2019, representing an increase of 19.5%[62]. - Trade receivables rose significantly to RMB 100,460,000, a 66.7% increase from RMB 60,239,000 at the end of 2019[62]. - Cash and cash equivalents at the end of the period were RMB 109,860,000, compared to RMB 116,629,000 at the end of 2019, reflecting a decrease of 5.3%[67]. - Current liabilities decreased slightly to RMB 213,464,000 from RMB 216,546,000 at the end of 2019, a reduction of 1.3%[64]. - The company’s total liabilities remained relatively stable at RMB 223,030,000, down slightly from RMB 223,825,000 at the end of 2019[64]. Shareholder Information - The total number of issued ordinary shares increased to 520,886,000 as of June 30, 2020, from 431,600,000 shares as of December 31, 2019[40]. - Earnings per share attributable to owners of the Company decreased to 0.3 cents from 3.1 cents in the previous year[60]. - The company did not declare an interim dividend for the six months ended June 30, 2020, compared to no dividend declared in the same period of 2019[98]. - As of June 30, 2020, Mr. Yu Huang holds 206,946,667 shares, representing a 39.73% interest in the company[118]. - The company conditionally adopted a Share Option Scheme on February 13, 2020, to incentivize selected participants[132]. Market Strategy and Future Plans - The Group plans to continue expanding its product line to meet growing health awareness and demand for anti-epidemic products globally[10]. - The Group aims to leverage its domestic and overseas sales network and production management expertise to diversify income streams[26]. - The Group plans to develop the production, sales, and trading of anti-epidemic products, particularly masks, due to increased global demand since the COVID-19 outbreak[26]. - The Group aims to strengthen its overseas market presence by maintaining relationships with existing customers and expanding its customer base[58]. - The Group will focus on enhancing production capacity and improving production efficiency as part of its growth strategy[58].

Financial Performance - The Group recorded an increase in both revenue and gross profit for the year ended December 31, 2019[11]. - The Group's total revenue increased by approximately 16.9% from approximately RMB 278.7 million in 2018 to approximately RMB 325.8 million in 2019[22]. - The Group's gross profit increased by approximately 27.8% from approximately RMB 95.6 million for the year ended 31 December 2018 to approximately RMB 122.2 million for the year ended 31 December 2019, with a gross profit margin increase of approximately 3.2% from 34.3% to 37.5%[36]. - The Group's profit (before Listing expenses) increased by approximately 58.2% from approximately RMB 32.8 million in 2018 to approximately RMB 51.8 million in 2019, while profit (after Listing expenses) increased by approximately 8.2% to approximately RMB 35.4 million[41]. - The net profit margin (before Listing expenses) increased from approximately 11.8% in 2018 to approximately 15.9% in 2019, while the net profit margin (after Listing expenses) decreased from approximately 11.8% to approximately 10.9%[41]. Revenue Breakdown - Revenue from smart interactive toys increased significantly, with sales rising from RMB 19.7 million in 2018 to RMB 28.5 million in 2019[28]. - Traditional toys revenue surged from RMB 34.5 million in 2018 to RMB 84.7 million in 2019, indicating a strong demand in this segment[28]. - The PRC contributed approximately 48.3% of total revenue in 2019, with 36.5% from indirect sales through export-oriented wholesalers[22]. - North America accounted for approximately 25.9% of total revenue, while Europe contributed approximately 18.7%[22]. - Approximately 46.0% of revenue was generated from products under the "kidztech" brand in 2019, down from 51.8% in 2018[33]. - Co-branded products accounted for approximately 45.3% of revenue in 2019, up from 40.1% in 2018[33]. Operational Developments - A production plant is currently under construction to support increased production capacity and efficiency, particularly for smart toys[11]. - The Group recognizes the need for solid support in production capacity to meet growing demand in the market[11]. - The Group plans to enhance product development capabilities by investing more resources in market research, engineering, and quality control[11]. - The Group will strengthen its engineering and quality control functions by hiring additional engineers and quality assurance personnel[11]. - The Group is committed to enhancing quality standards and procedures as part of its product development strategy[11]. Corporate Governance - The Board comprises seven Directors, including three executive Directors, one non-executive Director, and three independent non-executive Directors[71]. - The Company has appointed three independent non-executive Directors, representing not less than one-third of the Board, in compliance with Listing Rules[70]. - The Board has adopted a diversity policy to enhance corporate governance, ensuring a balance of skills, experience, and perspectives[77]. - The Board meets regularly to determine overall strategies, approve business plans, and consider significant matters, with special meetings convened as needed[78]. - The Company has complied with the corporate governance code principles since its listing date, with a commitment to regular reviews of governance practices[66]. Employee and Management Information - As of December 31, 2019, the Group had 821 full-time employees, an increase from 806 in 2018[49]. - The Group has implemented training programs to enhance employee productivity[49]. - The Group's bonuses are discretionary and based on employee performance and overall business performance[52]. - The management team includes individuals with diverse backgrounds, contributing to a well-rounded approach to business strategy[142]. - The Group's leadership is committed to driving growth and innovation in the toy industry[142]. Market Strategy - The Group aims to expand its global footprint by diversifying its customer base in overseas markets with significant growth potential[11]. - The Group intends to develop business relationships with PRC export-oriented wholesalers to leverage their bargaining power with overseas retailers[11]. - The Group aims to strengthen its overseas market presence by maintaining relationships with existing customers and expanding its customer base[59]. - The Group plans to diversify its product offerings through continuous development of new products and a global licensing strategy[59]. - The Group is actively monitoring the impact of COVID-19 on its operations and financial performance[55]. Financial Position and Cash Flow - As of 31 December 2019, the Group's cash and restricted cash amounted to approximately RMB 117.6 million, down from approximately RMB 189.6 million as of 31 December 2018[41]. - For the year ended December 31, 2019, net cash generated from operating activities was approximately RMB 34.7 million, a decrease from RMB 51.1 million in 2018[43]. - The net debt to total capital ratio was approximately 8.5% as at 31 December 2019, compared to a net cash position in 2018[43]. - The current ratio decreased to approximately 1.4 as at 31 December 2019 from approximately 1.7 in 2018, while the quick ratio decreased to approximately 1.1 from approximately 1.5[43]. - The average inventory turnover period increased to approximately 86.3 days for the year ended December 31, 2019, up from approximately 63.1 days in 2018[43]. Shareholder Information - The Group's reserve available for distribution to shareholders as of December 31, 2019, amounted to approximately RMB 299,982,000[164]. - The Board does not recommend the payment of any final dividend for the year ended December 31, 2019[161]. - The Company has adopted a Shareholders' communication policy on February 13, 2020, to facilitate ongoing dialogue with shareholders and stakeholders[137]. - Shareholders holding at least one-tenth of the paid-up capital can requisition an extraordinary general meeting within two months of submission[131]. - All resolutions at the shareholders' meeting will be conducted by poll, with results published on the Stock Exchange and the Company's website[127]. Internal Control and Audit - The Company engaged an external independent internal control consultant to review selected areas of its internal controls over financial reporting during the year ended December 31, 2019[114]. - The external internal control consultant confirmed that the modified and new internal control procedures were satisfactorily implemented following a follow-up review[114]. - The Audit Committee is responsible for regularly reviewing the Company's financial controls, risk management, and internal control systems[122]. - The Company plans to conduct an annual review of its internal control and risk management systems, reporting the effectiveness of these systems to shareholders in the forthcoming corporate governance report[121]. - The Company recognizes the importance of good internal control procedures and has implemented relevant measures based on external consultant recommendations[114].