Revenue Performance - The Group's total revenue decreased by approximately 5.0% from approximately RMB53.1 million for the six months ended June 30, 2023, to approximately RMB50.5 million for the six months ended June 30, 2024[5]. - Revenue from sales of smart toy vehicles dropped by approximately 8.7% from approximately RMB53.1 million for the six months ended June 30, 2023, to approximately RMB48.5 million for the six months ended June 30, 2024[7]. - Revenue for the six months ended June 30, 2024, was RMB 50,488,000, a decrease of 5.1% from RMB 53,148,000 in 2023[44]. - Sales of smart toy vehicles accounted for RMB 48,509,000, while procurement and selling of raw materials and electronic parts contributed RMB 1,979,000[55]. - The Group did not record any revenue from smart interactive toys or traditional toys during the first half of 2024, consistent with the previous period[12]. Financial Losses and Profitability - The Group recorded a net loss of approximately RMB17.6 million for the six months ended June 30, 2024, representing an increase of loss of approximately RMB3.4 million or 23.6% compared to the loss of approximately RMB14.2 million for the six months ended June 30, 2023[15]. - Gross profit for the same period was RMB 8,597,000, down from RMB 8,805,000, reflecting a gross margin of 17.0%[44]. - Total comprehensive loss for the period was RMB 25,271,000, significantly higher than RMB 11,503,000 in the previous year[45]. - Net impairment losses on trade receivables rose to RMB 7,396,000 from RMB 3,467,000, indicating increased credit risk[44]. Economic Impact and Strategic Response - The decline in revenue was attributed to the downturn in the PRC's macroeconomic environment and the impact of the Russian-Ukrainian War and global inflation on operations in Hong Kong[5]. - The Group's China branch office operations were significantly affected by the challenging economic conditions, leading to a decrease in orders from both PRC and overseas customers[5]. - The interim report indicates a need for strategic adjustments in response to external economic pressures[5]. - Future strategies may include enhancing product offerings and exploring new markets to mitigate the impact of current economic challenges[4]. Operational Efficiency and Cost Management - The Group's selling expenses decreased significantly by approximately 97.4% from approximately RMB0.27 million for the six months ended 30 June 2023 to approximately RMB7,000 for the six months ended 30 June 2024[15]. - The Group's administrative expenses decreased by approximately 19.9% from approximately RMB15.1 million for the six months ended 30 June 2023 to approximately RMB12.1 million for the six months ended 30 June 2024[15]. - The Group intends to improve production efficiency and control costs by outsourcing part of the production process to suppliers and subcontractors[43]. Financial Position and Liquidity - As of June 30, 2024, the gearing ratio was approximately 46.6%, an increase of 3.9 percentage points from approximately 42.7% as of 31 December 2023[19]. - The Group's total borrowings were approximately RMB145.3 million as of June 30, 2024, compared to approximately RMB143.7 million as of 31 December 2023[19]. - The current ratio was approximately 1.4 as at 30 June 2024, down from approximately 1.5 as of 31 December 2023[20]. - The Group's cash and cash equivalents amounted to approximately RMB47.3 million as of June 30, 2024, compared to approximately RMB48.9 million as of December 31, 2023[20]. - Net current assets decreased to RMB 135,221,000 from RMB 155,023,000, reflecting a tighter liquidity position[46]. Share Capital and Governance - The total number of issued ordinary shares of the Company remained at 624,564,000 as of June 30, 2024[29]. - The Directors do not recommend the payment of an interim dividend for the six months ended June 30, 2024, consistent with the previous year[62]. - The company has complied with all applicable provisions of the Corporate Governance Code, except for the separation of the roles of chairman and chief executive officer, which are currently held by Mr. Yu Huang[102]. - The audit committee, composed entirely of independent non-executive directors, has direct access to external auditors and independent professional advisers as needed[102]. Employee and Operational Developments - As of June 30, 2024, the Group had 14 full-time employees, a decrease from 27 employees as of December 31, 2023[36]. - The Group has implemented training programs to enhance employee productivity[37]. - Bonuses for employees are discretionary and based on individual performance and overall business performance[38]. Share Option Scheme - The Share Option Scheme was conditionally adopted on February 13, 2020, to incentivize selected participants for their contributions to the Group[90]. - The exercise price of options under the Share Option Scheme cannot fall below the price stipulated in the Listing Rules[90]. - The total number of shares that may be allotted and issued upon the exercise of all options under the Share Option Scheme is capped at 52,000,000 shares, representing approximately 8.33% of the issued shares as of the report date[91][94]. - No options were exercised or vested during the six months ended June 30, 2024, and there were no cancellations or lapses of options during this period[95][96].

Revenue Performance - The Group's total revenue decreased by approximately 5.0% from approximately RMB53.1 million for the six months ended 30 June 2023 to approximately RMB50.5 million for the six months ended 30 June 2024[6]. - Revenue from sales of smart toy vehicles dropped by approximately 8.7% from approximately RMB53.1 million for the six months ended 30 June 2023 to approximately RMB48.5 million for the six months ended 30 June 2024[8]. - Revenue for the six months ended June 30, 2024, was RMB 50,488,000, a decrease of 5% compared to RMB 53,148,000 in the same period of 2023[55]. - Sales of smart toy vehicles accounted for RMB 48,509,000, while procurement and selling of raw materials and electronic parts contributed RMB 1,979,000[56]. Economic Impact - The decline in revenue was attributed to the downturn in the PRC's macroeconomic environment and the impact of the Russian-Ukrainian War and global inflation on operations in Hong Kong[6]. - The Group's China branch office operations were significantly affected by the economic conditions, leading to a decrease in orders from both PRC and overseas customers[10]. - The interim report indicates that the Group's operations are facing challenges due to external economic factors, impacting overall performance[10]. - The Group's future outlook may depend on the recovery of the macroeconomic environment in the PRC and global market conditions[10]. Profitability and Loss - Gross profit decreased by approximately 2.4% from approximately RMB8.8 million for the six months ended June 30, 2023, to approximately RMB8.6 million for the six months ended June 30, 2024[14]. - The gross profit margin improved to approximately 17.0% for the six months ended June 30, 2024, up from approximately 16.6% for the same period in 2023, due to effective cost control[14]. - The Group recorded a net loss of approximately RMB17.6 million for the six months ended June 30, 2024, an increase of approximately RMB3.4 million or 23.6% compared to the loss of approximately RMB14.2 million for the same period in 2023[14]. - Total comprehensive loss for the period was RMB 25,271,000, significantly higher than the loss of RMB 11,503,000 in the same period last year[44]. Financial Position - The gearing ratio increased to approximately 46.6% as of June 30, 2024, from approximately 42.7% as of December 31, 2023[18]. - Total borrowings were approximately RMB145.3 million as of June 30, 2024, compared to approximately RMB143.7 million as of December 31, 2023[18]. - The current ratio was approximately 1.4 as of June 30, 2024, down from approximately 1.5 as of December 31, 2023[19]. - Cash and cash equivalents amounted to approximately RMB47.3 million as of June 30, 2024, compared to approximately RMB48.9 million as of December 31, 2023[19]. Employee and Operational Changes - The Group had 14 full-time employees as of June 30, 2024, a decrease from 27 employees as of December 31, 2023[35]. - The Group has implemented training programs to enhance employee productivity, which is believed to have contributed to increased efficiency[36]. - The Group has adopted a share option scheme to reward employees for their contributions[36]. Shareholder Information - Mr. Yu Huang holds a long position in 206,746,667 shares, representing approximately 33.10% of the total shareholding[83]. - Ms. Chen Cheng, as the spouse of Mr. Yu Huang, is also deemed to hold a long position in 206,746,667 shares, equating to approximately 33.10%[88]. - Gold-Face Finance Limited has a security interest in 145,080,000 shares, representing approximately 23.23% of the total shareholding[87]. - Upbest Group Limited, as a controlled corporation, also holds a long position in 145,080,000 shares, equivalent to approximately 23.23%[87]. Corporate Governance - The Company complied with all applicable code provisions of the Corporate Governance Code, except for the separation of the roles of chairman and chief executive officer[101]. - The Company has established an Audit Committee in compliance with Rule 3.21 of the Listing Rules and the CG Code[116]. - All directors confirmed compliance with the Model Code for Securities Transactions during the six months ended June 30, 2024[105]. Share Option Scheme - The total number of Shares that may be allotted and issued upon the exercise of all options under the Share Option Scheme must not exceed 10% of the number of Shares in issue on the listing date, which is 52,000,000 Shares, representing approximately 8.33% of the Shares in issue as of the report date[92]. - The Company conditionally adopted the Share Option Scheme on 13 February 2020 to incentivize selected participants for their contributions[92]. - The company granted 52,000,000 options to employees at an exercise price of HK$1.17 per share, representing approximately 8.33% of the issued shares as of June 30, 2024[95]. - As of June 30, 2024, no options were exercised, lapsed, or cancelled during the six months ended[96].

Financial Performance - In 2023, China's toy exports amounted to USD 40.57 billion, down 12.2% year on year, marking eight consecutive months of negative growth[13]. - The Group's total revenue decreased by approximately 22.4% from approximately RMB169.4 million in FY2022 to approximately RMB131.4 million in FY2023[22]. - The Group's gross profit decreased from approximately RMB28.3 million in FY2022 to approximately RMB15.0 million in FY2023, representing a decrease of approximately 47.0%[42]. - The gross profit margin decreased by approximately 5.3% from approximately 16.7% in FY2022 to approximately 11.4% in FY2023[42]. - The net loss increased from approximately RMB76.7 million in FY2022 to approximately RMB98.3 million in FY2023, mainly due to increased net impairment losses[43]. - Selling expenses increased by approximately 80.3% from approximately RMB0.9 million in FY2022 to approximately RMB1.6 million in FY2023[44]. - Administrative expenses significantly decreased by approximately 53.9% from approximately RMB76.1 million in FY2022 to approximately RMB35.1 million in FY2023[45]. - The net impairment losses on trade and other receivables increased from approximately RMB24 million in FY2022 to approximately RMB40.7 million in FY2023, representing an increase of approximately 69.6%[51]. - Taxation expenses increased by approximately RMB12.3 million to approximately RMB6.9 million in FY2023, compared to a taxation credit of approximately RMB5.4 million in FY2022[52]. Business Strategy and Market Focus - The Group adjusted its business strategy by outsourcing most production processes, reducing fixed staff costs and machinery maintenance costs, which led to increased production costs and decreased gross profit[13]. - The Group actively explored emerging markets and reduced reliance on long-term customers from European and American markets[13]. - The Group plans to explore the domestic toy retail market and emerging countries around the "Belt and Road Initiative" to stabilize domestic consumption[37]. - The Group will continue to seek collaboration opportunities with well-known brands to enhance product marketability[35]. - The Group aims to enhance core competitiveness through optimization in market expansion, brand building, research and development, and talent attraction[18]. - The Group plans to expand production capacity by outsourcing part of the production process to suppliers and subcontractors, thereby improving production efficiency[106]. - The Group will allocate more resources to expand sales in domestic and emerging Asian markets[106]. - The Group aims to diversify its product offerings through continuous development of new products and a global licensing strategy[106]. Corporate Governance - The Group recognizes the importance of sound corporate governance and is committed to improving accountability and transparency for shareholders[108]. - The Board of Directors is responsible for the overall management and strategic direction of the Group, ensuring appropriate supervision and guidance[113]. - 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[109]. - The Board consists of six Directors, including two executive Directors, one non-executive Director, and three independent non-executive Directors[117]. - The Company has achieved gender diversity on the Board with 33.3% female representation, having two female members and four male members as of December 31, 2023[124]. - The Board has adopted a diversity policy to ensure a balanced composition that supports business strategy execution[123]. - The Board meets regularly to determine overall strategies and approve business plans, with special meetings convened as needed[130]. - The Company considers the current gender diversity satisfactory and is committed to further improvement when suitable candidates are identified[127]. Risk Management and Internal Control - The Group has adopted a three-tier risk management approach to identify, assess, and manage different types of risks[180]. - The Group emphasizes the importance of a sound internal control system to mitigate key risk exposures[180]. - The Audit Committee has reviewed the adequacy of resources and qualifications of the accounting and internal audit functions on an annual basis[182]. - The Group's internal control system is designed to provide reasonable assurance against material misstatement or loss[180]. - The Board has reviewed the effectiveness of the risk management and internal control system and considers them generally effective and adequate in all material respects[186]. Shareholder Communication - The company emphasizes communication with shareholders and presents independent resolutions for significant matters at the annual general meeting[197]. - All resolutions proposed at the annual general meeting are subject to voting, with results published on the Hong Kong Stock Exchange website and the company's website[197]. - The next annual general meeting notification will be sent to shareholders at least 21 days prior to the meeting[197]. - Shareholders can convene an extraordinary general meeting (EGM) following the procedures outlined in the Articles and applicable regulations[199].

Financial Performance - The Group's total revenue decreased by approximately 22.4% from approximately RMB169.4 million for the year ended December 31, 2022, to approximately RMB131.4 million for the year ended December 31, 2023[14]. - The Group's net loss increased from approximately RMB76.7 million for FY2022 to a net loss of approximately RMB98.3 million for FY2023, primarily due to an increase in net impairment losses on trade and other receivables[63]. - Gross profit decreased from approximately RMB 28.3 million in 2022 to about RMB 15.0 million in 2023, a reduction of approximately 47%[37]. - Gross margin fell from approximately 16.7% in 2022 to about 11.4% in 2023, a decline of approximately 5.3%[37]. - Selling expenses increased by approximately 80.3% from approximately RMB0.9 million for FY2022 to approximately RMB1.6 million for FY2023, mainly due to increased freight and marketing expenses[63]. - Administrative expenses significantly decreased by approximately 53.9% from approximately RMB76.1 million in FY2022 to approximately RMB35.1 million in FY2023, due to the absence of share-based payment recognition[63]. - Net impairment losses on trade and other receivables increased significantly from approximately RMB24 million for FY2022 to approximately RMB40.7 million for FY2023, representing an increase of approximately 69.6%[64]. - Taxation expenses increased by approximately RMB12.3 million, from a credit of approximately RMB5.4 million in FY2022 to an expense of approximately RMB6.9 million in FY2023[64]. Market Trends - China's toy exports amounted to USD40.57 billion in 2023, down 12.2% year on year, marking negative growth for eight consecutive months[10]. - The overall consumption in the toy market was sluggish despite vibrant sales during the Christmas season in Europe and America[10]. - Traditional toys generated no revenue in 2023, a decline from RMB 88.94 million in 2022, due to a sluggish domestic retail market[32]. Business Strategy - The Group adjusted its business strategy by outsourcing production for most orders, reducing fixed staff costs and machinery maintenance costs, while increasing production management manpower[10]. - The Group actively explored emerging markets and reduced reliance on long-term customers from European and American markets[11]. - The Group adjusted its sales strategy to focus on emerging markets and lower profit margin products to diversify its customer base[31]. - The Group aims to improve talent team building in product development and production to enhance core competitiveness[11]. - The Group aims to enhance its core competitiveness through optimization in market expansion, brand building, and R&D innovation, focusing on smart toy vehicles and interactive toys[51]. - The Group plans to explore the domestic toy retail market and emerging countries along the "Belt and Road Initiative" to leverage stable domestic consumption[61]. Production and Inventory Management - Certain stockpiled raw materials and electronic parts were sold at low gross profit to speed up inventory turnover and reduce the risk of overstocking[14]. - The average inventory turnover period increased to approximately 55.5 days in FY2023 from approximately 44.1 days in FY2022[41]. - The majority of smart toy vehicles sold were under the "kidztech" brand and included co-branded products with renowned automobile manufacturers[31]. - The group suspended production and sales of traditional toys until market conditions improve due to low gross profit margins[32]. - The Group intends to expand its production capacity by outsourcing part of the production process to suppliers and subcontractors to improve efficiency[84]. Financial Position - As of December 31, 2023, the Group's cash and cash equivalents amounted to approximately RMB 48.9 million, up from approximately RMB 6.2 million as of December 31, 2022[41]. - Trade receivables decreased from approximately RMB 327.5 million as of December 31, 2022, to approximately RMB 247.4 million as of December 31, 2023, with average turnover days increasing from approximately 273.2 days to approximately 332.0 days[41]. - Trade and other payables decreased by approximately RMB 32.1 million or approximately 19.0% from approximately RMB 168.8 million as of December 31, 2022, to approximately RMB 136.7 million as of December 31, 2023[41]. - Bank and other borrowings amounted to approximately RMB 143.7 million as of December 31, 2023, compared to approximately RMB 139.8 million as of December 31, 2022, with fixed interest rates ranging from 2.25% to 18.00%[43]. - The Group's gearing ratio was approximately 42.7%, up from 35.1% on 31 December 2022, with total borrowings of approximately RMB143.7 million[64]. - The current ratio was approximately 1.5 as at 31 December 2023, compared to approximately 1.6 as at 31 December 2022[64]. Corporate Governance - The Group has complied with all applicable code provisions of the Corporate Governance Code, with ongoing reviews to enhance governance standards[86]. - The Board is committed to sound corporate governance, ensuring accountability and transparency to protect shareholder interests[112]. - The Board believes that the current structure, where the chairman and CEO roles are held by the same individual, allows for swift decision-making and effective business direction[113]. - The Company has adopted the Model Code for Securities Transactions by Directors, confirming compliance by all Directors during FY2023[125]. - The Audit Committee is composed of independent members, ensuring transparency and accountability in financial reporting[131]. - The Company has established three Board Committees: Audit, Remuneration, and Nomination, to oversee specific matters[130]. - The Company has received annual confirmations of independence from each independent non-executive Director, ensuring compliance with the Listing Rules[137]. Employee Management - As of December 31, 2023, the Group had 27 full-time employees, a significant decrease from 95 in 2022, mainly due to outsourcing part of the production process[80]. - The Group has implemented training programs for employees to enhance productivity, contributing to overall business performance[82]. - The Group's contributions to the Mandatory Provident Fund Scheme in Hong Kong are 5% of employees' earnings, capped at HK$1,500 monthly[83]. - Bonuses for employees are discretionary, based on individual performance and the overall performance of the Group[82]. - As of December 31, 2023, 38% of the Group's employees are female, reflecting its commitment to diversity and inclusion[93]. Risk Management - The Group's financial risk management is overseen by the treasury department, maintaining a healthy financial condition through cash generated from operations and bank borrowings[103]. - The Group's operating subsidiaries in Hong Kong primarily transact in USD, while those in China operate in RMB, with no significant foreign exchange risk identified[104]. - The company emphasizes risk management and financial control within its operations[192]. Future Outlook - The geopolitical landscape and global inflation are expected to adversely impact economic recovery, while the Group anticipates stable domestic consumption[61]. - The Group plans to diversify its product offerings through continuous development of new products and a global licensing strategy[84].

Revenue Performance - The Group's total revenue decreased by approximately 48.6% from approximately RMB103.4 million for the six months ended June 30, 2022, to approximately RMB53.1 million for the six months ended June 30, 2023[14]. - Revenue from sales of smart toy vehicles dropped by approximately 48.6% from approximately RMB103.4 million for the six months ended June 30, 2022, to approximately RMB53.1 million for the six months ended June 30, 2023[16]. - The Group did not record any revenue from smart interactive toys during the first half of 2023, compared to nil for the same period in 2022[17]. - The Group did not record any revenue from traditional toys during the period, down from RMB5.3 million for the six months ended June 30, 2022, due to a quiet domestic retail market[24]. - Revenue for the six months ended June 30, 2023, was RMB 53,148,000, a decrease of 48.6% from RMB 103,415,000 in the same period of 2022[111]. - Sales of toy cars accounted for the entire revenue in 2023, while sales of raw materials and electronic parts were nil, compared to RMB 30,806,000 in 2022[111]. - Revenue from sales to PRC customers dropped from approximately RMB 73.5 million in 2022 to zero in 2023 due to outsourcing manufacturing to suppliers outside of the PRC[119]. Profitability and Loss - The Group's gross profit decreased by approximately 32.3% from approximately RMB13.0 million for the six months ended June 30, 2022, to approximately RMB8.8 million for the six months ended June 30, 2023[27]. - Gross profit for the same period was RMB 8,805, down 32.5% from RMB 13,010 in 2022[93]. - The Group recorded a net loss of approximately RMB14.2 million for the six months ended 30 June 2023, a decrease of 67.4% compared to a net loss of approximately RMB43.5 million for the same period in 2022[31]. - The Group's loss for the period attributable to owners is approximately RMB 14,232,000, a decrease from a loss of RMB 43,542,000 in the same period last year, representing a 67.3% improvement[134]. - Loss from operations improved to RMB 8,650, compared to a loss of RMB 39,618 in the prior year, indicating a reduction of 78.1%[93]. - Total comprehensive income for the period attributable to the owners of the Company was a loss of RMB 11,503, an improvement from a loss of RMB 35,778 in the same period last year[95]. Expenses and Cost Management - The Group's gross profit margin rebounded to approximately 16.6% for the six months ended June 30, 2023, from approximately 12.6% for the six months ended June 30, 2022, mainly due to effective cost control[27]. - Selling expenses decreased by approximately 80% from approximately RMB1.3 million for the six months ended June 30, 2022, to approximately RMB0.27 million for the six months ended June 30, 2023[32]. - Administrative expenses decreased by approximately 71.1% from approximately RMB52.3 million for the six months ended June 30, 2022, to approximately RMB15.1 million for the six months ended June 30, 2023[33]. - Staff costs decreased dramatically to RMB 948,000 in the first half of 2023 from RMB 35,255,000 in the same period last year, a reduction of 97.3%[133]. - The depreciation of property, plant, and equipment decreased to RMB 6,886,000 in 2023 from RMB 8,538,000 in 2022, a decline of 19.4%[133]. - The amortization of intangible assets significantly decreased to RMB 108,000 in 2023 from RMB 2,407,000 in 2022, a reduction of 95.5%[133]. Financial Position and Liquidity - The Group's cash and cash equivalents amounted to approximately RMB30.6 million as at 30 June 2023, an increase from approximately RMB6.2 million as at 31 December 2022[49]. - The current ratio was approximately 1.5 as at 30 June 2023, slightly down from approximately 1.6 as at 31 December 2022[44]. - The gearing ratio was approximately 34.8% as at 30 June 2023, stable compared to approximately 35.1% as at 31 December 2022[43]. - The Group's trade receivables increased by approximately RMB62.4 million or approximately 19.1% from RMB327.5 million as at 31 December 2022 to approximately RMB389.9 million as at 30 June 2023[46]. - Trade receivables increased to RMB 389,895 as of June 30, 2023, up 19.0% from RMB 327,541 at the end of 2022[94]. - The Group's trade payables increased significantly to RMB 106,890,000 as of June 30, 2023, compared to RMB 60,974,000 as of December 31, 2022, representing a rise of 75.4%[149]. - Trade and other payables increased by approximately RMB56.5 million or approximately 38.4% from approximately RMB168.8 million as at 31 December 2022 to approximately RMB225.3 million as at 30 June 2023[51]. Strategic Initiatives and Future Plans - The Group plans to continue seeking opportunities for co-branding with renowned brands to enhance product marketability[26]. - The Group's smart toys and traditional toy products are branded under "kidztech" and co-branded with renowned automobile manufacturers and popular entertainment characters[25]. - The Group has suspended the production and sales of traditional toys until market conditions improve due to low profit margins[24]. - The company aims to prioritize overseas markets while expanding its customer base, focusing on PRC export-oriented wholesalers and retailers[90][91]. - The company plans to diversify its product offerings through continuous development of new products and a global licensing strategy[91]. - The company intends to expand its production capacity by outsourcing part of the production process to suppliers and subcontractors to improve efficiency[91]. - The Group did not have any significant investments, material acquisitions, or disposals of subsidiaries during the six months ended June 30, 2023[53][58]. Share Capital and Financing - On July 26, 2023, the Company entered into a placing agreement to issue up to 104,177,200 new ordinary shares at a placing price of HK$0.35 per share, representing a discount of approximately 1.4% to the closing price on the date of the agreement[73]. - The completion of the placing agreement on August 23, 2023, resulted in the successful placement of 103,678,000 shares, raising gross proceeds of HK$36,287,300[74][75]. - The net proceeds from the placing, after related expenses, were approximately HK$35,765,000, which will strengthen the Group's financial position[75][76]. - The newly issued shares accounted for approximately 19.9% of the company's issued share capital before the placement and about 16.6% after the placement[79]. - The total number of issued ordinary shares was 520,886,000, unchanged from December 31, 2022[55][60]. - The Group's capital commitments remained stable at approximately RMB17.4 million as of June 30, 2023[65][70]. - The Group's bank and other borrowings were secured by property, plant, and equipment, as well as personal guarantees from certain shareholders[14]. - The total borrowings as of June 30, 2023, were repayable on demand or within one year, amounting to RMB 134,478,000, a decrease from RMB 139,834,000 as of December 31, 2022[14]. Employee and Management Information - As of June 30, 2023, the company had approximately 27 full-time employees, a significant decrease from 95 employees as of December 31, 2022, due to outsourcing part of the production process[83][88]. - The total remuneration packages for employees include salaries, insurance, and discretionary bonuses based on performance[84][85]. - The company has implemented training programs to enhance employee productivity and has adopted a share option scheme to reward contributions[84][88]. Share Option Scheme - The total number of shares that may be allotted and issued under the Share Option Scheme is capped at 10% of the total shares in issue on the listing date, which is 52,000,000 shares[183]. - The Company granted 52,000,000 share options at an exercise price of HK$1.17 per share, with the closing price before the grant date being HK$1.15 per share[184][187]. - As of June 30, 2023, there were 52,000,000 effective share options outstanding, representing approximately 9.98% of the issued shares[185][187]. - The options granted are exercisable for 10 years from the date of grant, which is from June 21, 2022, to June 20, 2032[192][193]. - The options granted were not subject to any performance targets[192].

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） 截至二零二三年六月三十日止六個月未經審核中期業績公告 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二零二三年六月三十日止六個月未經審核綜合中期業績。 本公告載有本公司二零二三年中期報告的全文，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」）有關中期業績初步公告附隨資料之 相關規定。 本公司二零二三年中期報告的列印版本將於二零二三年九月三十日或之 前交付給本公司股東，並可於聯交所網站(www.hkexnews.hk)及本公司網站 (https://kidztech.net/)上查看。 承董事會命 奇士達控股有限公司 ...

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 ...

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].