索蒴·研丸 KML Technology Group Limited 高萌科技集團有限公司 (Incorporated in the Cayman Islands with limited liability) （於開曼群島註fflJ-戌立之有限公司） Stock Code股份代號：8065 Third Qua臣霹繻 2019 索蒴·研丸 KML Technology Group Limited 高萌科技集團有限公司 • CHARACTERISTIC OF GEM OF THE STOCK EXCHANGE OF HONG KONG LIMITED (THE "STOCK EXCHANGE") GEM has been positioned as a market designed to accommodate small and mid-sized companies to which a higher investment risk may be attached than other companies listed on the Stock Exchange. Prospective investor ...

Financial Performance - The Group's revenue for the six months ended September 30, 2019, was approximately HK$106.6 million, representing an increase of approximately HK$1.6 million or 1.5% compared to HK$105.0 million for the same period in 2018[18]. - The gross profit for the same period was approximately HK$28.7 million, down from approximately HK$32.0 million in 2018[18]. - The net profit for the six months ended September 30, 2019, was approximately HK$6.0 million, a decrease from approximately HK$8.8 million in 2018[19]. - Revenue for the six months ended September 30, 2019, was HK$106,589,000, a slight increase of 1.5% compared to HK$105,025,000 in the same period of 2018[23]. - Gross profit decreased to HK$28,669,000, down 10.6% from HK$32,035,000 year-over-year[23]. - Profit before taxation for the period was HK$7,276,000, representing a decline of 32.5% from HK$10,757,000 in the previous year[23]. - Profit attributable to owners of the Company was HK$6,033,000, down 31.3% from HK$8,771,000 in the same period of 2018[23]. - Basic earnings per share decreased to 1.51 HK cents, down 31.0% from 2.19 HK cents year-over-year[23]. - The Group's profit before taxation for the six months ended September 30, 2019, was significantly impacted by a net foreign exchange loss of HK$38,000 compared to a loss of HK$363,000 in 2018[112]. - Net profit attributable to the owners of the company was approximately HK$7.2 million for the six months ended September 30, 2019, down from HK$8.8 million in 2018, primarily due to decreased gross profit and losses from changes in fair value of insurance policies[166]. Dividend and Recommendations - The Board does not recommend the payment of an interim dividend for the six months ended September 30, 2019, consistent with the previous year[19]. - The Group did not recommend any interim dividend for the six months ended September 30, 2019[117]. Compliance and Reporting - The financial report is prepared in compliance with the GEM Listing Rules, ensuring accuracy and completeness of the information provided[4]. - The interim financial statements have been prepared in accordance with Hong Kong Accounting Standard 34, ensuring compliance with local regulations[38]. Market and Strategic Position - The company continues to face market volatility risks due to its positioning in the GEM market, which is designed for small and mid-sized companies[2]. - The company has not disclosed any new product developments or market expansion strategies in the current report[18]. - The company’s financial highlights indicate a need for strategic adjustments to improve profitability moving forward[18]. - The Group anticipates potential negative impacts on performance due to recent economic, social, and political conditions in Hong Kong, which may delay some E&M engineering projects[158]. - The Group aims to diversify its clientele and explore emerging markets while maintaining its position in the existing E&M market[155]. Assets and Liabilities - Trade receivables increased to HK$54,384,000, up 32.1% from HK$41,146,000 as of March 31, 2019[26]. - Total assets less current liabilities increased to HK$151,366,000, compared to HK$144,343,000 as of March 31, 2019[29]. - Net assets rose to HK$150,463,000, up from HK$144,135,000 as of March 31, 2019[29]. - Current liabilities increased to HK$54,377,000, compared to HK$44,672,000 as of March 31, 2019[29]. - The Group's lease liabilities at April 1, 2019, were HK$5,588,000, with current liabilities amounting to HK$5,445,000 and non-current liabilities at HK$143,000[100]. Cash Flow and Investments - Net cash from operating activities decreased to HK$23,746,000 for the six months ended September 30, 2019, down from HK$24,974,000 in the same period of 2018, representing a decline of approximately 4.9%[34]. - Net cash used in investing activities was HK$26,617,000, a significant increase compared to a net cash inflow of HK$5,045,000 in the prior year, indicating a shift in investment strategy[34]. - Cash and cash equivalents at the end of the period decreased to HK$36,718,000 from HK$70,244,000, reflecting a reduction of approximately 47.7%[34]. - New bank borrowings raised amounted to HK$2,600,000, indicating the company's efforts to secure additional financing[34]. - The Group has utilized HK$25,592,000 of the planned HK$36,000,000 net proceeds as of 30 September 2019, leaving HK$10,408,000 unutilized[186]. Employee and Operational Changes - As of September 30, 2019, the company employed a total of 204 full-time employees, down from 209 in 2018[179]. - Total staff costs for the six months ended September 30, 2019, were HK$38,023,000, a decrease of 1.8% from HK$38,739,000 in 2018[112]. - The Group has enhanced employee remuneration packages, including upgraded medical insurance and professional indemnity insurance plans[188]. - The Group is in the process of recruiting additional marketing staff and setting up a marketing and demonstration area[196]. Capital Expenditure and Investments - Capital expenditure amounted to approximately HK$3.4 million for the six months ended September 30, 2019, compared to approximately HK$0.4 million in 2018[173]. - The Group has purchased several fibre cable testing related equipment to maintain competitiveness in the railway sector, anticipating increased reliance on optical fibre networks[187]. - The Group plans to expand office space for research and development, recruit additional R&D staff, and invest in relevant software to enhance capabilities in electronic payment services[157]. Engineering Solutions and Services - E&M engineering solutions and services generated revenue of HK$88,335,000, up from HK$87,515,000, indicating a growth of about 0.94%[104]. - E&M engineering maintenance services revenue increased to HK$16,177,000 from HK$14,209,000, reflecting a growth of approximately 13.87%[104]. - The Group's operations are solely derived from E&M engineering solutions and services, with no further analysis of segments presented due to a single operating segment[106]. - The Group has been providing electrical and mechanical engineering solutions and services in Hong Kong for over 40 years, focusing on Transportation Mission Critical Systems Solutions[146]. Marketing and Business Development - The Group has increased marketing efforts and business exposure, particularly in Taiwan[194]. - The Group has produced corporate and promotional videos to enhance corporate image and brand awareness[195]. - The Group has further enhanced banking facilities to improve performance guarantees for undertaking large-scale E&M engineering projects[198].

Financial Performance - The Group's revenue for the three months ended June 30, 2019, was approximately HK$51.8 million, a decrease of approximately HK$5.3 million or 9.3% compared to HK$57.1 million for the same period in 2018[19] - The gross profit for the same period was approximately HK$15.4 million, down from approximately HK$18.1 million in 2018[19] - The net profit for the three months ended June 30, 2019, was approximately HK$5.1 million, compared to a net profit of approximately HK$6.5 million in 2018[20] - Revenue for the three months ended June 30, 2019, was HK$51,784,000, a decrease of 9.9% from HK$57,087,000 in the same period of 2018[24] - Gross profit for the period was HK$15,360,000, down 15.0% from HK$18,071,000 year-over-year[24] - Profit before taxation decreased to HK$5,838,000, a decline of 27.4% compared to HK$8,029,000 in the previous year[24] - Profit for the period attributable to owners of the Company was HK$5,141,000, down 20.7% from HK$6,483,000 in the same period of 2018[24] - Basic earnings per share for the period was 1.29 HK cents, a decrease from 1.62 HK cents in the prior year[24] - The financial highlights indicate a trend of declining revenue and profit margins, suggesting potential challenges in market performance[19][20] Dividend Policy - The Board does not recommend the payment of an interim dividend for the three months ended June 30, 2019, consistent with the previous year[20] - The Group does not recommend an interim dividend for the three months ended June 30, 2019[45] - The Board does not recommend an interim dividend for the three months ended June 30, 2019[72] Operational Insights - The Group's performance reflects a need for strategic reassessment to address the revenue decline and improve profitability moving forward[19][20] - The Group's operational strategies may require adjustments to enhance market competitiveness and drive future growth[19][20] - The Group's operations are solely derived from E&M engineering solutions and services, focusing on automatic fare collection systems, electronic payment systems, and traffic control systems[39] - The Group's revenue is generated from a full spectrum of services including design, equipment assembly, supply, installation, and maintenance support[56] - The E&M Engineering Solutions and Services segment accounted for approximately 81.6% of total revenue for the three months ended June 30, 2019[61] - Revenue from E&M engineering solutions and services was HK$42,215,000, a decrease of 13.1% from HK$48,557,000 in the same period of 2018[38] - Revenue from E&M engineering maintenance services increased to HK$8,565,000, up 21.4% from HK$7,057,000 year-over-year[38] - The Group submitted 73 tenders and quotations, with 35 contracts awarded, including subcontracts totaling approximately HK$22.5 million for CCTV system replacements[62] Governance and Compliance - The report is prepared in compliance with the GEM Listing Rules, affirming the commitment to accurate and complete financial reporting[5] - The financial statements for the three months ended June 30, 2019, have not been audited but were reviewed by the Company's audit committee[35] - The Audit Committee reviewed the unaudited condensed consolidated results for the three months ended June 30, 2019, and confirmed compliance with applicable accounting standards[83] - The company has adopted the corporate governance code as per GEM Listing Rules and complied with all applicable provisions as of June 30, 2019[84] - The compliance adviser, Kingsway Capital, has no interest in the share capital of the company or its subsidiaries[89] - The company confirmed that all directors complied with the trading standards as required by GEM Listing Rules during the reporting period[85] Shareholding Structure - As of June 30, 2019, Mr. Luk Kam Ming holds 162,000,000 shares, representing approximately 40.5% of the company's shareholding[96] - Mr. Luk Kwai Lung has an interest in a controlled corporation with 138,000,000 shares, accounting for approximately 34.5% of the company's shareholding[96] - Mr. Luk Yin Cheung holds 138,600,000 shares, which is about 34.7% of the company's shareholding[96] - Mr. Chan Chak Lun Philip is a beneficial owner of 4,000,000 shares, representing approximately 1.0% of the company's shareholding[96] - The shareholding structure indicates significant family interests, with multiple individuals holding substantial shares through spousal interests[106] - The company continues to maintain a robust governance structure regarding share ownership and options[107] Share Option Scheme - The share option scheme was approved on September 20, 2017, to recognize contributions from directors and employees[107] - The company granted a total of 9,200,000 share options under the Share Option Scheme on September 3, 2018, with approximately 48.9% vested by March 3, 2019, and 51.1% expected to vest by March 3, 2020[109] - The exercise price of the options granted is HK$0.385 per share, with the closing price immediately before the date of grant being HK$0.35 per share[111] - As of June 30, 2019, all 9,200,000 options granted remained outstanding, with no options exercised, cancelled, or lapsed during the three months ended[116] - The company adopted a Share Award Scheme on November 5, 2018, which is valid for 15 years, but no awarded shares were granted, vested, or forfeited during the three months ended June 30, 2019[117] Taxation - Current tax expense for the three months ended June 30, 2019, was HK$220,000, significantly lower than HK$1,235,000 in 2018, reflecting a decrease of 82.2%[43] - Deferred tax expense increased to HK$477,000 in 2019 from HK$311,000 in 2018, representing a rise of 53.5%[43] Market Conditions - The Group does not foresee significant impacts from recent economic, social, or political conditions in Hong Kong on its performance[64] Other Information - There were no subsequent events reported after the reporting period[54] - The Group's operations are concentrated in a single operating segment with no further analysis presented[39] - The company did not purchase, sell, or redeem any of its listed securities during the three months ended June 30, 2019[88] - No changes to directors' information were required to be disclosed as of the report date[87] - The company has not identified any other persons with interests or short positions in shares that require disclosure as of June 30, 2019[104] - None of the Directors or controlling Shareholders had interests in any competing business during the same period[121] - The Company did not disclose any significant financial performance metrics or user data in the provided documents[124]

Financial Performance - For the year ended March 31, 2019, KML Technology Group Limited reported a revenue increase of approximately HK$16.6 million, or 8.6%, from approximately HK$194.0 million to approximately HK$210.6 million[19]. - The Group achieved a net profit of approximately HK$19.3 million, representing a net profit margin of approximately 9.2%, compared to a net loss of approximately HK$2.1 million for the previous year[19]. - Excluding non-recurring listing expenses from the previous year, the Group's net profit for that year would have been approximately HK$13.7 million, with a net profit margin of 7.1%[19]. - The significant increase in net profit by 40.9% and net profit margin by 29.6% was attributed to improved productivity and better cost management[19]. - Revenue for the year ended March 31, 2019, amounted to approximately HK$210.6 million, representing an increase of approximately HK$16.6 million or approximately 8.6% compared to HK$194.0 million for the year ended March 31, 2018[27]. - Net profit for the year ended March 31, 2019, was approximately HK$19.3 million, a significant improvement from a net loss of approximately HK$2.1 million for the previous year[28]. - Gross profit for the year ended March 31, 2019, was approximately HK$66.1 million, compared to approximately HK$56.0 million in 2018[30]. - The Group's gross profit rose by approximately 18.0% from approximately HK$56.0 million to approximately HK$66.1 million, attributed to increased revenue and a relative reduction in cost of sales[47]. - The cost of sales increased by approximately 4.7% from approximately HK$138.0 million to approximately HK$144.5 million, primarily due to a higher number of projects undertaken[47]. - The Group recorded a net profit attributable to owners of approximately HK$19.3 million for the year, a significant turnaround from a net loss of approximately HK$2.1 million in the previous year[49]. Business Operations and Projects - The E&M Solutions and Services segment accounted for approximately 82.2% of total revenue for the year ended March 31, 2019[39]. - Major projects completed during the reporting period included the supply and installation of an e-Payment system at government tolls and the provision of over 400 Octopus-enabled kiosks[39]. - Future projects include the retrofit of about 1,000 ticket gates to enable Alipay HK QR Code payment for travel on Hong Kong's MTR system[39]. - The Group partnered with Octopus to develop wall-mounted kiosks for the Government's Public Transport Fare Subsidy Scheme, which commenced in February 2019[20]. - KML Technology Group Limited is retrofitting over 1,000 MTR entry and exit gates with QR Code payment capabilities in collaboration with AlipayHK over the next two years[20]. - The Group plans to explore and expand its clientele while diversifying into Smart Mobility and Smart Living markets[21]. - The Group aims to deepen penetration in the Hong Kong E&M engineering industry, particularly in Transportation Mission Critical System Solutions, with a planned allocation of HK$7,564,000, but actual spending was only HK$790,000[72]. Management and Governance - The company has a strong management team with diverse engineering and business backgrounds, enhancing its operational capabilities[105][109]. - The Group's leadership structure includes family members, ensuring continuity and alignment with the company's vision[119][122]. - The Group's board includes independent non-executive directors with significant experience in various industries, enhancing corporate governance[130][136]. - The company is committed to strategic planning and financial management to navigate industry challenges and opportunities[98]. - The management team is well-educated, with degrees from reputable institutions, contributing to informed decision-making[118][126]. - The Group's risk management framework is supported by experienced directors, ensuring robust oversight and strategic direction[125][131]. Financial Position and Liquidity - As of 31 March 2019, the Group had approximately HK$77.0 million in bank balances and cash, an increase of approximately HK$16.8 million from HK$60.2 million in the previous year[56]. - The Group maintained a healthy liquidity position throughout the year, with ongoing credit assessments to reduce exposure to credit risk[77]. - The Group did not incur any borrowing for the year ended March 31, 2019, making the gearing ratio not applicable[75]. - As of March 31, 2019, the Group had pledged bank deposits of HK$10.8 million to secure banking facilities, an increase from HK$5.0 million in 2018[80]. - Future commitments included operating lease commitments of approximately HK$5.9 million, down from HK$10.2 million in 2018, and capital commitments of approximately HK$1.2 million for additional equipment[81]. Environmental and Sustainability Initiatives - KML Technology Group Limited has been awarded the ISO 14001:2015 certification, demonstrating its commitment to environmental sustainability[21]. - The Group's environmental management system was recognized, achieving ISO 14001:2015 certification for the company and its two subsidiaries during the reporting period[176]. Challenges and Risks - The economic outlook for the year ending March 31, 2020, is expected to be uncertain due to potential trade wars, but the Group anticipates ample opportunities for growth[21]. - The company faces potential operational and financial risks due to reliance on key personnel and the ability to attract and retain talented staff[97]. - The company may need to form joint ventures to bid for larger or more complex projects, which could introduce operational or financial risks[97]. - The company is encountering challenges in exploring opportunities in different business areas due to licensing or registration requirements, which may limit business growth[97]. Employee and Workforce - The company employed 202 employees as of March 31, 2019, a decrease from 212 employees in 2018[64]. - The Group employed 202 employees and maintained a good working relationship without any labor disputes during the year[183]. - The company has expanded its insurance coverage and employee remuneration packages, including upgrading medical insurance plans and providing funds for performance bonus schemes[66]. Dividend and Shareholder Information - No final dividend is recommended for the year ended March 31, 2019[31]. - The Board did not recommend a final dividend for the year ended March 31, 2019, consistent with the previous year[164].

Financial Performance - The Group's revenue for the nine months ended December 31, 2018, was approximately HK$156.2 million, an increase of approximately HK$9.5 million or 6.5% compared to HK$146.7 million for the same period in 2017[19]. - Gross profit for the nine months ended December 31, 2018, amounted to approximately HK$46.5 million, up from approximately HK$40.6 million in 2017[19]. - The net profit for the nine months ended December 31, 2018, was approximately HK$12.5 million, a significant improvement from a net loss of approximately HK$6.0 million in 2017[20]. - Revenue for the nine months ended December 31, 2018, increased to HK$156,243,000, up 6.3% from HK$146,687,000 in the same period of 2017[24]. - Gross profit for the same period rose to HK$46,498,000, representing a 14.5% increase from HK$40,635,000 in 2017[24]. - Profit before taxation improved significantly to HK$15,017,000 compared to a loss of HK$4,147,000 in the previous year[24]. - Net profit attributable to owners of the Company for the period was HK$12,456,000, a turnaround from a loss of HK$5,967,000 in 2017[24]. - Basic earnings per share increased to 3.11 HK cents, compared to a loss of 1.49 HK cents per share in the prior year[24]. - The Group recorded a profit attributable to owners of approximately HK$12.5 million for the nine months ended December 31, 2018, compared to a loss of approximately HK$6.0 million in 2017[87]. Dividend Policy - The Board does not recommend an interim dividend for the nine months ended December 31, 2018, consistent with the previous year[20]. - The Group does not recommend the payment of any interim dividend for the nine months ended December 31, 2018[45]. - No interim dividend was recommended for the nine months ended December 31, 2018[93]. Business Segments - Revenue from E&M engineering solutions and services was HK$129,744,000, up from HK$123,584,000 in 2017[38]. - E&M engineering maintenance services revenue increased to HK$21,548,000, a 40.5% rise from HK$15,336,000 in the previous year[38]. - The Group's largest business segment, the E&M solutions and services division, contributed approximately 83.0% of total revenue for the nine months ended December 31, 2018[81]. - E&M Solutions and Services segment accounted for approximately 83.0% of the total revenue for the nine months ended 31 December 2018, with a subtotal of HK$129.7 million[79]. - The Group's operations are solely derived from E&M engineering solutions and services, focusing on automatic fare collection systems, electronic payment systems, and traffic control systems[39]. Share Options and Equity - The Company recognized share-based expenses of HK$745,000 during the period[27]. - Total equity attributable to owners of the Company increased to HK$137,004,000 as of December 31, 2018, from HK$120,048,000 in the previous year[27]. - The maximum number of shares for options under the Share Option Scheme is capped at 40,000,000, representing 10% of the total shares issued[55]. - A total of 9,200,000 share options were granted under the Share Option Scheme as of December 31, 2018[135]. - The exercise price for the share options was set at HK$0.385, with the closing price before the grant being HK$0.35[63]. - The subscription price for shares under the Share Option Scheme is determined by the Board and cannot be less than the highest of the closing price on the date of grant or the average closing prices for the preceding five business days[133]. - The Share Option Scheme will remain in force for 10 years from the Listing Date unless terminated earlier by shareholders[134]. Compliance and Governance - The Group's financial data is presented in compliance with the GEM Listing Rules, ensuring transparency and accuracy[5]. - The audit committee has reviewed the unaudited consolidated results for the nine months ended December 31, 2018, and found them to comply with applicable accounting standards[106]. - The company has established an audit committee in accordance with GEM Listing Rules to oversee financial reporting and compliance matters[106]. - The compliance adviser confirmed that it or its associates had no interests in the company's share capital[110]. Market Outlook - The Group's performance reflects a recovery from previous losses, indicating potential for future growth[20]. - The Group expects revenue from the modernization and upgrading of transportation systems to continue growing in both the short and long term due to expanding market opportunities[82]. - The report emphasizes the importance of careful consideration for investors due to the higher risks associated with companies listed on GEM[2]. Shareholding Structure - As of December 31, 2018, Mr. KM Luk holds 162,000,000 shares, representing approximately 40.5% of the company's shareholding[114]. - Mr. KL Luk has an interest in a controlled corporation with 138,000,000 shares, accounting for about 34.5% of the company's shareholding[114]. - Mr. YC Luk also has an interest in a controlled corporation with 138,600,000 shares, which is approximately 34.7% of the company's shareholding[114]. - Mr. CL Chan holds 4,000,000 shares, representing about 1.0% of the company's shareholding[114]. - As of December 31, 2018, KML Holdings held 138,000,000 shares, representing approximately 34.5% of the company's shareholding[120]. - Madam Leung, as a beneficial owner and spouse of Mr. KM Luk, held 162,000,000 shares, accounting for approximately 40.5% of the company's shareholding[120]. - Ms. Chan Patricia, as the spouse of Mr. KL Luk, was deemed to be interested in 138,000,000 shares, representing approximately 34.5% of the company's shareholding[120]. - Ms. Woo, as a beneficial owner and spouse of Mr. YC Luk, held 138,600,000 shares, which is approximately 34.7% of the company's shareholding[120]. Operational Highlights - The Group completed significant projects including the Supply and Installation of "Stop-and-go" e-Payment System and the Provision of over 400 units of Octopus-enabled kiosks[79]. - The Group plans to undertake future projects including Optical Fibre Backbones for various train control systems and Replacement of Smoke Curtains at specific lines[79]. - The Group was awarded over 140 projects during the reporting period, including the design and implementation of mobile payment for Taoyuan Metro and retrofitting about 1,000 ticket gates for Alipay HK[80]. Administrative Expenses - Administrative expenses rose by approximately 7.7% from approximately HK$29.8 million to approximately HK$32.1 million, mainly due to increased professional fees and staff costs[86].