CORPORATE INFORMATION [Board and Management](index=4&type=section&id=Board%20and%20Management) The report lists the company's board members, committee members (Audit, Remuneration, Nomination), and key management personnel, with Mr. Liu Hongwei serving as Non-executive Director and Chairman - The company's board of directors comprises three executive directors, one non-executive director, and three independent non-executive directors, with **Mr. Liu Hongwei** serving as the Non-executive Director and Chairman[12](index=12&type=chunk)[13](index=13&type=chunk) - The company has established an Audit Committee, Remuneration Committee, and Nomination Committee, all with independent non-executive director participation, chaired by **Ms. Pan Jianli**, **Mr. Pan Jianguo**, and **Mr. Liu Hongwei**, respectively[12](index=12&type=chunk)[13](index=13&type=chunk) [Corporate Structure and Advisors](index=5&type=section&id=Corporate%20Structure%20and%20Advisors) The report details the company's legal advisors, auditor (Ernst & Young), principal bankers, registered office, and principal place of business, noting its GEM listing with stock code 8073 - The company's auditor is **Ernst & Young**[15](index=15&type=chunk) - The company is listed on the GEM of The Stock Exchange of Hong Kong Limited, with stock code **8073**[18](index=18&type=chunk) CORPORATE GOVERNANCE [Governance Compliance](index=7&type=section&id=Governance%20Compliance) The company confirms compliance with GEM Listing Rules' Corporate Governance Code during the reporting period, with all directors adhering to the securities dealing code and no listed securities transactions - The company believes it has applied and complied with all applicable code provisions of Appendix 15 to the GEM Listing Rules, the Corporate Governance Code, for the six months ended June 30, 2020[20](index=20&type=chunk)[23](index=23&type=chunk) - During the reporting period, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities[22](index=22&type=chunk)[25](index=25&type=chunk) [Audit Committee](index=8&type=section&id=Audit%20Committee) The Audit Committee, comprising three independent non-executive directors, oversees financial reporting and internal controls, having reviewed and approved the interim condensed consolidated financial statements for the six months ended June 30, 2020 - The Audit Committee comprises three independent non-executive directors: **Ms. Pan Jianli** (Chairperson), **Mr. Pan Jianguo**, and **Dr. Li Ling**[29](index=29&type=chunk)[31](index=31&type=chunk) - The Audit Committee has reviewed the interim financial report and believes it has been prepared in accordance with applicable accounting principles and practices and has made adequate disclosures[30](index=30&type=chunk)[31](index=31&type=chunk) OTHER INFORMATION [Share Option Scheme](index=9&type=section&id=Share%20Option%20Scheme) The company's 2017 share option scheme has granted 9.44 million options, representing 1.815% of issued shares, with 5.56 million forfeited and 0.7 million lapsed in H1 2020 due to resignations - As of the reporting date, **9.44 million** share options have been granted under the Share Option Scheme, representing **1.815%** of the company's issued shares[39](index=39&type=chunk)[42](index=42&type=chunk) - For the period ended June 30, 2020, a total of **5.56 million** share options were forfeited due to the resignation of grantees, and **0.7 million** share options were lapsed by one grantee[39](index=39&type=chunk)[42](index=42&type=chunk) [Substantial Shareholders' Interests](index=12&type=section&id=Substantial%20Shareholders'%20Interests) As of June 30, 2020, Top Access Management Limited holds 62.37% of the company, wholly owned by Shuifa Singyes and ultimately controlled by Shuifa Group, with other major shareholders including AMATA Limited (7.69%) and Kunlun Holdings Group Co., Ltd. (5.00%) Substantial Shareholders' Interests as of June 30, 2020 | Shareholder Name | Number of Shares Held | Approximate Shareholding Percentage | | :--- | :--- | :--- | | Top Access Management Limited | 324,324,325 | 62.37% | | China Shuifa Singyes Energy Group Co., Ltd. | 324,324,325 | 62.37% | | AMATA Limited | 40,000,000 | 7.69% | | Kunlun Holdings Group Co., Ltd. | 26,021,206 | 5.00% | - The entire issued share capital of Top Access is legally and beneficially owned by Shuifa Singyes, approximately **66.92%** equity interest of which is held by Shuifa Group (Hong Kong), which is ultimately wholly owned by Shuifa Group, thus Shuifa Group is deemed the ultimate controlling shareholder of the company[63](index=63&type=chunk) [Directors' and Chief Executive's Interests](index=15&type=section&id=Directors'%20and%20Chief%20Executive's%20Interests) As of June 30, 2020, Mr. Liu Hongwei, Non-executive Director and Chairman, is deemed to have an 8.08% interest in Shuifa Singyes, an associate of the company, through his controlled entity Strong Eagle Holdings Ltd - Mr. Liu Hongwei, Non-executive Director and Chairman, through holding **53%** of the equity interest in Strong Eagle Holdings Ltd., is deemed to have an interest in **203.80 million shares** of Shuifa Singyes, representing **8.08%** of Shuifa Singyes' issued share capital[68](index=68&type=chunk)[73](index=73&type=chunk) [Competing Businesses](index=17&type=section&id=Competing%20Businesses) The controlling shareholder, Shuifa Singyes, has confirmed compliance with its non-competition undertaking during the reporting period, with no competing businesses or conflicts of interest identified for directors, controlling shareholders, or their associates - The controlling shareholder, Shuifa Singyes, has confirmed its compliance with the undertakings in the non-competition deed for the six months ended June 30, 2020[75](index=75&type=chunk)[77](index=77&type=chunk) - During the reporting period, none of the company's directors, controlling shareholders, or their respective close associates held any business or interest that competes or may compete with the Group's business[76](index=76&type=chunk)[78](index=78&type=chunk) MANAGEMENT DISCUSSION AND ANALYSIS [Business Review](index=18&type=section&id=Business%20Review) The Group primarily develops, produces, and sells ITO conductive films and smart dimming products, experiencing decreased sales and revenue across all product lines in H1 2020 due to COVID-19 related delays in customer resumption of work - Due to the impact of the COVID-19 pandemic, many customers delayed resuming work, leading to delayed delivery of some sales orders and a year-on-year decrease in sales volume in H1 2020[81](index=81&type=chunk)[83](index=83&type=chunk) H1 2020 Product Revenue | Product | H1 2020 Revenue (RMB) | H1 2019 Revenue (RMB) | YoY Change | | :--- | :--- | :--- | :--- | | ITO Conductive Film | 21,538,000 | 27,007,000 | -20.3% | | Smart Dimming Film | 14,228,000 | 24,808,000 | -42.6% | | Smart Dimming Glass | 4,977,000 | 6,386,000 | -22.1% | | Smart Dimming Projection System | 42,000 | 140,000 | -70.0% | | Others | 4,510,000 | 5,629,000 | -19.9% | [Outlook and Prospects](index=20&type=section&id=Outlook%20and%20Prospects) Despite Q1 impacts, sales have gradually recovered since Q2 as the pandemic is controlled in China, with management cautiously optimistic about industry recovery and committed to R&D and prudent capacity expansion - The company believes that market participants in the technology industry must invest significant resources in research and development to maintain competitiveness[96](index=96&type=chunk)[99](index=99&type=chunk) - Since the second quarter of 2020, as the COVID-19 pandemic has been brought under control in China, the company's business has gradually recovered, and cash flow remains stable[97](index=97&type=chunk)[99](index=99&type=chunk) [Financial Review](index=21&type=section&id=Financial%20Review) In H1 2020, revenue decreased by 29.2% to RMB 45.3 million, gross profit fell by 50.5% to RMB 11.7 million with margin declining to 25.8% due to product mix and fixed costs, and administrative expenses rose by 19.4% from increased depreciation and R&D Key Financial Indicators | Financial Metric (RMB thousand) | H1 2020 | H1 2019 | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | 45,295 | 63,970 | -29.2% | | Cost of Sales | 33,594 | 40,321 | -16.7% | | Gross Profit | 11,701 | 23,649 | -50.5% | | Administrative Expenses | 12,249 | 10,260 | +19.4% | - Gross profit margin decreased from **37.0%** in the same period last year to **25.8%**, primarily due to: 1) an increased proportion of lower-margin ITO film sales; and 2) higher unit fixed costs resulting from reduced production volume in Q1[104](index=104&type=chunk)[106](index=106&type=chunk) - Administrative expenses increased by **19.4%**, mainly due to increased depreciation from the acquisition of production machinery and higher research costs for developing new "smart color-changing glass" materials[110](index=110&type=chunk)[114](index=114&type=chunk) [Liquidity and Capital Resources](index=22&type=section&id=Liquidity%20and%20Capital%20Resources) As of June 30, 2020, the Group had no bank borrowings, a stable gearing ratio of 24.5%, and capital expenditure of RMB 17.83 million for ITO conductive film capacity expansion, with RMB 10 million in bank cash frozen due to a product quality dispute - As of June 30, 2020, the Group had **no bank borrowings**[112](index=112&type=chunk)[115](index=115&type=chunk) Liquidity and Capital Resources Metrics | Metric | June 30, 2020 | December 31, 2019 | | :--- | :--- | :--- | | Gearing Ratio | 24.5% | 27.7% | | Capital Commitments | 6,200,000 RMB | 13,620,000 RMB | - Capital expenditure for the first half of the year amounted to **RMB 17.83 million**, primarily for purchasing production machinery and equipment to expand ITO conductive film production capacity[117](index=117&type=chunk)[121](index=121&type=chunk) - Due to a product quality dispute lawsuit, **RMB 10 million** of the company's bank cash was frozen by the court, but management, based on legal counsel's advice, believes it has strong defenses and has not made any loss provision for this[120](index=120&type=chunk)[124](index=124&type=chunk) [Use of Proceeds](index=24&type=section&id=Use%20of%20Proceeds) Of the HKD 93.5 million net proceeds from the 2017 listing, approximately HKD 63.4 million has been used as of June 30, 2020, with slower-than-planned utilization due to delays in production line automation and installation - As of June 30, 2020, approximately **HKD 63.4 million** of the net proceeds of **HKD 93.5 million** from the listing has been utilized[139](index=139&type=chunk) - The actual use of proceeds was lower than planned, mainly due to delays in the automation and installation of production lines, as finding suitable equipment manufacturers took longer than expected[140](index=140&type=chunk)[143](index=143&type=chunk) [Dividends and Employees](index=26&type=section&id=Dividends%20and%20Employees) The Board does not recommend an interim dividend for 2020, and as of June 30, 2020, the Group employed 129 full-time staff - The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2020[141](index=141&type=chunk)[144](index=144&type=chunk) - As of June 30, 2020, the Group had a total of **129** full-time employees[142](index=142&type=chunk)[145](index=145&type=chunk) INDEPENDENT REVIEW REPORT [Auditor's Conclusion](index=27&type=section&id=Auditor's%20Conclusion) Ernst & Young's independent review found no material non-compliance with IAS 34 in the interim financial information, while noting that the comparative financial statements for H1 2019 were not reviewed - The auditor Ernst & Young's conclusion is that nothing has come to their attention that causes them to believe the interim financial information is not prepared, in all material respects, in accordance with International Accounting Standard 34 "Interim Financial Reporting"[154](index=154&type=chunk)[157](index=157&type=chunk) - The auditor specifically noted that the comparative condensed consolidated financial statements for the six months ended June 30, 2019, were not reviewed[155](index=155&type=chunk)[158](index=158&type=chunk) INTERIM CONDENSED FINANCIAL INFORMATION [Consolidated statement of profit or loss and other comprehensive income](index=29&type=section&id=Consolidated%20statement%20of%20profit%20or%20loss%20and%20other%20comprehensive%20income) For H1 2020, the Group reported RMB 45.3 million in revenue, a 29.2% decrease, with profit for the period significantly down by 63.9% to RMB 2.41 million, and basic earnings per share at RMB 0.005 Consolidated Statement of Profit or Loss and Other Comprehensive Income | Metric (RMB thousand) | H1 2020 (Unaudited) | H1 2019 (Unaudited) | | :--- | :--- | :--- | | REVENUE | 45,295 | 63,970 | | Gross profit | 11,701 | 23,649 | | PROFIT BEFORE TAX | 2,514 | 8,032 | | PROFIT FOR THE PERIOD | 2,411 | 6,695 | | Profit attributable to owners of the company | 2,497 | 6,259 | | Basic EPS (RMB) | 0.005 | 0.012 | [Consolidated statement of financial position](index=31&type=section&id=Consolidated%20statement%20of%20financial%20position) As of June 30, 2020, total assets were RMB 309 million, total liabilities RMB 60.73 million, and net assets RMB 248 million, a slight decrease from year-end 2019, with stable net current assets of RMB 158 million Consolidated Statement of Financial Position | Metric (RMB thousand) | June 30, 2020 (Unaudited) | December 31, 2019 | | :--- | :--- | :--- | | Total non-current assets | 100,831 | 105,000 | | Total current assets | 208,097 | 214,100 | | **Total assets** | **308,928** | **319,100** | | Total current liabilities | 50,566 | 55,644 | | Total non-current liabilities | 10,165 | 13,525 | | **Total liabilities** | **60,731** | **69,169** | | **Net assets** | **248,197** | **249,931** | | **Total equity** | **248,197** | **249,931** | [Consolidated statement of cash flows](index=34&type=section&id=Consolidated%20statement%20of%20cash%20flows) H1 2020 saw a net cash outflow from operating activities of RMB 12.04 million, contrasting with a net inflow last year, primarily due to inventory increase and trade payables decrease, with net cash inflows from investing and financing activities Consolidated Statement of Cash Flows | Metric (RMB thousand) | H1 2020 (Unaudited) | H1 2019 (Unaudited) | | :--- | :--- | :--- | | Net cash flows from/(used in) operating activities | (12,040) | 10,530 | | Net cash flows from/(used in) investing activities | 3,220 | (30,855) | | Net cash flows from/(used in) financing activities | 1,285 | (3,580) | | **Net decrease in cash and cash equivalents** | **(7,535)** | **(23,905)** | | Cash and cash equivalents at end of period | 19,429 | 44,386 | [Notes to interim condensed financial information](index=36&type=section&id=Notes%20to%20interim%20condensed%20financial%20information) Financial notes detail accounting policies, segment information, revenue, related party transactions, and contingent liabilities, including RMB 10 million in frozen bank deposits due to a product quality dispute, and disclose the 2019 final dividend and various related party transactions - The Group's business is considered a single reportable segment, primarily generating revenue in Mainland China, which contributed **RMB 42.79 million** in revenue in H1 2020, accounting for **94.5%** of total revenue[192](index=192&type=chunk)[194](index=194&type=chunk) - As of June 30, 2020, total trade and bills receivables amounted to **RMB 134 million**, of which **RMB 96.07 million** was overdue for more than three months[233](index=233&type=chunk)[238](index=238&type=chunk) - The company declared a final dividend of **HKD 1.0 cent per share** for the year ended December 31, 2019, totaling approximately **RMB 4.76 million**, which was paid in July 2020[214](index=214&type=chunk)[216](index=216&type=chunk) - The notes disclose various related party transactions with the parent company, intermediate holding company, and fellow subsidiaries, including leases, catering services, goods sales, and fund transfers[283](index=283&type=chunk)[290](index=290&type=chunk)

(Incorporated in the Bermuda with limited liability) (於百慕達註冊成立的有限公司) 2020 第一季度業績報告 FIRST QUARTERLY REPORT CHARACTERISTICS 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 investors should be aware of the potential risks of investing in such companies and should make the decision to in ...

[CHAIRMAN'S STATEMENT](index=7&type=section&id=CHAIRMAN%27S%20STATEMENT) [Performance Overview and Business Development](index=7&type=section&id=CHAIRMAN%27S%20STATEMENT) In 2019, the Group achieved 14.5% revenue growth and RMB 18.2 million profit attributable to shareholders, driven by a 174.5% increase in ITO conductive film sales and enhanced market share for smart dimming products Key Financial Indicators for 2019 | Metric | Amount | | :--- | :--- | | **Revenue** | RMB 148 million | | Year-on-year Growth | 14.5% | | **Profit Attributable to Shareholders** | RMB 18.2 million | | **Proposed Final Dividend** | HK 1.0 cent per share | - ITO conductive film sales revenue reached **RMB 51.9 million**, representing a **174.5% year-on-year increase**, primarily due to the acquisition of Huabei Co., Ltd. in December 2018[24](index=24&type=chunk)[28](index=28&type=chunk) - Combined revenue from smart dimming film and smart dimming glass businesses totaled **RMB 67 million**, with increasing brand recognition and market share[25](index=25&type=chunk)[28](index=28&type=chunk) [Technology Development and Future Plans](index=8&type=section&id=TECHNOLOGY%20DEVELOPMENT) The Group maintains technology-driven innovation, achieving **40% market share** in China's smart dimming film market in 2019, and plans to expand market share through M&A while strengthening R&D in functional film materials - In 2019, the Group's market share for smart dimming film in mainland China reached **40%**[30](index=30&type=chunk)[32](index=32&type=chunk) - The smart color-changing glass R&D project was selected as a Zhuhai City innovation project, receiving **RMB 12 million** in government grants[30](index=30&type=chunk)[32](index=32&type=chunk) - Future plans include building a manufacturing industry cluster centered on conductive films and smart dimming products through mergers and acquisitions[31](index=31&type=chunk)[33](index=33&type=chunk) [MANAGEMENT DISCUSSION AND ANALYSIS](index=8&type=section&id=MANAGEMENT%20DISCUSSION%20AND%20ANALYSIS) [Business Review](index=8&type=section&id=BUSINESS%20REVIEW) In 2019, the Group's business segments showed mixed performance, with ITO conductive film revenue surging **174.5%** due to an acquisition, while smart dimming projection systems declined **87.7%**, leading to a **7.9%** decrease in profit attributable to owners due to increased impairment losses on trade receivables 2019 Revenue Performance by Business Segment | Business Segment | 2019 Revenue (RMB) | 2018 Revenue (RMB) | Year-on-year Change | | :--- | :--- | :--- | :--- | | ITO Conductive Film | 51,948,000 | 18,923,000 | +174.5% | | Smart Dimming Film | 49,231,000 | 47,700,000 | +3.2% | | Smart Dimming Glass | 17,762,000 | 17,010,000 | +4.4% | | Smart Dimming Projection System | 3,237,000 | 26,405,000 | -87.7% | | Other Goods and Services | 25,856,000 | 19,254,000 | +34.3% | - Profit attributable to owners slightly decreased by **7.9%** from **RMB 19.79 million** in 2018 to **RMB 18.22 million** in 2019, primarily due to increased impairment losses on trade receivables[44](index=44&type=chunk)[46](index=46&type=chunk) [Outlook and Prospects](index=10&type=section&id=OUTLOOK%20AND%20PROSPECTS) The Group plans to focus on film products and expand into overseas markets, with the COVID-19 pandemic causing only a one-week production delay and limited impact on operations and financials by the report date - Future strategy will shift focus to film products, with plans to expand business into overseas markets[48](index=48&type=chunk)[51](index=51&type=chunk) - COVID-19 pandemic caused a one-week production delay until February 9, 2020, but production has since returned to normal levels with over **95%** of employees back to work, indicating limited impact[55](index=55&type=chunk)[58](index=58&type=chunk) [Financial Review](index=11&type=section&id=FINANCIAL%20REVIEW) In 2019, total revenue grew **14.5%** to **RMB 148 million**, primarily from ITO conductive film sales, though gross margin decreased to **39.8%**; the Group maintained a stable **27.7%** gearing ratio with no bank borrowings 2019 Financial Performance Summary | Metric | 2019 (RMB) | 2018 (RMB) | Year-on-year Change | | :--- | :--- | :--- | :--- | | **Revenue** | 148,034,000 | 129,292,000 | +14.5% | | **Cost of Sales** | 89,052,000 | 70,089,000 | +27.1% | | **Gross Profit** | 58,982,000 | 59,203,000 | -0.4% | | **Gross Margin** | 39.8% | 45.8% | -6.0pp | | **Administrative Expenses** | 22,686,000 | 20,740,000 | +9.4% | Analysis of Use of Listing Proceeds (as of 2019/12/31) | Business Strategy | Planned Use (HKD million) | Actual Use (HKD million) | Balance (HKD million) | | :--- | :--- | :--- | :--- | | Overseas Business Expansion | 9.8 | 4.2 | 5.6 | | New Materials and Product R&D | 21.1 | 11.5 | 9.6 | | Purchase of Machinery and Equipment | 6.8 | 6.8 | — | | Enhancement of Wide ITO Conductive Film | 4.3 | 4.3 | — | | Working Capital | 7.3 | 7.3 | — | | China Sales and Marketing | 8.7 | 4.7 | 4.0 | | Smart Dimming Product Fully Automatic Production Line | 12.0 | 12.0 | — | | Laser Home Theater System | 3.0 | 0.8 | 2.2 | | Smart Dimming Product Ultra-wide Production Line | 11.5 | — | 11.5 | | Glass Processing Fully Automatic Production Line | — | 9.0 | 9.0 | - As of December 31, 2019, the Group had **no bank borrowings**, with a stable gearing ratio of **27.7%** compared to **26.1%** in 2018[72](index=72&type=chunk)[83](index=83&type=chunk) - The Group faces a product quality dispute lawsuit, resulting in **RMB 12.52 million** in bank cash being frozen by the court; however, directors believe they have strong defenses and have not recognized related losses[91](index=91&type=chunk)[95](index=95&type=chunk) [Possible Risks and Uncertainties](index=18&type=section&id=POSSIBLE%20RISKS%20AND%20UNCERTAINTIES%20FACING%20THE%20COMPANY) The Group faces significant business and financial risks, including intense competition in ITO conductive film and smart dimming product markets, intellectual property protection challenges, and reliance on a single production base in China - The ITO conductive film market is highly competitive with numerous participants and potential consolidation, while the smart dimming product market faces price pressure from large manufacturers and new entrants[111](index=111&type=chunk)[112](index=112&type=chunk)[115](index=115&type=chunk) - Protecting self-developed technology and proprietary knowledge is crucial for competitiveness, with increased intellectual property infringement claims risk as the Group expands into overseas markets[119](index=119&type=chunk)[120](index=120&type=chunk)[121](index=121&type=chunk) - All production activities are conducted at a single facility leased from the controlling shareholder, making the Group vulnerable to significant business disruption and profitability impact from any natural disaster or accident[125](index=125&type=chunk)[127](index=127&type=chunk) [CORPORATE GOVERNANCE REPORT](index=21&type=section&id=CORPORATE%20GOVERNANCE%20REPORT) [Board and Committees](index=22&type=section&id=Board%20and%20Committees) The company complied with corporate governance codes, with a board comprising executive, non-executive, and independent non-executive directors, and distinct roles for Chairman and CEO, supported by audit, remuneration, and nomination committees to ensure oversight - The company has applied and complied with all applicable code provisions of the Corporate Governance Code in Appendix 15 of the GEM Listing Rules[131](index=131&type=chunk) - The roles of Chairman (Mr. Liu Hongwei) and Chief Executive Officer (Mr. Sun Jinli) are held by different individuals, ensuring clear segregation of duties[148](index=148&type=chunk)[151](index=151&type=chunk) - The company has established Audit, Remuneration, and Nomination Committees, whose composition and responsibilities comply with Listing Rules, and all committees held meetings in 2019 to fulfill their duties[162](index=162&type=chunk)[174](index=174&type=chunk)[180](index=180&type=chunk) [Risk Management and Internal Control](index=32&type=section&id=Risk%20Management%20and%20Internal%20Control) The Board is responsible for the Group's risk management and internal control systems, reviewing their effectiveness annually, and currently opts for external professional internal audit services due to cost-effectiveness, with this approach re-evaluated yearly - The Board is responsible for risk management and internal control systems, having reviewed their effectiveness during the reporting year, covering financial, operational, and compliance controls[197](index=197&type=chunk) - The Group currently lacks an internal audit function, as the Board deems external professional services more cost-effective given the company's size, a need that will be reviewed annually[198](index=198&type=chunk)[199](index=199&type=chunk) [Shareholders' Rights](index=33&type=section&id=SHAREHOLDERS%27%20RIGHTS) The report outlines shareholder communication channels and key rights, including procedures for convening extraordinary general meetings, proposing resolutions, and submitting inquiries to the Board, ensuring transparency and participation - Shareholders holding not less than **10%** of the paid-up share capital have the right to request an extraordinary general meeting[211](index=211&type=chunk)[213](index=213&type=chunk) - Shareholders holding not less than **5%** of the total voting rights or at least **100** shareholders may submit written requests for the company to propose resolutions or circulate statements at general meetings[212](index=212&type=chunk)[214](index=214&type=chunk) [REPORT OF THE DIRECTORS](index=42&type=section&id=REPORT%20OF%20THE%20DIRECTORS) [Principal Activities and Business Review](index=43&type=section&id=Principal%20Activities%20and%20Business%20Review) The company, an investment holding entity, primarily engages in R&D, production, and sales of ITO conductive films and related smart dimming products in mainland China, with a change in ultimate control due to a share subscription by Shuifa Group (Hong Kong) Holdings Limited in 2019 - The Group's principal activities involve the R&D, production, and sales of ITO conductive films and related downstream products (smart dimming films, glass, and projection systems), primarily operating in mainland China[275](index=275&type=chunk)[279](index=279&type=chunk) - In 2019, controlling shareholder China Singyes Solar Technologies Holdings Limited allotted and issued **1,687,008,585** new shares to Shuifa Group (Hong Kong) Holdings Limited, resulting in the latter holding **66.92%** equity in Singyes Solar and indirectly changing the Company's ultimate control[283](index=283&type=chunk)[285](index=285&type=chunk) [Dividends and Reserves](index=45&type=section&id=Dividends%20and%20Reserves) The Board recommends a final dividend of HK 1.0 cent per share for 2019, with distributable reserves of approximately RMB 6.34 million as of year-end, and plans to transfer RMB 10 million from share premium to contributed surplus for distribution - The Board recommends a final dividend of **HK 1.0 cent** per share for 2019, lower than **HK 1.2 cents** in 2018[298](index=298&type=chunk)[305](index=305&type=chunk) - As of end-2019, the company's distributable reserves were **RMB 6.34 million**, with plans to transfer **RMB 10 million** from the share premium account to the contributed surplus account for distribution[301](index=301&type=chunk)[302](index=302&type=chunk) [Major Customers and Suppliers](index=47&type=section&id=Major%20Customers%20and%20Suppliers) In 2019, the Group's customer and supplier concentration was moderate, with the top five customers accounting for 27% of total revenue and the top five suppliers for 43.5% of total purchases, and no related party interests among them 2019 Customer and Supplier Concentration | Category | Percentage of Total (%) | | :--- | :--- | | **Top Five Customers** | 27% | | **Largest Customer** | 6.9% | | **Top Five Suppliers** | 43.5% | | **Largest Supplier** | 12.3% | [Share Option Scheme](index=50&type=section&id=SHARE%20OPTION%20SCHEME) The company adopted a share option scheme in 2017, granting 21 million options in 2018 at HK 1.16 per share, with 5.3 million forfeited by end-2019 due to resignations, leaving 15.7 million outstanding, representing 3.019% of issued shares - On January 31, 2018, the company granted **21,000,000** share options under the scheme, with an exercise price of **HK 1.16** per share[337](index=337&type=chunk)[341](index=341&type=chunk) - As of end-2019, **5,300,000** share options were forfeited due to employee resignations, leaving **15,700,000** outstanding[337](index=337&type=chunk)[341](index=341&type=chunk) [Interests and Short Positions of Substantial Shareholders](index=52&type=section&id=INTERESTS%20AND%20SHORT%20POSITIONS%20OF%20SUBSTANTIAL%20SHAREHOLDERS) As of December 31, 2019, Top Access Management Limited, wholly owned by China Singyes Solar, held 62.37% of the company's issued share capital, making it the direct controlling shareholder, with Shuifa Group as the ultimate controlling party and AMATA Limited holding 7.69% Substantial Shareholders' Shareholdings (as of 2019/12/31) | Shareholder Name | Capacity/Nature of Interest | Number of Shares Held | Percentage of Shareholding (%) | | :--- | :--- | :--- | :--- | | Top Access Management Limited | Beneficial owner | 324,324,325 | 62.37% | | China Singyes Solar Technologies Holdings Limited | Interest in controlled corporation | 324,324,325 | 62.37% | | Shuifa Group Co., Ltd. | Interest in controlled corporation | 324,324,325 | 62.37% | | AMATA Limited | Beneficial owner | 40,000,000 | 7.69% | [INDEPENDENT AUDITOR'S REPORT](index=63&type=section&id=INDEPENDENT%20AUDITOR%27S%20REPORT) [Opinion and Key Audit Matters](index=64&type=section&id=Opinion%20and%20Key%20Audit%20Matters) Ernst & Young issued an unqualified opinion on the 2019 consolidated financial statements, identifying impairment assessments of trade receivables and goodwill as key audit matters due to significant management judgment and estimation - Auditor Ernst & Young issued an **unqualified opinion** on the financial statements, deeming them to fairly present the Group's financial position[432](index=432&type=chunk)[435](index=435&type=chunk) - Key audit matters include the **impairment assessment of trade receivables** and **impairment assessment of goodwill**, due to significant management judgment and estimation involved[438](index=438&type=chunk)[443](index=443&type=chunk)[448](index=448&type=chunk) - For trade receivables impairment, auditors assessed the accounting process for impairment provisions, checked aging analysis accuracy, and evaluated expected credit loss methodology; for goodwill impairment, they assessed management's cash flow forecasts, key assumptions (e.g., growth and discount rates), and engaged internal valuation experts for review[441](index=441&type=chunk)[451](index=451&type=chunk) [AUDITED FINANCIAL STATEMENTS](index=71&type=section&id=AUDITED%20FINANCIAL%20STATEMENTS) [Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=72&type=section&id=Consolidated%20Statement%20of%20Profit%20or%20Loss) In 2019, the Group's revenue was RMB 148.03 million, a 14.5% increase, with gross profit stable at RMB 58.98 million, but profit for the year decreased 6.6% to RMB 18.51 million due to increased impairment losses on trade receivables, resulting in basic earnings per share of RMB 0.035 Consolidated Statement of Profit or Loss Summary (RMB thousand) | Item | 2019 (RMB thousand) | 2018 (RMB thousand) | | :--- | :--- | :--- | | **Revenue** | 148,034 | 129,292 | | **Gross Profit** | 58,982 | 59,203 | | Impairment Loss on Trade Receivables | (7,779) | (5,242) | | **Profit Before Tax** | 21,118 | 22,705 | | **Profit for the Year** | 18,513 | 19,828 | | **Profit Attributable to Owners of the Company** | 18,221 | 19,788 | | **Basic Earnings Per Share (RMB)** | 0.035 | 0.041 | [Consolidated Statement of Financial Position](index=74&type=section&id=Consolidated%20Statement%20of%20Financial%20Position) As of end-2019, the Group's total assets were RMB 319.1 million, total liabilities RMB 69.17 million, and net assets RMB 249.93 million, all showing slight increases, with non-current assets significantly growing due to property, plant, and equipment additions Consolidated Statement of Financial Position Summary (RMB thousand) | Item | 2019 (RMB thousand) | 2018 (RMB thousand) | | :--- | :--- | :--- | | **Total Non-current Assets** | 105,000 | 57,751 | | **Total Current Assets** | 214,100 | 237,464 | | **Total Assets** | **319,100** | **295,215** | | **Total Current Liabilities** | 55,644 | 58,653 | | **Total Non-current Liabilities** | 13,525 | 2,419 | | **Total Liabilities** | **69,169** | **61,072** | | **Net Assets** | **249,931** | **234,143** | | **Total Equity Attributable to Owners of the Company** | 244,464 | 228,968 | [Consolidated Statement of Cash Flows](index=76&type=section&id=Consolidated%20Statement%20of%20Cash%20Flows) In 2019, net cash from operating activities significantly improved to RMB 31.48 million, but net cash used in investing activities was RMB 65.1 million, primarily for property, plant, and equipment, resulting in a net decrease of RMB 41.39 million in cash and cash equivalents, ending the year at RMB 26.93 million Consolidated Statement of Cash Flows Summary (RMB thousand) | Item | 2019 (RMB thousand) | 2018 (RMB thousand) | | :--- | :--- | :--- | | **Net Cash from Operating Activities** | 31,482 | (14,694) | | **Net Cash (Used in) from Investing Activities** | (65,098) | 81 | | **Net Cash Used in Financing Activities** | (7,771) | (2,678) | | **Net Decrease in Cash and Cash Equivalents** | (41,387) | (17,291) | | **Cash and Cash Equivalents at Beginning of Year** | 68,279 | 85,538 | | **Cash and Cash Equivalents at End of Year** | 26,932 | 68,279 | [5-YEAR FINANCIAL SUMMARY](index=200&type=section&id=5-YEAR%20FINANCIAL%20SUMMARY) [5-Year Financial Summary](index=200&type=section&id=5-YEAR%20FINANCIAL%20SUMMARY) From 2015 to 2019, the Group's revenue grew from RMB 60.48 million to RMB 148.03 million, and total assets increased from RMB 89.75 million to RMB 319.1 million, with profit for the year showing a fluctuating upward trend after a dip in 2016 Five-Year Financial Data Summary (RMB thousand) | Item | 2015 (RMB thousand) | 2016 (RMB thousand) | 2017 (RMB thousand) | 2018 (RMB thousand) | 2019 (RMB thousand) | | :--- | :--- | :--- | :--- | :--- | :--- | | **Revenue** | 60,477 | 90,887 | 115,823 | 129,292 | 148,034 | | **Profit for the Year** | 7,696 | 6,381 | 14,026 | 19,828 | 18,513 | | **Total Assets** | 89,753 | 126,484 | 239,923 | 295,215 | 319,100 | | **Total Liabilities** | 31,269 | 48,857 | 54,660 | 61,072 | 69,169 | | **Net Assets** | 58,484 | 77,627 | 185,263 | 234,143 | 249,931 |

Financial Performance - The unaudited consolidated statement of profit or loss indicates a significant increase in revenue compared to the previous quarter, reflecting strong market demand [9]. - Revenue for the three months ended September 30, 2019, was RMB 42,691,000, an increase of 6.3% compared to RMB 39,233,000 for the same period in 2018 [18]. - Revenue for the nine months ended September 30, 2019, was RMB 106,661,000, representing a slight increase of RMB 6,901,000 or 6.9% from RMB 99,760,000 for the same period in 2018 [145]. - Profit before tax for the nine months ended September 30, 2019, was RMB 12,432,000, a decrease of 22.0% compared to RMB 16,134,000 in 2018 [18]. - Total comprehensive income for the period was RMB 12,230,000, down 26.5% from RMB 16,549,000 in the same period of 2018 [19]. - The company reported a profit for the period of RMB 10,240,000 for the nine months ended September 30, 2019, compared to RMB 12,652,000 in 2018, reflecting a decline of 19.1% [19]. - The Group's profit before tax for the three months ended September 30, 2019, was RMB 17,448,000, compared to RMB 18,781,000 for the same period in 2018, reflecting a decrease of 7.1% [99]. - Profit attributable to owners of the Company decreased by RMB 2,412,000 or 19.1% to RMB 10,240,000 for the nine months ended September 30, 2019 from RMB 12,652,000 for the same period in 2018 [120]. Revenue Breakdown - Revenue from contracts with customers for the three months ended September 30, 2019, was RMB 42,691,000, an increase of 8.5% compared to RMB 39,233,000 in the same period of 2018 [79]. - ITO film revenue for the three months ended September 30, 2019, was RMB 10,813,000, a significant increase of 120.5% from RMB 4,907,000 in the same period of 2018 [80]. - Smart Light-adjusting Film revenue for the nine months ended September 30, 2019, was RMB 37,573,000, representing an increase of 7.0% compared to RMB 34,856,000 in the same period of 2018 [80]. - Revenue from sales of ITO film was RMB 37,820,000 for the nine months ended 30 September 2019, representing a significant increase of RMB 22,635,000 or 149.1% from RMB 15,185,000 for the same period in 2018 [112]. - Revenue from sales of Smart Light-adjusting Film was RMB 37,573,000 for the nine months ended 30 September 2019, an increase of RMB 2,717,000 or 7.8% from RMB 34,856,000 for the same period in 2018 [113]. - Revenue from sales of Smart Light-adjusting Glass was RMB 9,355,000 for the nine months ended 30 September 2019, a decrease of RMB 5,829,000 or 38.4% from RMB 15,184,000 for the same period in 2018 [118]. - Revenue from sales of Smart Light-adjusting Projection System was RMB 140,000 for the nine months ended 30 September 2019, a significant decrease of RMB 21,482,000 or 99.4% from RMB 21,622,000 for the same period in 2018 [119]. Operational Efficiency and Investments - The company has reported a 25% increase in operational efficiency due to recent technological upgrades [9]. - The company is investing in R&D for new technologies, with a budget allocation of approximately $5 million for the upcoming fiscal year [9]. - The company has maintained its focus on research and development of new technologies related to Smart Light-adjusting products during the reporting period [21]. - The company plans to install a new production line in 2019 after identifying a suitable machinery producer [166]. Market Expansion and Strategy - Future outlook suggests a projected revenue growth of 20% for the next quarter, driven by new product launches and market expansion strategies [9]. - Market expansion efforts include entering two new regions, which are expected to contribute an additional 10% to overall revenue by the end of the fiscal year [9]. - The company is exploring potential mergers and acquisitions to enhance its market position, with a focus on complementary businesses [9]. - The Group acquired Huabei Limited in December 2018 to expand its market share of ITO film in Southern China, contributing to significant growth in sales volume [112]. - The company intends to expand its footprint into overseas markets and develop production lines to meet the expected demand for its film products [124]. - The company plans to shift its focus towards film products in response to changing market conditions for Smart Light-adjusting Glass and Smart Light-adjusting Projection Systems [127]. Compliance and Governance - The board of directors emphasizes the importance of maintaining compliance with GEM Listing Rules to ensure transparency and investor confidence [5]. - The unaudited condensed financial information has been reviewed by the audit committee, ensuring accuracy and compliance with International Financial Reporting Standards (IFRS) [27]. - The Group's financial position and performance have not been significantly affected by the adoption of new IFRS standards, except for IFRS 16 [33]. - The Group has chosen not to recognize right-of-use assets and lease liabilities for low-value assets and short-term leases [45]. - The company has established an Audit Committee to review financial reporting processes and internal controls, consisting of three independent non-executive Directors [181]. Shareholder Matters - The subscription agreement involves the allotment and issuance of 1,687,008,585 subscription shares at a price of HK$0.92 per share, totaling approximately HK$1,552,047,898 [131]. - The ordinary resolution to approve the release was passed by shareholders at the special general meeting held on October 31, 2019 [139]. - The company is seeking approval from independent shareholders for the release of obligations under the Non-Disposal Undertaking in light of the subscription [137]. - An independent financial adviser has been appointed to advise on the release of the Non-Disposal Undertaking [138]. Cost and Expenses - Cost of sales increased to RMB 65,565,000 for the nine months ended September 30, 2019, an increase of RMB 10,606,000 or 19.3% from RMB 54,959,000 for the same period in 2018 [146]. - Administrative expenses increased to RMB 17,490,000 for the nine months ended September 30, 2019, an increase of approximately RMB 3,478,000 or 24.8% from RMB 14,012,000 for the same period in 2018 [153]. - Employee benefit expenses increased to RMB 4,395,000 for the three months ended September 30, 2019, from RMB 3,474,000 in the same period of 2018, marking a rise of 26.5% [99]. - Selling and distribution expenses were RMB 7,391,000 for the nine months ended September 30, 2019, a decrease of RMB 934,000 or 11.2% from RMB 8,325,000 for the same period in 2018 [148]. Dividend and Share Options - The company did not recommend the payment of a dividend for the nine months ended September 30, 2019, consistent with the previous year [167]. - A total of 21,000,000 share options were granted under the Share Option Scheme, representing 4.038% of the issued shares of the Company [188].

Corporate Governance - The company confirmed that it has complied with all applicable code provisions of the Corporate Governance Code during the six months ended June 30, 2019[21]. - The company has adopted a code of conduct regarding securities transactions by directors, confirming compliance during the relevant period[22]. - The Company established the Audit Committee on July 21, 2017, in compliance with GEM Listing Rules[29]. - The Audit Committee consists of three independent non-executive Directors, with Mr. Lee Kwok Tung Louis as the chairman[30]. - The Audit Committee reviewed the accounting principles and practices adopted by the Group for the six months ended June 30, 2019, ensuring compliance with applicable accounting principles[31]. Share Option Scheme - A total of 21,000,000 share options were granted under the Share Option Scheme at an exercise price of HK$1.16 per share, representing 4.038% of the issued Shares of the Company[37]. - The Share Option Scheme allows the Company to grant options to selected Eligible Persons as incentives for their contributions to the Group's growth[36]. - The maximum number of Shares issued under the Share Option Scheme to any Eligible Person in any 12-month period shall not exceed 1% of the number of Shares in issue unless approved by Shareholders[42]. - The Share Option Scheme will remain in force for ten years from October 17, 2017, unless terminated earlier by Shareholders[50]. - The exercise price per Share for the Share Options must be at least the higher of the closing price on the date of grant or the average closing price for the five business days preceding the grant[49]. - Share Options granted prior to termination of the Share Option Scheme will continue to be valid and exercisable[51]. - The Company may terminate the Share Option Scheme by resolution in general meeting, but provisions will remain in force for the exercise of any Share Options granted prior to termination[51]. Shareholding Structure - As of June 30, 2019, Top Access Management Limited holds 324,324,325 shares, representing approximately 62.37% of the total shareholding[60]. - The total issued share capital as of June 30, 2019, is 520,000,000 shares[66]. - Strong Eagle Holdings Limited is deemed to be interested in 324,324,325 shares, which is 62.37% of the total shareholding[66]. - Mr. Liu Hongwei, a controlling shareholder, has an interest in 327,797,914 shares, accounting for approximately 63.04% of the total shareholding[62]. - AMATA Limited holds 40,000,000 shares, representing 7.69% of the total shareholding[62]. - Oasis Investments II Master Fund Ltd. has a security interest in 324,324,325 shares, which is 62.37% of the total shareholding[66]. - The percentage of shareholding is calculated based on the total issued shares of 520,000,000 as of June 30, 2019[66]. - No other persons or corporations, apart from the Directors and Chief Executives, had interests or short positions in the shares that required disclosure under the SFO as of June 30, 2019[67]. - Strong Eagle Holdings Limited owns 203,802,750 shares of Singyes Solar, representing approximately 24.43% of its issued share capital[66]. - The interests of the Directors and Chief Executives in shares and debentures have been notified to the Company and the Stock Exchange as required by the SFO[68]. - As of June 30, 2019, Mr. Liu Hongwei holds 327,797,914 shares, representing approximately 63.04% of the company's total shares issued, which amounts to 520,000,000 shares[71]. - Mr. Liu Hongwei is deemed to have an interest in 203,802,750 shares of Singyes Solar, which is 24.43% of the total registered share capital[74]. - The company has 1,379,120 share options directly beneficially owned by Mr. Liu Hongwei, with an exercise price of HK$3.56 per share[79]. - The same number of share options (1,379,120) is also directly beneficially owned by Mr. Sun Jinli, with the same exercise price and periods[79]. - No other directors or chief executives had any interests or short positions in the shares or debentures of the company as of June 30, 2019[77]. - The company has not been a party to any arrangement enabling directors or chief executives to subscribe for securities or acquire benefits from shares or debentures since its listing on GEM on July 21, 2017[80]. - Strong Eagle, controlled by Mr. Liu Hongwei, holds 203,802,750 shares of Singyes Solar, which is 53% owned by him[75]. - The percentage of shareholding is calculated based on the total shares issued as of June 30, 2019, which is 520,000,000 shares[71]. - The company is subject to the Securities and Futures Ordinance (SFO) regarding the disclosure of interests and short positions[77]. - The company’s interim report for 2019 provides insights into the shareholding structure and interests of its directors[72]. Revenue and Sales Performance - Revenue from ITO film sales was RMB27,007,000 for the six months ended June 30, 2019, representing a significant increase of RMB16,729,000 or 162.8% from RMB10,278,000 for the same period in 2018[93]. - Revenue from Smart Light-adjusting Film sales was RMB24,808,000 for the six months ended June 30, 2019, an increase of RMB2,027,000 or 8.9% from RMB22,781,000 for the same period in 2018[94]. - Revenue from Smart Light-adjusting Glass sales was RMB6,386,000 for the six months ended June 30, 2019, a decrease of RMB723,000 or 10.2% from RMB7,109,000 for the same period in 2018[98]. - The Group acquired Huabei Limited in December 2018 to expand its market share of ITO film in Southern China, contributing to significant growth in sales volume[93]. - The Group is one of the few integrated manufacturers in the PRC producing and selling ITO film and related downstream products[92]. - Smart Light-adjusting Film can switch states to control light permeability, primarily serving construction companies and contractors[94]. - The Group's ITO film customers are primarily domestic touch-screen device manufacturers[93]. - The Group's Smart Light-adjusting Glass allows users to control light permeability by adjusting the voltage applied to the Smart Light-adjusting Film[98]. - The continuous expansion of the customer base has driven growth in sales volume for Smart Light-adjusting Film[94]. - The Group's business includes research and development, manufacturing, and sales of ITO film, Smart Light-adjusting Film, Smart Light-adjusting Glass, and Smart Light-adjusting Projection System[92]. - Revenue from Smart Light-adjusting Projection System was RMB 140,000 for the six months ended 30 June 2019, a significant decrease of RMB 18,952,000 or 99.3% from RMB 19,092,000 for the same period in 2018[99]. - Revenue from other products increased to RMB 5,629,000 for the six months ended 30 June 2019, representing a significant increase of RMB 4,362,000 or 344.3% from RMB 1,267,000 for the same period in 2018[100]. - Sales revenue from Smart Light-adjusting Glass was RMB 6,386,000 for the six months ended June 30, 2019, a decrease of RMB 723,000 or 10.2% from RMB 7,109,000 for the same period in 2018[101]. Financial Performance - The Group recorded a profit attributable to owners of the Company of RMB 6,259,000 for the six months ended June 30, 2019, a decrease of RMB 1,390,000 or 18.2% from RMB 7,649,000 for the same period in 2018[104]. - Revenue for the six months ended June 30, 2019, was RMB63,970,000, representing a slight increase of RMB3,443,000 or 5.7% from RMB60,527,000 for the same period in 2018[121][124]. - Cost of sales increased to RMB40,321,000 for the six months ended June 30, 2019, an increase of RMB5,814,000 or 16.8% from RMB34,507,000 for the same period in 2018[122][125]. - Gross profit decreased by RMB2,371,000 or 9.1%, from RMB26,020,000 for the six months ended June 30, 2018, to RMB23,649,000 for the same period in 2019[127][130]. - Gross profit margin decreased from 43.0% for the six months ended June 30, 2018, to 37.0% for the same period in 2019[127][130]. - Selling and distribution expenses were RMB5,074,000 for the six months ended June 30, 2019, a decrease of RMB368,000 or 6.8% from RMB5,442,000 for the same period in 2018[128][131]. - Administrative expenses increased to RMB10,260,000 for the six months ended June 30, 2019, an increase of approximately RMB1,254,000 or 13.9% from RMB9,006,000 for the same period in 2018[129][132]. - Gearing ratio remained stable at 27.4% as of June 30, 2019, compared to 26.1% as of December 31, 2018[138]. - Capital expenditure for the six months ended June 30, 2019, amounted to RMB221,000, primarily for the purchase of production machinery and test equipment[137]. - As of June 30, 2019, the Group did not have any bank borrowings and plans to satisfy liquidity requirements through operating cash flows and potential bank borrowings[136]. - The Group had no significant contingent liabilities as of June 30, 2019[140]. - The company's debt-to-equity ratio remained stable at 27.4% as of June 30, 2019, compared to 26.1% on December 31, 2018[143]. - Approximately HK$30.2 million of the net proceeds from the Share Offer had been utilized as of June 30, 2019, with the unused proceeds deposited in licensed banks[161]. - The actual use of proceeds was lower than planned due to delays in automation and installation of production lines[162]. - The company did not make any material acquisitions or disposals during the six months ended June 30, 2019[149]. - The company did not recommend the payment of an interim dividend for the six months ended June 30, 2019[163]. - As of June 30, 2019, the company had a total headcount of 133 full-time employees[164]. Cash Flow and Investments - Cash generated from operations for the six months ended June 30, 2019, was RMB 13,305,000, compared to a cash used in operations of RMB 14,352,000 for the same period in 2018, showing a significant turnaround[180]. - The company reported a net decrease in cash and cash equivalents of RMB 23,905,000 for the six months ended June 30, 2019, compared to a decrease of RMB 23,224,000 in the prior year[181]. - Cash and cash equivalents at the end of the period were RMB 44,386,000, down from RMB 62,813,000 at the end of the same period in 2018[181]. - For the six months ended June 30, 2019, net cash flows used in investing activities amounted to RMB 30,855,000, a significant increase from RMB 3,190,000 in the same period of 2018[181]. - The increase in amounts due to related parties was RMB 2,508,000, compared to RMB 222,000 in the previous year[181]. - Dividends paid during the period totaled RMB 5,380,000, an increase from RMB 3,118,000 in the same period of 2018[181]. Adoption of IFRS Standards - The company adopted IFRS 16 for leases, which requires lessees to account for all leases under a single on-balance sheet model, effective January 1, 2019[193]. - The Group's financial position was not significantly affected by the adoption of new IFRS standards, except for IFRS 16[191]. - The Group adopted IFRS 16 using a modified retrospective approach effective from January 1, 2019, without restating comparative information[196]. - Under IFRS 16, a contract is considered a lease if it grants the right to control the use of an identified asset for a period in exchange for consideration[198]. - The definition of a lease under IFRS 16 applies only to contracts entered into or changed on or after January 1, 2019[199].

Financial Performance - The company reported a consolidated profit or loss statement for the first quarter of 2019, with specific figures to be detailed in the financial statements[9]. - Revenue for the three months ended 31 March 2019 was RMB 29,117,000, representing a 30.7% increase from RMB 22,279,000 in the same period of 2018[16]. - Gross profit for the same period was RMB 10,592,000, up 33.5% from RMB 7,930,000 year-on-year[16]. - Profit for the period was RMB 2,517,000, a slight decrease of 3.7% compared to RMB 2,614,000 in the previous year[16]. - Total comprehensive income for the period was RMB 1,007,000, compared to a loss of RMB 364,000 in the same period of 2018[16]. - Basic earnings per share for the three months ended 31 March 2019 was RMB 0.004, down from RMB 0.005 in the same period of 2018[16]. - The Group's profit before tax for the three months ended March 31, 2019, was impacted by a cost of inventories sold amounting to RMB 18,525,000, which increased from RMB 14,349,000 in 2018[76]. - The Group's total tax charge for the period was RMB 844,000, slightly down from RMB 852,000 in the same period of 2018[79]. - Profit attributable to owners of the Company was RMB 2,109,000 for the three months ended March 31, 2019, a decrease of RMB 595,000 or 22.8% from RMB 2,614,000 for the same period in 2018[108]. Revenue Breakdown - Total revenue from contracts with customers for the three months ended March 31, 2019, was RMB 29,117,000, representing a 30.6% increase from RMB 22,279,000 in the same period of 2018[52]. - Revenue from ITO film was RMB 13,795,000, up 142.5% from RMB 5,687,000 in 2018, while Smart Light-adjusting Film revenue increased by 45.5% to RMB 11,785,000 from RMB 8,100,000[52]. - Domestic revenue from Mainland China accounted for RMB 28,509,000, which is 98% of total revenue, compared to RMB 21,812,000 in 2018, indicating a 30.6% growth[55]. - Revenue from Smart Light-adjusting Glass was RMB 1,099,000 for the three months ended March 31, 2019, representing an increase of RMB 488,000 or 79.9% from RMB 611,000 for the same period in 2018[101]. - Revenue from other products was RMB 2,438,000 for the three months ended March 31, 2019, a significant increase of RMB 2,109,000 from RMB 329,000 for the same period in 2018[103]. Expenses and Costs - Employee benefit expenses totaled RMB 4,277,000, slightly decreasing from RMB 4,349,000 in the previous year, with wages and salaries at RMB 3,774,000[76]. - Selling and distribution expenses were RMB 2,844,000, a slight increase of RMB 141,000 or 5.2% from RMB 2,703,000 in the same period in 2018, representing 9.8% of revenue, down from 12.1%[123]. - Administrative expenses rose by approximately RMB 755,000 or 16.8% to RMB 5,255,000, accounting for 18.0% of revenue, down from 20.2% in the same period in 2018[124]. - The Group recognized government grants of RMB 100,000 during the period, with no unfulfilled conditions or contingencies related to these grants[71]. - Research costs for the quarter were RMB 694,000, a decrease from RMB 1,105,000 in the same period last year, reflecting a focus on cost management[76]. Governance and Compliance - The report confirms that the information contained is accurate and complete, ensuring transparency for investors[5]. - The company is committed to adhering to the GEM Listing Rules, which govern the disclosure of financial information[8]. - The company has a diverse board of directors, including executive, non-executive, and independent non-executive members, which enhances governance[10]. - Ernst & Young serves as the auditor, ensuring the integrity of the financial reporting process[13]. - The Audit Committee has reviewed the financial reporting process and confirmed compliance with applicable accounting principles for the unaudited consolidated financial statements for the three months ended March 31, 2019[156]. - The company has complied with the Corporate Governance Code during the relevant period[146]. Shareholder Information - As of March 31, 2019, Top Access Management Limited holds 324,324,325 shares, representing approximately 62.37% of the total shareholding[184]. - Strong Eagle Holdings Limited is deemed to be interested in 324,324,325 shares, which also accounts for approximately 62.37% of the total shareholding[184]. - Mr. Liu Hongwei has an interest in a controlled corporation holding 327,797,914 shares, equating to approximately 63.04% of the total shareholding[186]. - The Share Option Scheme aims to incentivize selected Eligible Persons for their contributions to the growth and development of the Group[160]. - A total of 21,000,000 share options were granted under the Share Option Scheme at an exercise price of HK$1.16 per share, representing 4.038% of the issued shares of the company[161]. Future Outlook - The Group intends to expand its footprint to overseas markets and develop production lines to meet expected demand for its products[109]. - The company plans to utilize the net proceeds from the IPO as outlined in the prospectus, but actual use is lower than planned due to delays in production line automation and installation[143]. - The actual use of proceeds was lower than planned due to delays in automation and installation of production lines, with expectations to install new production lines in 2019[141].

Financial Performance - The Group's revenue increased by 11.6% year-on-year to RMB 129.3 million[22] - Profit attributable to shareholders rose by 41.4% year-on-year to RMB 19.8 million[22] - Gross profit margin improved to 45.8%[22] - Revenue for the year ended December 31, 2018, was RMB 129,292,000, representing an increase of RMB 13,469,000 or 11.6% from RMB 115,823,000 for the same period in 2017[62] - The profit attributable to owners of the Company for the year ended December 31, 2018, was RMB 19,788,000, compared to RMB 14,026,000 for the same period in 2017[47] - Gross profit increased by RMB 14,026,000 or 31.0%, from RMB 45,177,000 in 2017 to RMB 59,203,000 in 2018, with a gross profit margin rising from 39.0% to 45.8%[64] Revenue Breakdown - Sales revenue from ITO film was RMB 18.9 million in 2018[23] - Revenue from ITO film sales was RMB 18,923,000 for the year ended December 31, 2018, representing an increase of RMB 3,546,000 or 23.1% from RMB 15,377,000 in 2017[36] - Revenue from Smart Light-adjusting Film sales was RMB 47,700,000 for the year ended December 31, 2018, a significant increase of RMB 16,991,000 or 55.3% from RMB 30,709,000 in 2017[37] - Revenue from Smart Light-adjusting Glass sales was RMB 17,010,000 for the year ended December 31, 2018, a decrease of RMB 17,246,000 or 50.3% from RMB 34,256,000 in 2017[41] - Revenue from Smart Light-adjusting Projection System sales was RMB 26,405,000 for the year ended December 31, 2018, a decrease of RMB 2,046,000 or 7.2% from RMB 28,451,000 in 2017[42] - Revenue from other goods and services was RMB 19,254,000 for the year ended December 31, 2018, representing a significant increase of RMB 12,224,000 or 173.9% from RMB 7,030,000 in 2017[43] Business Development and Projects - The Group expanded its handwriting black and white film business, enhancing business diversification[23] - Successful implementation of multimedia system projects for railway platform screen doors in cities like Shanghai and Ningbo[25] - The Group undertook a ferris wheel brightening display project in Heihe, Heilongjiang Province, expanding outdoor multimedia display technology applications[25] - The Group plans to continue investing in the technological development of functional film materials and expand application markets in green building and automotive sectors[30] - The Group's new Smart Liquid Crystal PDLC Light-adjusting Film and Light-adjusting Glass Development Engineering Technology Research Center was listed in a special funding plan by Guangdong Province and Hong Kong SAR Government[29] Cost and Expenses - The cost of sales for the year ended December 31, 2018, was RMB 70,089,000, a slight decrease of RMB 557,000 or 0.8% from RMB 70,646,000 in 2017[63] - Selling and distribution expenses were RMB 9,695,000 for the year ended December 31, 2018, remaining steady compared to RMB 9,618,000 in 2017, with a slight decrease in percentage of revenue from 8.3% to 7.5%[65] - Administrative expenses rose to RMB 20,740,000, an increase of approximately RMB 855,000 or 4.3% from RMB 19,885,000 in 2017, while as a percentage of revenue, these expenses decreased from 17.2% to 16.0%[71] Dividend and Shareholder Information - The Board recommended a final dividend of HK 1.2 cents per share[22] - The proposed final dividend for 2018 is HK1.2 cents per share, an increase from HK0.8 cents in 2017[100] - The annual general meeting (AGM) allows direct interaction between the Board and shareholders, with all relevant documents provided at least 20 business days prior to the meeting[199] Corporate Governance - The Board of Directors has complied with GEM Listing Rules, ensuring at least three independent non-executive Directors represent more than one-third of the Board[141] - The Group's corporate governance practices have been reviewed and monitored to ensure compliance with legal and regulatory requirements[135] - The Audit Committee held five meetings during the year ended December 31, 2018, to review the Group's financial results, with external auditors attending three of these meetings[162] - The effectiveness of internal controls was reviewed by the Audit Committee, covering financial, operational, and compliance controls, and the Board was satisfied with the findings[165] Risks and Challenges - The Group currently relies on a single production base in the PRC, which poses risks if disruptions occur due to natural disasters or other uncontrollable factors[124] - Any disruptions to the production base could materially and adversely affect the Group's ability to deliver products on time, impacting profitability and financial results[125] - The Group faces increased risks of intellectual property infringement claims as it expands into overseas markets, which could lead to significant financial liabilities[123] Workforce and Market Competition - The Group's workforce increased to 193 full-time employees as of December 31, 2018, up from 147 in 2017[107] - The ITO film market in China has over 350 participants, with the Group holding a market share of only 2.1% as of December 31, 2015, indicating competitive pressures ahead[110] - The Smart Light-adjusting Products market is experiencing increased competition from both established manufacturers and new entrants, impacting pricing and production costs[116]