（於百慕達註冊成立的有限公司） （股份代號：8076） 截至二零二二年十二月三十一日止年度 全年業績公佈 香港聯合交易所有限公司（「聯交所」）GEM之特色 GEM的定位，乃為中小型公司提供一個上市的市場，此等公司相比起其他在主板上市的公司 帶有較高投資風險。有意投資的人士應了解投資於該等公司的潛在風險，並經過審慎周詳考 慮後方作出投資決定。 由於GEM上市公司普遍為中小型公司，在GEM買賣的證券可能會較於主板買賣的證券承受 更大的市場波動風險，同時無法保證在GEM買賣的證券會有高流通量的市場。 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報告的內容概不負責，對其準確 性或完整性亦不發表任何聲明，並明確表示概不就因本報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。 本報告乃遵照香港聯合交易所有限公司的GEM證券上市規則之規定而提供有關新利軟件（集 團）股份有限公司（「本公司」）之資料。本公司各董事（「董事」）願就本報告所載內容共同及 個別承擔全部責任。董事在作出一切合理查詢後，確認就彼等所知及所信：本報告所載資料 在各重大方面均屬準確及完整，且無誤導或欺詐成份；本報告並無遺漏 ...

Financial Performance [Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=6&type=section&id=Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) For the nine months ended September 30, 2022, the Group recorded a net loss of RMB 35.263 million, a 68.6% increase from the prior year, with sales revenue decreasing 20.1% to RMB 38.626 million primarily due to reduced technical support service income, and gross loss expanding to RMB 19.474 million Consolidated Statement of Profit or Loss Summary (As of September 30) | Indicator | For the three months ended September 30 (RMB thousands) | For the nine months ended September 30 (RMB thousands) | | :--- | :--- | :--- | | | **2022** | **2021** | **2022** | **2021** | | Sales Revenue | 19,168 | 17,330 | 38,626 | 48,368 | | Gross Profit / (Loss) | 155 | (4,709) | (19,474) | (11,156) | | Loss Before Tax | (5,085) | (7,136) | (35,263) | (22,790) | | Loss for the Period | (5,085) | (7,075) | (35,263) | (20,921) | | Basic Loss Per Share (RMB cents) | (0.39) | (0.54) | (2.68) | (1.59) | [Consolidated Statement of Changes in Equity](index=7&type=section&id=Consolidated%20Statement%20of%20Changes%20in%20Equity) As of September 30, 2022, the Group's total equity significantly decreased to RMB 16.717 million from RMB 51.980 million at the beginning of the year, primarily due to the RMB 35.263 million loss recorded during the period Summary of Changes in Equity | Item | Amount (RMB thousands) | | :--- | :--- | | As at January 1, 2022 (Audited) | 51,980 | | Loss and Total Comprehensive Expenses for the Period | (35,263) | | **As at September 30, 2022 (Unaudited)** | **16,717** | [Summary of Notes to Financial Statements](index=8&type=section&id=Notes%20to%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) The notes to the financial statements detail revenue composition, tax status, and dividend policy, indicating that while technical support services are the primary revenue source, their income decreased year-on-year, a key subsidiary enjoys a 15% preferential tax rate but had no assessable profit during the period, and the Board does not recommend an interim dividend [Sales Revenue Composition](index=8&type=section&id=2.%20Sales%20Revenue) Technical support services constitute the largest portion of the Group's total sales revenue, but for the nine months ended September 30, 2022, this income was RMB 33.994 million, a 23.8% decrease from RMB 44.620 million in the prior year Sales Revenue Details (For the nine months ended September 30) | Revenue Type | 2022 (RMB thousands) | 2021 (RMB thousands) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Sales of Software Products | 2,968 | 1,740 | +70.6% | | Sales of Related Hardware Products | 1,664 | 2,008 | -17.1% | | Provision of Technical Support Services | 33,994 | 44,620 | -23.8% | | **Total** | **38,626** | **48,368** | **-20.1%** | [Other Gains and Losses](index=9&type=section&id=4.%20Other%20Gains%20and%20Losses) For the nine months ended September 30, 2022, the Group recorded a net other loss of RMB 1.219 million, compared to a gain of RMB 4.719 million in the prior year, primarily due to a shift from net exchange gain to net exchange loss - The period recorded a net exchange loss of **RMB 2.113 million**, compared to a net exchange gain of **RMB 2.269 million** in the prior period, which is the primary reason for the change in other gains and losses[20](index=20&type=chunk) - The prior period included a gain from the disposal of a subsidiary of approximately **RMB 2.461 million**, which was absent in the current period[20](index=20&type=chunk) [Income Tax](index=10&type=section&id=5.%20Income%20Tax%20Credit) Xinli Technology, a key subsidiary in China, enjoys a 15% preferential corporate income tax rate as a high-tech enterprise; however, no Chinese corporate income tax was accrued as the Group generated no assessable profit during the period - Subsidiary Xinli Technology is recognized as a high-tech enterprise, applying a **15% preferential tax rate**, lower than the standard **25%** tax rate[22](index=22&type=chunk) - For the nine months ended September 30, 2022, the Group generated no assessable profit in China, thus no Chinese corporate income tax was provided[23](index=23&type=chunk) [Dividends](index=11&type=section&id=7.%20Dividends) The Board does not recommend the payment of any dividends for the nine months ended September 30, 2022 - The Board does not recommend the payment of dividends for the nine months ended September 30, 2022 (nine months ended September 30, 2021: nil)[26](index=26&type=chunk) Management Discussion and Analysis [Financial Review](index=12&type=section&id=Financial%20Review%20and%20Performance) The Group's revenue for the first nine months decreased by **20%** year-on-year to **RMB 38.626 million**, primarily due to a **24%** reduction in technical support service income, while net loss expanded by **69%** year-on-year to **RMB 35.263 million** due to decreased revenue and a one-off gain from subsidiary disposal in the prior period, though distribution and selling expenses decreased by **36%** due to effective cost-saving measures Key Financial Indicators Change (For the nine months ended September 30) | Indicator | 2022 (RMB thousands) | 2021 (RMB thousands) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Sales Revenue | 38,626 | 48,368 | -20% | | Cost of Sales | 58,100 | 59,524 | -2% | | Administrative Expenses | 11,001 | 9,686 | +14% | | Distribution and Selling Expenses | 3,993 | 6,270 | -36% | | Finance Costs | 828 | 1,234 | -33% | | Net Loss | 35,263 | 20,921 | +69% | - The primary reasons for the expanded loss include: (i) a revenue decrease of approximately **RMB 9.742 million**; and (ii) a gain from the disposal of a subsidiary of approximately **RMB 2.461 million** in the prior period, which was absent in the current period[30](index=30&type=chunk) [Business Review and Strategy](index=13&type=section&id=Business%20Review) Recurring domestic COVID-19 outbreaks led to reduced IT investment in the banking sector, significantly impacting the Group's business; in response, the Group adheres to its "New One Body, Two Wings" strategy, adjusting product structure, focusing on online-offline integration for payment services, expanding to small and medium-sized banks and merchants, and exiting unprofitable provincial outsourcing services to control losses - Recurring domestic COVID-19 outbreaks impacted banking sector revenue and reduced IT investment, significantly affecting the Group's business and leading to a decline in revenue[32](index=32&type=chunk) - The Group adheres to its "New One Body, Two Wings" strategy, diversifying payment products into various scenarios such as aggregated payment, government-finance payment, and smart hospitals, while preparing for the development of digital currency[35](index=35&type=chunk) - The bank merchant outsourcing service business underwent strategic contraction, exiting certain unprofitable provinces, reducing service coverage from **13 provinces and 19 branches** to **11 provinces and 13 branches** to enhance efficiency and profitability[36](index=36&type=chunk) [Future Outlook](index=15&type=section&id=Future%20Outlook) The Group will continue to focus on "Payment + Outsourcing Services," prioritizing services for small and medium-sized merchants and new payment scenarios, developing a distinctive "OFFLINE TO ONLINE" operation and maintenance model, while strictly controlling costs and strengthening risk monitoring to achieve a virtuous cycle of "increasing revenue and reducing expenditure" - The core business remains "Payment + Outsourcing Services," extending to services for small and medium-sized merchants and new payment scenarios to form a data foundation[39](index=39&type=chunk) - The Group will continue to strictly control costs and strengthen overall business risk monitoring, aiming to achieve "increasing revenue and reducing expenditure"[39](index=39&type=chunk) Other Important Information [Shareholding Structure](index=16&type=section&id=Interests%20and%20Short%20Positions%20of%20Major%20Shareholders%20and%20Other%20Persons%20in%20Shares%2C%20Underlying%20Shares%20and%20Debentures) The report discloses the shareholding of major shareholders and directors holding over **5%** of the company's equity as of September 30, 2022, with Mr. Xiong Rongli and his associates, Mr. Lin Xuexin, Ms. Zhou Cuilian, Mr. Li Dong, and Ms. Lei Ying identified as key interest holders [Major Shareholders' Interests](index=16&type=section&id=Interests%20and%20Short%20Positions%20of%20Major%20Shareholders%20and%20Other%20Persons%20in%20Shares%2C%20Underlying%20Shares%20and%20Debentures) As of September 30, 2022, Goldcorp Industrial Limited, Mr. Xiong Rongli, Mr. Lin Xuexin, Mr. Li Dong, and their associates are the company's major shareholders Major Shareholders' Shareholding (As of September 30, 2022) | Shareholder Name | Number of Shares Held (Long Position) | Percentage of Shareholding | | :--- | :--- | :--- | | Goldcorp Industrial Limited | 136,307,500 | 10.35% | | Mr. Xiong Rongli (and his spouse Ms. Yao Bin) | 174,840,000 | 13.27% | | Mr. Lin Xuexin (and his spouse Ms. Zhou Cuilian) | 123,552,682 | 9.38% | | Mr. Li Dong (and his spouse Ms. Lei Ying) | 71,775,500 | 5.45% | [Directors' and Chief Executives' Interests](index=18&type=section&id=Interests%20and%20Short%20Positions%20of%20Directors%20and%20Chief%20Executives%20in%20Shares%2C%20Underlying%20Shares%20and%20Debentures) As of September 30, 2022, several directors held company shares and share options, with Mr. Xiong Rongli (resigned) and Mr. Lin Xuexin being the executive directors with the highest shareholding percentages Directors' Total Shareholding Interests (As of September 30, 2022) | Director Name | Total Interests (Shares) | Percentage of Issued Share Capital | | :--- | :--- | :--- | | Mr. Xiong Rongli (resigned) | 174,840,000 | 13.27% | | Mr. Lin Xuexin | 123,552,682 | 9.38% | | Mr. Cui Jian | 32,755,000 | 2.49% | | Mr. Xiong Ying | 18,410,322 | 1.40% | [Share Option Scheme](index=20&type=section&id=Share%20Option%20Scheme) The company has a share option scheme to incentivize directors and employees; the report details unexercised share options as of September 30, 2022, totaling **75,588,259** options, with no new grants, exercises, or lapses during the period - As of September 30, 2022, a total of **75,588,259** share options remained unexercised, involving directors, continuous contract employees, and consultants[58](index=58&type=chunk) - During the reporting period, no new share options were granted, exercised, or lapsed[58](index=58&type=chunk) [Corporate Governance](index=24&type=section&id=Corporate%20Governance%20Practices) The company claims compliance with the Corporate Governance Code, with one deviation: the CEO position has been vacant since November 1, 2022; the Audit and Risk Management Committee has reviewed the quarterly results and deemed them properly prepared and adequately disclosed - The company complies with the Corporate Governance Code, but with a deviation: the roles of Chairman and Chief Executive Officer are not separated, and the CEO position has been vacant since **November 1, 2022**[63](index=63&type=chunk) - The Audit and Risk Management Committee, comprising three independent non-executive directors, has reviewed the unaudited results for the period and deemed them adequately disclosed[69](index=69&type=chunk) - The company has a Remuneration Committee and a Nomination Committee, with adjustments made to their members after the reporting period[66](index=66&type=chunk)[67](index=67&type=chunk)

Financial Performance - For the six months ended June 30, 2022, the company reported sales revenue of RMB 19,458,000, a decrease of 37.3% compared to RMB 31,038,000 for the same period in 2021[11] - The cost of sales and services for the same period was RMB 39,087,000, resulting in a gross loss of RMB 19,629,000, compared to a gross loss of RMB 6,447,000 in the previous year[11] - The company recorded a net loss of RMB 30,178,000 for the six months ended June 30, 2022, compared to a net loss of RMB 13,846,000 for the same period in 2021, reflecting a significant increase in losses[11] - Basic and diluted loss per share for the period was RMB 2.29, compared to RMB 1.05 for the same period in 2021[11] - The total comprehensive loss for the six months ended June 30, 2022, was RMB (30,178,000), compared to a loss of RMB (13,846,000) for the same period in 2021, indicating a significant increase in losses[27] - The group reported a loss of approximately RMB 30,178,000 for the six months ended June 30, 2022, an increase of 118% compared to RMB 13,846,000 for the same period last year[69] Assets and Liabilities - As of June 30, 2022, total assets amounted to RMB 55,897,000, down from RMB 89,147,000 as of December 31, 2021[13] - The company's total equity decreased significantly to RMB 21,802,000 from RMB 51,980,000, indicating a deterioration in financial health[15] - Non-current liabilities increased to RMB 21,099,000 from RMB 17,907,000, suggesting a rise in financial obligations[15] - The company's total borrowings amounted to RMB 21,053,000 as of June 30, 2022, compared to RMB 17,862,000 as of December 31, 2021[84] - The total amount of trade and other receivables was RMB 32,858,000 as of June 30, 2022, compared to RMB 42,881,000 as of December 31, 2021, representing a decline of 23.43%[47] - The total accounts payable decreased to RMB 10,014,000 as of June 30, 2022, from RMB 16,833,000 as of December 31, 2021, representing a reduction of approximately 40.4%[51] Cash Flow and Liquidity - The company's cash and cash equivalents decreased to RMB 21,013,000 from RMB 44,976,000 at the end of the previous year, indicating liquidity challenges[13] - The net cash used in operating activities for the six months ended June 30, 2022, was RMB (25,567,000), an improvement compared to RMB (35,393,000) for the same period in 2021[20] - The cash and cash equivalents at the end of the period were RMB 21,013,000, down from RMB 41,388,000 at the end of June 30, 2021, reflecting a decrease of approximately 49.3%[20] - The group held cash and cash equivalents of approximately RMB 21,013,000 as of June 30, 2022, down from RMB 44,976,000 as of December 31, 2021[81] Operational Focus and Strategy - The management indicated a focus on cost control and potential market expansion strategies to improve future performance[11] - The group is focusing on enhancing marketing efforts while continuing to implement cost-saving measures, with expectations for improved performance in the upcoming quarter[69] - The group is adapting its product structure to align with the trends of financial reform and localization in mainland China[72] Shareholder and Governance Information - Major shareholders include Goldcorp Industrial Limited and Great Song Enterprises Limited, each holding 32.78% of the shares[96] - The company has established a Remuneration Committee to review and recommend remuneration policies for directors and senior management[123] - The company has established a Nomination Committee to develop nomination policies and recommend appointments to the board[125] - The company has adhered to the corporate governance code as per GEM Listing Rules Appendix 15 during the reporting period[121] Employee and Compensation - The company employed 1,020 staff as of June 30, 2022, an increase from 997 staff in the same period of 2021, with employee costs amounting to RMB 42,336,000[87] - The company has adopted a share option scheme for certain employees[88] Other Financial Metrics - Interest income for the six months ended June 30, 2022, increased to RMB 137,000 from RMB 53,000 in the same period of 2021, reflecting a growth of 158.49%[39] - The company's effective tax rate for its subsidiary in Hangzhou was 15% for the six months ended June 30, 2022, due to its qualification as a high-tech enterprise[42] - Other income for the six months ended June 30, 2022, was RMB 594,000, an increase from RMB 466,000 in the same period of 2021, reflecting a growth of 27.48%[39]

Financial Performance - For the three months ended March 31, 2022, the company reported sales revenue of RMB 5,364,000, a decrease of 60.6% compared to RMB 13,615,000 for the same period in 2021[14] - The cost of sales and services for the same period was RMB 20,422,000, down from RMB 23,868,000, indicating a reduction of 14.5%[14] - The gross loss for the first quarter was RMB 15,058,000, compared to a gross loss of RMB 10,253,000 in the previous year, reflecting an increase in loss of 46.5%[14] - Other income for the quarter was RMB 169,000, down from RMB 320,000, representing a decline of 47.2%[14] - The company reported a pre-tax loss of RMB 21,107,000, compared to a pre-tax loss of RMB 18,453,000 in the same quarter last year, an increase in loss of 14.3%[14] - The total comprehensive loss for the period was RMB 21,107,000, which is the same as the pre-tax loss[14] - The basic and diluted loss per share for the quarter was RMB 1.60, compared to RMB 1.40 in the previous year, indicating a worsening of 14.3%[14] - The company recorded sales revenue of approximately RMB 5,364,000 for the three months ended March 31, 2022, a decrease of about 61% compared to RMB 13,615,000 for the same period last year[25] - Revenue from technical support services significantly declined, contributing to the overall drop in sales revenue[25] - The company reported a loss attributable to owners of the company of RMB (21,107,000) for the three months ended March 31, 2022, compared to a loss of RMB (18,453,000) for the same period last year[23] - The group recorded a loss of approximately RMB 21,107,000, an increase of about 14% compared to RMB 18,453,000 in the same period last year, with declining sales revenue being the main reason for the increased loss[27] - Sales decreased by 61% compared to the same period last year, while overall costs decreased by 18%[29] Expenses and Cost Management - The cost of sales and services for the three months ended March 31, 2022, was approximately RMB 20,422,000, a decrease of about 14% from RMB 23,868,000 in the same period last year[25] - For the three months ended March 31, 2022, management expenses were approximately RMB 4,376,000, a decrease of about 5% compared to RMB 4,584,000 for the same period last year[26] - Distribution and selling expenses were approximately RMB 2,001,000, down about 48% from RMB 3,862,000 in the same period last year, primarily due to effective cost-saving measures[26] - Financing costs were approximately RMB 285,000, a decrease of about 50% from RMB 570,000 in the same period last year, mainly due to reduced borrowing[27] - The group plans to continue strict cost control and enhance risk management across all business areas to achieve a positive cycle of "increasing revenue and reducing expenses"[34] Shareholding Structure - Goldcorp Industrial Limited and Great Song Enterprises Limited each hold 431,782,500 shares, representing 32.78% of the company's total equity[36] - Mr. Xiong Rongli holds a total of 470,315,000 shares, which accounts for 35.70% of the company's equity[36] - Ms. Li Qiling controls voting rights exceeding one-third in Great Song Enterprises Limited, which in turn holds over one-third of the voting rights in Goldcorp Industrial Limited[40] - The total equity held by Mr. Xiong Rongli, including beneficial ownership, amounts to 470,315,000 shares, or 35.70%[41] - Mr. Xiong Rongli's direct and indirect holdings in the company total 470,315,000 shares, equating to 35.70% of the issued share capital[41] - The company has a total of 1,315,000,000 shares issued, with significant ownership concentrated among a few shareholders[41] - The board of directors collectively holds 431,782,500 shares, which is 32.78% of the total issued shares[41] - The company has no other disclosures regarding additional shareholdings by directors or executives as of March 31, 2022[39] - The ownership structure indicates a high concentration of shares among a few key stakeholders, which may impact corporate governance and decision-making[41] - The company is subject to the Securities and Futures Ordinance, requiring disclosure of significant shareholdings[39] Stock Options - The company has authorized the issuance of stock options for a total of up to 81,184,000 shares, representing approximately 10% of the issued share capital as of the date of the special shareholders' meeting on February 28, 2011[45] - The updated authorization allows for an additional 86,443,000 shares to be issued under the stock option plan, also representing about 10% of the issued share capital as of the annual general meeting on May 11, 2016[45] - The company granted stock options for 61,032,000 shares, which accounts for approximately 6.95% of the issued share capital as of the annual general meeting on May 11, 2008[46] - The company granted stock options for 47,550,000 shares at an exercise price of HKD 0.368 per share on October 9, 2007, with the closing price on the previous trading day being HKD 0.36[49] - The company granted stock options for 20,900,000 shares at an exercise price of HKD 0.20 per share on January 19, 2010, with the closing price on the previous trading day being HKD 0.20[49] - The company granted stock options for 8,990,000 shares at an exercise price of HKD 0.84 per share on August 16, 2010, with the closing price on the previous trading day being HKD 0.84[50] - The company granted stock options for 65,000,000 shares at an exercise price of HKD 0.730 per share on January 10, 2011, with the closing price on the previous trading day being HKD 0.730[50] - The company granted stock options for 19,260,000 shares at an exercise price of HKD 0.714 per share on January 13, 2011, with the closing price on the previous trading day being HKD 0.690[51] - The company granted stock options for 59,780,000 shares at an exercise price of HKD 0.1122 per share on June 24, 2013, with the closing price on the previous trading day being HKD 0.101[52] - The company granted stock options for 21,400,000 shares at an exercise price of HKD 0.43 per share on May 15, 2015, with the closing price on the previous trading day being HKD 0.43[52] - The company has a total of 75,588,259 unexercised stock options as of March 31, 2022[55] - The exercise price for stock options granted ranges from HKD 0.0948 to HKD 0.3635[55] - No stock options were exercised or expired during the reporting period[55] Corporate Governance - The company has complied with GEM listing rules regarding corporate governance throughout the reporting period[58] - The Audit and Risk Management Committee reviewed the unaudited financial results for the three months ended March 31, 2022, and found them to be prepared in accordance with applicable accounting standards[63] - The company has established a Compensation Committee to review and recommend the compensation policies for directors and senior management[60] - The company has a Nomination Committee responsible for formulating nomination policies and making recommendations to the board[61] - The company has not encountered any conflicts of interest or competitive business activities among its directors and major shareholders during the reporting period[57] Strategic Focus - The group is focusing on expanding online payment solutions and integrating services with banks and partners, such as the cloud store platform in collaboration with major banks[30] - The strategy of "New Dual Wings" aims to expand offline market services, targeting major banks and regions with economic advantages, while also adjusting to focus on small banks and merchants[32] - The digital currency pilot led by the People's Bank of China presents a significant opportunity for the group in the payment sector[33]

Financial Performance - The Group's annual sales revenue increased by 10% compared to the previous year[17] - Overall costs also rose by 10% compared to last year[17] - The annual loss decreased by 56% compared to the same period last year[17] - The Group's net profit in 2019 was RMB 25,004,000, indicating significant improvement despite current losses[17] - The Group recorded total revenue of approximately RMB 94,408,000 for the year ended December 31, 2021, representing a 10% increase compared to RMB 85,535,000 in 2020[39] - The group's revenue increased by approximately 12% year-on-year, primarily due to the growth in technical support services[44] - Revenue for the year ended December 31, 2021, was RMB 94,408,000, an increase from RMB 85,535,000 in 2020, representing a growth of approximately 10.3%[139] - The loss attributable to shareholders for the year ended December 31, 2021, was RMB (13,768,000), an improvement from a loss of RMB (31,204,000) in 2020[139] Cost Management - Cost of sales for the year increased by 19% to approximately RMB 93,492,000, primarily due to rising staff costs, resulting in a gross profit margin of approximately 1%[43] - The cost of sales rose to approximately RMB 93,492,000, an increase of 19% compared to RMB 78,776,000 in 2020, mainly due to higher employee costs[44] - Administrative expenses decreased by 7% to approximately RMB 14,640,000, attributed to the disposal of a subsidiary[46] - Distribution and selling expenses decreased by 23% to approximately RMB 9,274,000, due to effective cost control measures[46] - Research and development expenses decreased by 13% to approximately RMB 8,180,000, also due to the disposal of a subsidiary[47] - The Group will continue to implement stringent cost control and strengthen risk management across its various businesses[32] Strategic Development - The Group has achieved better results in product development and has been recognized by most bank customers[17] - The Group's strategic development includes a focus on core business and complementary products[17] - The Group is shifting its payment landscape from offline to online, focusing on small and medium-sized banks and merchants, which is becoming increasingly important[23] - The introduction of the cloud version of MIS (payment software) aims to meet the diverse needs of payment processes, including government-integrated payments and smart hospital payments[23] - Digital money is identified as a key strategic development area for the Group, aligning with the broader financial reform in China[29] - The Group aims to form a new OFFLINE TO ONLINE (O2O) model to better align with the evolving financial environment[31] Economic and Market Conditions - The pandemic has caused sporadic business interruptions from July onwards[16] - The overall economic recovery has led to an increase in workload for the Group[17] - The financial reform trend in Mainland China is influencing the Group's future development direction[18] - The Group's core business performance is influenced by economic conditions and property market performance, which cannot be fully mitigated by investment strategies[128] - The company continues to face business risks including economic conditions and property market performance in investment locations[132] Operational Risks and Management - Cybersecurity risks are a concern for the Group, which is enhancing IT security and compliance with privacy standards to protect sensitive data[129] - The Group actively manages liquidity risk by monitoring cash flows and maintaining adequate cash levels to meet obligations[119] - The Group faces risks related to attracting and retaining key personnel, and offers competitive remuneration packages to mitigate this risk[127] - The Group promotes green measures and practices in daily operations to enhance environmental sustainability, implementing various energy-saving initiatives[104] Shareholder and Governance Information - Major shareholders include Goldcorp Industrial Limited and Great Song Enterprises Limited, each holding 32.78% of the company's shares[193] - Mdm Iu Pun holds a family interest of 35.59% in the company[193] - The concentration of voting power among a few individuals may impact corporate governance and decision-making processes[199] - The ownership structure indicates potential influence over the company's strategic direction and operational decisions[199] - The company is required to notify the Stock Exchange of any interests or short positions in shares as per the Securities and Futures Ordinance[200] Compliance and Reporting - Throughout 2021, there was no incidence of non-compliance with relevant laws and regulations that significantly impacted the Group's business[163] - The Group's business review includes discussions on principal risks and uncertainties, important events affecting the Group, and likely future developments[162] - The directors do not recommend the payment of dividends for the year[169] - A summary of the published results and assets and liabilities of the Group for the last five financial years is provided in the annual report[173]

Financial Performance - For the nine months ended September 30, 2021, the company's sales revenue from customer contracts was RMB 48,368,000, a decrease of 2.8% compared to RMB 49,770,000 for the same period in 2020[11] - The cost of sales and services for the nine months ended September 30, 2021, was RMB 59,524,000, an increase of 20.4% from RMB 49,484,000 in the previous year[11] - The gross loss for the nine months ended September 30, 2021, was RMB 11,156,000, compared to a gross profit of RMB 286,000 for the same period in 2020[11] - The total comprehensive loss for the period was RMB 20,921,000, which is an increase of 20.5% from RMB 17,361,000 in the same period last year[11] - The basic and diluted loss per share for the nine months ended September 30, 2021, was RMB 1.59, compared to RMB 1.32 for the same period in 2020[11] - The company reported a net loss attributable to owners of the company of RMB 7,075,000 for the three months ended September 30, 2021, compared to a loss of RMB 143,000 in 2020[28] - The group recorded sales revenue of approximately RMB 48,368,000 for the nine months ended September 30, 2021, a decrease of 3% compared to RMB 49,770,000 for the same period last year[31] - Net loss for the nine months ended September 30, 2021, was approximately RMB 20,921,000, an increase of 21% from RMB 17,361,000 in the same period last year[32] Revenue Breakdown - Software product sales for the three months ended September 30, 2021, were RMB 575,000, compared to RMB 412,000 for the same period in 2020, representing a 39.5% increase[18] - Revenue from hardware product sales increased significantly to RMB 1,752,000 for the three months ended September 30, 2021, from RMB 15,000 in the same period of 2020[18] - Technical support service revenue decreased slightly to RMB 15,003,000 for the three months ended September 30, 2021, from RMB 19,157,000 in 2020, a decline of 21.3%[18] - Total sales revenue for the three months ended September 30, 2021, was RMB 17,330,000, down from RMB 19,584,000 in 2020, a decrease of 11.6%[18] Cost Management - The group aims to enhance marketing efforts while continuing to implement cost-saving measures, expecting improved performance in the upcoming quarter[33] - Management expenses decreased by 13% to approximately RMB 9,686,000, down from RMB 11,181,000, mainly due to the sale of a subsidiary[32] - Distribution and selling expenses fell by 30% to approximately RMB 6,270,000, compared to RMB 9,009,000 last year, attributed to effective cost-saving measures[32] - The company incurred financing costs of RMB 1,234,000 for the nine months ended September 30, 2021, a decrease of 25.6% from RMB 1,659,000 in the previous year[11] Share Capital and Options - As of September 30, 2021, the company has a total of 431,782,500 shares held by Goldcorp Industrial Limited, representing 32.78% of the issued share capital[48] - The company has authorized a new stock option plan allowing for the issuance of up to 81,184,000 stock options, which represents approximately 10% of the issued share capital as of the special general meeting date[52] - The stock option plan was initially adopted on August 27, 2001, and has been updated multiple times to increase the authorized limit for stock options[53][55] - In 2021, the company had 198,275,729 share options granted, with 106,833,930 options remaining unexercised as of September 30, 2021[61] Corporate Governance - The company has established a remuneration committee to review the remuneration policies for directors and senior management[68] - The company has adhered to the corporate governance code as per GEM Listing Rules during the nine months ending September 30, 2021[65] - The company established the Nomination Committee in March 2012 to develop nomination policies and recommend director appointments to the board[69] - The Audit and Risk Management Committee was formed on August 27, 2001, to oversee financial reporting, internal controls, and risk management systems[71] - The chairman of the Audit and Risk Management Committee is Mr. Pu Bingrong, with other members being independent non-executive directors[71] Future Outlook - The company has not provided specific guidance for future performance or new product developments in the conference call[11] - The management discussed potential strategies for market expansion but did not disclose specific figures or timelines[11] - The group is adapting to the growing demand for online products, particularly in the context of digital currency development, and is launching new payment solutions[36] - The group plans to maintain strict cost control and enhance risk monitoring across all business operations to achieve a positive cycle of "increasing revenue and reducing expenditure"[40] - The "New Dual-Wing" strategy focuses on expanding offline markets and developing merchant services, with a target of increasing service coverage from 2 provincial branches to 19 branches across 13 provinces[38]

Financial Performance - For the six months ended June 30, 2021, the company reported sales revenue of RMB 31,038,000, a 33% increase compared to RMB 23,310,000 for the same period in 2020[11]. - The cost of sales for the same period was RMB 37,485,000, up from RMB 25,425,000 in 2020, resulting in a gross loss of RMB 6,447,000 compared to a gross loss of RMB 2,115,000 in the previous year[11]. - The company incurred a loss before tax from continuing operations of RMB 18,333,000 for the six months ended June 30, 2021, compared to a loss of RMB 14,861,000 in 2020[11]. - The net loss attributable to the company for the six months was RMB 13,216,000, compared to a loss of RMB 18,248,000 in the same period of the previous year[13]. - Basic and diluted loss per share from continuing operations was RMB (1.39) for the six months ended June 30, 2021, compared to RMB (1.00) in 2020[13]. - The company reported other income of RMB 466,000 for the six months, a decrease from RMB 571,000 in the previous year[11]. - Distribution and selling expenses were RMB 4,285,000, slightly down from RMB 4,266,000 in 2020[11]. - Management expenses decreased to RMB 7,371,000 from RMB 7,430,000 in the previous year[11]. - The company recognized a tax credit of RMB 85,000 for the six months ended June 30, 2021, compared to RMB 1,645,000 in 2020[11]. - The company reported a total comprehensive loss of RMB (13,846,000) for the six months ended June 30, 2021, compared to a loss of RMB (17,218,000) in the same period of 2020, indicating an improvement in performance[18]. Assets and Liabilities - As of June 30, 2021, total assets decreased to RMB 96,409,000 from RMB 134,389,000 as of December 31, 2020, representing a decline of approximately 28.2%[15]. - Non-current liabilities decreased significantly from RMB 45,305,000 in 2020 to RMB 22,980,000 in 2021, a reduction of about 49.3%[16]. - The company reported a total equity of RMB 51,902,000 as of June 30, 2021, down from RMB 65,748,000 at the end of 2020, reflecting a decline of approximately 21.0%[16]. - The company’s total liabilities decreased from RMB 40,143,000 in 2020 to RMB 36,945,000 in 2021, a reduction of approximately 7.0%[16]. - The company’s borrowings decreased to RMB 44,596,000 as of June 30, 2021, from RMB 63,789,000 as of December 31, 2020, representing a reduction of about 30%[61]. - The company had trade receivables overdue by more than 90 days amounting to RMB 9,086,000 as of June 30, 2021, compared to RMB 7,508,000 at the end of 2020, indicating an increase of approximately 21%[54]. Cash Flow and Investments - The net cash used in operating activities for the six months ended June 30, 2021, was RMB (35,393,000), slightly improved from RMB (36,782,000) in the same period of 2020[21]. - Cash and cash equivalents at the end of June 30, 2021, were RMB 41,388,000, down from RMB 58,358,000 at the beginning of the period, indicating a decrease of 29.1%[21]. - The company’s cash flow from investing activities improved to RMB 37,047,000 in 2021 from RMB (3,403,000) in 2020, indicating a positive turnaround in investment cash flow[21]. - The company completed the sale of Hangzhou Hengxinli Software Co., Ltd. for a cash consideration of RMB 40,000,000 on May 24, 2021[41]. - The sale of the subsidiary resulted in a net cash inflow of RMB 40,000,000, with a gain of RMB 2,461,000 recognized from the sale[45]. Operational Developments - The company plans to focus on expanding its market presence and enhancing its product offerings in the upcoming periods[11]. - The company expanded its merchant outsourcing services to 12 provinces and 18 provincial branches, up from 2 branches six years ago, focusing on major banks and economic provinces[78]. - The company is adapting to the increasing demand for online products and has launched a cloud-based payment software to meet diverse payment needs[76]. - The company aims to enhance value-added services, integrating merchant outsourcing and payment products as a core strategic development[78]. - The company sees opportunities in the digital currency pilot led by the People's Bank of China, positioning itself for future growth in the payment sector[79]. Shareholder and Governance - Major shareholders include Goldcorp Industrial Limited and Great Song Enterprises, each holding 32.78% of the shares[97]. - The company did not recommend any dividend payment for the six months ended June 30, 2021, consistent with the previous year[52]. - The company complied with the corporate governance code as per GEM Listing Rules Appendix 15 during the six months ended June 30, 2021[120]. - The company adhered to the securities trading regulations for directors as outlined in GEM Listing Rules during the six months ended June 30, 2021[121]. - The Remuneration Committee was established in November 2005 to review and recommend remuneration policies for directors and senior management[122]. - The Nomination Committee was formed in March 2012 to develop nomination policies and recommend appointments to the board[124]. - The Audit and Risk Management Committee was established on August 27, 2001, to oversee financial reporting, internal controls, and risk management systems[125]. Employee and Compensation - The company employed 1,045 staff from continuing operations as of June 30, 2021, an increase from 804 staff six months prior[88]. - Employee costs from continuing operations for the reporting period were approximately RMB 37,065,000, compared to RMB 28,663,000 for the same period in 2020[88]. - The company has adopted a share option scheme for certain employees[89]. - The total number of share options granted and unexercised as of June 30, 2021, was 106,833,930 shares[117].

[Company Information](index=4&type=section&id=Company%20Information) This section provides essential corporate details including board members, key management, auditors, banks, and company registration information [Company Basic Information](index=4&type=section&id=Company%20Basic%20Information) This section details the company's board, key management, committees, auditors, principal bankers, and registration information - The company's board members include executive directors Xiong Rongli (Chairman), Xiong Ying (Vice Chairman), Lin Xuexin (CEO), Cui Jian, and independent non-executive directors Pu Bingrong, Tan Guoqing, and Lu Jingwen[6](index=6&type=chunk) - The company secretary is Tang Zhijun, with Xiong Rongli and Tang Zhijun serving as compliance officers and authorized representatives[6](index=6&type=chunk) - Deloitte Touche Tohmatsu is the auditor, and principal bankers include Industrial and Commercial Bank of China (Asia) Limited and Bank of China (Hong Kong) Limited[6](index=6&type=chunk) - The company's GEM stock code is **8076**, and its official website is www.singlee.com.cn[8](index=8&type=chunk)[9](index=9&type=chunk) [Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=6&type=section&id=Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) This section presents the unaudited consolidated financial results for the three months ended March 31, 2021, showing significant revenue growth but continued losses, albeit narrowed [Overview of Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=6&type=section&id=Overview%20of%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) This section presents the unaudited consolidated financial results for the three months ended March 31, 2021, showing significant revenue growth but continued losses, albeit narrowed Consolidated Statement of Profit or Loss and Other Comprehensive Income Key Data (For the three months ended March 31) | Indicator | 2021 (RMB '000) | 2020 (RMB '000) | Year-on-Year Change (%) | | :--- | :--- | :--- | :--- | | Sales Revenue | 13,615 | 3,347 | +307.0% | | Cost of Sales and Services | (23,868) | (18,076) | +32.0% | | Gross Loss | (10,253) | (14,729) | -30.4% | | Other Income | 320 | 233 | +37.3% | | Loss Before Tax | (18,453) | (24,004) | -23.1% | | Loss and Total Comprehensive Expense for the Period | (18,453) | (23,219) | -20.6% | | Basic Loss Per Share (RMB cents) | (1.40) | (1.76) | -20.4% | | Diluted Loss Per Share (RMB cents) | (1.40) | (1.76) | -20.4% | [Consolidated Statement of Changes in Equity](index=7&type=section&id=Consolidated%20Statement%20of%20Changes%20in%20Equity) This section outlines the changes in the company's equity for the three months ended March 31, 2021, primarily reflecting the impact of period losses and lapsed share options [Overview of Consolidated Statement of Changes in Equity](index=7&type=section&id=Overview%20of%20Consolidated%20Statement%20of%20Changes%20in%20Equity) This section outlines the changes in the company's equity for the three months ended March 31, 2021, primarily reflecting the impact of period losses and lapsed share options Consolidated Statement of Changes in Equity Key Data (For the three months ended March 31) | Indicator | March 31, 2021 (RMB '000) | March 31, 2020 (RMB '000) | | :--- | :--- | :--- | | Share Capital | 12,538 | 12,538 | | Share Premium | 179,132 | 179,132 | | Statutory Reserve | 3,613 | 3,613 | | Shareholder's Contribution | 786 | 786 | | Exchange Reserve | 5,217 | 5,217 | | Share-based Payment Reserve | 7,217 | 32,095 | | Accumulated Losses | (161,208) | (159,648) | | **Total** | **47,295** | **73,733** | - As of March 31, 2021, total equity was **RMB 47,295,000**, a decrease from **RMB 65,748,000** on January 1, 2021, primarily due to losses for the period and lapsed share options[12](index=12&type=chunk) - In accordance with PRC laws and regulations, the company's subsidiaries in China are required to establish two non-distributable statutory reserves: an enterprise development fund and a statutory surplus reserve[13](index=13&type=chunk) [Notes to the Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=8&type=section&id=Notes%20to%20the%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) This section provides detailed notes to the unaudited consolidated financial statements, covering general information, revenue breakdown, other income, tax, loss per share, and dividends [1. General Information](index=8&type=section&id=1.%20General%20Information) This section outlines the basis of preparation for the unaudited consolidated financial statements, confirming compliance with IFRS and GEM Listing Rules, and consistency in accounting policies - The unaudited consolidated financial statements are prepared in accordance with International Financial Reporting Standards, disclosure requirements of the Hong Kong Companies Ordinance, and the GEM Listing Rules, presented in RMB[14](index=14&type=chunk)[15](index=15&type=chunk) - Accounting policies for the current period are consistent with the 2020 annual financial statements, and the adoption of new IFRS has no significant impact on the condensed consolidated financial statements[16](index=16&type=chunk) - The unaudited consolidated results have been reviewed by the company's Audit and Risk Management Committee but have not been reviewed or audited by external auditors[16](index=16&type=chunk) [2. Sales Revenue](index=8&type=section&id=2.%20Sales%20Revenue) This section details the composition of sales revenue, primarily from computer software, hardware sales, and significantly increased technical support services Sales Revenue Composition (For the three months ended March 31) | Revenue Source | 2021 (RMB '000) | 2020 (RMB '000) | Year-on-Year Change (%) | | :--- | :--- | :--- | :--- | | Sales of Software Products | 1,595 | 902 | +76.8% | | Sales of Related Hardware Products | 69 | 14 | +392.9% | | Provision of Technical Support Services | 11,951 | 2,431 | +391.6% | | **Total Sales Revenue** | **13,615** | **3,347** | **+307.0%** | - Revenue from technical support services significantly increased by **391.6%** to **RMB 11,951,000**, being the primary driver of sales revenue growth for the period[17](index=17&type=chunk) [3. Other Income](index=9&type=section&id=3.%20Other%20Income) This section discloses the components of other income, including interest income and other miscellaneous income, showing an overall increase Other Income Composition (For the three months ended March 31) | Income Source | 2021 (RMB '000) | 2020 (RMB '000) | Year-on-Year Change (%) | | :--- | :--- | :--- | :--- | | Interest Income | 34 | 133 | -74.4% | | Others | 286 | 100 | +186.0% | | **Total Other Income** | **320** | **233** | **+37.3%** | [4. Income Tax Credit](index=9&type=section&id=4.%20Income%20Tax%20Credit) This section explains the group's income tax position, noting no tax provision was made due to the absence of assessable profits in Hong Kong and mainland China - No provision for Hong Kong profits tax was made as the Group did not generate estimated assessable profits in Hong Kong[19](index=19&type=chunk) - For the three months ended March 31, 2021, the Group did not generate assessable profits in China, thus no provision for PRC enterprise income tax was made[20](index=20&type=chunk) Income Tax Credit (For the three months ended March 31) | Indicator | 2021 (RMB '000) | 2020 (RMB '000) | | :--- | :--- | :--- | | PRC Enterprise Income Tax – Under-provision in Prior Years | – | (1,174) | | Deferred Tax – Current Year | – | 1,959 | | **Total Income Tax Credit** | **–** | **785** | [5. Loss Per Share](index=10&type=section&id=5.%20Loss%20Per%20Share) This section provides details on the calculation of basic and diluted loss per share, which decreased to RMB 1.40 cents for the period Loss Per Share Calculation (For the three months ended March 31) | Indicator | 2021 (RMB '000 / '000 shares) | 2020 (RMB '000 / '000 shares) | | :--- | :--- | :--- | | Loss for the Period Attributable to Owners of the Company | (18,453) | (23,219) | | Weighted Average Number of Ordinary Shares | 1,317,240 | 1,317,240 | | **Basic and Diluted Loss Per Share (RMB cents)** | **(1.40)** | **(1.76)** | [6. Dividends](index=10&type=section&id=6.%20Dividends) This section states that the board of directors does not recommend the payment of any dividends for the three months ended March 31, 2021 - The Board does not recommend the payment of any dividend for the three months ended March 31, 2021 (2020: nil)[23](index=23&type=chunk) [Management Discussion and Analysis](index=11&type=section&id=Management%20Discussion%20and%20Analysis) This section provides an overview of the group's financial and business performance, strategic initiatives, and future outlook [Financial Review and Performance](index=11&type=section&id=Financial%20Review%20and%20Performance) This section reviews the group's first-quarter financial performance, highlighting increased sales revenue driven by technical support services and narrowed losses due to cost control - For the three months ended March 31, 2021, sales revenue was approximately **RMB 13,615,000**, an increase of approximately **307%** year-on-year, primarily driven by growth in technical support services revenue[25](index=25&type=chunk) - Cost of sales and services increased by approximately **32%** to **RMB 23,868,000**, and administrative expenses increased by approximately **23%** to **RMB 4,584,000**, both primarily due to higher staff costs[25](index=25&type=chunk) - Distribution and selling expenses decreased by approximately **15%** to **RMB 3,862,000**, mainly attributable to the Group's effective cost-saving initiatives[25](index=25&type=chunk) - Loss for the period was approximately **RMB 18,453,000**, a decrease of approximately **21%** year-on-year, with increased sales revenue being the primary reason for the reduced loss[26](index=26&type=chunk) - The Group will continue to intensify marketing efforts and implement cost-saving measures, expecting improved performance in the next quarter as products mature and costs are controlled[26](index=26&type=chunk) [Business Review](index=12&type=section&id=Business%20Review) This section reviews the group's business performance amidst the pandemic, highlighting significant sales growth, strategic focus on online payment scenarios, and preparation for digital currency - Despite the ongoing global pandemic, the mainland China market gradually recovered, with the Group's first-quarter sales increasing by **307%** year-on-year and overall costs rising by **20%**, indicating a significant business improvement[28](index=28&type=chunk) - The Group actively advanced its 'New One Body, Two Wings' strategy, achieving breakthroughs in new payment forms, shifting R&D towards online solutions, launching cloud-based MIS payment software, and collaborating with banks and third parties to build payment scenarios[29](index=29&type=chunk) - Strategic adjustments include expanding payment products to small and medium-sized banks and merchants, and preparing for the comprehensive development of digital currency[29](index=29&type=chunk) - Bank merchant outsourcing services have expanded to **15 provinces**, with a **70%** bid-winning rate, integrating with payment businesses to become a core of the Group's strategic development[31](index=31&type=chunk) - The digital currency pilot program led by the People's Bank of China presents development opportunities for the Group in the payment sector[31](index=31&type=chunk) [Future Outlook](index=13&type=section&id=Future%20Outlook) This section outlines the group's future direction, focusing on "payment + outsourcing services" as core, developing new OFFLINE TO ONLINE operational models, and emphasizing cost control and risk monitoring - 'Payment + Outsourcing Services' will remain Xinli's core business, with new payment scenarios for small and medium-sized merchants and 'Bank-School Connect' becoming key sources of the Group's big data[32](index=32&type=chunk) - The Group will develop a distinctive OFFLINE TO ONLINE operational model and evolve with a 'new combination punch' approach to meet financial environment demands[32](index=32&type=chunk) - The Group will continue to strictly control costs and strengthen risk monitoring across all businesses to achieve a virtuous cycle of 'increasing revenue and reducing expenditure'[32](index=32&type=chunk) [Other Information](index=14&type=section&id=Other%20Information) This section covers disclosures regarding substantial shareholders, directors' interests, share option schemes, and corporate governance practices [Interests and Short Positions of Substantial Shareholders and Other Persons in Shares, Underlying Shares and Debentures](index=14&type=section&id=Interests%20and%20Short%20Positions%20of%20Substantial%20Shareholders%20and%20Other%20Persons%20in%20Shares%2C%20Underlying%20Shares%20and%20Debentures) This section discloses the interests and short positions of substantial shareholders (excluding directors or chief executives) in the company's shares as of March 31, 2021 Substantial Shareholder Holdings (As of March 31, 2021) | Shareholder Name | Capacity/Nature of Interest | Number of Shares Held (Long Position) | Percentage of Share Capital Held | | :--- | :--- | :--- | :--- | | Goldcorp Industrial Limited | Beneficial Owner | 431,782,500 | 32.78% | | Great Song Enterprises Limited | Beneficial Owner | 431,782,500 | 32.78% | | Mr. Xiong Rongli | Corporate Interest | 431,782,500 | 32.78% | | Mr. Xiong Rongli | Beneficial Owner | 72,782,500 | 5.53% | | Ms. Li Qiling | Corporate Interest | 431,782,500 | 32.78% | | Ms. Yao Bin | Family Interest | 504,565,000 | 38.31% | - Mr. Xiong Rongli and Ms. Li Qiling are deemed to be interested in the shares held by Goldcorp Industrial Limited due to their equity and voting control in the company[39](index=39&type=chunk) - Ms. Yao Bin, as the spouse of Mr. Xiong Rongli, is deemed to be interested in the shares held by Mr. Xiong Rongli under the Securities and Futures Ordinance[39](index=39&type=chunk) [Interests and Short Positions of Directors and Chief Executive in Shares, Underlying Shares and Debentures](index=16&type=section&id=Interests%20and%20Short%20Positions%20of%20Directors%20and%20Chief%20Executive%20in%20Shares%2C%20Underlying%20Shares%20and%20Debentures) This section details the interests and short positions of the company's directors and chief executive in the company's and its associated corporations' shares as of March 31, 2021 Directors' Interests in Company Securities (As of March 31, 2021) | Name of Director | Capacity/Nature of Interest | Interest in Ordinary Shares | Interest in Underlying Shares in Respect of Share Options | Total Interest | Percentage of Company's Issued Share Capital | | :--- | :--- | :--- | :--- | :--- | :--- | | Mr. Xiong Rongli | Corporate Interest | 431,782,500 | – | 431,782,500 | 32.78% | | Mr. Xiong Rongli | Beneficial Owner | 72,782,500 | – | 72,782,500 | 5.53% | | Mr. Xiong Ying | Beneficial Owner | 14,547,500 | 3,862,822 | 18,410,322 | 1.40% | | Mr. Lin Xuexin | Beneficial Owner | 9,470,000 | 4,992,682 | 14,462,682 | 1.10% | | Mr. Pu Bingrong | Beneficial Owner | – | 307,606 | 307,606 | 0.02% | | Mr. Tan Guoqing | Beneficial Owner | – | 307,606 | 307,606 | 0.02% | | Mr. Lu Jingwen | Beneficial Owner | – | 307,606 | 307,606 | 0.02% | - Mr. Xiong Rongli holds a **50%** beneficial interest in the associated corporation Goldcorp Industrial Limited[42](index=42&type=chunk)[44](index=44&type=chunk) [Share Option Scheme](index=17&type=section&id=Share%20Option%20Scheme) This section outlines the company's share option scheme, including its history, authorized limits, exercise price determination, and details of unexercised options as of March 31, 2021 - The company's share option scheme was adopted in 2001, with a new scheme effective immediately upon its expiry in 2011, primarily to reward directors and eligible employees[43](index=43&type=chunk) - The scheme's authorized limit has been updated multiple times, most recently in 2018, allowing for the grant of share options for up to **61,032,000** shares[45](index=45&type=chunk) - The exercise price of share options is determined by the Board, not less than the higher of the closing price of shares on the grant date and the average closing price for the preceding five business days[46](index=46&type=chunk) Overview of Share Options (As of March 31, 2021) | Name of Director, Continuing Contract Employees and Consultants | Number of Unexercised Share Options as at January 1, 2021 | Number of Share Options Lapsed During the Period | Number of Unexercised Share Options as at March 31, 2021 | | :--- | :--- | :--- | :--- | | Xiong Rongli | 76,901,500 | (76,901,500) | – | | Lin Xuexin | 816,339 | (816,339) | – | | Continuing Contract Employees (excluding Directors) | 13,723,960 | (13,723,960) | – | | Xiong Ying | 47,324 | – | 47,324 | | Lin Xuexin | 3,549,300 | – | 3,549,300 | | Pu Bingrong | 307,606 | – | 307,606 | | Tan Guoqing | 307,606 | – | 307,606 | | Lu Jingwen | 307,606 | – | 307,606 | | Consultants | 42,644,839 | – | 42,644,839 | | **Total** | **198,275,729** | **(91,441,799)** | **106,833,930** | - As of March 31, 2021, **106,833,930** share options remained unexercised, with **91,441,799** share options lapsing during the period[54](index=54&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=21&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20the%20Company%27s%20Listed%20Securities) This section confirms that neither the company nor its subsidiaries engaged in any purchase, sale, or redemption of its listed securities during the reporting period - Neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities during the reporting period[55](index=55&type=chunk) [Material Acquisitions and Disposals of Subsidiaries and Associates](index=21&type=section&id=Material%20Acquisitions%20and%20Disposals%20of%20Subsidiaries%20and%20Associates) This section discloses a material transaction where the company conditionally agreed to sell its indirect wholly-owned subsidiary, Hangzhou Hengxinlirong Software Co., Ltd., for RMB 40,000,000 - The company conditionally agreed to dispose of its entire equity interest in Hangzhou Hengxinlirong Software Co., Ltd., an indirect wholly-owned subsidiary, for a cash consideration of **RMB 40,000,000**[56](index=56&type=chunk) - Upon completion, Hangzhou Hengxinlirong will cease to be a subsidiary of the Company, and its financial results will no longer be consolidated into the Company's financial statements[56](index=56&type=chunk) - The completion of this agreement is subject to the fulfillment of conditions precedent outlined in the Company's circular[58](index=58&type=chunk) [Competition and Conflicts of Interest](index=22&type=section&id=Competition%20and%20Conflicts%20of%20Interest) This section states that no directors, management shareholders, or substantial shareholders engaged in competing businesses or had conflicts of interest with the group during the reporting period - For the three months ended March 31, 2021, none of the company's directors, management shareholders, substantial shareholders, or their respective associates engaged in any business competing or likely to compete with the Group's business, nor did they have any other conflicts of interest with the Group[59](index=59&type=chunk) [Corporate Governance Practices](index=22&type=section&id=Corporate%20Governance%20Practices) This section confirms the company's compliance with the Corporate Governance Code provisions outlined in Appendix 15 of the GEM Listing Rules during the reporting period - The Company has complied with the code provisions of the Corporate Governance Code set out in Appendix 15 to the GEM Listing Rules for the three months ended March 31, 2021[60](index=60&type=chunk) [Securities Transactions by Directors](index=22&type=section&id=Securities%20Transactions%20by%20Directors) This section confirms the company's compliance with GEM Listing Rules regarding directors' securities transactions and found no non-compliance after specific inquiries - For the three months ended March 31, 2021, the Company complied with the required standard of dealings concerning securities transactions by directors as set out in Rules 5.48 to 5.67 of the GEM Listing Rules[61](index=61&type=chunk) - The Company has made specific enquiries with all directors and is not aware of any non-compliance with the required standard of dealings regarding directors' securities transactions[61](index=61&type=chunk) - Employees who may possess unpublished price-sensitive information of the Group are also subject to the same code of conduct, and no breaches were identified during the period[61](index=61&type=chunk) [Remuneration Committee](index=23&type=section&id=Remuneration%20Committee) This section describes the Remuneration Committee's establishment, primary function of reviewing and recommending remuneration policies for directors and senior management, and its current composition - The Remuneration Committee was established in November 2005, with its primary function being to review and make recommendations on the remuneration policies for directors and senior management[63](index=63&type=chunk) - Mr. Pu Bingrong chairs the Remuneration Committee, with members including Mr. Xiong Rongli, Mr. Tan Guoqing, and Mr. Lu Jingwen[63](index=63&type=chunk) [Nomination Committee](index=23&type=section&id=Nomination%20Committee) This section outlines the Nomination Committee's establishment, key responsibilities including developing nomination policies, recommending director appointments, and reviewing board diversity, along with its membership - The Nomination Committee was established in March 2012, primarily responsible for formulating nomination policies, recommending director nominations and appointments, succession planning for the Board, and developing and reviewing the Board Diversity Policy[64](index=64&type=chunk) - Mr. Xiong Rongli chairs the Nomination Committee, with members including Mr. Pu Bingrong, Mr. Tan Guoqing, and Mr. Lu Jingwen[64](index=64&type=chunk) [Audit and Risk Management Committee](index=23&type=section&id=Audit%20and%20Risk%20Management%20Committee) This section details the Audit and Risk Management Committee's formation, terms of reference, key duties in overseeing financial reporting and risk management, and its review of the current unaudited results - The Audit and Risk Management Committee was established on August 27, 2001, primarily to review and oversee the Group's financial reporting process, internal control systems, and risk management systems[65](index=65&type=chunk) - Mr. Pu Bingrong chairs the Audit and Risk Management Committee, with members including Mr. Tan Guoqing and Mr. Lu Jingwen, all of whom are independent non-executive directors[65](index=65&type=chunk) - The Committee has reviewed the Group's unaudited results for the three months ended March 31, 2021, and considers them to be prepared in accordance with applicable accounting standards and requirements, with adequate disclosures[65](index=65&type=chunk)

Financial Performance - The Group recorded a loss of RMB 31,204,000 for the year 2020, compared to a profit of approximately RMB 25,004,000 in 2019, marking a significant decline in performance[16] - Revenue for the year dropped by 34% compared to the same period last year, while cost of sales and total expenses rose by 12%[16] - The Group recorded total revenue of approximately RMB 85,535,000 for the year ended December 31, 2020, a decrease of 34% compared to RMB 129,675,000 in 2019[35] - Revenue from the provision of technical support services decreased by 27% year-on-year, significantly impacting overall revenue[38] - The Group reported a loss of approximately RMB 31,204,000 for the year ended December 31, 2020, compared to a profit of approximately RMB 25,004,000 in 2019, primarily due to a significant revenue decline from the Covid-19 pandemic[44] - The group recorded a segment loss of approximately RMB31.15 million for 2020, compared to a profit of approximately RMB30.89 million in 2019[82] - The loss attributable to shareholders for the year ended December 31, 2020, was RMB (31,204,000), compared to a profit of RMB 25,004,000 in 2019[141] - Total assets decreased to RMB 151,196,000 in 2020 from RMB 192,474,000 in 2019, representing a decline of approximately 21%[141] - Total liabilities decreased to RMB (85,448,000) in 2020 from RMB (95,522,000) in 2019, a reduction of about 10.7%[141] - Net assets decreased to RMB 65,748,000 in 2020 from RMB 96,952,000 in 2019, reflecting a decline of approximately 32%[141] Operational Challenges - The Group's growth over the past five years was entirely wiped out due to the substantial suspension of banking operations and disruptions caused by COVID-19 outbreaks[16] - The Group's performance was impacted by the suspension or closing of branches, shopping malls, and stores during the pandemic[17] - The Group's business operations were severely affected by the global financial crisis, leading to intermittent business activities[16] - The Group aims to deepen overall process development by collaborating with banks and third parties[17] Cost Management - Cost of sales increased by 6% to approximately RMB 78,776,000, primarily due to rising staff costs, resulting in a gross profit margin of 8%, down from 42% in 2019[39] - Administrative expenses rose by 9% to approximately RMB 15,797,000, attributed mainly to increased staff costs[42] - Research and development costs increased by 439% to approximately RMB 9,388,000, reflecting a shift to expensing all incurred costs during the year[43] - The Group will continue to implement stringent cost control measures and strengthen risk management across its various businesses[26] - The Group plans to enhance sales and strengthen cost control measures, expecting improved financial results in the coming year as products mature in the market[52] Strategic Initiatives - The Group's "Payment plus Service" department shifted its focus online, launching WeChat Pay and CCB payment channels, and introduced cloud-based MIS payment software[17] - The pandemic provided opportunities for small and medium-sized banks to develop mobile banking and payment processes, prompting the Group to focus on relevant business development in 2021[18] - The Group aims to expand its merchant service business and has increased its service coverage from 2 provincial bank branches to 15 provinces in 2020[23] - The Group plans to integrate banking outsourcing services and payment products to form a cohesive business portfolio for future development[23] - The Group is focusing on a core business strategy with two complementary products, particularly in the payment and service outsourcing sectors[24] Financial Stability - The Group maintained its financial stability by leveraging a strong record of payment collection from previous years[16] - Borrowings decreased by 7% to approximately RMB 63,789,000 as at 31 December 2020, down from approximately RMB 68,471,000 in 2019, mainly due to the repayment of unsecured director's loans[51] - The Group's cash and cash equivalents decreased to approximately RMB 58,358,000 as at 31 December 2020, from approximately RMB 76,170,000 in 2019, primarily due to a decrease in the collection of receivables[55] - The current ratio as at 31 December 2020 was approximately 3 times, down from approximately 5 times in 2019, indicating a decline in liquidity[55] - The gearing ratio increased to approximately 57% as at 31 December 2020, compared to approximately 50% in 2019, reflecting a higher level of debt relative to assets[67] Human Resources - Total staff costs for the year amounted to approximately RMB74.33 million, an increase from approximately RMB65.44 million in 2019[84] - As of December 31, 2020, the group had 965 employees, up from 850 employees in 2019[84] - The Group recognizes the importance of attracting and retaining key personnel, offering competitive remuneration packages[130][134] Risk Management - The Group faces various key risks including market risk, liquidity risk, operational risk, and investment risk, which could impact financial performance and business prospects[111][119][120][121] - Foreign exchange rate risk is present due to assets and liabilities denominated in Renminbi, HKD, and USD, with management monitoring exposure and considering hedging when necessary[117][122] - The Group actively manages interest rate risk for interest-sensitive products and investments through dynamic analysis and cost-effective measures[118][123] - Liquidity risk is managed by monitoring cash flows and maintaining adequate cash levels to meet obligations[119][124] - The Group is committed to enhancing IT security to mitigate risks from cyberattacks and data breaches, ensuring compliance with legal and industry standards[132][136] Compliance and Governance - There were no incidences of non-compliance with relevant laws and regulations during the year that significantly impacted business operations[107] - The Group maintains good relationships with business partners and banks, with no significant disputes reported during the year[109] - The Group collaborates with responsible suppliers to ensure quality goods at competitive prices through effective supply chain management[110] - The report indicates compliance with the Securities and Futures Ordinance regarding the disclosure of interests in shares[198] Shareholder Information - The Company does not recommend the payment of dividends for the year ended 31 December 2020[162] - The Company had no reserves available for distribution to equity as of 31 December 2020, consistent with 2019[180] - Goldcorp Industrial Limited and Great Song Enterprises Limited each hold 431,782,500 shares, representing 32.78% of the total shareholding[194] - Mdm Iu Pun holds a family interest of 581,466,500 shares, which is 44.14% of the total shareholding[194] - Mr. Hung Yung Lai has beneficial ownership of 76,901,500 share options, which correspond to the same number of underlying shares[195] - Ms. Li Kei Ling controls more than one third of the voting power of Great Song Enterprises Limited, which in turn holds more than one third of the voting power of Goldcorp Industrial Limited[199] - The directors or chief executives of the company were not aware of any other person with a 5% or more interest in the company's shares as of December 31, 2020[197]

[Company Information and Disclaimer](index=1&type=section&id=I.%20Company%20Information%20and%20Disclaimer) This section covers GEM market characteristics, associated risks, and the directors' responsibility statement for report accuracy [GEM Market Characteristics and Risks](index=2&type=section&id=1.1%20GEM%20Market%20Characteristics%20and%20Risks) The GEM market provides a listing platform for SMEs but entails higher investment risks, potential market volatility, and uncertain liquidity - The GEM market is positioned as a listing platform for SMEs, but investment risks are higher[3](index=3&type=chunk) - Securities of GEM listed companies may experience greater market volatility and high liquidity is not guaranteed[3](index=3&type=chunk) [Directors' Responsibility Statement](index=2&type=section&id=1.2%20Directors'%20Responsibility%20Statement) Directors jointly and individually assume full responsibility for the report's content, confirming its accuracy, completeness, and absence of misleading or fraudulent information - The company's directors jointly and individually assume full responsibility for the content contained in this report[3](index=3&type=chunk) - Directors confirm that the report's information is accurate, complete, not misleading or fraudulent in all material aspects, and contains no omissions[3](index=3&type=chunk) [Financial Performance Overview](index=3&type=section&id=II.%20Financial%20Performance%20Overview) This section provides an overview of the group's financial performance, including the consolidated statement of profit or loss and changes in equity [Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=3&type=section&id=2.1%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) For the nine months ended September 30, 2020, the group's sales revenue significantly decreased by 30.47% year-on-year, gross profit turned to loss, resulting in a net loss of RMB 17,361 thousand Key Data from Consolidated Statement of Profit or Loss and Other Comprehensive Income (For the nine months ended September 30) | Indicator | 2020 (RMB thousands) | 2019 (RMB thousands) | Year-on-year Change (%) | | :--- | :--- | :--- | :--- | | Sales Revenue | 49,770 | 71,587 | -30.47% | | Cost of Sales and Services | (49,484) | (47,936) | 3.23% | | Gross Profit | 286 | 23,651 | -98.79% | | Profit (Loss) Before Tax | (19,167) | 3,284 | -683.34% | | Profit (Loss) and Total Comprehensive Income (Expense) for the Period | (17,361) | 1,743 | -1096.10% | | Basic Earnings (Loss) Per Share (RMB cents) | (1.32) | 0.15 | -980.00% | [Consolidated Statement of Changes in Equity](index=4&type=section&id=2.2%20Consolidated%20Statement%20of%20Changes%20in%20Equity) As of September 30, 2020, the group's total equity was RMB 79,591 thousand, a decrease from RMB 96,952 thousand at the beginning of the year, primarily due to a net loss of RMB 17,361 thousand for the period Key Data from Consolidated Statement of Changes in Equity (As of September 30) | Indicator | September 30, 2020 (RMB thousands) | January 1, 2020 (RMB thousands) | September 30, 2019 (RMB thousands) | | :--- | :--- | :--- | :--- | | Share Capital | 12,538 | 12,538 | 12,538 | | Share Premium | 179,132 | 179,132 | 179,132 | | Accumulated Losses | (152,686) | (137,728) | (161,283) | | Total Equity | 79,591 | 96,952 | 73,691 | - According to the Bermuda Companies Act, share premium distribution is subject to the company's solvency and realizable value of assets[5](index=5&type=chunk) - Chinese subsidiaries are required to establish two non-distributable statutory reserves: an enterprise development fund and a statutory surplus reserve[6](index=6&type=chunk) [Notes to the Financial Statements](index=5&type=section&id=III.%20Notes%20to%20the%20Financial%20Statements) This section details the basis of preparation for the unaudited consolidated financial statements, adherence to IFRS and GEM Listing Rules, and the impact of new accounting standards [General Information](index=5&type=section&id=3.1%20General%20Information) This section explains the unaudited consolidated financial statements' preparation basis, adherence to IFRS, Hong Kong Companies Ordinance, and GEM Listing Rules, with RMB as the functional currency - Financial statements are prepared in accordance with International Financial Reporting Standards, the Hong Kong Companies Ordinance, and the GEM Listing Rules[8](index=8&type=chunk) - The Group's functional currency is RMB, accounting policies are consistent with the prior year, and the adoption of new IFRS had no material impact[9](index=9&type=chunk)[10](index=10&type=chunk) [Breakdown of Sales Revenue](index=5&type=section&id=3.2%20Breakdown%20of%20Sales%20Revenue) The group's sales revenue primarily derives from technical support services, followed by software and related hardware product sales, with technical support service revenue declining by 31.12% year-on-year Breakdown of Sales Revenue (For the nine months ended September 30) | Revenue Source | 2020 (RMB thousands) | 2019 (RMB thousands) | Year-on-year Change (%) | | :--- | :--- | :--- | :--- | | Sales of Software Products | 4,024 | 5,279 | -23.80% | | Sales of Related Hardware Products | 720 | 944 | -23.73% | | Provision of Technical Support Services | 45,026 | 65,364 | -31.12% | | **Total Sales Revenue** | **49,770** | **71,587** | **-30.47%** | [Other Income](index=6&type=section&id=3.3%20Other%20Income) For the nine months ended September 30, 2020, the group's total other income increased by 121.93% year-on-year to RMB 1,953 thousand, primarily due to a significant increase in other income items Breakdown of Other Income (For the nine months ended September 30) | Revenue Source | 2020 (RMB thousands) | 2019 (RMB thousands) | Year-on-year Change (%) | | :--- | :--- | :--- | :--- | | Interest Income | 510 | 371 | 37.47% | | Others | 1,443 | 509 | 183.50% | | **Total Other Income** | **1,953** | **880** | **121.93%** | [Income Tax Credit (Expense)](index=6&type=section&id=3.4%20Income%20Tax%20Credit%20(Expense)) For the nine months ended September 30, 2020, the group recorded an income tax credit of RMB 1,806 thousand, compared to an income tax expense of RMB 1,541 thousand in the prior period, mainly due to deferred tax turning into a credit Breakdown of Income Tax Credit (Expense) (For the nine months ended September 30) | Indicator | 2020 (RMB thousands) | 2019 (RMB thousands) | Change (RMB thousands) | | :--- | :--- | :--- | :--- | | China Corporate Income Tax - Under-provision for prior years | (72) | – | (72) | | Deferred Tax - Current Period | 1,878 | (1,541) | 3,419 | | **Total Income Tax Credit (Expense)** | **1,806** | **(1,541)** | **3,347** | - Hangzhou Xinli Technology Co., Ltd., as a high-tech enterprise, enjoys a preferential China corporate income tax rate of **15%**[14](index=14&type=chunk) - The Group generated no assessable profits in Hong Kong, thus no Hong Kong profits tax provision was made; no assessable profits were generated in China in 2020 either[16](index=16&type=chunk) [Earnings (Loss) Per Share](index=7&type=section&id=3.5%20Earnings%20(Loss)%20Per%20Share) For the nine months ended September 30, 2020, the loss attributable to owners of the company was RMB 17,361 thousand, resulting in basic and diluted loss per share of RMB 1.32 cents Earnings (Loss) Per Share Calculation (For the nine months ended September 30) | Indicator | 2020 (RMB thousands/thousand shares) | 2019 (RMB thousands/thousand shares) | | :--- | :--- | :--- | | Profit (Loss) for the Period Attributable to Owners of the Company | (17,361) | 1,743 | | Weighted Average Number of Ordinary Shares (thousand shares) | 1,317,240 | 1,149,143 | | Basic Earnings (Loss) Per Share (RMB cents) | (1.32) | 0.15 | | Diluted Earnings (Loss) Per Share (RMB cents) | (1.32) | 0.15 | - For the nine months in 2020 and 2019, diluted earnings (loss) per share calculation did not assume the exercise of certain share options, as their exercise price was higher than the average market price[20](index=20&type=chunk) [Dividend Policy](index=8&type=section&id=3.6%20Dividend%20Policy) The Board does not recommend paying a dividend for the nine months ended September 30, 2020, consistent with the prior period - The Board does not recommend paying a dividend for the nine months ended September 30, 2020[21](index=21&type=chunk) [Management Discussion and Analysis](index=9&type=section&id=IV.%20Management%20Discussion%20and%20Analysis) This section reviews the use of proceeds from the rights issue, financial performance, business operations, and future strategies, highlighting the impact of the global financial crisis and COVID-19 [Use of Proceeds from Rights Issue](index=9&type=section&id=4.1%20Use%20of%20Proceeds%20from%20Rights%20Issue) The company completed a rights issue in May 2019, raising approximately HKD 24.42 million net, primarily for general working capital, with HKD 4.10 million remaining as of September 30, 2020 - A rights issue was completed in May 2019, raising net proceeds of approximately **HKD 24.42 million** (approximately **RMB 21.564 million**)[23](index=23&type=chunk) - The net proceeds are intended for the Group's general working capital[23](index=23&type=chunk) Summary of Use of Proceeds from Rights Issue (As of September 30, 2020) | Purpose | Planned Net Proceeds (HKD millions) | Actual Amount Used (HKD millions) | Unused Balance (HKD millions) | Expected Timeline | | :--- | :--- | :--- | :--- | :--- | | General Working Capital | 24.42 | 20.32 | 4.10 | December 31, 2020 | [Financial Review and Performance](index=10&type=section&id=4.2%20Financial%20Review%20and%20Performance) For the nine months ended September 30, 2020, the group's sales revenue decreased by approximately 30%, leading to a net loss of RMB 17,361 thousand, primarily due to declining technical support service revenue and increased staff costs - Sales revenue was approximately **RMB 49.77 million**, a decrease of approximately **30%** year-on-year, mainly due to a **31%** decline in technical support service revenue[26](index=26&type=chunk) - Cost of sales was approximately **RMB 49.484 million**, an increase of **3%**, and administrative expenses were approximately **RMB 11.181 million**, an increase of **13%**, both primarily due to increased staff costs[26](index=26&type=chunk) - Distribution and selling expenses were approximately **RMB 9.009 million**, a decrease of **14%**, mainly due to the implementation of effective cost-saving measures[26](index=26&type=chunk) - Finance costs were approximately **RMB 1.659 million**, a decrease of approximately **16%**, mainly due to reduced interest expenses on lease liabilities and decreased borrowings[27](index=27&type=chunk) - The Group recorded a net loss of approximately **RMB 17.361 million**, turning from profit to loss primarily due to a significant decline in business revenue impacted by the COVID-19 pandemic[27](index=27&type=chunk) [Business Review](index=11&type=section&id=4.3%20Business%20Review) In Q3 2020, the group's business was severely hampered by the global financial crisis and COVID-19, leading to a 30% sales decline and a loss, prompting strategic adjustments towards online payment services and expanded offline merchant services - Affected by the global financial crisis and COVID-19, banking business was significantly delayed, leading to a **30%** year-on-year sales decline in Q3 and a loss of **RMB 17.361 million** for the first nine months[29](index=29&type=chunk) - Under the 'Payment + Service' strategy, payment business R&D shifted towards online, integrating WeChat Pay and China Construction Bank channels, launching cloud-based MIS, and moving payment scenarios from offline to online[29](index=29&type=chunk) - Service business expanded into offline markets, with merchant services now covering **15 provinces**, gradually integrating bank merchant outsourcing services with payment products to form combined offerings[30](index=30&type=chunk) - Collaborating with city commercial banks like Bank of Beijing and Bank of Shanghai, the group rapidly expanded financial products using existing customer and market resources, and integrated local and foreign currency products during the pandemic to build a more comprehensive financial system[32](index=32&type=chunk) [Future Outlook](index=12&type=section&id=4.4%20Future%20Outlook) The group will continue to leverage "Payment + Outsourcing Services," business district platforms, and "Bank-School Link" as big data sources, forming an "OFFLINE TO ONLINE" operational model, promoting bank collaborations, and strictly controlling costs - "Payment + Outsourcing Services," business district platforms, and "Bank-School Link" remain key big data sources for the Group, forming a unique "OFFLINE TO ONLINE" operational model[33](index=33&type=chunk) - The "combination punch" development approach will better align with overall financial environment needs, with the Group continuing strict cost control and enhanced risk monitoring to achieve a virtuous cycle of 'increasing revenue and reducing expenditure'[33](index=33&type=chunk) [Equity and Directors' Interests](index=13&type=section&id=V.%20Equity%20and%20Directors'%20Interests) This section details the interests of major shareholders, directors, and chief executives in the company's shares and share options, including the share option scheme [Major Shareholders' Interests](index=13&type=section&id=5.1%20Major%20Shareholders'%20Interests) As of September 30, 2020, Goldcorp Industrial Limited and Great Song Enterprises Limited each held 32.78% of the company's shares, with Mr. Xiong Rongli and Ms. Li Qiling indirectly holding the same, and Ms. Yao Bin deemed to have a 44.14% interest Major Shareholders' Interests in the Company's Ordinary Shares (As of September 30, 2020) | Shareholder Name | Capacity/Nature of Interest | Number of Shares Held (Long Position) | Percentage of Share Capital Held | | :--- | :--- | :--- | :--- | | Goldcorp Industrial Limited | Beneficial Owner | 431,782,500 | 32.78% | | Great Song Enterprises Limited | Beneficial Owner | 431,782,500 | 32.78% | | Mr. Xiong Rongli | Corporate Interest | 431,782,500 | 32.78% | | Mr. Xiong Rongli | Beneficial Owner | 72,782,500 | 5.53% | | Ms. Li Qiling | Corporate Interest | 431,782,500 | 32.78% | | Ms. Yao Bin | Family Interest | 581,466,500 | 44.14% | Major Shareholders' Interests in Share Options (As of September 30, 2020) | Shareholder Name | Capacity/Nature of Interest | Number of Share Options Held | Number of Underlying Shares | | :--- | :--- | :--- | :--- | | Mr. Xiong Rongli | Beneficial Owner | 76,901,500 | 76,901,500 | - Goldcorp Industrial Limited is jointly held by Mr. Xiong Rongli and Great Song Enterprises Limited, which is wholly owned by Ms. Li Qiling[38](index=38&type=chunk) [Directors' and Chief Executive's Interests](index=15&type=section&id=5.2%20Directors'%20and%20Chief%20Executive's%20Interests) As of September 30, 2020, Mr. Xiong Rongli, as Chairman, Executive Director, and controlling shareholder, held a total interest of 44.14% in the company's shares and share options, with other directors also holding interests Directors' Interests in the Company's Securities (As of September 30, 2020) | Director Name | Capacity/Nature of Interest | Interest in Ordinary Shares | Interest in Underlying Shares from Share Options | Total Interest | Total Percentage of Company's Issued Share Capital | | :--- | :--- | :--- | :--- | :--- | :--- | | Mr. Xiong Rongli | Corporate Interest | 431,782,500 | – | 431,782,500 | 32.78% | | Mr. Xiong Rongli | Beneficial Owner | 72,782,500 | 76,901,500 | 149,684,000 | 11.36% | | Mr. Xiong Ying | Beneficial Owner | 14,547,500 | 3,862,822 | 18,410,322 | 1.40% | | Mr. Lin Xuexin | Beneficial Owner | 9,470,000 | 5,809,021 | 15,279,021 | 1.16% | | Mr. Pu Bingrong | Beneficial Owner | – | 307,606 | 307,606 | 0.02% | | Mr. Tan Guoqing | Beneficial Owner | – | 307,606 | 307,606 | 0.02% | | Mr. Lu Jingwen | Beneficial Owner | – | 307,606 | 307,606 | 0.02% | Directors' Interests in Associated Corporations (As of September 30, 2020) | Director Name | Capacity/Nature of Interest | Name of Associated Corporation | Number of Ordinary Shares Held | Percentage of Total Shares in Associated Corporation | | :--- | :--- | :--- | :--- | :--- | | Mr. Xiong Rongli | Beneficial Owner | Goldcorp Industrial Limited | 1 | 50% | [Share Option Scheme](index=16&type=section&id=5.3%20Share%20Option%20Scheme) The company's share option scheme, adopted in 2001 and replaced in 2011, aims to reward directors and eligible employees, with 198,275,729 unexercised options as of September 30, 2020 - The company's share option scheme was adopted in 2001, expired in 2011, and was replaced by a new scheme to reward directors and eligible employees[43](index=43&type=chunk) - The scheme's authorized limit has been updated multiple times, most recently on May 11, 2018, allowing subscription for a total of **61,032,000 shares**, representing approximately **6.95%** of the issued share capital[45](index=45&type=chunk) - The exercise price of share options is determined by the Board, not less than the higher of the closing price on the grant date and the average closing price for the preceding five days[46](index=46&type=chunk) Overview of Unexercised Share Options (As of September 30, 2020) | Director Name, Continuing Contract Employees and Consultants | Exercise Period | Adjusted Exercise Price (HKD) | Unexercised Share Options as of January 1, 2020 | Share Options Lapsed During the Period | Unexercised Share Options as of September 30, 2020 | | :--- | :--- | :--- | :--- | :--- | :--- | | Pu Bingrong | 2010.07.19-2020.01.18 | 0.1690 | 709,860 | (709,860) | – | | Tan Guoqing | 2010.07.19-2020.01.18 | 0.1690 | 709,860 | (709,860) | – | | Lu Jingwen | 2010.07.19-2020.01.18 | 0.1690 | 709,860 | (709,860) | – | | Xiong Ying | 2010.07.19-2020.01.18 | 0.1690 | 2,957,750 | (2,957,750) | – | | Lin Xuexin | 2010.07.19-2020.01.18 | 0.1690 | 769,015 | (769,015) | – | | Xiong Rongli | 2011.02.28-2021.01.09 | 0.6170 | 76,901,500 | – | 76,901,500 | | Lin Xuexin | 2011.02.28-2021.01.12 | 0.6035 | 816,339 | – | 816,339 | | Continuing Contract Employees (excluding Directors) | 2011.02.28-2021.01.12 | 0.6035 | 13,723,960 | – | 13,723,960 | | Xiong Ying | 2015.05.15-2025.05.14 | 0.3635 | 2,247,890 | – | 2,247,890 | | Lin Xuexin | 2015.05.15-2025.05.14 | 0.3635 | 3,549,300 | – | 3,549,300 | | Pu Bingrong | 2017.04.07-2027.04.06 | 0.1538 | 307,606 | – | 307,606 | | Tan Guoqing | 2017.04.07-2027.04.06 | 0.1538 | 307,606 | – | 307,606 | | Lu Jingwen | 2017.04.07-2027.04.06 | 0.1538 | 307,606 | – | 307,606 | | **Total** | | | **216,069,553** | **(17,793,824)** | **198,275,729** | [Corporate Governance and Compliance](index=21&type=section&id=VI.%20Corporate%20Governance%20and%20Compliance) This section outlines the company's adherence to corporate governance practices, including securities transactions, conflicts of interest, and the roles of its remuneration, nomination, and audit committees [Dealings in Listed Securities](index=21&type=section&id=6.1%20Dealings%20in%20Listed%20Securities) During the reporting period, neither the company nor its subsidiaries purchased, sold, or redeemed any of the company's listed securities - Neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities[54](index=54&type=chunk) [Competition and Conflicts of Interest](index=21&type=section&id=6.2%20Competition%20and%20Conflicts%20of%20Interest) For the nine months ended September 30, 2020, no directors, management shareholders, major shareholders, or their associates engaged in any business competing with the group or had other conflicts of interest - No directors, management shareholders, major shareholders, or their associates engaged in any business competing or potentially competing with the Group, nor did any other conflicts of interest arise[55](index=55&type=chunk) [Corporate Governance Practices](index=21&type=section&id=6.3%20Corporate%20Governance%20Practices) The company consistently complied with the code provisions of the Corporate Governance Code as set out in Appendix 15 of the GEM Listing Rules for the nine months ended September 30, 2020 - The company consistently complied with the code provisions of the Corporate Governance Code as set out in Appendix 15 of the GEM Listing Rules for the nine months ended September 30, 2020[56](index=56&type=chunk) [Directors' Securities Transactions](index=21&type=section&id=6.4%20Directors'%20Securities%20Transactions) For the nine months ended September 30, 2020, the company complied with GEM Listing Rules 5.48 to 5.67 regarding directors' securities transactions, with no non-compliance with the code of conduct - The company complied with GEM Listing Rules 5.48 to 5.67 regarding directors' securities transactions, with no non-compliance with the code of conduct identified[57](index=57&type=chunk) [Remuneration Committee](index=21&type=section&id=6.5%20Remuneration%20Committee) Established in November 2005, the Remuneration Committee's primary role is to review and recommend remuneration policies for directors and senior management, chaired by Mr. Pu Bingrong - The Remuneration Committee was established in November 2005, primarily to review and recommend remuneration policies for directors and senior management[58](index=58&type=chunk) - The Remuneration Committee is chaired by Mr. Pu Bingrong, with members including Mr. Xiong Rongli, Mr. Tan Guoqing, and Mr. Lu Jingwen[58](index=58&type=chunk) [Nomination Committee](index=22&type=section&id=6.6%20Nomination%20Committee) Established in March 2012, the Nomination Committee formulates nomination policies, advises on director appointments and board succession, and reviews the Board Diversity Policy, chaired by Mr. Xiong Rongli - The Nomination Committee was established in March 2012, primarily to formulate nomination policies, advise on director nominations and appointments, and develop and review the Board Diversity Policy[60](index=60&type=chunk) - The Nomination Committee is chaired by Mr. Xiong Rongli, with members including Mr. Pu Bingrong, Mr. Tan Guoqing, and Mr. Lu Jingwen[60](index=60&type=chunk) [Audit and Risk Management Committee](index=22&type=section&id=6.7%20Audit%20and%20Risk%20Management%20Committee) Established on August 27, 2001, the Audit and Risk Management Committee reviews and oversees the group's financial reporting, internal controls, and risk management systems, confirming the unaudited results' compliance with accounting standards - The Audit and Risk Management Committee was established on August 27, 2001, primarily to review and oversee the Group's financial reporting, internal control, and risk management systems[61](index=61&type=chunk) - The Committee reviewed the unaudited results for the nine months ended September 30, 2020, deeming them prepared in accordance with applicable accounting standards and regulations, with adequate disclosure[61](index=61&type=chunk) - The Committee is chaired by Mr. Pu Bingrong, with members including Mr. Tan Guoqing and Mr. Lu Jingwen, all independent non-executive directors[61](index=61&type=chunk)