[Financial Highlights](index=4&type=section&id=Financial%20Highlights) [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=4&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) The company shifted from profit to a **HK$56.81 million loss** attributable to owners in Q1 2022, with revenue plummeting **87.4% to HK$11.87 million** due to declining lithium-ion battery sales, though total comprehensive income reached **HK$730 million** from exchange gains Key Financial Indicators for Q1 2022 | Indicator | For the three months ended March 31 (HK$ thousands) | For the three months ended March 31 (HK$ thousands) | | :--- | :--- | :--- | | | **2022** | **2021** | | **Revenue** | 11,865 | 94,346 | | **Gross Profit** | 7,428 | 29,178 | | **(Loss)/Profit before tax** | (56,378) | 161,804 | | **(Loss)/Profit for the period** | (56,378) | 161,804 | | **(Loss)/Profit attributable to owners of the Company** | (56,806) | 154,992 | | **Total comprehensive income for the period** | 730,129 | (197,723) | | **Basic (loss)/earnings per share** | (0.58) HK cents | 1.59 HK cents | [Notes to the Financial Statements](index=5&type=section&id=Notes%20to%20the%20Financial%20Statements) Notes to the financial statements reveal specific reasons for performance changes, primarily a sharp decline in total revenue from lithium-ion battery sales and a shift from significant other operating income to expenses due to a **HK$49.26 million loss** on financial assets at fair value through profit or loss, with no dividends declared this quarter [Revenue](index=5&type=section&id=Revenue) Total revenue for the period was **HK$11.87 million**, an **87.4% decrease** from **HK$94.35 million** in the prior year, primarily due to a sharp drop in lithium-ion battery sales from **HK$92.71 million** to **HK$10.58 million**, alongside a slight decline in battery swapping service income Revenue Composition (HK$ thousands) | Item | Q1 2022 | Q1 2021 | | :--- | :--- | :--- | | Lithium-ion battery sales | 10,575 | 92,714 | | Battery swapping service income | 1,290 | 1,632 | | **Total** | **11,865** | **94,346** | [Other Operating Expenses/Income](index=5&type=section&id=Other%20Operating%20Expenses%2FIncome) The period recorded **net other operating expenses of HK$42.94 million**, a stark contrast to **HK$116 million in income** last year, primarily due to a shift from **HK$109 million gain** to a **HK$49.26 million loss** on financial assets at fair value through profit or loss - A **HK$49.26 million loss** on financial assets at fair value through profit or loss was the primary reason for the shift from other operating income to expenses[10](index=10&type=chunk) [Finance Costs](index=6&type=section&id=Finance%20Costs) Finance costs decreased by **37.1%** year-on-year from **HK$3.33 million** to **HK$2.09 million**, primarily due to reduced interest expenses on bank and other borrowings - Interest expenses on bank and other borrowings decreased from **HK$3.28 million** to **HK$2.01 million**, significantly contributing to the reduction in finance costs[13](index=13&type=chunk) [Dividends](index=6&type=section&id=Dividends) The Board resolved not to declare any dividends for the three months ended March 31, 2022, consistent with the prior year's policy - The Board resolved not to declare any dividends for the three months ended March 31, 2022[14](index=14&type=chunk) [Earnings/Loss Per Share](index=6&type=section&id=Earnings%2FLoss%20Per%20Share) Due to the company's shift from profit to loss, basic loss per share was **0.58 HK cents**, compared to basic earnings per share of **1.59 HK cents** in the prior year - Basic (loss)/earnings per share shifted from **1.59 HK cents** in the prior year to **(0.58) HK cents** for the current period[6](index=6&type=chunk)[15](index=15&type=chunk) [Changes in Reserves](index=7&type=section&id=Changes%20in%20Reserves) As of March 31, 2022, the Group's total equity increased to **HK$5.416 billion** from **HK$4.686 billion** at the beginning of the year, primarily driven by **HK$787 million** in exchange reserve gains, offsetting operating losses - Exchange gains of **HK$787 million** from currency translation during the period were the main driver for the increase in total comprehensive income and total equity[17](index=17&type=chunk) [Management Discussion and Analysis](index=8&type=section&id=Management%20Discussion%20and%20Analysis) [Business Segment Performance](index=8&type=section&id=Business%20Segment%20Performance) The company's core businesses include lithium-ion batteries, battery sharing services, and the Brazilian SAM iron ore project, with the battery business facing challenges from low capacity utilization and high costs, the GETI battery sharing service experiencing revenue decline due to competition, and the SAM project facing significant delays in environmental permit applications [Lithium-ion Battery Business](index=8&type=section&id=Lithium-ion%20Battery%20Business) The Group's lithium-ion battery business, primarily through Zhejiang Hengyuan New Energy (52% owned) and Shandong Hengyuan New Energy (24.5% owned), supplies batteries for high-end PHEV models, but faces challenges from insufficient capacity and high costs, leading to the loss of Lynk & Co PHEV orders since 2021, prompting active negotiations with new automotive and energy storage clients - Insufficient battery factory capacity and low utilization rates, leading to higher average costs than competitors, were the primary reasons for losing Lynk & Co orders[20](index=20&type=chunk) - The Group conducts its lithium battery business through Zhejiang Hengyuan New Energy (**52% owned**) and Shandong Hengyuan New Energy (an associate, **24.5% owned**)[21](index=21&type=chunk)[22](index=22&type=chunk) [Battery Sharing Business](index=9&type=section&id=Battery%20Sharing%20Business) The Group operates an e-bike battery sharing business under the 'GETI' brand in Jiangsu and Zhejiang provinces, China, with approximately **676 swapping stations** and **2,233 package users** as of March 2022, utilizing both self-operated and franchised models - As of March 2022, the GETI brand had approximately **676 battery swapping stations** and **2,233 package users**[24](index=24&type=chunk) [Progress of SAM Iron Ore Project](index=9&type=section&id=Progress%20of%20SAM%20Iron%20Ore%20Project) The Group's SAM iron ore project in Brazil, a significant long-term investment with cumulative funding of approximately **USD157 million**, aims for **27.5 million tonnes** of high-quality iron concentrate annually with a total estimated investment of **USD2.78 billion**, but faces severe delays in its preliminary environmental license application due to tightened regulations and lawsuits following other dam failures in Brazil - The Group has cumulatively invested approximately **USD157 million** in the Brazilian SAM iron ore project[26](index=26&type=chunk) Key Expected Indicators for SAM Project | Indicator | Value | | :--- | :--- | | Annual Production (dry basis iron concentrate) | 27,500,000 tonnes | | Total Investment (Capex) | 2.78 billion USD | | Operating Cost (Opex, first 18 years) | Approx. 27.6 USD/tonne | | FOB Cost (first 18 years) | Approx. 40.9 USD/tonne | - The issuance of the preliminary environmental license (LP) for the SAM project has been severely delayed due to two tailings dam failures at other Brazilian mines and related lawsuits[30](index=30&type=chunk)[32](index=32&type=chunk) [Financial Performance Analysis](index=12&type=section&id=Financial%20Performance%20Analysis) In Q1 2022, the Group's revenue plummeted **87.4% to HK$11.9 million** due to reduced demand for lithium-ion batteries from Volvo Cars, resulting in a **HK$56.8 million loss** attributable to owners, primarily from a sharp decline in gross profit and a **HK$49.3 million fair value loss** on financial assets, though administrative and finance costs decreased, with cash balance at **HK$426 million** and a **5.3% debt-to-equity ratio** - Operating revenue significantly decreased by **87.4%**, primarily due to reduced demand for lithium-ion batteries from key client Volvo Cars[35](index=35&type=chunk) - Key reasons for the shift from profit to loss include a **net loss of approximately HK$49.3 million** on financial assets (compared to a **HK$109 million gain** in the prior year) and a substantial decrease in gross profit[35](index=35&type=chunk)[38](index=38&type=chunk) - Administrative expenses decreased by **18.1%** year-on-year, and finance costs declined due to reduced borrowings[36](index=36&type=chunk) - As of March 31, 2022, the Group's cash and cash equivalents balance was approximately **HK$426 million**, with a debt-to-equity ratio of **5.3%**[38](index=38&type=chunk)[39](index=39&type=chunk) [Business Outlook](index=13&type=section&id=Business%20Outlook) The company anticipates continued high growth in the new energy vehicle industry but expects a significant revenue decline in H1 2022 for its PHEV battery business due to intense competition and rising industry standards, while actively pursuing new product launches for new clients by mid-2022, advancing the Brazilian SAM iron ore project, and exploring M&A, investment, and cooperation opportunities in smart vehicle sectors as part of its dual-track strategy in new energy and resources - Operating revenue is expected to decline significantly in H1 2022, primarily due to a substantial reduction in PHEV battery orders from Volvo Cars[41](index=41&type=chunk) - The company aims to introduce new products for new clients by mid-2022 to adapt to market changes[41](index=41&type=chunk) - The company will continue to explore M&A, investment, and cooperation opportunities in areas such as smart vehicle cockpits, automotive chips, autonomous driving, and shared mobility[41](index=41&type=chunk) - The Group's overall business strategy is a dual-track development in new energy vehicle-related businesses and resource sectors[42](index=42&type=chunk) [Corporate Governance and Other Disclosures](index=14&type=section&id=Corporate%20Governance%20and%20Other%20Disclosures) [Directors' and Shareholders' Interests](index=15&type=section&id=Directors'%20and%20Shareholders'%20Interests) The report discloses directors' and major shareholders' equity as of March 31, 2022, with Chairman Mr. He Xuechu holding approximately **42.07%** as the controlling shareholder, and Zhejiang Geely Holding Group Co Ltd and its controlling shareholder Mr. Li Shufu collectively holding approximately **19.83%** as major shareholders Major Shareholders' Shareholdings (as of March 31, 2022) | Shareholder Name/Entity | Total Shares Held | Approximate Shareholding Percentage (%) | | :--- | :--- | :--- | | He Xuechu | 4,145,399,189 | 42.07 | | Zhejiang Geely Holding Group Co Ltd | 1,850,675,675 | 18.78 | | Li Shufu | 1,953,739,675 | 19.83 | [Share Option Scheme](index=16&type=section&id=Share%20Option%20Scheme) Under the company's share option scheme adopted on May 21, 2012, **8,750,000** unexercised share options granted to employees on May 14, 2015, with an exercise price of **HK$2.61** per share, remained outstanding at the end of the reporting period - At the end of the reporting period, **8,750,000** unexercised share options granted to employees remained outstanding, with an exercise price of **HK$2.61**[49](index=49&type=chunk) [Connected Transactions](index=18&type=section&id=Connected%20Transactions) During the reporting period, the Group engaged in a connected transaction, selling approximately **HK$2.4 million** worth of lithium-ion batteries to an associate of Zhejiang Geely, a major shareholder of the company - The Group sold approximately **HK$2.4 million** worth of lithium-ion batteries to an associate of Zhejiang Geely, a major shareholder[55](index=55&type=chunk) [Compliance and Audit](index=14&type=section&id=Compliance%20and%20Audit) The company confirmed compliance with all Corporate Governance Code provisions in Appendix 15 of the GEM Listing Rules for the three months ended March 31, 2022, and its Audit Committee reviewed the unaudited results, deeming them prepared in accordance with applicable accounting standards and regulations with adequate disclosure - The company has complied with all Corporate Governance Code provisions set out in Appendix 15 of the GEM Listing Rules[42](index=42&type=chunk) - The Audit Committee has reviewed the Group's unaudited results for the three months ended March 31, 2022[58](index=58&type=chunk)

Financial Performance - The company reported revenue of HKD 478.9 million for the year ended December 31, 2021, a 61% increase from HKD 297.1 million in the previous year[8]. - Profit attributable to owners of the company was approximately HKD 88.5 million, a significant decrease from HKD 1,156.6 million in 2020, primarily due to the absence of asset impairment reversals related to the SAM iron ore project[9]. - The gross profit for the year was approximately HKD 115.1 million, with a gross profit margin of 24.0%, down from 31.3% in the previous year[67]. - Other operating income for the year was approximately HKD 114.6 million, compared to an expense of HKD 47.8 million in the previous year[67]. - Financial costs for the year were approximately HKD 8.8 million, a decrease from HKD 16.8 million in the previous year, primarily due to the repayment of loans from Zhejiang Geely[68]. - The group recorded a net gain of HKD 119.8 million from financial assets measured at fair value through profit or loss, compared to a loss of HKD 50 million in the previous year[70]. - The group's cash and cash equivalents balance as of December 31, 2021, was approximately HKD 396.4 million, an increase from HKD 372.7 million as of December 31, 2020[71]. - The capital debt ratio of the group as of December 31, 2021, was 6.1%, improved from 8.9% as of December 31, 2020, due to a reduction in total loans and borrowings[71]. - The total net proceeds from the placement and subscription of new shares amounted to HKD 1,336 million, with HKD 950 million allocated for enhancing lithium-ion battery capacity and potential investments in the electric vehicle sector[73]. - The company confirmed a financial cost of approximately HKD 800,000 related to short-term loans provided to Zhejiang Hengyuan New Energy during the fiscal year ending December 31, 2021[128]. Lithium-Ion Battery Business - The lithium-ion battery business contributed approximately HKD 473.1 million in revenue, with strong export sales to Europe increasing by about HKD 116.7 million, accounting for 24.4% of total lithium battery sales[8]. - The lithium-ion battery division recorded revenue of approximately HKD 473.1 million (around RMB 392.7 million) for the year ended December 31, 2021, representing an increase of about 62.7% compared to the previous year's revenue of HKD 290.8 million (around RMB 259 million)[20]. - The profit for the lithium-ion battery division was approximately HKD 17.2 million, a turnaround from a loss of HKD 130.5 million in 2020, primarily due to reduced impairment of property, plant, and equipment and increased gross profit[20]. - The company has a production capacity of approximately 2 million kWh for lithium-ion batteries at its subsidiary Zhejiang Hengyuan New Energy, with the first production line for soft-pack batteries having started mass production in 2018[18]. - The company’s lithium-ion battery products include 12V and 48V batteries, in addition to those used for PHEVs[15]. GETI Battery-Sharing Business - The GETI battery-sharing business in China had approximately 666 battery swap stations and 2,242 package users by December 2021, with revenue of about HKD 5.8 million[8]. - The battery sharing business, branded as "GETI," has established around 666 battery swap stations and served over 1 million battery swap services since its launch in mid-2019[21]. - The company plans to expand the GETI service to other regions in China and enhance battery quality and specifications to improve user experience[8]. Market Trends and Industry Outlook - The global shift from traditional gasoline vehicles to low-emission electric vehicles is expected to continue, with new energy vehicle sales projected to reach about 20% of total new car sales by 2025[10]. - The company anticipates continued high growth in the new energy vehicle industry in the coming years due to recent policy developments in China[10]. - The group anticipates that new energy vehicle sales will reach approximately 20% of total new car sales by 2025, with an expected growth trend in the industry[78]. Strategic Initiatives and Investments - The company is actively pursuing potential acquisitions in the smart vehicle driving seat, automotive chips, and components sectors, as well as in electric control and autonomous driving technologies[13]. - The company has invested a total of approximately USD 157 million in the Brazilian iron ore project, with an expected annual production of 27.5 million tons of dry iron concentrate at an average grade of 66.2% over the first eighteen years of operation[25]. - The company is exploring strategic partnerships and investments in the electric vehicle battery sector to mitigate sales concentration risks[83]. - The company is focused on dual-track development in the new energy vehicle sector and resource areas to create shareholder value[80]. Challenges and Risks - The company is facing challenges due to increased competition and new industry benchmarks, which are expected to lead to a significant decline in revenue in the first half of 2022[12]. - The lithium-ion battery division faces risks from reliance on a few major customers, which could significantly impact financial performance if orders decrease[83]. - Rising raw material costs for lithium-ion batteries, particularly cobalt and lithium, could adversely affect profitability and financial performance[84]. Governance and Compliance - The company did not recommend the payment of a final dividend for the year ended December 31, 2021, consistent with the previous year[1]. - The board of directors consists of seven members, with more than one-third being independent non-executive directors, ensuring appropriate professional qualifications and financial management expertise[139]. - The company has adopted a board diversity policy to enhance efficiency, considering factors such as gender, age, cultural background, and professional experience[149]. - The internal control system is designed to provide reasonable assurance against significant misstatements or losses, with risk management procedures established to identify, assess, and mitigate risks[153]. - The company has established a dividend policy that considers financial condition, capital levels, future cash requirements, and market conditions before declaring dividends[161]. Employee and Workplace Policies - The total number of employees as of December 31, 2021, was 198, down from 261 in 2020, indicating a reduction of approximately 24%[187]. - The overall average monthly employee turnover rate during the reporting period was approximately 29.28%[191]. - The company maintains a zero-tolerance policy towards discrimination and harassment in the workplace[195]. - The group has achieved ISO 45001:2018 certification for its occupational health and safety management system, emphasizing a "safety first" approach[200]. - The group conducts regular occupational health education training and safety drills to enhance employee awareness of safety practices[200]. Environmental, Social, and Governance (ESG) Commitment - The company emphasizes the importance of integrating Environmental, Social, and Governance (ESG) principles into its risk management system[172]. - The ESG report for the year ending December 31, 2021, highlights the company's commitment to sustainable development and transparency in its ESG measures and performance[172]. - The board of directors is responsible for overseeing the company's ESG strategy and ensuring the accuracy of the ESG report[174]. - The company maintains regular communication with shareholders and potential investors through meetings and announcements[169].

Financial Performance - For the nine months ended September 30, 2021, the total revenue was HKD 327,154,000, a significant increase of 84.4% compared to HKD 177,435,000 for the same period in 2020[8] - Lithium battery sales contributed HKD 322,644,000 to the revenue, up from HKD 172,997,000 in the previous year, reflecting a growth of 86.5%[8] - The gross profit for the nine months ended September 30, 2021, was HKD 93,856,000, compared to HKD 37,597,000 in 2020, marking an increase of 149.5%[5] - The company reported a profit before tax of HKD 132,778,000 for the nine months ended September 30, 2021, compared to a loss of HKD 168,167,000 in the same period of 2020[5] - The net profit attributable to the owners of the company for the nine months was HKD 108,736,000, a turnaround from a loss of HKD 163,021,000 in the previous year[5] - The company reported a basic and diluted earnings per share of HKD 1.12 for the nine months ended September 30, 2021, compared to a loss per share of HKD 1.67 in the previous year[5] - Profit attributable to owners for the same period was approximately HKD 108.7 million, a significant turnaround from a loss of HKD 163 million in the previous year[36] - Gross profit for the nine months was approximately HKD 93.9 million, with a gross margin of 28.7%, up from HKD 37.6 million and a gross margin of 21.2% in the previous year[33] Foreign Exchange and Financial Costs - The company incurred a foreign exchange loss of HKD 372,671,000 for the nine months, compared to a loss of HKD 1,230,772,000 in the same period of 2020[5] - The financial costs decreased to HKD 7,474,000 from HKD 13,578,000, representing a reduction of 45.0%[10] - Financial costs decreased to approximately HKD 7.5 million from HKD 13.6 million in the previous year, attributed to loan repayments[36] Market Presence and Business Strategy - The company plans to continue expanding its market presence and investing in new technologies to drive future growth[4] - The company has been negotiating with potential new customers in the automotive and energy storage sectors to expand its market presence[17] - The company anticipates continued high growth in the electric vehicle industry over the coming years, driven by the global shift from traditional gasoline vehicles to low and zero-emission electric vehicles[40] - The company is pursuing a cautious yet proactive approach in its business operations and development, considering mergers and acquisitions in areas such as automotive chips, electric control, and autonomous driving[40] - The company’s overall business strategy focuses on dual-track development in the electric vehicle sector and resource areas to create shareholder value[41] Investments and Projects - The total investment for the SAM project is expected to be $2.24 billion, excluding pipeline and port projects led by Lotus Brasil and the Brazilian government[26] - As of September 30, 2021, the company has invested a total of approximately $156.4 million in the SAM project, including $78 million in funding for preliminary work[23] - The company aims to obtain environmental permits (LP) by Q4 2021 to Q1 2022, with the possibility of installation permits (LI) by Q2 2023 and trial production by Q2 2026[25] - The company has not yet obtained preliminary environmental feasibility approval for the SAM iron ore project, but recent positive developments in Minas Gerais have prompted continued project advancement[40] Shareholder Information - As of September 30, 2021, the company’s major shareholder, He Xuechu, holds approximately 42.07% of the shares[44] - The total shares held by Hongqiao Capital amount to 4,065,000,000, representing 41.25% of the company[50] - Zhejiang Geely Holding Group owns 100% of Geely International (Hong Kong) Limited, which holds 18.78% of the company's issued shares[51] Compliance and Governance - The company has complied with all code provisions of the GEM Listing Rules during the nine months ending September 30, 2021[41] - The board of directors confirmed compliance with the trading standards for securities transactions during the nine months ending September 30, 2021[59] - The audit committee reviewed the unaudited performance for the nine months ending September 30, 2021, ensuring compliance with applicable accounting standards[60] - The company has established an audit committee in accordance with GEM listing rules and corporate governance codes[60]

Financial Performance - The company reported revenue of HKD 205,286,000 for the six months ended June 30, 2021, compared to HKD 91,833,000 for the same period in 2020, representing a growth of 123.5%[5] - The gross profit for the six months ended June 30, 2021, was HKD 57,673,000, compared to HKD 28,495,000 in the previous year, indicating an increase of 102.5%[5] - The net loss for the six months ended June 30, 2021, was HKD 22,577,000, a significant improvement from a loss of HKD 62,693,000 in the same period of 2020[5] - The company achieved a basic and diluted loss per share of HKD 0.31 for the six months ended June 30, 2021, compared to a loss of HKD 0.53 per share in the previous year[6] - The total comprehensive income for the six months ended June 30, 2021, was HKD 337,824,000, compared to a loss of HKD 242,695,000 in the same period of 2020[6] - The company reported a profit of HKD 26,729,000 for the six months ended June 30, 2021, compared to a loss of HKD 7,557,000 in the same period of 2020[17] - The company’s total comprehensive income for the period was HKD 337,824 thousand, compared to HKD 139,227 thousand in the previous year, representing a significant increase[9] Assets and Liabilities - Total assets increased to HKD 7,345,699 thousand, up from HKD 7,056,524 thousand, representing a growth of approximately 4.1% year-over-year[8] - Current assets rose to HKD 764,083 thousand, compared to HKD 746,681 thousand, reflecting an increase of about 2.3%[8] - Current liabilities decreased significantly to HKD 293,154 thousand from HKD 457,309 thousand, a reduction of approximately 35.9%[8] - Total equity increased to HKD 5,225,949 thousand from HKD 4,799,022 thousand, marking an increase of approximately 8.9%[9] - The company’s borrowings decreased to HKD 136,597 thousand from HKD 182,421 thousand, a decline of approximately 25.2%[8] - The company’s borrowings amounted to HKD 278,726,000 as of June 30, 2021, a decrease from HKD 425,411,000 as of December 31, 2020[39] Cash Flow and Investments - Net cash and cash equivalents at the end of the period were HKD 270,102 thousand, down from HKD 372,651 thousand, indicating a decrease of about 27.5%[10] - The company reported a net cash outflow from operating activities of HKD (28,798) thousand, compared to an inflow of HKD 31,769 thousand in the previous year[10] - The company made a capital injection of HKD 89,103 thousand into a non-wholly owned subsidiary during the period[11] - The company plans to invest HKD 200,000,000 in the Brazilian iron ore project and HKD 186,000,000 for general operating expenses[76] Market and Strategic Initiatives - The company plans to continue expanding its market presence and developing new products and technologies to drive future growth[4] - The company has identified potential acquisition targets to enhance its business portfolio and market reach[4] - The management expressed optimism about future performance, citing improved operational efficiencies and market conditions[4] - The company aims to explore strategic investments in smart vehicle technologies, including autonomous driving and vehicle lightweighting, in response to trends in electrification and shared mobility[75] Operational Developments - The company has established around 400 battery swap stations and 1,800 subscription users for its battery-sharing business under the "GETI" brand as of June 2021[52] - The production capacity of the subsidiary Zhejiang Hengyuan New Energy is approximately 2,000,000 kWh of ternary lithium batteries annually, with the first production line having started mass production in 2018[50] - The company is currently negotiating with potential new customers in the automotive and energy storage sectors to expand its market presence despite challenges in customer acquisition[49] Environmental and Regulatory Matters - The company aims to obtain environmental permits for the SAM project by Q4 2021, with installation permits expected by Q2 2023 and trial production by Q2 2026, subject to uncertainties[57] - SAM has faced significant delays in obtaining environmental permits due to regulatory changes and incidents, including a dam collapse in 2015 that halted approvals for all tailings dams in Brazil[59] - In March 2021, SAM restarted its environmental assessment process after signing a technical cooperation agreement with IBAMA and SEMAD, allowing for the continuation of the preliminary environmental permit application[61] Shareholder and Corporate Governance - The major shareholder, Hongqiao Capital, holds approximately 4,065,000,000 shares, representing about 41.25% of the total shares[94] - The total number of shares held by the director and major executives as of June 30, 2021, includes 4,145,399,189 shares, accounting for approximately 42.07%[87] - The company has complied with all code provisions set out in the GEM Listing Rules Appendix 15 during the six-month period ending June 30, 2021[86] - The company has established an audit committee in compliance with GEM listing rules and corporate governance codes[104]

Financial Performance - The company reported a revenue of HKD 94,346,000 for the three months ended March 31, 2021, compared to HKD 35,172,000 for the same period in 2020, representing a growth of 168%[8] - Lithium-ion battery sales accounted for HKD 92,714,000, significantly increasing from HKD 34,258,000 year-over-year[8] - The company achieved a gross profit of HKD 161,804,000 for the quarter, with a net profit attributable to owners of HKD 154,992,000[6] - Other operating income totaled HKD 115,800,000, up from HKD 17,793,000 in the previous year, driven by various income streams including bank interest and government grants[9] - The financial costs for the quarter were HKD 3,325,000, a decrease from HKD 5,998,000 in the same period last year[10] - The total comprehensive income for the period was a loss of HKD 197,723,000, primarily due to foreign exchange losses[6] - The basic and diluted earnings per share for the period were both HKD 1.59[6] - The company reported a basic earnings of approximately HKD 154,992,000 for the three months ended March 31, 2021, compared to a loss of HKD 67,983,000 for the same period in 2020[13] - The total equity of the company as of March 31, 2021, was HKD 4,799,022,000, an increase from HKD 4,766,595,000 as of March 31, 2020[14] - The gross profit for the period was about HKD 29.2 million, with a gross margin of 30.9%, an improvement from a gross margin of 27.8% in the previous year[36] - Other operating income for the period was approximately HKD 115.8 million, a substantial increase from HKD 17.8 million in the previous year, mainly due to the rise in the stock price of a subsidiary[36] - Financial costs decreased to approximately HKD 3.3 million from HKD 6 million in the previous year, primarily due to reduced borrowings[36] - The company has improved operational efficiency and reduced indirect costs, contributing to the enhanced gross margin[36] Market Expansion and Strategy - The company plans to continue expanding its market presence and developing new technologies in the lithium battery sector[5] - The company is committed to enhancing its operational efficiency and exploring potential mergers and acquisitions to drive growth[5] - The company is negotiating with automotive manufacturers and potential new customers in the energy storage sector to promote product matching[15] - The company plans to expand its battery swapping service under the "GETI" brand, which currently has about 229 battery swapping stations and 2,100 active users[35] - The company aims to provide safe, convenient, and reliable battery swapping services across China, leveraging the transition from lead-acid to lithium batteries in electric bicycles[35] - The company anticipates significant growth in the new energy vehicle market, projecting a competitive increase in the sector by 2025, with an expected total of 5 million vehicles[39] - The company is exploring mergers, investments, and partnerships in areas such as smart vehicle technology, automotive chips, and autonomous driving[40] - The company is committed to a dual-track development strategy focusing on new energy vehicles and resource sectors to create shareholder value[40] Production and Capacity - The subsidiary Zhejiang Hengyuan New Energy has a designed annual production capacity of approximately 2,000,000 kWh of ternary lithium-ion batteries[17] - The current annual production capacity of the joint venture Shandong Hengyuan New Energy is 150,000 kWh for lithium iron phosphate batteries and 225,000 kWh for ternary lithium-ion batteries[18] - Approximately 98.3% of the total revenue was contributed by the lithium-ion battery factory in Zhejiang, with the remaining revenue primarily from battery replacement services for electric bicycles in China[35] Environmental and Regulatory Matters - The environmental permit application process has faced significant delays due to regulatory changes and past mining disasters, impacting the timeline for project approvals[26] - If the preliminary environmental permit (LP) is obtained in Q4 2021, the installation permit (LI) could be granted by Q2 2023, with trial production expected in Q2 2026[24] - The company has completed a new environmental impact study in compliance with updated regulations, submitted in early 2019[27] - The project is interdependent with the pipeline project by Lotus Brasil, which should be submitted for environmental approval together[27] - The company has been actively communicating with environmental authorities to optimize the project and address regulatory requirements[26] Investment and Financial Position - The total investment for the SAM project is expected to be $2.24 billion, excluding pipeline and port projects led by Lotus Brasil and the Brazilian government[25] - The annual production capacity of the SAM project is projected to reach 27.5 million tons of iron concentrate, with an average grade of 66.2% over the first 18 years of operation[22] - The estimated operating cost (Opex) for the first 18 years is approximately $20.4 per ton of iron concentrate, increasing to about $25.7 per ton thereafter[25] - The expected FOB (Free on Board) cost for the first 18 years is around $33.7 per ton, rising to $39.0 per ton thereafter[25] - The company has cumulatively invested approximately $155.22 million in the SAM project, including $76.8 million in funding and $78.42 million in acquisition costs[22] - The company is actively seeking to recover investments in Shandong Hengyuan New Energy through negotiations or legal actions due to unpaid capital contributions[39] Shareholder Information - 洪桥资本持有4,065,000,000股股份，占总股份的41.25%[59] - 貿学初及其配偶FOO Yatyan合计持有4,145,399,189股股份，占总股份的42.07%[59] - 吉利国际(香港)有限公司持有1,850,675,675股股份，占总股份的18.78%[59] - 李书福通过浙江吉利控股集团有限公司持有1,953,739,675股股份，占总股份的19.83%[59] Compliance and Governance - 本公司在截至2021年3月31日的期间内未有任何与业务构成竞争的权益[62] - 本公司已成立审核委员会，确保业绩按适用会计准则编制并充分披露[65] - 截至2021年3月31日，董事会确认所有董事遵守交易必守标准[63] - 本公司在截至2021年3月31日的三个月内未进行任何上市证券的购买、出售或赎回[65]

Financial Performance - The company reported a revenue of HKD 85,602,000 for the three months ended September 30, 2020, compared to HKD 70,564,000 for the same period in 2019, representing a 21.3% increase[4]. - Gross profit for the three months ended September 30, 2020, was HKD 20,574,000, a significant recovery from a gross loss of HKD 515,000 in the same period last year[4]. - The company incurred a loss of HKD 40,639,000 for the three months ended September 30, 2020, compared to a profit of HKD 12,108,000 in the same period in 2019, indicating a shift in performance[4]. - The company reported a total comprehensive loss of HKD 110,561,000 for the three months ended September 30, 2020, compared to a loss of HKD 267,669,000 in the same period last year[4]. - The company’s total revenue for the nine months ended September 30, 2020, was HKD 177,435,000, down from HKD 196,082,000 in the previous year, indicating a decline of 9.5%[8]. - The company reported a loss attributable to owners of approximately HKD 163,021,000 for the nine months ended September 30, 2020, compared to a loss of HKD 18,874,000 for the same period in 2019[16]. - The gross profit for the nine months ended September 30, 2020, was approximately HKD 37.6 million, with a gross margin of 21.2%, an improvement attributed to higher profit margins from upgraded products[33]. - The company recorded revenue of approximately HKD 177.4 million for the nine months ended September 30, 2020, a decrease of 9.5% compared to HKD 196.1 million in the same period last year[33]. Expenses and Costs - The company’s administrative expenses increased to HKD 12,307,000 for the three months ended September 30, 2020, compared to HKD 10,563,000 in the same period in 2019[4]. - The company’s financial costs decreased to HKD 3,672,000 for the three months ended September 30, 2020, from HKD 4,468,000 in the same period in 2019, showing a reduction of 17.8%[4]. - The financial cost for bank and other loans interest was HKD 13,338,000 for the nine months ended September 30, 2020, an increase from HKD 12,634,000 in 2019[13]. - The sales and distribution costs for the period were approximately HKD 15 million, an increase attributed to higher product maintenance costs[34]. - The financial cost for the nine months ending September 30, 2020, was approximately HKD 13,600,000, compared to HKD 13,000,000 for the same period in 2019[36]. Assets and Liabilities - The total liabilities, including borrowings, amounted to HKD 67,155,000[10]. - The company’s total assets were reported at HKD 293,303,000[10]. - The company reported a total equity of HKD 3,255,270,000 as of September 30, 2020, compared to HKD 4,766,595,000 as of January 1, 2020, indicating a decrease of approximately 31.7%[17]. - The cash and cash equivalents balance as of September 30, 2020, was approximately HKD 277,000,000, with a focus on prudent cost control amid economic challenges[37]. Business Operations - Lithium-ion battery sales amounted to HKD 172,997,000 for the nine months ended September 30, 2020, down from HKD 195,875,000 in the previous year, reflecting a decline of 11.6%[8]. - The revenue from the battery sharing business under the "GETI" brand was approximately HKD 4,400,000 for the period ending September 30, 2020[23]. - As of September 2020, the "GETI" battery swapping stations numbered around 229, serving approximately 2,600 subscription users[23]. - The company has successfully entered the Chinese Ministry of Industry and Information Technology's catalog for new energy vehicles with its battery packs, including models from Volvo and Lynk & Co[18]. - The production capacity of Zhejiang Hengyuan New Energy is approximately 2,000,000 kWh of ternary lithium batteries annually, with the first production line capable of producing 500,000 kWh having started operation in mid-2018[19]. - The company is actively negotiating with major and new automotive manufacturers in the energy storage sector to explore new customer opportunities[18]. - The company has developed standardized battery modules with over 10,000 plug-in cycles and multiple safety features for its battery sharing business[26]. - The company has been involved in the production and supply of battery modules for various plug-in hybrid electric vehicles (PHEVs) including models from Volvo and Lynk & Co[18]. Losses and Financial Challenges - The company recognized a loss of HKD 4,558,000 from an associate for the three months ended September 30, 2020, compared to a minimal loss of HKD 7,000 in the same period last year[4]. - The company’s basic loss per share for the three months ended September 30, 2020, was HKD 0.44, compared to a loss of HKD 0.06 in the same period last year[4]. - The company incurred a loss of HKD 163,021,000 during the third quarter of 2020, compared to a loss of HKD 18,874,000 in the same period of 2019, representing an increase in losses of approximately 764.5%[17]. - The loss attributable to the owners for the nine months ending September 30, 2020, was approximately HKD 163,000,000, an increase from HKD 18,900,000 in 2019, primarily due to losses from joint ventures and non-cash losses from the sale of subsidiaries[36]. - The company recognized a loss of approximately HKD 38,800,000 due to uncertainties regarding capital contributions from Jiangsu Tiankai related to Shandong Hengyuan New Energy[36]. Shareholder Information - The total number of shares held by Hongqiao Capital Limited is 4,065,000,000, representing approximately 41.25% of the total shares[55]. - Mr. He Xuechu holds 57,939,189 shares directly and has a total stake of 4,145,399,189 shares, which is about 42.07%[55]. - The major shareholder, Geely International (Hong Kong) Limited, holds 1,850,675,675 shares, accounting for 18.78% of the total shares[55]. - The total number of shares outstanding is approximately 9,902,000,000, based on the holdings of major shareholders[55]. - The company has granted stock options totaling 8,750,000 shares, with an exercise price of HKD 2.61, set to expire in 2023[52]. - The stock options granted in 2012 have a total of 5,000,000 shares that have expired, leaving no unexercised options from that grant[52]. - Mr. Li Shufu, a major shareholder, holds 103,064,000 shares directly, contributing to a total of 1,953,739,675 shares when including his controlled entities[55]. - The company has not reported any new strategies or market expansions in the latest earnings call[58]. Loans and Financial Support - Zhejiang Geely provided a loan of RMB 100,000,000 (approximately HKD 114,000,000) to Zhejiang Hengyuan New Energy at a fixed annual interest rate of 4.75%, which was fully repaid by September 30, 2020[59]. - In 2019, Zhejiang Geely issued two loans to Zhejiang Hengyuan New Energy totaling RMB 152,800,000 (approximately HKD 174,100,000) at a fixed annual interest rate of 4.35%, both of which were fully repaid by September 30, 2020[59]. - Shanghai Huapu Automobile Co., Ltd. provided a loan of RMB 33,600,000 (approximately HKD 36,850,000) to Zhejiang Hengyuan New Energy, with a repayment period extended to March 20, 2021[59]. - As of September 30, 2020, the company recognized financial costs of HKD 5,600,000 related to the aforementioned short-term loans[59]. Environmental and Community Engagement - The environmental permit application process for the SAM project is ongoing, with the company taking legal measures to expedite the process and resolve the public civil lawsuit[41]. - The company is actively monitoring the environmental permit approval process and has received interim rulings allowing continued environmental studies[41]. - SAM received support letters from 5 municipal mayors and 15 local organizations/associations after the environmental permit process was suspended[42]. - SAM donated 70,000 medical surgical masks to six municipalities in northern Minas Gerais during the early stages of the COVID-19 pandemic[42]. - SAM signed a non-binding MOU with Huawei Brazil to collaborate on the development of unmanned mining technology and the application of 5G technology in mining operations[42].

Financial Performance - For the six months ended June 30, 2020, the company reported total revenue of HKD 91,833,000, a decrease of 26.8% compared to HKD 125,518,000 for the same period in 2019[5] - The gross profit for the same period was HKD 17,023,000, compared to HKD 501,000 in 2019, indicating a significant improvement in gross margin[5] - The company incurred a loss before tax of HKD 127,528,000, which is a substantial increase from the loss of HKD 49,007,000 in the previous year[5] - The total comprehensive loss for the period was HKD 1,274,208,000, compared to a gain of HKD 12,352,000 in 2019, reflecting a significant downturn[5] - Basic loss per share for the six months was HKD 1.23, compared to HKD 0.13 in the same period last year[5] - The company reported a significant foreign exchange loss of HKD 1,163,522,000, compared to a gain of HKD 22,265,000 in the previous year[5] - The company reported a loss of HKD 119,295 thousand during the period, compared to a profit in the previous year[7] - The company recorded a total segment loss of HKD 7,557 thousand for the six months ended June 30, 2020, significantly improved from a loss of HKD 77,856 thousand in the same period of 2019[17] - The group recorded revenue of approximately HKD 91.8 million for the six months ended June 30, 2020, a decrease of 26.8% compared to HKD 125.5 million for the same period last year[63] - The group reported a loss attributable to owners of approximately HKD 119.3 million for the six months ended June 30, 2020, compared to a loss of HKD 12.7 million for the same period in 2019[63] Assets and Liabilities - Total assets decreased from HKD 6,972,344 thousand as of December 31, 2019, to HKD 4,865,729 thousand as of June 30, 2020, representing a decline of approximately 30.2%[6] - Non-current assets, particularly exploration and evaluation assets, saw a significant drop from HKD 6,316,882 thousand to HKD 4,590,705 thousand, a decrease of about 27.4%[6] - Current liabilities reduced sharply from HKD 686,136 thousand to HKD 282,581 thousand, a reduction of approximately 58.8%[6] - The company's cash and cash equivalents decreased from HKD 351,714 thousand to HKD 219,717 thousand, a decline of about 37.5%[6] - The net asset value decreased from HKD 4,766,595 thousand to HKD 3,365,831 thousand, reflecting a decrease of approximately 29.4%[6] - The total equity attributable to owners of the company decreased from HKD 4,690,975 thousand to HKD 3,365,806 thousand, a decline of about 28.1%[7] - The company’s inventory decreased from HKD 235,237 thousand to HKD 184,637 thousand, a reduction of approximately 21.5%[6] - The company’s receivables also saw a decline from HKD 133,945 thousand to HKD 58,071 thousand, a decrease of about 56.6%[6] - The total borrowings as of June 30, 2020, were HKD 402,933,000, a decrease of 37.5% from HKD 644,772,000 as of December 31, 2019[47] - The total accounts payable as of June 30, 2020, was HKD 13,627,000, down 84.4% from HKD 87,116,000 as of December 31, 2019[45] Operational Efficiency - Administrative expenses decreased to HKD 39,249,000 from HKD 89,073,000, showing a reduction in operational costs[5] - The company recognized an impairment loss of HKD 58,767,000 related to assets classified as held for sale[5] - The company’s financial costs for the period were HKD 9,906,000, compared to HKD 8,501,000 in the previous year, indicating an increase in financing expenses[5] - The company’s management is focused on restructuring and cost-cutting measures to improve future performance amid challenging market conditions[5] - The company reported a significant reduction in cash used in investing activities, totaling HKD (11,740) thousand compared to HKD (78,987) thousand in 2019[8] - Administrative expenses significantly decreased, mainly due to a reduction in R&D expenses related to new battery product testing, which decreased by approximately HKD 50.2 million[65] Strategic Initiatives - The company plans to focus on market expansion and new product development to improve future performance[7] - The company plans to continue exploring new strategies for market expansion and product development in the upcoming periods[13] - The group is focusing on expanding its battery-sharing services in Jiangsu and Zhejiang provinces, with plans to extend to other regions in China[64] - The company expects the overall business strategy to focus on dual-track development in the new energy vehicle sector and resource areas to create value for shareholders[75] Shareholder Information - As of June 30, 2020, the total number of shares held by major shareholders is 4,145,399,189, representing approximately 42.07% of the total shares[84] - The largest shareholder, 洪橋資本, holds 4,065,000,000 shares, accounting for 41.25% of the total shares[90] - The total number of shares held by 李書福 is 1,953,739,675, representing approximately 19.83% of the total shares[90] - The company has granted stock options totaling 8,750,000 shares, with an exercise price of HKD 2.61, which are set to expire in 2023[87] - The company’s major shareholders include 吉利國際 and 江蘇沙鋼, holding 18.78% and 4.53% of the total shares, respectively[90] Legal and Regulatory Matters - The company has faced legal challenges regarding environmental permits for the SAM project, but a recent ruling allowed the continuation of environmental studies and analyses[70] - The company has been actively communicating with government and environmental agencies to support the SAM project and has received letters of support from local mayors and associations[70] - The company has complied with all code provisions set out in the GEM Listing Rules during the six-month period ending June 30, 2020[82]

Financial Performance - Revenue for the first quarter of 2020 was HKD 35,172,000, a decrease of 64.3% compared to HKD 98,528,000 in the same period of 2019[4] - Gross profit for the first quarter was HKD 9,790,000, compared to a gross loss of HKD 3,938,000 in Q1 2019[4] - The company reported a net loss of HKD 64,835,000 for the first quarter, significantly higher than the loss of HKD 23,213,000 in Q1 2019[4] - Lithium-ion battery sales amounted to HKD 34,258,000, down from HKD 98,528,000 in the previous year[7] - The total comprehensive loss for the three months ended March 31, 2020, was HKD 1,031,513,000, compared to a total comprehensive loss of HKD 37,149,000 for the same period in 2019[12] - The loss attributable to the company's owners was approximately HKD 68,000,000, compared to a loss of HKD 10,300,000 for the same period last year[23] Operating Income and Expenses - Other operating income increased to HKD 17,793,000 from HKD 14,833,000 in the same quarter of 2019[8] - Financial costs rose to HKD 5,998,000, compared to HKD 2,651,000 in Q1 2019, reflecting increased interest expenses[9] - Other operating income for the period was approximately HKD 17,800,000, an increase from HKD 14,800,000 in the previous year, primarily due to government subsidies of HKD 12,500,000[22] - Administrative expenses decreased significantly by approximately HKD 9,000,000 compared to the previous year, mainly due to reduced R&D expenses related to new battery products[23] Shareholder Information - Basic loss per share for the period was HKD 0.70, compared to HKD 0.11 in the previous year[4] - The company has not declared any dividends for the three months ended March 31, 2020, consistent with the previous year[10] - The company’s reserve changes included a loss of HKD 67,983,000 for the period, impacting retained earnings[12] - As of March 31, 2020, the major shareholder holds approximately 42.07% of the company's shares[33] Government Grants and Support - The company received government grants totaling HKD 12,470,000, a significant increase from HKD 1,162,000 in Q1 2019[8] Production and Capacity - Zhejiang Hengyuan New Energy, a subsidiary, has a maximum designed capacity of 2,000,000 kWh of lithium-ion batteries per year, with the first production line having started mass production in Q2 2018[13] - The lithium-ion battery factory in Zhejiang contributed over 97% of the group's revenue, with the global economic activity severely impacted by the COVID-19 pandemic, leading to a 60.2% and 56.4% decrease in production and sales of new energy vehicles in China, respectively[20] Strategic Initiatives - The company is focused on expanding its battery service offerings, with battery replacement service revenue reported at HKD 914,000[7] - The group launched the "GETI" brand battery-sharing business in Jiangsu and Zhejiang provinces, focusing on electric motorcycle services, with approximately 230 battery swap stations and 1,500 active users as of March 2020[22] - The company aims for dual-track development in the new energy vehicle sector and resource field to create value for shareholders[29] Project Developments - The group provided approximately USD 74,000,000 in funding for the SAM project in Brazil, with total project investment reaching approximately USD 154,000,000[25] - The SAM project aims for an annual production capacity of 27,500,000 tons of iron concentrate, with an average grade of 66.2% over the first eighteen years of operation[25] - The company will continue to push forward the SAM iron ore project despite delays in obtaining preliminary environmental feasibility approval[29] Compliance and Governance - The company has complied with all code provisions set out in the GEM Listing Rules during the three months ended March 31, 2020[31] - All directors complied with the trading requirements during the three months ended March 31, 2020[44] Stock Options and Shareholdings - The company has granted stock options totaling 5,000,000 and 8,750,000, with exercise prices of HKD 0.95 and HKD 2.61 respectively[35] - 洪桥资本持有4,065,000,000股股份，占总股份的41.25%[38] - 吉利国际（香港）有限公司持有1,850,675,675股股份，占总股份的18.78%[38] - 李书福通过浙江吉利控股集团有限公司持有19.83%的股份[38]

Financial Performance - The company recorded revenue of HKD 341.3 million for the year ended December 31, 2019, an increase of 43% compared to HKD 238.6 million in the previous year[9]. - The profit attributable to owners of the company was approximately HKD 415.6 million, a decrease of 57% from HKD 974.5 million for the year ended December 31, 2018[10]. - The company achieved a gross profit of approximately HKD 4.3 million with a gross margin of 1.3%, a significant improvement from a gross loss of HKD 47.6 million (gross margin: -19.9%) in the previous year[10]. - The lithium-ion battery segment recorded revenue of approximately HKD 340,000,000, an increase of about 42.3% compared to last year's revenue of HKD 239,000,000[27]. - The segment's loss before non-cash items was approximately HKD 12,600,000, significantly reduced from HKD 109,500,000 in the previous year, due to cost control measures and improved gross margins[29]. - Other operating income for the year was approximately HKD 196.6 million, significantly up from HKD 38.3 million in 2018, primarily due to increased government subsidies[71]. - The company’s cash and cash equivalents balance was approximately HKD 351.7 million, with a current ratio of 1.38, up from 1.19 in the previous year[75]. - The group recorded revenue of HKD 341.3 million for the year ended December 31, 2019, an increase of 43% compared to HKD 238.6 million in the previous year[70]. - The gross profit for the year was approximately HKD 4.3 million, with a gross margin of 1.3%, compared to a gross loss of HKD 47.6 million and a gross margin of -19.9% in the previous year[70]. Operational Developments - The lithium-ion battery factory in Zhejiang contributed over 98% of the group's revenue, driven by increased demand from customers such as Volvo and Lynk & Co[10]. - Production efficiency for battery cells and packs improved by approximately 38% and 42%, respectively, following operational upgrades at the Zhejiang factory[10]. - The workforce at the Zhejiang battery factory was reduced by over 40% to approximately 240 employees, optimizing human resource structure without compromising battery quality[10]. - The company launched a battery-sharing business under the "GETI" brand in Jiangsu and Zhejiang provinces, focusing on electric motorcycle services, generating revenue of approximately HKD 1 million by the end of 2019[10]. - The company plans to expand its battery-sharing services across China, aiming to provide safe and reliable battery swapping services to customers nationwide[10]. - The battery-sharing business "GETI" launched in mid-2019, with approximately 230 battery swap stations and 1,500 active users by March 2020, generating revenue of about HKD 1,000,000 and a loss of HKD 2,800,000 for the year[30]. Strategic Initiatives - The company is actively seeking acquisition, investment, and collaboration opportunities in areas such as charging and battery replacement, electric motors, and autonomous driving[14]. - A joint venture has been established with Hangzhou Youxing Technology and Hangzhou Hexijiao Technology to provide ride-hailing services, initially launched in Paris in January 2020[13]. - The company plans to continue developing its lithium battery business while exploring opportunities in electric vehicle electrification and smart mobility[14]. - The company is focused on expanding its market presence through innovative business models and technology advancements in the battery-sharing sector[30]. - The company is considering strategic partnerships in battery charging, electric motors, and vehicle lightweighting as part of its growth strategy[92]. Challenges and Risks - The company’s revenue for the first quarter of 2020 is expected to decline by over 50% compared to the same period last year due to global economic challenges and COVID-19 impact[13]. - The decrease in profit was primarily due to a reduction in non-cash impairment reversals related to exploration and evaluation assets associated with the SAM iron ore project[10]. - The company faces risks from regulatory changes in China's new energy vehicle industry, which could negatively impact financial performance if unfavorable policies are enacted[83]. - Rising raw material costs for lithium-ion batteries, particularly cobalt and lithium, could adversely affect profitability, despite efforts to control costs through improved production efficiency[85]. Environmental and Regulatory Matters - The implementation of new national standards for electric bicycles in China is expected to accelerate the transition from lead-acid to lithium batteries, presenting growth opportunities for the company[10]. - The environmental impact assessment (EIA) for the SAM project was submitted on January 7, 2019, and the project has undergone various regulatory updates due to safety concerns following mining incidents in Brazil[41]. - The SAM project has faced delays in environmental permit analysis due to the need for updated safety regulations, with the last extension request made on June 25, 2019[41]. - The company has complied with new state laws and regulations regarding dam safety, ensuring that the SAM project meets stringent technical and environmental standards[41]. - The company has engaged with government agencies and various stakeholders to introduce its new tailings treatment technology following the Brumadinho dam disaster[47]. Shareholder and Governance Matters - The company has confirmed that all related party transactions were conducted in the ordinary course of business and on fair terms[66]. - The independent non-executive directors have reviewed the related party transactions and confirmed their fairness and reasonableness[66]. - The company has a structured approach to assess the independence of its independent non-executive directors[182]. - The company has established a risk management framework to identify, assess, and mitigate significant risks affecting its objectives[168]. - The audit committee reviewed the internal control system and found it effective and sufficient for the year ended December 31, 2019[171]. Human Resources and Talent Management - The total employee count decreased to 481 as of December 31, 2019, with employee benefits costs amounting to HKD 61,600,000, down from HKD 78,700,000 in the previous year[89]. - The remuneration policy for employees is based on their expertise, qualifications, and performance, aligned with the company's objectives[183]. - The company emphasizes the importance of talent as a key asset for sustainable development[193]. - The company aims to provide competitive salaries and development opportunities for employees[193].