VERTICAL INTERNATIONAL HOLDINGS LIMITED 弘 浩 國 際 控 股 有 限 公 司 ( 於 開 曼 群 島 註 冊 成 立 的 有 限 公 司 ) 股份代號: 8375 中期報告 2019 香港聯合交易所有限公司（「聯交所」）GEM的特色 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 在聯交所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，並應經過審慎周詳的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 買賣之證券承受較大的市場波動風險，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聯交所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 分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。 本報告乃遵照聯交所GEM證券上巿規則（「GEM上市規則」）而刊載，旨在提 供有關弘浩國際控股有限公司（「本公司」）之資料，本公司各董事（「董事」） 願就本報告共同及個別地承擔全部責任，並在作出一切合理查詢 ...

Financial Performance - For the three months ended March 31, 2019, the group's revenue was approximately HKD 18.9 million, a decrease of about 30.6% compared to the same period in 2018[14]. - The gross profit margin for the same period was approximately 18.1%, down from 22.2% in the previous year[14]. - The group recorded a loss of approximately HKD 0.5 million for the three months ended March 31, 2019, compared to a profit of approximately HKD 1.2 million in the same period of 2018[14]. - Basic loss per share for the period was approximately HKD 0.06, compared to a basic earnings per share of approximately HKD 0.15 in the previous year[14]. - Total comprehensive income for the period was HKD 887,000, down from HKD 2.7 million in the same period of 2018[16]. - The group's gross profit decreased by 43.4% compared to the same period last year, reflecting the impact of the trade war and tariff disputes between China and the United States[35]. - The group's gross profit decreased from approximately HKD 6.1 million for the three months ended March 31, 2018, to approximately HKD 3.4 million for the three months ended March 31, 2019, a decline of approximately 43.4%[40]. - The gross profit margin fell from approximately 22.2% for the three months ended March 31, 2018, to approximately 18.1% for the three months ended March 31, 2019, primarily due to a revenue drop of approximately HKD 8.4 million without a corresponding reduction in fixed manufacturing costs[40]. Revenue Breakdown - Sales of industrial aluminum electrolytic capacitors amounted to HKD 13.6 million, down from HKD 19.97 million, while electronic component trading generated HKD 5.31 million, down from HKD 7.29 million[26]. - The group's revenue for the three months ended March 31, 2019, was approximately HKD 18.9 million, a decrease of 30.6% from approximately HKD 27.3 million in the same period of 2018[38]. Expenses and Costs - The group's administrative expenses were HKD 3.0 million, slightly down from HKD 3.1 million in the previous year[16]. - Financing costs increased to HKD 121,000 from HKD 35,000 in the previous year[16]. - Sales and distribution expenses decreased from approximately HKD 1.2 million for the three months ended March 31, 2018, to approximately HKD 0.9 million for the three months ended March 31, 2019, a decline of approximately 26.1%[42]. - The cost of sales decreased from approximately HKD 21.2 million to approximately HKD 15.5 million, a reduction of about 27.0%[39]. Dividends and Shareholder Returns - The board does not recommend the payment of any dividend for the three months ended March 31, 2019, consistent with the previous year[14]. - The company did not declare or recommend any dividends for the three months ended March 31, 2019, consistent with the previous year[30]. - No dividends were declared or paid to ordinary shareholders for the three months ended March 31, 2019, consistent with the same period in 2018[49]. Future Outlook and Strategy - The management anticipates ongoing economic uncertainties will continue to affect the group's revenue and significantly reduce gross profit throughout 2019[35]. - The group is committed to investing in technology development to enhance its technical capabilities and maintain competitive advantages despite the challenges posed by global trade disputes[36]. - The group will continue to review its business methods and actively seek global opportunities in response to the rapidly changing business environment[35]. Other Information - The deferred tax credit for the three months ended March 31, 2019, was HKD 247,000, compared to HKD 210,000 in the same period of 2018[27]. - The group had capital commitments of approximately HKD 0.9 million as of March 31, 2019, related to the purchase of equipment and machinery to expand production capacity, down from HKD 8.9 million as of March 31, 2018[50]. - There were no significant acquisitions or disposals during the three months ended March 31, 2019[51]. - The group did not have any significant contingent liabilities as of March 31, 2019[52]. - The company has not announced any new product or technology developments during this reporting period[16]. - The company has not purchased, sold, or redeemed any of its listed securities during the three months ended March 31, 2019[71]. - The audit committee has reviewed the unaudited quarterly results for the three months ended March 31, 2019[75]. - The company has adopted the corporate governance code as per GEM listing rules and has complied with most provisions, except for the separation of roles between the chairman and CEO[69].

Financial Performance - The company's revenue for the year ended December 31, 2018, decreased by approximately 8.5% compared to the previous year, reflecting the impact of global trade tariff disputes[9] - The group's revenue decreased from approximately HKD 109.7 million for the year ended December 31, 2017, to approximately HKD 100.4 million for the same period in 2018, representing a decline of about 8.5%[11] - Revenue from the sale of industrial aluminum electrolytic capacitors remained stable at approximately HKD 78.8 million for the year ended December 31, 2018, compared to HKD 78.4 million for the previous year[9] - The group's gross profit decreased from approximately HKD 24.2 million in 2017 to approximately HKD 22.6 million in 2018, a decline of about 6.5%[14] - Selling and distribution expenses increased from approximately HKD 2.6 million in 2017 to approximately HKD 4.0 million in 2018, an increase of about HKD 1.4 million[15] - Administrative expenses rose from approximately HKD 7.9 million in 2017 to approximately HKD 12.1 million in 2018, an increase of about HKD 4.1 million[16] - Cash and cash equivalents decreased to approximately HKD 38.2 million as of December 31, 2018, from HKD 45.0 million in 2017[21] - The company’s reserves available for distribution to shareholders as of December 31, 2018, were approximately HKD 48 million, down from HKD 55 million in 2017[120] Strategic Initiatives - The company plans to enhance production efficiency significantly in the coming years through the acquisition of advanced production machinery and equipment[7] - The company aims to optimize product design and technology, standardize raw materials, and enhance production automation as part of its strategic deployment for 2019[8] - The company will continue to invest resources in research and development to provide advanced technical solutions and maintain its position as a leading quality capacitor manufacturer[8] - The company plans to invest in technology development and expand production capacity to meet market demand and enhance competitive advantage[10] - The company plans to continue expanding its market presence and product offerings in the upcoming fiscal year[34] - The management team emphasizes ongoing development of new technologies and products to enhance competitive advantage[34] Corporate Governance - The company has adopted the corporate governance code as per GEM Listing Rules Appendix 15, ensuring compliance with governance standards[49] - The board consists of five members, including two executive directors and three independent non-executive directors[52] - The company will continue to enhance its corporate governance practices to align with business operations and development[50] - The company has established a corporate governance framework and developed policies and procedures to enhance board oversight[49] - The independent non-executive directors provide independent judgment on the company's strategy, performance, resources, and ethical standards[43] - The company has a dedicated company secretary with over 25 years of experience in corporate services[47] - The company has a structured approach to reviewing and improving its corporate governance practices regularly[50] - The company has confirmed that there were no violations of the trading code by relevant employees during the reporting period[51] - The company emphasizes the importance of good corporate governance standards to protect shareholder interests and enhance corporate value[49] - The company has adhered to the GEM listing rules regarding the appointment of at least three independent non-executive directors, constituting at least one-third of the board[57] Risk Management - The board confirmed its responsibility for risk management and internal control systems, which are designed to identify and manage risks affecting operational efficiency[80] - The board regularly reviews risk management and internal control systems, including financial, operational, and compliance controls, and considers them effective and adequate[82] - The company has implemented credit risk management policies to reduce credit risk associated with trade receivables[81] - The company has faced intense competition in the aluminum electrolytic capacitor industry, which poses a significant risk to its operations[108] - The company has no long-term contracts with its customers, which adds to the operational risks[108] Environmental Management - The group has established an environmental management system certified to ISO 14001:2015, aiming to minimize negative environmental impacts during production[174] - The group reported nitrogen oxide emissions of 4.64 kg and sulfur oxide emissions of 0.07 kg for the fiscal year ending December 31, 2018[179] - The group has reduced VOC emissions significantly by improving the thermal hardening process and replacing UV lamps with UV LED tubes[176] - The group has implemented waste reduction measures and has not experienced any major violations of environmental regulations during the reporting period[185] - The company has established solid waste management procedures to classify waste into recyclable and non-recyclable categories[182] Employee Management - As of December 31, 2018, the company had a total of 129 employees, a decrease from 154 employees in 2017[194] - The employee distribution by region shows 5% in Hong Kong and 95% in Mainland China for 2018, consistent with 2017[196] - The gender distribution in 2018 was 61% male and 39% female, compared to 62% male and 38% female in 2017[199] - The age distribution for employees in 2018 indicates 23% are aged 18-25, 42% are aged 26-35, 30% are aged 36-45, and 5% are aged 46-55[194] - The overall employee count reflects a trend of reduction, indicating potential challenges in employee retention or recruitment strategies[194]