Financial Performance - For the nine months ended September 30, 2022, the group's revenue was approximately HKD 66.3 million, a decrease of about 35.6% compared to the same period in 2021[9] - The gross profit margin for the nine months ended September 30, 2022, was approximately 5.4%, down from 17.9% for the same period in 2021[9] - The group reported a loss of approximately HKD 8.7 million for the nine months ended September 30, 2022, compared to a profit of approximately HKD 4.3 million in the same period of 2021, representing a decrease of about HKD 13.0 million[9] - Basic loss per share for the nine months ended September 30, 2022, was approximately HKD 3.14, compared to basic earnings per share of approximately HKD 2.21 for the same period in 2021[9] - For the three months ended September 30, 2022, the group's revenue was HKD 21.0 million, compared to HKD 37.1 million for the same period in 2021[10] - The group incurred a loss of approximately HKD 2.4 million for the three months ended September 30, 2022, compared to a profit of HKD 1.6 million in the same period of 2021[10] - Total comprehensive loss for the nine months ended September 30, 2022, was approximately HKD 17.2 million, compared to a total comprehensive income of HKD 5.0 million for the same period in 2021[10] - The company reported a total comprehensive loss of HKD 17,206,000 for the nine months ended September 30, 2022, compared to a loss of HKD 8,658,000 in the same period of 2021[17] Revenue Breakdown - Revenue from the sale of self-manufactured industrial aluminum electrolytic capacitors was HKD 50,746,000, down 38.2% from HKD 81,986,000 in the previous year[17] - Revenue from the sale of industrial aluminum electrolytic capacitors dropped by about 31.3% to approximately HKD 50.7 million, compared to approximately HKD 82.0 million in the previous year[28] Expenses and Financial Position - The group's administrative expenses for the nine months ended September 30, 2022, were approximately HKD 9.5 million, compared to HKD 9.4 million for the same period in 2021[10] - The total expenses for the period amounted to HKD 17,206,000, which included a loss of HKD 8,658,000[17] - The company’s income tax expense for the nine months was HKD 531,000, down from HKD 1,903,000 in the previous year[18] - The sales cost for the nine months ended September 30, 2022, decreased by approximately 25.9% to about HKD 62.7 million, down from approximately HKD 84.6 million in the previous year[28] Shareholder Actions - The board proposed a special dividend of HKD 0.035 per ordinary share for shareholders on the register as of January 16, 2023, subject to approval at a special general meeting[9] - The board proposed a special dividend of HKD 0.035 per ordinary share, totaling HKD 10,080,000 for the nine months ended September 30, 2022, compared to no dividend in the same period of 2021[20] - The company plans to hold a special general meeting on January 5, 2023, to discuss matters including a proposed special dividend[61] - The company will suspend the registration of shareholders from December 30, 2022, to January 5, 2023, for the purpose of voting at the special general meeting[62] - The company will also suspend the registration of shareholders from January 12 to January 16, 2023, for the proposed special dividend distribution[63] Corporate Governance - The board is committed to maintaining high standards of corporate governance to protect shareholder interests and enhance corporate value[50] - The company has established an audit committee consisting of three independent non-executive directors to oversee internal audit functions and financial reporting processes[64] - The company has adhered to the corporate governance code, with the exception of a deviation regarding the roles of the chairman and CEO being held by the same individual[52] - The company will regularly review and improve its corporate governance practices in line with the latest developments[53] Capital and Financing - The company issued new shares through a rights issue, raising a total of HKD 20,160,000 during the reporting period[17] - The company issued 96,000,000 shares at a subscription price of HKD 0.21 per share, raising net proceeds of HKD 18.6 million, increasing the total number of shares from 192,000,000 to 288,000,000[22] - The company has entered into a loan agreement for a maximum of HKD 18 million in revolving and overdraft financing to support its subsidiary's operations and asset acquisitions[57] Future Outlook - The company plans to develop high-quality products to meet market demands and will continue to monitor future market trends[25] - The company will adopt a conservative approach towards future capital expenditure needs and investment opportunities due to the uncertain economic environment[25] - The company maintains a strong financial position with positive net cash status as of September 30, 2022, and has sufficient funds for future capital expenditures[25] Shareholding Structure - Vertical Investment holds 180,000,000 shares, representing 62.5% of the company's equity, and is fully owned by Mr. Wen[44] - Ms. Sun Koon Kwan, as a spouse of Mr. Wen, holds 180,300,000 shares, representing 62.6% of the company's equity[44] - As of the report date, the chairman and CEO, Mr. Wen, holds a 63.78% stake in the company[59] Capital Commitments and Acquisitions - As of September 30, 2022, the company had capital commitments of approximately HKD 1.5 million, down from HKD 1.9 million as of December 31, 2021, primarily related to the purchase of equipment and machinery for capacity expansion[36] - There were no significant acquisitions or disposals during the nine months ended September 30, 2022[37] - The company reported no significant contingent liabilities as of September 30, 2022[38]

Financial Performance - For the six months ended June 30, 2022, the group's revenue was approximately HKD 45.3 million, a decrease of about 31.3% compared to the same period in 2021[9]. - The gross profit margin for the six months ended June 30, 2022, was approximately 6.4%, down from 18.5% for the same period in 2021[9]. - The group recorded a loss of approximately HKD 6.3 million for the six months ended June 30, 2022, compared to a profit of approximately HKD 2.7 million in the same period of 2021, representing a decrease of about HKD 9.0 million[9]. - Basic loss per share for the six months ended June 30, 2022, was approximately HKD 2.34, compared to basic earnings per share of approximately HKD 1.43 for the same period in 2021[9]. - The total comprehensive loss for the six months ended June 30, 2022, was approximately HKD 10.3 million, compared to a total comprehensive income of approximately HKD 3.6 million for the same period in 2021[10]. - The group reported a loss before tax of HKD 6,126,000 for the six months ended June 30, 2022, compared to a profit before tax of HKD 3,776,000 for the same period in 2021[23][24]. - The group reported a net loss of HKD 1,623,000 for the three months ended June 30, 2022, compared to a loss of HKD 54,000 in the same period of 2021[28]. Revenue Breakdown - Revenue from the sale of industrial aluminum electrolytic capacitors was HKD 34,695,000, down 34.3% from HKD 52,745,000 in the previous year[23]. - Revenue from the trading of electronic components was HKD 10,575,000, a decrease of 19.5% from HKD 13,148,000 in the prior year[23]. - Revenue from customers in China was HKD 36,333,000, a decrease of 35.9% from HKD 56,652,000 in the previous year[27]. - Revenue from Hong Kong customers was HKD 561,000, down 68.9% from HKD 1,809,000 in the prior year[27]. - The company's revenue decreased by approximately 31.3% from about HKD 65.9 million in the six months ended June 30, 2021, to about HKD 45.3 million in the same period of 2022[51]. - Revenue from the sale of industrial aluminum electrolytic capacitors dropped from approximately HKD 52.7 million to about HKD 34.7 million, a decrease of about HKD 18.0 million[53]. Expenses and Costs - The group's sales cost for the six months ended June 30, 2022, was approximately HKD 42.4 million, compared to HKD 53.7 million for the same period in 2021[10]. - The group incurred administrative expenses of approximately HKD 6.5 million for the six months ended June 30, 2022, compared to HKD 6.5 million for the same period in 2021[10]. - The group incurred financing costs of HKD 256,000 for the six months ended June 30, 2022, compared to HKD 189,000 in the same period of 2021[29]. - The total employee compensation for the six months ended June 30, 2022, was approximately HKD 11.6 million, down from HKD 13.4 million for the same period in 2021[69]. Assets and Liabilities - Non-current assets decreased from HKD 53,940,000 to HKD 51,652,000, a decline of approximately 4.25%[11]. - Current assets decreased from HKD 103,369,000 to HKD 97,507,000, a decline of about 5.5%[11]. - Current liabilities decreased significantly from HKD 45,953,000 to HKD 32,570,000, a reduction of approximately 29%[12]. - The net current asset value increased from HKD 57,416,000 to HKD 64,937,000, an increase of about 13.3%[12]. - The total assets less current liabilities increased from HKD 111,356,000 to HKD 116,589,000, an increase of approximately 4.1%[11]. - The company's total assets as of June 30, 2022, were approximately HKD 149.2 million, down from HKD 157.3 million as of December 31, 2021[63]. - The total bank borrowings as of June 30, 2022, were approximately HKD 11.1 million, down from HKD 14.8 million as of December 31, 2021[64]. Cash Flow - The company reported a net cash outflow from operating activities of HKD 3,714,000 compared to a cash inflow of HKD 1,702,000 in the previous year[14]. - The financing activities generated a net cash inflow of HKD 10,916,000, down from HKD 14,487,000 in the previous year[14]. - The cash and cash equivalents at the end of the period decreased slightly from HKD 46,242,000 to HKD 43,094,000[14]. Shareholder Actions - The board of directors did not recommend the payment of any dividend for the six months ended June 30, 2022[9]. - The company declared a final dividend of HKD 0.01 per share for the year ended December 31, 2021, totaling HKD 2.88 million, approved by shareholders[34]. - The company issued new shares through a rights issue, raising HKD 20,160,000 during the period[14]. - The company issued 96,000,000 shares at a subscription price of HKD 0.21 per share, raising a net amount of HKD 18.6 million[37]. - A share consolidation was approved on January 10, 2022, resulting in the consolidation of 960,000,000 shares into 192,000,000 consolidated shares[103]. Corporate Governance - The company has complied with the corporate governance code, except for the separation of the roles of Chairman and CEO, which are held by the same individual[100]. - The audit committee consists of three independent non-executive directors, ensuring compliance with GEM listing rules and corporate governance codes[109]. - The audit committee's primary responsibility includes reviewing the effectiveness of the group's internal audit functions, financial reporting processes, and risk management systems[109]. Future Outlook - The company is focused on improving operational efficiency and exploring new market opportunities to enhance future performance[9]. - The company plans to continue developing quality products to meet market demands and will implement cost-saving measures to reduce operating costs amid economic uncertainties[52]. - As of June 30, 2022, the group had capital commitments of approximately HKD 1.5 million, primarily related to the purchase of equipment and machinery for capacity expansion[66]. Employee Information - The group had a total of 163 full-time employees as of June 30, 2022, compared to 186 employees in the previous year[69]. Foreign Exchange and Risk Management - The group has no foreign exchange hedging policy but closely monitors foreign exchange risks[71]. - The group’s assets and liabilities in foreign currencies as of June 30, 2022, included HKD 3,587,000 in USD assets and HKD 12,177,000 in USD liabilities[71].

VERTICAL INTERNATIONAL HOLDINGS LIMITED 弘浩國際 控 股 有 限 公 司 股份代號 : 8375 （於開曼群島註冊成立的有限公司） VERTICAL INTERNATIONAL HOLDINGS LIMITED 弘浩國際 控 股 有 限 公 司 Stock Code: 8375 (Incorporated in the Cayman Islands with limited liability) 2022 FIRST QUARTERLY REPORT 2022 第一季度 報告 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 ...

Financial Performance - The company's revenue for the year 2021 reached HKD 132.5 million, primarily driven by a 34.3% increase in sales of self-manufactured industrial aluminum electrolytic capacitors to HKD 105.0 million[11]. - The company's revenue for the year ended December 31, 2021, increased by approximately 37.6% to about HKD 132.5 million, up from approximately HKD 96.3 million for the year ended December 31, 2020[18]. - Sales of industrial aluminum electrolytic capacitors rose significantly from approximately HKD 78.2 million to about HKD 105.0 million, marking an increase of approximately 26.8 million[14]. - Gross profit increased by 53.3% from approximately HKD 15.2 million to about HKD 23.3 million, with the gross profit margin rising from approximately 15.8% to 17.6%[20]. - The company's annual profit increased from approximately HKD 0.8 million to about HKD 5.1 million, primarily due to revenue and gross profit increases of approximately HKD 36.2 million and HKD 8.1 million, respectively[24]. Dividends and Shareholder Returns - The board has proposed a final dividend of HKD 0.01 per share for the year, up from HKD 0.0015 per share in 2020, aiming to maximize company value and strengthen business structure[12]. - The board proposed a final dividend of HKD 0.01 per share for the year ended December 31, 2021, compared to HKD 0.0015 per share in 2020[30]. - The total distributable reserves of the company as of December 31, 2021, amounted to approximately HKD 47 million, a slight decrease from HKD 48 million in 2020[158]. Production and Capacity Expansion - The company is expanding its production lines in China to meet growing product demand and achieve greater economies of scale, allowing for a more aggressive pricing strategy and increased market share[11]. - The company will continue to monitor the need for increased production capacity and invest in research and development for growth[11]. - The company is committed to enhancing production and sales capabilities to meet rising demand and accelerate the development of competitive products[11]. - As of December 31, 2021, the group had capital commitments of approximately HKD 1.9 million, primarily related to the purchase of equipment and machinery to expand production capacity[31]. - The company plans to use the proceeds from the share placement for increasing production capacity and ongoing R&D efforts[44]. Market and Economic Conditions - The overall economic activity is gradually improving, but growth remains slower than pre-pandemic levels due to ongoing challenges from the COVID-19 pandemic[10]. - The company anticipates continued increases in raw material costs in 2022, presenting greater challenges for the business and the industry[12]. - The company operates in the aluminum electrolytic capacitor industry, which faces intense competition[144]. - The company's revenue sources are heavily reliant on the Chinese market and sales of major products[144]. - The company does not have any long-term contracts with its customers, which may impact revenue stability[144]. Corporate Governance - The company has adopted the corporate governance code as per GEM Listing Rules, ensuring compliance and enhancing transparency and accountability[70]. - The company will continue to strengthen its corporate governance practices in line with business operations and development[71]. - The company has confirmed compliance with the trading standards set forth in GEM Listing Rules for the fiscal year ending December 31, 2021[72]. - The company has a governance framework in place, with policies and procedures established to enhance board oversight and business integrity[70]. - The board of directors is responsible for leading and managing the company, overseeing business strategies and performance[82]. Risk Management - The company has implemented procedures to ensure strict prohibition of unauthorized access and use of information[114]. - The company has adopted credit risk management policies to continuously assess and monitor significant overdue payments[113]. - The board is responsible for establishing, implementing, and monitoring risk management and internal control systems[113]. Employee and Remuneration - The total number of full-time employees increased to 167 as of December 31, 2021, from 162 in 2020, with total remuneration amounting to approximately HKD 28.5 million, up from HKD 20.1 million in 2020[35]. - The remuneration committee ensures transparency in the remuneration policies for all directors and senior management[95]. - The compensation range for senior management (non-directors) as of December 31, 2021, was from HKD 0 to HKD 1,000,000, with 1 individual in this range[109]. Shareholder Relations - The company has established a shareholder communication policy to ensure that shareholder concerns are addressed effectively[131]. - The company has received annual confirmations from all independent non-executive directors regarding their independence as per GEM listing rules[79]. - The independent non-executive directors attended the annual general meeting to gain a comprehensive understanding of shareholder opinions[111]. Capital Structure and Financing - The company has a financing agreement with Bank of China (Hong Kong) Limited for a maximum revolving loan of HKD 18,000,000[187]. - The company has maintained at least 25% of its issued share capital held by the public as of December 31, 2021, in compliance with GEM listing rules[193]. - The company has not made any charitable or other donations during the year, consistent with the previous year[192]. Audit and Compliance - The audit committee held four meetings during the year to review the company's financial performance and internal control systems[90]. - The audit committee reviewed the consolidated financial statements for the year ended December 31, 2021, and discussed risk management and internal control systems[91]. - The audit fees paid to the external auditor, Crowe (HK) CPA Limited, for the annual audit for the year ended December 31, 2021, amounted to HKD 725,000, with total fees for audit and non-audit services reaching HKD 824,300[118].

Financial Performance - For the nine months ended September 30, 2021, the group's revenue was approximately HKD 103.0 million, an increase of about 55.9% compared to the same period in 2020[6]. - The gross profit margin for the nine months ended September 30, 2021, was approximately 17.9%, up from 14.2% for the same period in 2020[6]. - Basic earnings per share for the nine months ended September 30, 2021, was approximately HKD 0.47, compared to a basic loss per share of HKD 0.15 for the same period in 2020[6]. - The group reported a pre-tax profit of HKD 6.2 million for the nine months ended September 30, 2021, compared to a pre-tax loss of HKD 0.52 million for the same period in 2020[8]. - Total comprehensive income for the nine months ended September 30, 2021, was HKD 5.048 million, compared to a total comprehensive loss of HKD 2.489 million for the same period in 2020[8]. - The group recorded a net profit of HKD 2.103 million for the three months ended September 30, 2021, compared to a net profit of HKD 0.059 million for the same period in 2020[8]. - The company reported a profit of HKD 4,309,000 for the nine months ended September 30, 2021, compared to a loss of HKD 1,206,000 in the same period in 2020[19]. - The total comprehensive income for the nine months ended September 30, 2021, was HKD 102,405,000, compared to HKD 14,966,000 for the same period in 2020[16]. - The company incurred a tax expense of HKD 1,903,000 for the nine months ended September 30, 2021, compared to HKD 686,000 for the same period in 2020[16]. - Gross profit for the nine months ended September 30, 2021, rose to approximately HKD 18.4 million, an increase of about HKD 9.0 million from approximately HKD 9.4 million for the same period in 2020[26]. - The company's sales cost increased from approximately HKD 56.7 million to approximately HKD 84.6 million, consistent with the revenue growth[25]. Revenue Breakdown - For the nine months ended September 30, 2021, the revenue from the sale of self-manufactured industrial aluminum electrolytic capacitors was HKD 81,986,000, representing a 55.3% increase from HKD 52,790,000 in the same period of 2020[15]. - The revenue from trading aluminum electrolytic capacitors and electronic components for the nine months ended September 30, 2021, was HKD 21,005,000, up 58.5% from HKD 13,263,000 in the same period of 2020[15]. - The total revenue for the nine months ended September 30, 2021, was HKD 102,991,000, compared to HKD 66,053,000 for the same period in 2020, marking a 55.7% increase[15]. - For the nine months ended September 30, 2021, the company's revenue increased by approximately 55.9% to about HKD 103.0 million, compared to approximately HKD 66.1 million for the same period in 2020[22][24]. Dividends - The board did not recommend any dividend for the nine months ended September 30, 2021, while a final dividend of HKD 0.15 per share was approved for the year ended December 31, 2020[6]. - The company did not declare or pay any dividends for the two periods under review, but proposed a final dividend of HKD 0.15 per share for the year ended December 31, 2020[18]. - The company has no dividends declared or proposed for the nine months ended September 30, 2021[33]. Corporate Governance - The company has established an audit committee consisting of three independent non-executive directors to oversee financial reporting and internal controls[54][55]. - The board of directors has confirmed compliance with the trading standards as per GEM Listing Rules up to September 30, 2021[48]. - The company has adhered to the corporate governance code, with a noted deviation regarding the separation of the roles of chairman and CEO[50][51]. - The audit committee has reviewed the unaudited quarterly results for the nine months ending September 30, 2021[55]. - The company will regularly review and improve its corporate governance practices[52]. Market Strategy - The company aims to continue expanding its market presence and enhancing its product offerings in the upcoming quarters[6]. - The company continues to seek more customer orders for its self-manufactured products to maintain revenue growth amid a challenging business environment[22]. - The company is closely monitoring market developments and assessing the financial impact of the uncertain economic environment on its operations and financial performance[23]. Shareholding and Ownership - Vertical Investment holds a direct interest of 600,000,000 shares, representing 62.5% of the company's equity[41][44]. - Mr. Wen is the beneficial owner of Vertical Investment, which is fully owned by him[41][44]. Other Information - The company’s total assets as of September 30, 2021, amounted to HKD 108,706,000, an increase from HKD 97,357,000 as of January 1, 2021[12]. - As of September 30, 2021, the company had capital commitments of approximately HKD 1.0 million related to the purchase of equipment and machinery to expand production capacity[35]. - The company has not purchased, sold, or redeemed any listed securities during the nine months ending September 30, 2021[53]. - The company has not granted any stock options since the adoption of the stock option plan on October 24, 2017[47]. - No directors or major shareholders have interests in competing businesses as of September 30, 2021[49].

Financial Performance - For the six months ended June 30, 2021, the group's revenue was approximately HKD 65.9 million, an increase of about 75.3% compared to the same period in 2020[6]. - The gross profit margin for the same period was approximately 14.6%, compared to a loss of approximately HKD 1.5 million in the same period of 2020[6]. - The net profit for the six months ended June 30, 2021, was approximately HKD 2.7 million, compared to a profit of HKD 0.1 million in the same period of 2020[6]. - Basic earnings per share for the six months ended June 30, 2021, were approximately HKD 0.31, compared to a loss of HKD 0.18 per share in the same period of 2020[6]. - The group reported a total comprehensive income of approximately HKD 4.2 million for the six months ended June 30, 2021, compared to a loss of HKD 0.2 million in the same period of 2020[7]. - The total comprehensive income for the six months ended June 30, 2021, was HKD 3,553,000, compared to a total comprehensive expense of HKD 2,431,000 in the same period of 2020[10]. - For the six months ended June 30, 2021, the group recorded a profit of approximately HKD 2.7 million, compared to a loss of approximately HKD 1.5 million for the same period in 2020, representing an increase driven by revenue and gross profit growth of approximately HKD 28.3 million and HKD 6.7 million, respectively[58]. Assets and Liabilities - As of June 30, 2021, total assets amounted to approximately HKD 107.8 million, compared to HKD 86.3 million as of December 31, 2020[8]. - The total equity as of June 30, 2021, increased to HKD 107,211,000 from HKD 97,357,000 as of December 31, 2020, reflecting a growth of approximately 10.5%[10]. - The company's capital and reserves increased from HKD 97,357,000 to HKD 107,211,000, indicating a strong financial position[10]. - The company's total liabilities decreased significantly, with non-current lease liabilities reported at zero compared to HKD 205,000 in the previous year[10]. - As of June 30, 2021, the group's total assets were approximately HKD 155.3 million, up from HKD 132.8 million as of December 31, 2020, with total liabilities and shareholders' equity at approximately HKD 48.1 million and HKD 107.2 million, respectively[62]. Cash Flow - The net cash generated from operating activities for the six months ended June 30, 2021, was HKD 1,702,000, compared to a net cash used of HKD 1,455,000 in the same period of 2020[12]. - The company's financing activities generated a net cash inflow of HKD 14,487,000, a significant improvement from a net cash outflow of HKD 7,630,000 in the previous year[12]. - Cash and cash equivalents and restricted bank deposits amounted to approximately HKD 46.2 million as of June 30, 2021, compared to HKD 31.9 million as of December 31, 2020[62]. Revenue Sources - Revenue from China increased significantly to HKD 56,652,000, compared to HKD 30,946,000 in the previous year, marking an 83.0% growth[22]. - Revenue from the sale of self-manufactured industrial aluminum electrolytic capacitors surged from about HKD 27.1 million to approximately HKD 52.7 million[48]. - Segment profit for the industrial aluminum electrolytic capacitors was HKD 10,468,000, up from HKD 3,918,000, representing a 167.5% increase[14][22]. Shareholder Information - The company raised HKD 8,160,000 through the issuance of new shares during the reporting period[12]. - The company raised approximately HKD 7.74 million from the placement of 160,000,000 new shares at a price of HKD 0.051 per share[84]. - As of June 30, 2021, the company has a total of 600,000,000 shares held by Vertical Investment, representing a 62.5% ownership stake[86]. Operational Insights - The company continues to seek more customer orders for its self-manufactured products to maintain revenue growth[48]. - The company is closely monitoring market developments and assessing the financial impact of the challenging business environment[49]. - The company experienced delays in renting the second production facility, with HKD 2.1 million of unutilized funds expected to be fully utilized by December 31, 2021[83]. Corporate Governance - The company has confirmed compliance with the trading standards set forth in the GEM Listing Rules as of June 30, 2021[94]. - The company has adhered to the corporate governance code as per GEM listing rules, except for the deviation in code A.2.1 regarding the roles of the Chairman and CEO being held by the same individual[96]. - The audit committee, consisting of three independent non-executive directors, has reviewed the unaudited interim results for the six months ending June 30, 2021[101].

Financial Performance - For the three months ended March 31, 2021, the group's revenue was approximately HKD 25.5 million, an increase of about HKD 9.4 million or 58.7% compared to the same period in 2020[6] - The gross profit margin for the same period was approximately 15.6%, down from 16.0% in the prior year[6] - The loss for the period was approximately HKD 0.4 million, a significant improvement from a loss of HKD 1.5 million in the same period of 2020[6] - Basic loss per share for the three months ended March 31, 2021, was approximately HKD 0.05, compared to HKD 0.19 for the same period in 2020[6] - Total comprehensive loss for the period amounted to HKD 660,000, compared to HKD 2.2 million in the prior year[7] - The company reported a financing cost of HKD 56,000, down from HKD 125,000 in the previous year[7] - Other income for the period was HKD 357,000, slightly down from HKD 365,000 in the same period of 2020[7] - The company incurred administrative expenses of HKD 3.394 million, a decrease from HKD 3.556 million in the previous year[7] - The company's revenue for the three months ended March 31, 2021, increased by approximately 58.7% to about HKD 25.5 million from approximately HKD 16.1 million in the same period of 2020[24] - Revenue from the sale of industrial aluminum electrolytic capacitors rose significantly by approximately 60.9% to about HKD 20.4 million, compared to approximately HKD 12.7 million in the same period of 2020[26] - Revenue from the trading of electronic components increased to approximately HKD 5.1 million from approximately HKD 3.4 million in the same period of 2020[26] - The gross profit for the three months ended March 31, 2021, increased by approximately 54.7% to about HKD 4.0 million from approximately HKD 2.6 million in the same period of 2020[28] - The gross profit margin remained stable at approximately 15.6% for the three months ended March 31, 2021, compared to approximately 16.0% in the same period of 2020[28] - The company's sales cost increased by approximately 59.5% to about HKD 21.5 million from approximately HKD 13.5 million in the same period of 2020[27] - The company reported a loss of HKD 376,000 for the three months ended March 31, 2021, compared to a loss of HKD 1.5 million in the same period of 2020[20] Dividends and Shareholder Information - The board of directors did not recommend the payment of any dividend for the three months ended March 31, 2021, consistent with no dividends declared in the same period of 2020[6] - The company did not declare or pay any dividends for the two periods[18] - No dividends were declared or proposed for the three months ended March 31, 2021, consistent with the same period in 2020[35] - The major shareholder, Vertical Investment, holds 600,000,000 shares, representing 62.5% of the company's equity[45] Corporate Governance - The company has adhered to the corporate governance code as per GEM listing rules, except for deviation in clause A.2.1 regarding the separation of roles between the Chairman and CEO[51] - The Chairman and CEO, Mr. Wen, is also one of the founders and has been managing the company since its inception, which the board believes is in the best interest of the company[52] - The company has established an audit committee consisting of three independent non-executive directors to oversee internal audit functions and financial reporting processes[55] - The audit committee has reviewed the unaudited quarterly results for the three months ended March 31, 2021[56] - The company will regularly review and improve its corporate governance practices in line with the latest developments[53] Operational Strategy - The company plans to continue investing in technology development to enhance its competitive advantage despite ongoing economic uncertainties[25] - The company aims to review its business methods continuously to adapt to the challenging business environment[25] Expenses and Liabilities - Sales and distribution expenses increased from approximately HKD 0.7 million for the three months ended March 31, 2020, to approximately HKD 1.0 million for the three months ended March 31, 2021, representing an increase of approximately HKD 0.3 million[30] - Administrative expenses decreased from approximately HKD 3.6 million for the three months ended March 31, 2020, to approximately HKD 3.4 million for the three months ended March 31, 2021, a decrease of approximately HKD 0.2 million[30] - The income tax expense increased from approximately HKD 0.1 million for the three months ended March 31, 2020, to approximately HKD 0.3 million for the three months ended March 31, 2021, an increase of approximately HKD 0.2 million[31] - The group had no significant capital commitments as of March 31, 2021, remaining unchanged from March 31, 2020[36] - There were no significant acquisitions or disposals during the three months ended March 31, 2021[37] - The group had no significant contingent liabilities as of March 31, 2021, consistent with the previous year[38] Securities Transactions - The company has not purchased, sold, or redeemed any of its listed securities during the three months ended March 31, 2021[54]

VERTICAL INTERNATIONAL HOLDINGS LIMITED 弘浩國際 控 股 有 限 公 司 | --- | --- | |----------|--------------------------------| | | | | | | | | | | | VERTICAL | | | | | | | | | INTERNATIONAL HOLDINGS LIMITED | | 弘浩國際 | 股 有 限 公 司 | ANNUAL REPORT 2020 年報 VERTICAL INTERNATIONAL HOLDINGS LIMITED 弘浩國際控 股 有限公司 Stock Code: 8375 (Incorporated in the Cayman Islands with limited liability) ANNUAL REPORT 2020 股份代號 : 8375 （於開曼群島註冊成立的有限公司） 2020 年 報 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主板上市的公司帶有較高投資風 險。有意投資的人士 ...

Financial Performance - For the nine months ended September 30, 2020, the group's revenue was approximately HKD 66.1 million, an increase of about 5.3% compared to the same period in 2019[6]. - The gross profit margin for the nine months ended September 30, 2020, was approximately 14.2%, down from 18.0% for the same period in 2019[6]. - The basic loss per share for the nine months ended September 30, 2020, was approximately HKD 0.15, compared to HKD 0.09 for the same period in 2019[6]. - The net loss for the nine months ended September 30, 2020, was HKD 1.2 million, compared to a profit of HKD 0.1 million for the same period in 2019[7]. - The total comprehensive loss for the nine months ended September 30, 2020, was HKD 2.5 million, compared to HKD 2.1 million for the same period in 2019[7]. - The total comprehensive expenses for the nine months ended September 30, 2020, amounted to HKD 4,089,000, compared to HKD 2,100,000 for the same period in 2019, reflecting an increase of 94.7%[12]. - The group recorded a loss of HKD 1.2 million for the nine months ended September 30, 2020, compared to a loss of HKD 0.7 million for the same period in 2019[30]. - Basic loss per share increased from approximately HKD 0.09 to HKD 0.15, reflecting the increase in the period loss[31]. Revenue Breakdown - For the nine months ended September 30, 2020, the revenue from sales of industrial aluminum electrolytic capacitors was HKD 52,790,000, an increase of 20.5% compared to HKD 43,682,000 for the same period in 2019[13]. - The revenue from trading electronic components for the nine months ended September 30, 2020, was HKD 13,263,000, a decrease of 30.5% compared to HKD 19,051,000 for the same period in 2019[13]. - The company's total revenue for the three months ended September 30, 2020, was HKD 28,468,000, compared to HKD 21,411,000 for the same period in 2019, representing an increase of 33.5%[13]. - The group's revenue increased by approximately 5.3% from about HKD 62.7 million for the nine months ended September 30, 2019, to about HKD 66.1 million for the nine months ended September 30, 2020[24]. Expenses and Costs - The group incurred administrative expenses of HKD 8.58 million for the nine months ended September 30, 2020, down from HKD 9.30 million in the previous year[7]. - The financing costs for the nine months ended September 30, 2020, were HKD 0.297 million, a decrease from HKD 0.557 million in the same period in 2019[7]. - Sales costs rose by approximately 10.1% from about HKD 51.5 million to about HKD 56.7 million, consistent with revenue growth[25]. - Administrative expenses decreased by approximately 0.7 million HKD from about HKD 9.3 million to about HKD 8.6 million, mainly due to reduced consultancy and compliance costs[28]. Dividends and Shareholder Information - The board did not recommend any dividend payment for the nine months ended September 30, 2020, consistent with the previous year[6]. - The company did not declare or pay any dividends for the two periods under review, but proposed a final dividend of HKD 0.002 per share for the year ended December 31, 2019, totaling HKD 1,600,000[17]. - The group did not declare any dividends for the nine months ended September 30, 2020[33]. - Vertical Investment holds a direct interest of 600,000,000 shares, representing 75% of the company's equity[45]. Future Outlook and Management Commentary - The board expressed confidence in future growth despite the current challenges faced by the group[6]. - The company's management has indicated a commitment to improving operational efficiency and exploring new market opportunities to enhance revenue growth in the future[21]. - The ongoing economic uncertainty is expected to persist, prompting the group to continuously review its business model to adapt to the challenging operating environment[23]. Compliance and Governance - The board of directors has confirmed compliance with the trading standards as per GEM Listing Rules up to September 30, 2020[49]. - The audit committee, consisting of three independent non-executive directors, has reviewed the unaudited quarterly results for the nine months ending September 30, 2020[57]. - No significant acquisitions or disposals occurred during the nine months ended September 30, 2020[36]. - No purchases, sales, or redemptions of the company's listed securities occurred during the nine months ending September 30, 2020[56]. - The company has not granted any stock options under its stock option plan since its adoption on October 24, 2017[48]. Capital Expenditures - The group has committed capital expenditures of approximately HKD 539,000 as of September 30, 2020, primarily for equipment and machinery to expand capacity[35].

Financial Performance - For the six months ended June 30, 2020, the group's revenue was approximately HKD 37.6 million, a decrease of about 9.0% compared to the same period in 2019[8]. - The gross profit margin for the same period was approximately 14.6%, down from 17.9% in the previous year[8]. - The group reported a loss of approximately HKD 1.5 million for the six months ended June 30, 2020, compared to a loss of HKD 1.1 million for the same period in 2019[8]. - The basic and diluted loss per share for the six months ended June 30, 2020, was HKD 0.18, compared to a loss of HKD 0.13 for the same period in 2019[9]. - The company incurred a total comprehensive expense of HKD (4,031,000) for the six months ended June 30, 2020, compared to HKD (1,695,000) for the same period in 2019, indicating a significant increase in losses[13]. - Revenue and gross profit for the six months ended June 30, 2020, decreased by approximately HKD 3.7 million and HKD 1.9 million, respectively, compared to the same period in 2019[53]. Assets and Liabilities - Total assets as of June 30, 2020, were HKD 71.09 million, down from HKD 76.73 million as of December 31, 2019[10]. - Current liabilities increased to HKD 25.40 million as of June 30, 2020, compared to HKD 28.15 million as of December 31, 2019[10]. - The net cash balance decreased to HKD 27.34 million as of June 30, 2020, from HKD 38.92 million as of December 31, 2019[10]. - As of June 30, 2020, the company's net assets decreased to HKD 89,219,000 from HKD 93,250,000 as of December 31, 2019, representing a decline of approximately 4.4%[11]. - The company's total liabilities included lease liabilities of HKD 403,000 as of June 30, 2020, down from HKD 1,104,000 as of December 31, 2019, showing a decrease of approximately 63.5%[11]. - The total interest-bearing bank borrowings and lease liabilities as of June 30, 2020, were approximately HKD 8.5 million, down from HKD 14.2 million as of December 31, 2019[62]. Cash Flow - The company reported a net cash outflow from operating activities of HKD (1,455,000) for the six months ended June 30, 2020, compared to HKD (2,557,000) for the same period in 2019, indicating an improvement of approximately 43%[14]. - Total cash and cash equivalents decreased by HKD 11,077,000 for the six months ended June 30, 2020, compared to a decrease of HKD 5,923,000 in the same period of 2019, reflecting a worsening cash position[14]. - The company’s investment activities resulted in a net cash outflow of HKD (1,992,000) for the six months ended June 30, 2020, compared to HKD (3,482,000) in the same period of 2019, reflecting a decrease in investment expenditures[14]. Revenue Breakdown - For the six months ended June 30, 2020, external sales of industrial aluminum electrolytic capacitors amounted to HKD 27,090,000, while electronic component trading generated HKD 10,495,000, totaling HKD 37,585,000[23]. - Revenue from China increased to HKD 30,946,000 in 2020 from HKD 29,703,000 in 2019, while revenue from Hong Kong decreased to HKD 2,607,000 from HKD 4,594,000[27]. Expenses - The group’s administrative expenses decreased to HKD 6.23 million for the six months ended June 30, 2020, from HKD 6.45 million in the previous year[9]. - Sales and distribution expenses decreased by 28.1% from approximately HKD 1.7 million to approximately HKD 1.2 million, primarily due to reduced salaries and sales commissions[50]. - The total depreciation expense for property, plant, and equipment was HKD 3,166,000 for the six months ended June 30, 2020, compared to HKD 2,948,000 in 2019[32]. Strategic Initiatives - The company plans to continue investing in technology development to enhance its competitive edge despite ongoing economic uncertainties[46]. - The company has fully utilized HKD 2.7 million for the rent and renovation expenses of the second production facility in Dongguan, Guangdong Province, with the remaining funds expected to be fully utilized by December 31, 2021[71]. - The company has completed the hiring and retention of additional employees for its R&D department, fully utilizing the allocated funds for this purpose[71]. Governance and Compliance - The company has adopted the corporate governance code as per GEM Listing Rules Appendix 15, with a noted deviation regarding the separation of roles between the Chairman and CEO[82]. - The Audit Committee, consisting of three independent non-executive directors, has been established to assist the board in reviewing internal audit functions and financial reporting procedures[86].