NEXION TECHNOLOGIES LIMITED 2020 第一季度業績報告 2020 First Quarterly Report NEXION TECHNOLOGIES LIMITED (Incorporated in the Cayman Islands with limited liability) Stock code: 8420 香港聯合交易所有限公司（「聯交所」）GEM之特色 GEM的定位，乃為中小型公司提供一個上市的市場，此等公司相比起其他在聯交所上市的 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的證券承受 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。 本報告乃遵照聯交所GEM證 券 上 市 規 則（「GEM上 市 規 則」）之 規 定 提 供 有 關Nexion Technologies Limited（「本公司」）及其附屬公司（統稱「本集團」）之資料。本公司各董事（「董 事」）願對本報告所載資料共同及個別承擔全部責任。 ...

Business Development and Strategy - The company successfully developed its own network infrastructure, the Netsis Security Hub in Hong Kong, expanding revenue sources despite challenges from political restrictions and emerging technologies[13]. - The company is focusing on accelerating the development of its Software as a Service (SaaS) platform to maintain competitiveness in the growing Chinese market, aiming to make SaaS a significant revenue growth driver[13]. - The company plans to diversify its customer base and complete a series of marketing and engineering appointments to seize opportunities in the network infrastructure and security solutions business[14]. - The company is considering investing in technology to supplement its existing capabilities due to rapidly changing customer demands[14]. - The company aims to enhance its corporate image and brand among existing and potential customers through its mature network infrastructure and strong R&D capabilities[14]. - The company is expanding its SaaS business in China, with a strategic focus on daily operations and overall development[26]. - The company is focused on expanding its market reach and exploring potential mergers and acquisitions to drive growth[26]. - The company is actively involved in developing new technologies and products in the cybersecurity space, which is critical for future growth[34]. - The company has established partnerships with suppliers to enhance its product offerings and market presence[40]. - The company is exploring potential mergers and acquisitions to accelerate growth and expand its service capabilities[36]. - The company has a strategic plan to enhance its data monitoring and collection services, which is essential for maintaining competitive advantage[35]. Financial Performance - The total revenue for the year ended December 31, 2019, was approximately $5,815,000, a decrease from $8,573,000 in 2018[53]. - The network infrastructure solutions segment generated approximately $1,308,000 in revenue, down from $4,313,000 in 2018, while the network security solutions segment generated approximately $2,055,000, down from $4,260,000 in 2018[53]. - The SaaS segment reported an adjusted EBITDA of approximately $496,000 for the year ended December 31, 2019, with significant developments in the SaaS system and joint ventures established[51]. - The cost of goods sold decreased from approximately $3,134,000 in 2018 to about $722,000 in 2019, primarily due to reduced hardware procurement for network infrastructure projects[54]. - Employee costs and related expenses decreased to approximately $1,243,000 in 2019 from $1,705,000 in 2018, attributed to a reduction in average employee numbers[56]. - Sales and marketing expenses increased significantly to approximately $1,679,000 in 2019 from about $21,000 in 2018, mainly due to advertising costs for promoting the SaaS business in China[58]. - General and administrative expenses rose to approximately $2,101,000 in 2019 from about $840,000 in 2018, influenced by losses from the sale of subsidiaries and costs associated with the expansion of the SaaS business[59]. - The group reported total assets of approximately $17,736,000 and total liabilities of approximately $2,591,000 as of December 31, 2019, compared to $17,941,000 and $2,047,000 in 2018, respectively[60]. - The company completed a placement of 120,000,000 new shares at a price of HKD 0.09 per share, raising approximately HKD 10,800,000 (about $1,385,000) to improve financial conditions and expand into the Chinese market[69]. - The net proceeds from the placement are intended for developing information and communication technology services in China and general working capital[70]. Corporate Governance - The company is committed to maintaining high standards of compliance and governance, as evidenced by its independent non-executive directors with legal and financial expertise[27][28]. - The board consists of six members, including three executive directors and three independent non-executive directors, ensuring a balanced governance structure[102]. - The board held a total of 16 meetings during the year ending December 31, 2019, with full attendance from most directors[109]. - Independent non-executive directors represent at least one-third of the board, providing independent judgment in decision-making processes[110]. - The company has established three committees: audit, remuneration, and nomination, each with clear written terms of reference[115]. - The audit committee is responsible for reviewing financial statements and internal control procedures, ensuring compliance with GEM listing rules[116]. - The remuneration committee reviews performance-based remuneration and ensures no director determines their own pay[117]. - The nomination committee evaluates the board's structure and recommends suitable candidates for board positions[122]. - The company confirmed that all directors received appropriate training throughout the year[114]. - The company has implemented a compliance officer role, with an executive director serving in this capacity[143]. Employee and Management - The company has over 30 years of experience in the information technology industry, with a focus on providing IT services to both private and government sectors[20]. - The Chief Technology Officer, Mr. Gonzales, has over 19 years of experience in the IT sector, overseeing marketing, sales, and product support[22]. - The management team includes professionals with extensive backgrounds in finance, law, and technology, enhancing the company's strategic capabilities[27][28][29]. - The R&D director has over 25 years of experience in network design and management, indicating a robust technical foundation for product development[34]. - The marketing director has a background in establishing and managing businesses in surveillance and communication products, enhancing market outreach capabilities[36]. - The finance director has over 10 years of experience in financial management, ensuring sound financial oversight for the company[41]. - The company has a strong emphasis on product and technology research and development, aiming to innovate and improve service offerings[32]. - The company has maintained a competitive compensation structure to attract and retain high-quality employees[163]. - The company plans to continue evaluating the need for hiring new engineers after three engineers resigned during the year[85]. - The company has outsourced part of its development and upgrade work to technology providers during the year[85]. Risk Management and Compliance - The company identified several key risks, including the recoverability of trade receivables, which may impact cash flow[158]. - The company has no internal audit unit, as the board believes it is not cost-effective given the current operational scale[151]. - The company’s risk management activities are ongoing, with a focus on identifying and managing operational risks[159]. - The company has established a rigorous internal policy to manage insider information and securities trading by employees and directors[151]. - The company is committed to environmental sustainability and regularly reviews its internal policies and employee feedback[162]. Shareholder Relations - The company expresses gratitude to shareholders and partners for their trust and support, emphasizing the commitment to optimizing corporate strategies for exceptional performance[17]. - The company aims to maintain effective communication with shareholders and potential investors through quarterly, interim, and annual reports[148]. - The company’s dividend policy aims to provide stable and sustainable returns to shareholders, considering various financial factors[131]. - The company did not recommend the payment of a final dividend for the year ended December 31, 2019, compared to no dividend in 2018[134]. - As of December 31, 2019, the company's share premium and capital reserves were approximately $10,851,000 and $3,922,000 respectively, available for distribution to shareholders[182].

Financial Performance - For the nine months ended September 30, 2019, the total revenue was $3,494,000, a decrease of 50.3% compared to $7,032,000 for the same period in 2018[4] - The cost of goods sold for the nine months was $862,000, down 67.6% from $2,659,000 in the previous year[4] - The operating expenses for the nine months were $2,049,000, an increase of 53.3% compared to $1,336,000 in 2018[4] - The net loss attributable to owners for the nine months was $559,000, compared to a profit of $351,000 in the same period last year[6] - The basic and diluted loss per share for the nine months was $0.09, compared to earnings of $0.06 in the previous year[6] - The company reported a total comprehensive loss of $695,000 for the nine months, compared to a comprehensive income of $122,000 in 2018[10] - Adjusted EBITDA for the nine months ended September 30, 2019, was $1,377,000, down 56.2% from $3,142,000 in the same period of 2018[23] - The company reported a loss before tax of $559,000 for the nine months ended September 30, 2019, compared to a profit of $933,000 in the same period of 2018[23] - For the three months ended September 30, 2019, the company reported a loss attributable to owners of the company of $309,000 compared to a profit of $551,000 for the same period in 2018[30] Revenue Breakdown - Revenue from the Network Infrastructure Solutions segment for the nine months ended September 30, 2019, was $1,457,000, a decline of 60.7% from $3,707,000 in 2018[27] - Revenue from the Network Security Solutions segment for the nine months ended September 30, 2019, was $1,736,000, down 39.5% from $2,871,000 in the same period of 2018[27] - Revenue from external customers in Hong Kong increased significantly to $532,000 in 2019 from $10,000 in 2018[26] - Revenue from Malaysia decreased to $1,207,000 in 2019 from $2,078,000 in 2018, reflecting a decline of 41.9%[26] - Revenue from network infrastructure solutions was approximately $1,758,000, down from $4,161,000, representing a decline of about 57.7%[41] - Revenue from cybersecurity solutions was approximately $1,736,000, down from $2,871,000, a decrease of about 39.5%[41] Equity and Share Issuance - As of September 30, 2019, the total equity was $16,542,000, an increase from $15,575,000 at the beginning of the year[10] - The company issued 120,000,000 new shares at a price of HKD 0.09 per share, raising approximately $1,343,000[10] - The company raised approximately $1,385,000 from the placement of 120,000,000 new shares, intended for the development of ICT services in China and general working capital[51] Tax and Expenses - The company incurred a total income tax expense of $211,000 for the three months ended September 30, 2019, compared to $582,000 for the same period in 2018[6] - Total depreciation and amortization for the nine months ended September 30, 2019, was $762,000, an increase from $478,000 in the same period of 2018[21] - The company reported a depreciation expense of $524,000 for the nine months ended September 30, 2019, compared to $302,000 for the same period in 2018[5] - Employee costs and related expenses decreased from approximately $1,176,000 to $505,000, a decline of about 57.0%[43] - Total employee costs for the nine months ended September 30, 2019, were approximately $505,000, a decrease of about $671,000 compared to $1,176,000 for the same period in 2018[58] Corporate Governance and Compliance - The company did not recommend any dividend for the nine months ended September 30, 2019, consistent with the same period in 2018[32] - The company has complied with the applicable corporate governance code provisions, except for the separation of the roles of chairman and CEO[65] - The audit committee, consisting of three independent non-executive directors, has reviewed the unaudited condensed consolidated financial statements for the nine months ended September 30, 2019, confirming compliance with applicable accounting standards[73] - The board of directors, including three executive directors and three independent non-executive directors, collectively assumes responsibility for the accuracy and completeness of the report[74] Strategic Initiatives - The company has invested more resources in developing the Netsis Security Hub, launched in May 2019, to further diversify its revenue sources[35] - The company established a joint venture on September 24, 2019, to develop a SaaS platform aimed at providing comprehensive services to individual businesses and enterprises[36] - The company has focused on enhancing its R&D capabilities to continuously develop new products and improve existing services[36] - The company has established new entities in China to capitalize on the growing demand for SaaS solutions[36] Employment and Shareholding - As of September 30, 2019, the group had a total of 21 employees, a decrease from 27 employees in the previous year[58] - The chairman and CEO, Mr. Fu, holds 272,686,500 shares, representing 37.87% of the issued share capital[60] - Major shareholder Alpha Sense (BVI) also holds 272,686,500 shares, accounting for 37.87% of the issued share capital[62] - Power Ace Investments Limited holds 83,330,000 shares, which is 11.57% of the issued share capital[62] Other Information - The company did not anticipate any significant impact from the adoption of new or revised International Financial Reporting Standards on its financial statements[15] - There were no significant investments, acquisitions, or disposals of subsidiaries, associates, or joint ventures during the nine months ended September 30, 2019[55] - There were no pledges of assets as of September 30, 2019, and December 31, 2018[56] - The company did not purchase, sell, or redeem any of its listed securities during the nine months ended September 30, 2019[68] - The stock option plan was adopted through a written resolution passed on May 31, 2017, with no options granted, canceled, exercised, or lapsed as of September 30, 2019[71]

Financial Performance - For the six months ended June 30, 2019, Nexion Technologies Limited reported total revenue of $992,000, a decrease of 79.1% compared to $4,754,000 for the same period in 2018[4]. - The company incurred a loss before tax of $868,000 for the six months, compared to a profit of $171,000 in the same period of 2018[4]. - Total comprehensive loss attributable to owners for the six months was $942,000, compared to a loss of $388,000 in the prior year[6]. - The adjusted EBITDA for the total reportable segments was $310,000, a sharp decline from $1,636,000 in the previous year[22]. - The company reported a net loss attributable to owners of the company of $868,000 for the six months ended June 30, 2019, compared to a loss of $200,000 for the same period in 2018[36]. - The net loss for the six months ended June 30, 2019, increased to approximately $868,000 from $200,000 in the prior period, primarily due to a decrease in reported segment performance[86]. Revenue Breakdown - Revenue from external customers for the network infrastructure solutions segment was $537,000, while the network security solutions segment generated $455,000, totaling $992,000 for the period[20]. - The geographical revenue breakdown shows that Singapore contributed $229,000, while Myanmar's revenue dropped significantly to $213,000 from $3,008,000 in the previous year[25]. - Revenue from network infrastructure solutions was about $537,000, down from $3,827,000 in the previous year, while revenue from network security solutions was approximately $455,000, down from $927,000[81]. Cost and Expenses - The cost of goods sold for the six months was $283,000, down 88.2% from $2,409,000 in the previous year[4]. - Employee costs and related expenses for the six months were $318,000, a decrease of 61.2% from $820,000 in the same period of 2018[4]. - Other operating expenses increased from approximately $645,000 to about $916,000, attributed to higher maintenance and professional fees related to the Security Hub[85]. Assets and Liabilities - As of June 30, 2019, total assets amounted to $15,102,000, a decrease from $16,044,000 as of December 31, 2018[8]. - The company's cash and cash equivalents decreased to $5,760,000 from $7,818,000 at the end of 2018, reflecting a decline of 26.3%[8]. - Trade receivables from third parties decreased to $2,156,000 as of June 30, 2019, from $3,136,000 as of December 31, 2018, indicating a decline of approximately 31%[47]. - Trade payables increased to $330,000 as of June 30, 2019, compared to $243,000 as of December 31, 2018, representing a growth of approximately 36%[54]. Cash Flow - For the six months ended June 30, 2019, Nexion Technologies Limited reported a net cash outflow from operating activities of $710,000, a significant decrease from a cash inflow of $3,432,000 in the same period of 2018[10]. - The company experienced a total cash outflow of $2,049,000, compared to a smaller outflow of $345,000 in the prior year[10]. Corporate Governance - The company has complied with the corporate governance code, except for the deviation regarding the separation of the roles of chairman and CEO, which is held by the same individual[105]. - The audit committee, consisting of three independent non-executive directors, reviewed the unaudited condensed consolidated financial statements for the six months ending June 30, 2019, ensuring compliance with applicable accounting standards[113]. Future Outlook and Strategy - The company is currently negotiating multiple new projects with clients primarily in Southeast Asia, aiming to secure additional revenue in the second half of 2019[65]. - The company plans to reallocate internal resources to enhance its business development in China, seeking experienced partners in the ICT solutions sector[66]. - The company remains optimistic about the industry outlook and is confident in its future development due to its strong R&D capabilities and diversified customer base[66].

Financial Performance - For the three months ended March 31, 2019, Nexion Technologies Limited reported revenue of $275,000, a decrease of 88.8% compared to $2,445,000 in the same period of 2018[5]. - The company incurred a loss before tax of $504,000, compared to a loss of $343,000 in the prior year, reflecting a 46.9% increase in losses[5]. - Total comprehensive loss attributable to owners for the period was $518,000, slightly improved from $522,000 in the previous year[5]. - Basic and diluted loss per share for the period was $0.08, compared to $0.07 in the same period last year[5]. - Other income for the quarter was $63,000, down from $159,000, indicating a decline of 60.4% year-over-year[5]. - The company reported a loss before tax of $(504,000) for the three months ended March 31, 2019, compared to a loss of $(343,000) for the same period in 2018[18]. - The company's loss increased from approximately $397,000 for the three months ended March 31, 2018, to approximately $504,000 for the three months ended March 31, 2019, primarily due to a decrease in adjusted EBITDA[45]. Revenue Breakdown - For the three months ended March 31, 2019, revenue from external customers for the Network Infrastructure Solutions was $268,000, and for Network Security Solutions was $7,000, totaling $275,000[16]. - Revenue from external customers in the geographical segment for the three months ended March 31, 2019, included $120,000 from Singapore and $101,000 from Myanmar, while total revenue was $275,000[21]. - Revenue from the network infrastructure solutions business was approximately $268,000 for the three months ended March 31, 2019, compared to approximately $2,370,000 for the same period in 2018[40]. - The network security solutions business generated revenue of approximately $7,000 for the three months ended March 31, 2019, down from approximately $75,000 for the same period in 2018[40]. Cost Management - The cost of goods sold for the same period was $166,000, down from $1,663,000, indicating a significant reduction in inventory costs[5]. - Employee costs and related expenses decreased to $160,000 from $372,000, a reduction of 57.0%[5]. - Other operating expenses decreased from approximately $455,000 for the three months ended March 31, 2018, to approximately $325,000 for the same period in 2019[44]. - The total employee cost for the three months ended March 31, 2019, was approximately $160,000, a decrease of about $212,000 compared to approximately $372,000 for the same period in 2018[52]. - The company had a total of 22 employees as of March 31, 2019, down from 55 employees as of March 31, 2018, due to streamlining operations in China[52]. Investments and Developments - The company has successfully developed its own network infrastructure, Netsis Hybrid Converge Hub, expanding its revenue sources[36]. - The company is investing more resources in developing the Netsis Security Hub, expected to launch in 2019, further broadening its revenue sources[36]. - The company is exploring and expanding its business into new markets, including Europe, the Middle East, and Africa, to enhance its core competitiveness[37]. - There were no significant investments, acquisitions, or disposals during the three months ended March 31, 2019[50]. Financial Management and Governance - The company maintained a prudent financial management approach and a stable liquidity position throughout the reporting period[47]. - The company did not have any significant contingent liabilities as of March 31, 2019[49]. - The company has no foreign currency hedging policy but monitors foreign exchange rate fluctuations closely[48]. - The company complied with the corporate governance code, except for the separation of the roles of Chairman and CEO, which are held by the same individual[61]. - The company has adopted a code of conduct for directors regarding securities trading, which complies with GEM Listing Rules[65]. - The audit committee, consisting of three independent non-executive directors, has reviewed the unaudited consolidated financial statements for the three months ended March 31, 2019, and found them compliant with applicable accounting standards[69].

Company Overview - Nexion Technologies Limited focuses on providing network infrastructure and cybersecurity solutions, establishing itself as a regional provider in Southeast Asia since its inception in 2002[10]. - The company has established itself as a regional provider of network infrastructure solutions in Southeast Asia since its founding in 2002[42]. - The company primarily engages in providing network infrastructure solutions and developing network security solutions[154]. Strategic Plans and Market Expansion - The company plans to invest significantly in its R&D team to develop new products and enhance existing services, aiming to strengthen its position as a comprehensive ICT solutions provider in the Asia-Pacific region[10]. - Nexion aims to explore and expand its business into new markets, including Europe, the Middle East, and Africa, to diversify its business risks and utilize internal resources effectively[11]. - The company plans to diversify its geographical coverage and customer base, exploring markets in Europe, the Middle East, and Africa[47]. Financial Performance - For the year ended December 31, 2018, the total revenue was approximately $8,573,000, a slight increase from $8,538,000 in 2017[49]. - The network infrastructure solutions segment reported an adjusted EBITDA of approximately $362,000, down from $2,202,000 in 2017, primarily due to operating losses in the Chinese subsidiary[49][44]. - The network security solutions segment reported an adjusted EBITDA of approximately $4,161,000, an increase from $2,168,000 in 2017, attributed to new customers in South Korea[49][45]. - Revenue from Southeast Asian external customers accounted for approximately 77% of total revenue, down from 80% in 2017[45]. - Employee costs and related expenses increased to approximately $1,705,000 from $1,195,000 in 2017, mainly due to higher salaries and bonuses[51]. - Other operating expenses rose to approximately $861,000 from $752,000 in 2017, driven by further business development and expansion[52]. - As of December 31, 2018, the group had current assets of approximately $13,889,000, down from $15,455,000 in 2017[55]. - The group had no bank borrowings or debts, with total assets of approximately $17,941,000 and total liabilities of approximately $2,047,000 as of December 31, 2018[55]. Research and Development - The company emphasizes its strong R&D capabilities and diverse customer base as key factors for establishing a better reputation and leadership in the network infrastructure and cybersecurity market[13]. - The company has a strong focus on product and technology research, design, and development, led by Chief Development Officer Tian Guoliang[29]. - The R&D Director, Chen Gaozhi, has over 25 years of experience in software engineering and programming, emphasizing network design and large-scale deployment[31]. - The company is committed to developing proprietary solutions, indicating a focus on innovation and market differentiation[29]. - The group maintains a strong R&D capability and is optimistic about benefiting from the growing demand for network infrastructure and security solutions globally[48]. Management and Governance - The management team includes professionals with extensive backgrounds in finance, law, and technology, enhancing the company's strategic capabilities[23][24][25]. - The management team has a diverse educational background, with degrees in computer engineering, law, and business, contributing to a well-rounded leadership[21][24][26]. - The leadership team is actively involved in the implementation of new technologies and solutions, ensuring alignment with market demands[29][31]. - The board of directors consists of five members, including three independent non-executive directors, ensuring a balance of power[91]. - The company emphasizes the importance of independent non-executive directors in its governance structure, with a majority of the Nomination Committee being independent[116]. - The company has conducted eight board meetings in the fiscal year, with full attendance from all directors[98]. Shareholder and Dividend Policy - The company did not recommend a final dividend for the year ended December 31, 2018, consistent with 2017[67]. - The company has adopted a dividend policy to provide stable and sustainable returns to shareholders[126]. - The company has established a series of channels to maintain effective communication with shareholders and potential investors, including regular disclosures of quarterly, interim, and annual reports[146]. Risks and Challenges - The company anticipates a slowdown in business development in China due to the ongoing trade tensions between the US and China, while expecting less impact on Southeast Asia's economy[11]. - The group has identified several major risks, including the recoverability of trade receivables which may impact cash flow[156]. - The group faces uncertainties in acquiring new contracts, which may affect future revenue streams[158]. Operational Developments - The company has established a strong foundation in network security solutions, which is critical for its growth strategy[30]. - The group completed the acquisition of two properties in Singapore on January 9 and February 14, 2018, following the fulfillment of all conditions outlined in the subscription letters[64]. - The group has established a regional office in Dubai to support market expansion in the Middle East and Africa[76]. - The group plans to recruit qualified senior technical sales engineers in Dubai following the completion of a feasibility study[76]. Employee and Labor Relations - The total employee cost for the year ended December 31, 2018, was approximately $1,705,000, an increase of about $510,000 compared to the previous year[70]. - The group had 20 employees as of December 31, 2018, down from 44 employees in 2017, primarily due to streamlining operations in China and the sale of subsidiaries[70]. - The group has not experienced any significant employment relationship issues or labor disputes affecting operations as of the report date[161].