Financial Performance - The total revenue for the year ended December 31, 2022, was RMB 757.9 million, an increase of 39.3% compared to RMB 544.4 million in 2021[9] - The company reported a pre-tax loss of RMB 32 million for 2022, slightly higher than the loss of RMB 30.6 million in 2021[9] - The net loss attributable to shareholders for the year was RMB 21.5 million, an improvement from a loss of RMB 25.2 million in the previous year[9] - For the year ended December 31, 2022, the company recorded a loss of approximately RMB 25.6 million[13] - The company's revenue for the year ended December 31, 2022, was approximately RMB 757.9 million, an increase of about 39.2% compared to RMB 544.4 million in 2021[19] - Sales costs increased from RMB 538.3 million in 2021 to RMB 773.5 million in 2022, representing an increase of RMB 235.1 million or 43.7%[20] - The gross loss for the year ended December 31, 2022, was RMB 15.6 million, with a gross margin of 2.1%, compared to a gross profit of approximately RMB 6.1 million and a gross margin of 1.1% in 2021[21] - Other income and gains increased from approximately RMB 15.0 million in 2021 to about RMB 24.8 million in 2022[23] - The company's sales and distribution expenses increased by RMB 1.1 million or 24.9% due to the expansion of market share for rolled aluminum wire[24] - Administrative and other expenses decreased by RMB 7.8 million or 26.1% to RMB 22.0 million for the year ended December 31, 2022[25] - Financing costs decreased from approximately RMB 11.7 million in 2021 to about RMB 10.7 million in 2022[26] - The company's tax credits increased from approximately RMB 4.1 million in 2021 to about RMB 6.4 million in 2022[27] - The net loss margin for the year was approximately 3.4%, an improvement from 4.9% in 2021[28] Assets and Equity - Total assets decreased to RMB 392.5 million in 2022 from RMB 469.8 million in 2021, reflecting a decline of 16.4%[10] - Total equity decreased to RMB 135.5 million in 2022 from RMB 161.1 million in 2021, a reduction of 16%[10] - The total equity attributable to owners of the company was approximately RMB 111.8 million as of December 31, 2022, compared to RMB 133.3 million in the previous year[31] - The debt-to-equity ratio as of December 31, 2022, was 97.0%, a decrease from 112.0% in 2021[31] Operational Challenges and Strategies - The company is facing challenges such as intensified competition, supply chain disruptions, and rising input costs, impacting operational performance[7] - The company is reviewing its operations and investing in technology to enhance efficiency and productivity for future growth[7] - The company aims to simplify its supply chain and improve operational efficiency to address the challenges faced in 2022[7] - The company remains committed to creating shareholder value and returning to a growth and profitability trajectory[7] Employee and Workforce - The company employed a total of 183 full-time employees as of December 31, 2022, down from 221 in the previous year[40] - The total employee benefit expenses for the year were approximately RMB 12.1 million, slightly down from RMB 12.2 million in the previous year[40] - The overall employee turnover rate for the reporting period was approximately 45%, up from 26% in 2021[162] - The male employee count was 136 (74%) in 2022, compared to 157 (71%) in 2021, while female employees decreased from 64 (29%) to 47 (26%) in the same period[159] - The company has established a competitive compensation system, ensuring fair and reasonable remuneration for employees[164] - The company emphasizes equal employment opportunities and prohibits discrimination based on gender, race, or other differences[167] - The total number of trained employees in 2022 was 134, representing approximately 73% of the total workforce, down from 93% in 2021[176] - The average training hours per employee increased to 51.78 hours in 2022, compared to 24.56 hours in 2021[176] Governance and Compliance - The board consists of at least three independent non-executive directors, ensuring that independent opinions are available for good corporate governance[48] - The audit committee held four meetings during the year ended December 31, 2022, reviewing the annual financial statements and quarterly reports[57] - The company has established anti-discrimination and equal opportunity policies to ensure fair employment practices[74] - The board has established effective internal control systems to manage risks and ensure compliance with applicable laws and regulations[89] - The company has a shareholder communication policy to facilitate engagement between shareholders and the board[96] - The company has established anti-corruption policies and provides training to directors and employees at least once a year to enhance their understanding of integrity and business ethics[198] Environmental, Social, and Governance (ESG) Initiatives - The company emphasizes sustainable development as a core part of its business strategy, focusing on environmental, social, and governance (ESG) initiatives[104] - The ESG working group, composed of senior management and employees from various departments, reports to the board at least once a year and is tasked with implementing ESG measures and assessing related risks[106] - The group has set environmental goals covering emissions reduction, waste management, and resource conservation, which are reviewed annually by the board[107] - The report adheres to the ESG reporting guidelines set by the Hong Kong Stock Exchange, ensuring the principles of materiality, quantification, balance, and consistency are applied[110] - The company is committed to aligning with national policies aiming for carbon peak by 2030 and carbon neutrality by 2060, actively participating in government emission reduction plans[129] Product and Market - The company operates in the wire and cable manufacturing sector, with production facilities located in Sichuan Province, China[104] - The product portfolio includes finished and semi-finished wires and cables, aluminum products, and other related items[104] - The company has obtained 29 registered trademarks in mainland China and Hong Kong, and 61 important patents related to wire and cable products in China as of December 31, 2022[194] - The company has not encountered any significant issues regarding the supply of raw materials, maintaining stable relationships with suppliers[183] Safety and Health - The company is committed to providing a safe and healthy work environment, adhering to safety regulations and conducting regular safety training[170] - The company has received ISO 45001:2018 certification for occupational health and safety management systems[173] - The company conducts regular safety inspections and training to ensure compliance with safety regulations and enhance employee safety awareness[173] Community Engagement - The company donated RMB 10,000 to the Baoxing County Charity Association to support earthquake relief efforts during the reporting period[200]

香港交易及結算所有限公司及香港聯合交易所有限公司（「聯交所」）對本公佈之內容概不負責， 對其準確性或完整性亦不發表任何聲明，並明確表示概不對因本公佈全部或任何部分內容而 產生或因倚賴該等內容而引致之任何損失承擔任何責任。 China Saftower International Holding Group Limited 中國蜀塔國際控股集團有限公司 （於開曼群島註冊成立的有限公司） （股份代號：8623） 截 至 二 零 二 二 年 十 二 月 三 十 一 日 止 年 度 之 年 度 業 績 公 佈 中國蜀塔國際控股集團有限公司（「本公司」）董事（「董事」）會（「董事會」）欣然 公佈本公司及其附屬公司截至二零二二年十二月三十一日止年度的經審核綜 合財務業績。本公佈載列本公司二零二二年年度報告（「二零二二年年度報告」） 全文，並符合聯交所GEM證券上市規則（「GEM上市規則」）內有關年度業績初 步公佈資料的相關規定。二零二二年年度報告之印刷版本將適時寄發予本公 司股東，並於聯交所網站www.hkexnews.hk及本公司網站www.saftower.cn上可供 閱覽。 承董事會命 中國蜀塔國際控股集團有限公司 ...

Financial Performance - For the nine months ended September 30, 2022, the company's revenue was RMB 470,361,000, an increase of 21.6% compared to RMB 386,823,000 for the same period in 2021[6] - The cost of sales for the same period was RMB 483,254,000, resulting in a gross loss of RMB 12,893,000, compared to a gross profit of RMB 7,065,000 in 2021[6] - The company reported a net loss of RMB 24,868,000 for the nine months ended September 30, 2022, compared to a net loss of RMB 6,947,000 for the same period in 2021[6] - The basic and diluted loss per share for the nine months was RMB 2.28, compared to RMB 0.76 for the same period in 2021[8] - The total comprehensive loss for the period was RMB 24,938,000, compared to RMB 7,062,000 in the same period last year[8] - The company incurred a loss of RMB 21,006,000 during the nine months ended September 30, 2022, compared to a loss of RMB 6,451,000 for the same period in 2021, reflecting increased operational challenges[10] - The group reported a loss attributable to owners of the company of RMB 21,062,000 for the nine months ended September 30, 2022, compared to a loss of RMB 6,451,000 for the same period in 2021[34] Revenue and Sales - The revenue from wire and cable production and sales was RMB 171,857,000, while aluminum product sales generated RMB 298,504,000, indicating strong performance in both segments[21] - The group's revenue for the nine months ended September 30, 2022, was approximately RMB 470.4 million, an increase of about 21.6% compared to the same period in 2021[43] Costs and Expenses - Financing costs increased to RMB 10,527,000 from RMB 6,601,000, representing a rise of 59.5% year-on-year[6] - The company incurred administrative and other expenses of RMB 16,201,000, slightly up from RMB 15,957,000 in the previous year[6] - Sales costs increased from RMB 379.8 million for the nine months ended September 30, 2021, to RMB 483.3 million for the same period in 2022, an increase of RMB 103.5 million or 27.3%[44] - The cost of inventory recognized as an expense for the nine months ended September 30, 2022, was RMB 483,254,000, up 27% from RMB 379,758,000 in the same period of 2021[27] Other Income and Gains - Other income and gains for the nine months were RMB 15,422,000, up from RMB 9,349,000 in the previous year, reflecting a growth of 65.5%[6] - Other income and gains totaled RMB 15,422,000 for the nine months ended September 30, 2022, compared to RMB 9,349,000 in the previous year, driven by government grants and interest income[23] - Other income and gains increased from approximately RMB 9.3 million for the nine months ended September 30, 2021, to about RMB 15.4 million for the same period in 2022[47] Shareholder Information - As of September 30, 2022, the company’s major shareholder, Red Fly Investment Limited, holds 351,280,000 shares, representing 38.18% of the total shares[64] - The company’s director, Mr. Dang Fei, holds 351,280,000 shares through controlled entities, equating to 38.18% ownership[65] - Mr. Wang Xiaozhong holds 99,760,000 shares, which is 10.84% of the total shares[64] Governance and Compliance - The company has complied with the corporate governance code as per GEM Listing Rules Appendix 15, except for the separation of roles between the Chairman and CEO, which is deemed appropriate by the board[59] - The company has appointed a compliance advisor in accordance with GEM Listing Rules, ensuring adherence to regulatory requirements[62] - The company has maintained full compliance with the trading code for directors, with no reported breaches[61] - The board consists of experienced members, including three independent non-executive directors, ensuring a balance of power and authority[59] Future Outlook and Strategies - The company aims to enhance its market presence and is exploring new strategies for expansion, although specific details were not disclosed in the report[6] - The management is focused on improving operational efficiency and reducing costs to mitigate losses in future quarters[6] - The group is actively seeking opportunities to expand its influence in Southwest China and reduce regional concentration, potentially including expansion into other segments of the aluminum industry[38] - The group is evaluating various opportunities for business expansion and will notify investors and shareholders upon any actionable opportunities[38] Production and Operations - The company experienced a temporary production halt due to energy shortages caused by severe heatwaves and droughts in Central and Western China during July to September 2022[45] - The company’s operational focus remains on the production and sales of wires, cables, and aluminum products, with no separate reporting segments due to resource integration[17] - The company’s main operational base is located in Guangyuan, Sichuan Province, China, emphasizing its regional manufacturing capabilities[12] Dividends and Investments - The group has not declared an interim dividend for the nine months ended September 30, 2022[33] - The company did not declare any dividends for the nine months ended September 30, 2022, consistent with the previous year[57] - There were no significant investments, acquisitions, or disposals of subsidiaries or joint ventures during the nine months ended September 30, 2022[55] Accounting and Audit - The company's financial statements for the nine months ending September 30, 2022, were not audited but were reviewed by the audit committee, confirming compliance with applicable accounting standards and GEM listing rules[74] - The audit committee was established on June 10, 2020, consisting of three independent non-executive directors, with Mr. Chen Aifa serving as the chairman[74] Market Conditions - The average price of aluminum increased significantly during the period, impacting material costs, with the London Metal Exchange reporting an international aluminum price of approximately USD 2,800 per ton at the end of 2021, peaking at about USD 4,000 per ton in March 2022[44] - The group anticipates a gradual decline in raw material costs, benefiting from a 30% VAT refund and subsidies from the Ya'an local government[38] Miscellaneous - The company is currently evaluating the impact of new accounting standards but has not identified any significant financial impact on its operations[16] - The company has not disclosed any new product developments or market expansion strategies in the current report[68] - No significant events requiring disclosure occurred after September 30, 2022, up to the report date[72] - The report will be available on the Hong Kong Stock Exchange website and the company's website for at least 7 days from the publication date[76]

Financial Performance - The company reported revenue of RMB 349,490,000 for the six months ended June 30, 2022, representing a 70.7% increase compared to RMB 204,537,000 for the same period in 2021[8]. - The cost of sales increased to RMB 355,468,000, up from RMB 196,152,000, resulting in a gross loss of RMB 5,978,000 for the first half of 2022[8]. - Other income rose significantly to RMB 12,763,000, compared to RMB 3,036,000 in the previous year, indicating a 320.5% increase[8]. - The company incurred a loss before tax of RMB 14,523,000, compared to a loss of RMB 6,283,000 in the same period last year, reflecting a 131.5% increase in losses[8]. - The net loss for the period was RMB 12,984,000, which is a 140.3% increase from RMB 5,392,000 in the first half of 2021[8]. - Basic and diluted loss per share for the period was RMB 1.31, compared to RMB 0.65 for the same period in 2021[10]. - The total comprehensive loss for the period amounted to RMB 12,954,000, compared to RMB 5,691,000 in the previous year, marking a 127.5% increase[10]. - The company reported a foreign exchange gain of RMB 30,000 from the translation of overseas operations, contrasting with a loss of RMB 299,000 in the previous year[8]. Assets and Liabilities - As of June 30, 2022, total assets amounted to RMB 445,716,000, a decrease of 5.1% from RMB 469,811,000 as of December 31, 2021[12]. - Non-current assets increased to RMB 165,131,000 from RMB 159,051,000, primarily due to an increase in property, plant, and equipment, which rose to RMB 142,849,000 from RMB 137,017,000[12]. - Current liabilities decreased to RMB 291,011,000 from RMB 303,345,000, with trade payables increasing significantly to RMB 99,526,000 from RMB 65,545,000[12]. - Total equity decreased to RMB 148,137,000 from RMB 161,091,000, reflecting a loss of RMB 12,013,000 during the period[13]. - Cash and cash equivalents decreased to RMB 2,112,000 from RMB 6,668,000, indicating a net decrease of RMB 4,556,000[18]. - The company’s borrowings increased to RMB 160,345,000 from RMB 166,658,000, indicating a slight reduction in debt levels[12]. - The total trade payables as of June 30, 2022, were RMB 99,526,000, an increase of 51.7% from RMB 65,545,000 as of December 31, 2021[62]. Revenue Breakdown - Revenue from wire and cable production and sales was RMB 113,224,000 for the six months ended June 30, 2022, compared to RMB 204,376,000 for the same period in 2021, indicating a decrease of about 44.6%[39]. - Revenue from aluminum product sales significantly increased to RMB 236,266,000 for the six months ended June 30, 2022, from RMB 161,000 for the same period in 2021, marking a substantial growth[39]. - The significant revenue growth was primarily driven by new product sales of cast rolled coils from Yaan Baosheng Metal Materials Co., Ltd., contributing approximately RMB 235.0 million[80]. Expenses and Costs - Financing costs increased to RMB 7,830,000, up from RMB 4,649,000, indicating a rise of 68.8%[8]. - The total employee costs for the six months ended June 30, 2022, amounted to RMB 8,024,000, representing a 33.2% increase from RMB 6,025,000 in the same period of 2021[48]. - Selling and distribution expenses rose by RMB 1.7 million or 106.6% due to increased sales activities during the period[85]. - Administrative and other expenses decreased to RMB 10,242,000 from RMB 11,489,000, showing a reduction of 10.9%[8]. - The financing costs increased from approximately HKD 4.6 million to HKD 7.8 million, primarily due to an increase in average borrowings during the period[87]. Cash Flow and Operating Activities - The company reported a net cash inflow from operating activities of RMB 15,569,000, compared to a cash outflow of RMB 14,482,000 in the same period last year[18]. - The current portion of secured bank borrowings increased to RMB 105,097,000 from RMB 98,300,000, reflecting a growth of 6.9%[64]. Shareholder Information - The chairman and CEO, Mr. Dang Fei, holds a 38.18% stake in the company, representing 351,280,000 shares[111]. - The major shareholder Red Fly Investment Limited holds 351,280,000 shares, representing 38.18% of the total issued share capital[114]. - The company has confirmed that there are no competing interests from its controlling shareholders or directors as of June 30, 2022[116]. Governance and Compliance - The group has adopted corporate governance principles in line with GEM listing rules, ensuring a balance of power and authority within the board[106]. - The audit committee has reviewed the unaudited condensed consolidated financial statements for the six months ended June 30, 2022, and believes they comply with applicable accounting standards and GEM Listing Rules[120]. Future Outlook and Strategy - The company is actively seeking opportunities to expand its influence in Southwest China, particularly in the aluminum industry, to reduce regional concentration[76]. - The company anticipates a gradual decrease in metal costs, benefiting from a 30% immediate VAT refund and local government subsidies[76]. - The company is developing a metal recycling system in collaboration with a licensed aluminum recycler, which is expected to attract more government subsidies in the future[77]. - The company’s financial performance for the second half of 2022 may be impacted by uncertainties related to the pandemic and economic recovery[77].

Financial Performance - The company reported revenue of RMB 142,115,000 for the first quarter of 2022, a 65% increase compared to RMB 85,987,000 in the same period of 2021[8]. - Gross profit for the first quarter was RMB 71,000, significantly down from RMB 4,621,000 year-on-year[8]. - The net loss for the period was RMB 4,353,000, compared to a net loss of RMB 2,986,000 in the first quarter of 2021, representing an increase in loss of approximately 46%[8]. - Basic and diluted loss per share for the period was RMB 0.49, compared to RMB 0.39 in the first quarter of 2021[8]. - Total comprehensive loss for the period was RMB 4,320,000, compared to RMB 2,941,000 in the same quarter of the previous year[8]. - For the three months ended March 31, 2022, the company recorded a loss attributable to owners of approximately RMB 4.53 million, compared to a loss of RMB 3.09 million for the same period in 2021[34]. - Loss attributable to owners was approximately RMB 4.5 million for the three months ended March 31, 2022, compared to RMB 3.1 million for the same period in 2021[52]. Revenue Breakdown - Revenue from the production and sales of aluminum products was RMB 101,435,000, while revenue from wire and cable production and sales was RMB 40,680,000 for the three months ended March 31, 2022[21]. - All revenue for the three months ended March 31, 2022, was generated from customers in mainland China, with no non-current assets located outside of this region[17]. - Revenue for the three months ended March 31, 2022, was approximately RMB 142.1 million, representing an increase of about 65.3% compared to RMB 85.99 million in the same period of 2021[42]. Costs and Expenses - The cost of inventory recognized as an expense was RMB 142,044,000, compared to RMB 81,366,000 in the previous year, marking an increase of 74.5%[27]. - The cost of sales increased from RMB 81.4 million for the three months ended March 31, 2021, to RMB 142.0 million for the same period in 2022, an increase of RMB 60.6 million or 74.6%[43]. - The loss before income tax for the period was impacted by an increase in employee costs, which rose to RMB 3,414,000 from RMB 2,989,000 year-on-year, an increase of 14.2%[27]. - Sales and distribution expenses increased by approximately RMB 552,000 or 66.9%, aligning with the revenue growth for the year 2022[48]. - Administrative and other expenses decreased from RMB 6.7 million to RMB 6.5 million, a reduction of RMB 281,000 or 4.2%, primarily due to a decrease in travel frequency[49]. Financing and Other Income - The company incurred financing costs of RMB 2,674,000, up from RMB 2,281,000 in the previous year[8]. - The company incurred financing costs of RMB 2,798,000 for the three months ended March 31, 2022, compared to RMB 2,449,000 in the same period last year, an increase of 14.2%[25]. - Other income and net other losses amounted to RMB 5,708,000, compared to RMB 1,917,000 in the same quarter of 2021[8]. - Other income and gains increased from approximately RMB 1.9 million for the three months ended March 31, 2021, to approximately RMB 5.7 million for the same period in 2022, primarily due to government subsidies[45]. - Interest income increased to RMB 618,000 from RMB 2,000 year-on-year, reflecting a substantial rise[24]. - The company received government grants totaling RMB 5,194,000, up from RMB 1,660,000 in the previous year, indicating a growth of 212.0%[24]. Equity and Shareholder Information - The company’s total equity as of March 31, 2022, was RMB 156,771,000, down from RMB 161,091,000 at the beginning of the year[10]. - The company’s major shareholders include Mr. Party Fei with 38.18% and Mr. Wang Xiaozhong with 10.84% of the shares[64]. - As of March 31, 2022, Red Fly holds 351,280,000 shares, representing 38.18% of the company's equity[67]. - Xseven Investment holds 99,760,000 shares, representing 10.84% of the company's equity[67]. - The company has disclosed that the major shareholders include Party Jun, who holds 351,280,000 shares, equivalent to 38.18%[68]. Corporate Governance and Compliance - The company has complied with all provisions of the corporate governance code during the reporting period[59]. - The audit committee, established on June 10, 2020, consists of three independent non-executive directors and has reviewed the financial statements for the three months ending March 31, 2022[75]. - The company confirms that there are no controlling shareholders or directors with interests in any competing businesses as of March 31, 2022[71]. - The company has adopted a share option scheme as of June 10, 2020, but no options have been granted, exercised, cancelled, or lapsed since the listing date[72]. Future Outlook and Strategy - The company plans to continue exploring market expansion opportunities and new product development strategies[8]. - The company continues to manufacture and sell wires and cables, serving a diverse customer base including power companies and manufacturing enterprises[37]. - The company is closely monitoring government policies to capitalize on opportunities in the aluminum industry, aiming to expand its influence in Southwest China[38]. - The company’s product offerings include traditional and specialty wires and cables, as well as semi-finished aluminum products, aimed at maximizing market exposure and expanding market share[37]. Miscellaneous - The company did not declare or pay any dividends for the three months ended March 31, 2022, consistent with the same period in 2021[33]. - No significant contingent liabilities were reported as of March 31, 2022[53]. - There were no significant investments, acquisitions, or disposals of subsidiaries during the reporting period[55]. - No significant events requiring disclosure occurred after March 31, 2022, up to the report date[73]. - The report will be available on the GEM website and the company's website for at least 7 days from the date of publication[77].

Financial Performance - The total revenue for the year ended December 31, 2021, was RMB 544.39 million, an increase of 5.2% compared to RMB 518.16 million in 2020[11]. - The company reported a loss before tax of RMB 30.65 million for 2021, compared to a profit of RMB 2.67 million in 2020[11]. - The net loss attributable to the owners of the company for the year was RMB 25.22 million, a significant decline from a profit of RMB 1.90 million in the previous year[11]. - For the year ended December 31, 2021, the company recorded a revenue of approximately RMB 544.4 million, an increase of about 5.1% compared to RMB 518.2 million for the year ended December 31, 2020[19]. - The company incurred a loss of approximately RMB 26.5 million for the year ended December 31, 2021, compared to a profit of approximately RMB 2.8 million for the year ended December 31, 2020[14]. - Gross profit for the year ended December 31, 2021, was RMB 6.1 million, with a gross profit margin of 1.1%, down from RMB 36.5 million and 7.0% in 2020[21]. - The group recorded a loss attributable to the owners of approximately RMB 25.2 million for the year, compared to a profit of approximately RMB 1.9 million in the same period of 2020, resulting in a net loss margin of approximately 4.9%[28]. Assets and Liabilities - Total assets increased to RMB 469.81 million in 2021, up from RMB 349.07 million in 2020, reflecting a growth of 34.5%[12]. - Current assets rose to RMB 310.76 million, compared to RMB 214.76 million in 2020, marking an increase of 44.7%[12]. - Total liabilities increased to RMB 308.72 million in 2021, up from RMB 172.93 million in 2020, representing an increase of 78.4%[12]. - The company’s total equity decreased to RMB 161.09 million in 2021 from RMB 176.14 million in 2020, reflecting a decrease of 8.5%[12]. - The net current asset position decreased to RMB 7.42 million in 2021 from RMB 49.22 million in 2020, indicating a decline in liquidity[12]. - The company's cash and cash equivalents decreased to RMB 6,668 thousand in 2021 from RMB 12,073 thousand in 2020, a decline of 44.2%[182]. - The total liabilities increased to RMB 308,720 thousand in 2021 from RMB 172,930 thousand in 2020, marking an increase of 78.3%[184]. - The company's equity decreased to RMB 161,091 thousand in 2021 from RMB 176,144 thousand in 2020, a decrease of 8.5%[184]. Investments and Acquisitions - The company acquired a 70% stake in Ya'an Baosheng Metal Materials Co., Ltd., which is expected to enhance its upstream aluminum processing activities[9]. - The company successfully issued 120,000,000 shares, raising approximately HKD 8.9 million, which was used to acquire 70% of Ya'an Baosheng Metal Materials Co., Ltd.[16]. - The net amount from the subscription proceeds was approximately HKD 8.9 million, fully utilized for acquiring a 70% stake in Yaan Baosheng[44]. Operational and Strategic Focus - The company aims to adapt positively to the new economic normal and seek opportunities amid challenges posed by the pandemic and geopolitical tensions[9]. - The company is actively monitoring opportunities in the aluminum industry and aims to expand its influence in Southwest China[17]. - The company plans to leverage government policies to drive growth and reduce regional concentration[17]. - The company is committed to sustainable development and aims to minimize the environmental impact of its business activities[95]. - The company is exploring new strategies for growth, including potential mergers and acquisitions to strengthen its market presence[143]. Governance and Compliance - The Compensation Committee was established on June 10, 2020, in accordance with GEM Listing Rules, with the main responsibility of reviewing and approving management's compensation proposals[58]. - The Nomination Committee was also established on June 10, 2020, to review the board's structure, size, composition, and diversity, and to recommend suitable candidates for directorship[63]. - The board has adopted a diversity policy to ensure a diverse range of skills, knowledge, and experience among its members, considering factors such as age, gender, and cultural background[69]. - The company has established effective internal control systems, including a sound monitoring environment and clear policies and procedures[86]. - The company has received independence confirmations from all independent non-executive directors as per GEM Listing Rules[128]. Risk Management - The group faced significant risks including raw material price fluctuations and reliance on customer sales without long-term contracts[39]. - The board of directors is responsible for maintaining a robust risk management and internal control system to protect shareholder investments[85]. Financial Reporting and Audit - The independent auditor's report confirmed that the consolidated financial statements fairly reflect the group's financial position as of December 31, 2021[163]. - The audit identified the assessment of impairment of trade receivables as a key audit matter due to the significant management judgment involved[167]. - The group’s financial reporting process is overseen by the board of directors, with the audit committee assisting in this responsibility[173]. Employee and Management - The group employed a total of 221 full-time employees as of December 31, 2021, with total employee benefit expenses of approximately RMB 12.2 million for the year[40]. - The management team has over 15 years of experience in the manufacturing, processing, and sales of electrical wires and cables, indicating strong industry expertise[141]. - The company has expanded its board of directors to include experienced professionals with backgrounds in finance, law, and business management, enhancing governance and strategic oversight[143][147].

[Company Information](index=4&type=section&id=Company%20Information) This section provides essential corporate details, including board members, key personnel, advisors, and company registration information [Board of Directors](index=4&type=section&id=Board%20of%20Directors) This section lists the company's Board of Directors, including executive, non-executive, and independent non-executive directors, along with committee chairs and members - Board members include Mr. Dang Fei (Chairman and CEO), Mr. Wang Xiaozhong, Ms. Luo Qian, Mr. Luo Qiang as executive directors, Mr. Wang Haichen as a non-executive director, and Dr. Zuo Xinzhang, Mr. Chen Aifa, and Ms. Hu Xiaomin as independent non-executive directors[5](index=5&type=chunk) - The Audit Committee is chaired by Mr. Chen Aifa, the Remuneration Committee by Ms. Hu Xiaomin, and the Nomination Committee by Mr. Dang Fei[5](index=5&type=chunk) [Company Secretary, Compliance Officer and Authorized Representatives](index=4&type=section&id=Company%20Secretary%2C%20Compliance%20Officer%20and%20Authorized%20Representatives) This section identifies the company's company secretary, compliance officer, and authorized representatives - Mr. Hu Yuanping serves as the Company Secretary and Authorized Representative, while Mr. Wang Xiaozhong serves as the Compliance Officer[5](index=5&type=chunk) [Independent Auditor, Compliance Adviser and Legal Advisers](index=4&type=section&id=Independent%20Auditor%2C%20Compliance%20Adviser%20and%20Legal%20Advisers) This section discloses information regarding the company's independent auditor, compliance adviser, and legal advisers - The independent auditor is BDO Limited, the compliance adviser is Ample Capital Limited, and the legal adviser (as to Hong Kong law) is ONC Lawyers[5](index=5&type=chunk) [Registered Office and Principal Places of Business](index=4&type=section&id=Registered%20Office%20and%20Principal%20Places%20of%20Business) This section provides the company's registered office in the Cayman Islands and its principal places of business in mainland China and Hong Kong - The registered office is in the Cayman Islands, the principal place of business in China is in Guangyuan Economic and Technological Development Zone, Sichuan Province, and in Hong Kong is at 8 Hart Avenue, Tsim Sha Tsui, Kowloon[5](index=5&type=chunk)[6](index=6&type=chunk) [Principal Banks](index=5&type=section&id=Principal%20Banks) This section lists the company's principal banks in mainland China - Principal banks include Bank of Communications Co., Ltd. Chengdu Pidu District Branch, Bank of China Limited Pidu District Branch, and Chengdu Rural Commercial Bank Co., Ltd. Pidu Hongxing Branch[6](index=6&type=chunk) [Share Registrar and Stock Code](index=5&type=section&id=Share%20Registrar%20and%20Stock%20Code) This section provides information on the share registrars in the Cayman Islands and Hong Kong, along with the company's stock code and website - The principal share registrar and transfer office in the Cayman Islands is Appleby Global Services (Cayman) Limited, and the Hong Kong branch share registrar and transfer office is Tricor Investor Services Limited[6](index=6&type=chunk) - The stock code is **8623**, and the company website is www.saftower.cn[6](index=6&type=chunk) [Unaudited Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=6&type=section&id=Unaudited%20Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) This section presents the unaudited condensed consolidated financial performance, highlighting key income and expense items for the reporting periods [Third Quarter Performance Overview](index=6&type=section&id=Third%20Quarter%20Performance%20Overview) The group's unaudited condensed consolidated results for the nine and three months ended September 30, 2021, show an expanded loss and increased basic and diluted loss per share, primarily due to rising cost of sales and declining gross profit Key Financial Data for the Nine and Three Months Ended September 30, 2021 (RMB thousands) | Indicator | Nine Months Ended September 30 (2021) (RMB thousands) | Nine Months Ended September 30 (2020) (RMB thousands) | Three Months Ended September 30 (2021) (RMB thousands) | Three Months Ended September 30 (2020) (RMB thousands) | | :--- | :--- | :--- | :--- | :--- | | Revenue | 386,823 | 348,356 | 182,286 | 139,806 | | Cost of sales | (379,758) | (323,672) | (183,606) | (130,007) | | Gross profit/(loss) | 7,065 | 24,684 | (1,320) | 9,799 | | Other income and gains | 9,349 | 3,682 | 6,313 | 2,247 | | Selling and distribution expenses | (2,777) | (4,268) | (1,211) | (1,767) | | Administrative and other expenses | (15,957) | (11,121) | (4,468) | (4,205) | | Listing expenses | — | (7,838) | — | (6,973) | | Finance costs | (6,601) | (6,835) | (1,952) | (2,379) | | Loss before income tax expense | (8,921) | (1,696) | (2,638) | (3,278) | | Income tax credit | 1,974 | 464 | 1,083 | 730 | | Loss for the period | (6,947) | (1,232) | (1,555) | (2,548) | | Loss attributable to owners of the Company | (6,451) | (1,666) | (1,211) | (2,810) | | Basic and diluted loss per share (RMB cents) | (0.76) | (0.25) | (0.13) | (0.36) | [Unaudited Condensed Consolidated Statement of Changes in Equity](index=8&type=section&id=Unaudited%20Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity) This section outlines the changes in the group's equity during the reporting period, reflecting impacts from profit/loss, share issuance, and acquisitions [Overview of Equity Changes](index=8&type=section&id=Overview%20of%20Equity%20Changes) For the nine months ended September 30, 2021, the group's total equity slightly increased, primarily due to new share issuance and subsidiary acquisition, though loss for the period reduced retained profits Changes in Equity for the Nine Months Ended September 30, 2021 (RMB thousands) | Item | Balance at January 1, 2021 (RMB thousands) | Loss for the period (RMB thousands) | Other comprehensive income (RMB thousands) | Issue of new shares by subscription (RMB thousands) | Acquisition of a subsidiary (RMB thousands) | Balance at September 30, 2021 (RMB thousands) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Share capital | 7,226 | — | — | 7,466 | — | 14,692 | | Share premium | 30,642 | — | — | — | — | 30,642 | | Capital reserve | 69,696 | — | — | — | — | 69,696 | | Retained profits | 36,232 | (6,451) | — | — | — | 29,781 | | Statutory reserve | 7,724 | — | — | — | — | 7,724 | | Exchange reserve | (535) | — | (115) | — | — | (650) | | **Subtotal equity attributable to owners of the Company** | **150,985** | **(6,451)** | **(115)** | **7,466** | **—** | **151,885** | | Non-controlling interests | 25,159 | (496) | — | — | 3,183 | 27,846 | | **Total** | **176,144** | **(6,947)** | **(115)** | **7,466** | **3,183** | **179,731** | - On June 17, 2021, the company allotted and issued **120,000,000** subscription shares to independent third parties at **HKD0.075** per share, raising a total of **HKD9 million**[12](index=12&type=chunk) - Upon listing on July 10, 2020, the company issued **200,000,000** ordinary shares at **HKD0.3** per share under the share offer and listing[12](index=12&type=chunk) [Notes to the Unaudited Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20the%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) This section provides explanatory notes to the unaudited condensed consolidated financial statements, detailing accounting policies, segment information, and specific financial line items [General Information](index=9&type=section&id=General%20Information) This section outlines the company's place of incorporation, principal places of operation, nature of business, and listing date - The company was incorporated in the Cayman Islands on **October 9, 2018**, primarily engaged in the production and sale of wires, cables, and aluminum products in mainland China[14](index=14&type=chunk) - The company's shares were listed on GEM of The Stock Exchange of Hong Kong on **July 10, 2020**[14](index=14&type=chunk) [Basis of Preparation of Financial Information](index=9&type=section&id=Basis%20of%20Preparation%20of%20Financial%20Information) This section clarifies the basis for preparing the financial statements, adhering to Hong Kong Generally Accepted Accounting Principles and GEM Listing Rules, noting no material impact from unadopted new and revised standards - The financial statements are prepared in accordance with Hong Kong Generally Accepted Accounting Principles, Hong Kong Financial Reporting Standards, and the GEM Listing Rules[15](index=15&type=chunk) - There have been no significant changes in accounting policies applied to the unaudited condensed consolidated financial statements for the nine months ended September 30, 2021, and no new or revised standards issued but not yet effective have been applied[15](index=15&type=chunk)[17](index=17&type=chunk) [Segment Reporting](index=10&type=section&id=Segment%20Reporting) The group primarily operates a single reportable segment, the production and sale of wires, cables, and aluminum products, with all revenue and non-current assets originating from mainland China - The group has only one reportable operating segment: the production and sale of wires and cables, and the production and sale of aluminum products[18](index=18&type=chunk) - All of the group's revenue and non-current assets during the reporting period are derived from mainland China[19](index=19&type=chunk) [Revenue](index=11&type=section&id=Revenue) This section details the group's revenue composition, primarily from the production and sale of wires, cables, and aluminum products, with significant growth in aluminum product sales Revenue by Product Type (RMB thousands) | Product Type | Nine Months Ended September 30 (2021) | Nine Months Ended September 30 (2020) | Three Months Ended September 30 (2021) | Three Months Ended September 30 (2020) | | :--- | :--- | :--- | :--- | :--- | | Production and sale of wires and cables | 322,962 | 346,126 | 118,586 | 137,576 | | Production and sale of aluminum products | 63,861 | 2,230 | 63,700 | 2,230 | | **Total Revenue** | **386,823** | **348,356** | **182,286** | **139,806** | [Other Income and Gains](index=12&type=section&id=Other%20Income%20and%20Gains) This section presents the composition of the group's other income and gains, primarily comprising government grants and subsidies, which recorded significant growth Composition of Other Income and Gains (RMB thousands) | Item | Nine Months Ended September 30 (2021) | Nine Months Ended September 30 (2020) | Three Months Ended September 30 (2021) | Three Months Ended September 30 (2020) | | :--- | :--- | :--- | :--- | :--- | | Interest income | 35 | 6 | 16 | 2 | | Government grants and subsidies | 8,556 | 3,385 | 6,209 | 2,195 | | Sales of scrap metal consumables | 140 | 130 | 6 | — | | Rental income | 249 | — | — | — | | Others | 369 | 161 | 82 | 50 | | **Total** | **9,349** | **3,682** | **6,313** | **2,247** | - Government grants and subsidies are primarily for supporting China operations, purchasing property and machinery, employing disabled persons, and a 30% immediate refund of value-added tax for comprehensive utilization products and services[24](index=24&type=chunk) [Finance Costs](index=12&type=section&id=Finance%20Costs) This section outlines the group's finance costs, primarily consisting of interest expenses on bank and other borrowings, which slightly decreased during the period Composition of Finance Costs (RMB thousands) | Item | Nine Months Ended September 30 (2021) | Nine Months Ended September 30 (2020) | Three Months Ended September 30 (2021) | Three Months Ended September 30 (2020) | | :--- | :--- | :--- | :--- | :--- | | Interest expense on bank and other borrowings | 6,526 | 6,825 | 1,940 | 2,376 | | Interest expense on lease liabilities | 38 | 10 | 12 | 3 | | Others | 205 | — | — | — | | Finance costs capitalized in construction in progress | (168) | — | — | — | | **Finance costs recognized in profit or loss** | **6,601** | **6,835** | **1,952** | **2,379** | [Loss Before Income Tax Expense](index=13&type=section&id=Loss%20Before%20Income%20Tax%20Expense) This section discloses the main deductions contributing to the loss before income tax expense, including cost of inventories, depreciation, amortization, research and development costs, and staff costs Major Deductions for Loss Before Income Tax Expense (RMB thousands) | Item | Nine Months Ended September 30 (2021) | Nine Months Ended September 30 (2020) | Three Months Ended September 30 (2021) | Three Months Ended September 30 (2020) | | :--- | :--- | :--- | :--- | :--- | | Cost of inventories recognized as expense | 379,758 | 323,672 | 183,606 | 130,007 | | Depreciation of property, plant and equipment | 5,409 | 4,950 | 1,593 | 1,578 | | Employee costs (including directors' emoluments) | 7,771 | 6,780 | 2,710 | 2,118 | | Contributions to defined contribution retirement plans | 1,932 | 953 | 968 | 499 | | **Total employee costs** | **9,703** | **7,733** | **3,678** | **2,617** | [Income Tax Credit](index=14&type=section&id=Income%20Tax%20Credit) The group recorded an income tax credit for the period, primarily due to the recognition of assessable losses and certain subsidiaries benefiting from high-tech enterprise and Western Development tax preferential policies Income Tax Credit (RMB thousands) | Item | Nine Months Ended September 30 (2021) | Nine Months Ended September 30 (2020) | Three Months Ended September 30 (2021) | Three Months Ended September 30 (2020) | | :--- | :--- | :--- | :--- | :--- | | Income tax expense/(credit) | — | 42 | (60) | (464) | | Deferred tax credit | (1,974) | (506) | (1,023) | (266) | | **Income tax credit** | **(1,974)** | **(464)** | **(1,083)** | **(730)** | - Sichuan Shutower was recognized as a high-tech enterprise, enjoying a preferential corporate income tax rate of **15%**[29](index=29&type=chunk) - Guangyuan Tongchuang qualifies for the Western Development tax preferential policy, subject to a corporate income tax rate of **15%**[31](index=31&type=chunk) [Dividends](index=15&type=section&id=Dividends) The Board of Directors decided not to declare an interim dividend for the nine months ended September 30, 2021 - The directors resolved not to recommend the payment of an interim dividend for the nine months ended September 30, 2021, and September 30, 2020[32](index=32&type=chunk) [Loss Per Share](index=15&type=section&id=Loss%20Per%20Share) For the nine months ended September 30, 2021, basic and diluted loss per share was **RMB0.76 cents**, an increase from the prior year period - Loss per share attributable to owners of the Company for the period was **RMB0.76 cents** (2020: **RMB0.25 cents**)[9](index=9&type=chunk)[33](index=33&type=chunk) - Diluted loss per share is the same as basic loss per share as there are no potential dilutive ordinary shares[33](index=33&type=chunk) [Management Discussion and Analysis](index=16&type=section&id=Management%20Discussion%20and%20Analysis) This section provides a comprehensive review of the group's business performance, financial results, and future outlook, including strategic initiatives and risk factors [Business Review and Outlook](index=16&type=section&id=Business%20Review%20and%20Outlook) As a regional wire and cable manufacturer and supplier, the group's products include finished, semi-finished wires, and aluminum products, recording a loss of approximately **RMB6.9 million** for the nine months ended September 30, 2021, impacted by the pandemic - The group is a wire and cable manufacturer and supplier in Sichuan Province, China, offering finished wires and cables, semi-finished wires, aluminum products, and other products[36](index=36&type=chunk) - For the nine months ended September 30, 2021, the group recorded a loss of approximately **RMB6.9 million** (2020: loss of approximately **RMB1.2 million**), primarily due to the COVID-19 pandemic[36](index=36&type=chunk) - The company's shares were successfully listed on GEM of the Stock Exchange on **July 10, 2020**[37](index=37&type=chunk) [Future Prospects](index=16&type=section&id=Future%20Prospects) The group expanded its upstream aluminum processing business by acquiring a **70%** equity interest in Ya'an Baosheng and plans to invest in a new plant in Baoxing County, Ya'an City, to boost aluminum product sales revenue, capitalizing on opportunities from the Western Development Strategy - On June 17, 2021, the group successfully allotted and issued **120,000,000** shares to independent third-party subscribers, with net proceeds of approximately **HKD8.9 million** used to acquire a **70%** equity interest in Ya'an Baosheng, expanding into rolled aluminum foil and plate processing business[38](index=38&type=chunk) - The directors believe the acquisition will enable the group to expand its upstream business, providing a more stable raw material source, reducing production costs, and increasing profit margins[38](index=38&type=chunk) - On October 27, 2021, the group entered into an investment agreement with the Baoxing County Government of Ya'an City to invest in a new production plant with an annual capacity of **100,000 tonnes** of cold-rolled plates, expected to be completed by **October 2022**, with commercial production commencing six months after completion, to enhance aluminum product sales revenue[41](index=41&type=chunk) - The group will capitalize on the "Western Development Strategy" and Guangyuan Municipal Government's opportunities in the aluminum industry to expand its influence in Southwest China[40](index=40&type=chunk) [Financial Review](index=18&type=section&id=Financial%20Review) This section provides a detailed analysis of changes in financial indicators during the reporting period, including revenue growth, increased cost of sales, decreased gross profit and margin, higher other income, and various expense fluctuations, ultimately leading to an expanded loss attributable to owners of the Company [Revenue](index=18&type=section&id=Revenue) The group's revenue increased by **11.0%** year-on-year to **RMB386.8 million**, primarily driven by new product rolled coils from new subsidiary Ya'an Baosheng Metal Material Co., Ltd., contributing approximately **RMB63.9 million** - For the nine months ended September 30, 2021, the group's revenue was approximately **RMB386.8 million**, an increase of approximately **11.0%** compared to the same period in 2020[45](index=45&type=chunk) - The increase in revenue was mainly due to the contribution of approximately **RMB63.9 million** from new product rolled coils by the new subsidiary, Ya'an Baosheng Metal Material Co., Ltd[45](index=45&type=chunk) Revenue and Gross Profit by Product Type (Nine Months Ended September 30) (RMB thousands) | Product Type | 2021 Revenue (RMB thousands) | 2020 Revenue (RMB thousands) | 2021 Gross Profit (RMB thousands) | 2020 Gross Profit (RMB thousands) | 2021 Gross Margin | 2020 Gross Margin | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Classic Wires and Cables - Copper | 31,915 | 29,524 | 1,131 | 3,844 | 3.5% | 13.0% | | Classic Wires and Cables - Aluminum | 78,528 | 109,841 | 2,559 | 7,869 | 3.3% | 7.2% | | Specialty Wires and Cables - Copper | — | 4,909 | — | 1,381 | — | 28.1% | | Specialty Wires and Cables - Aluminum | 38,923 | 32,206 | 6,079 | 7,083 | 15.6% | 22.0% | | Semi-finished Wires - Bare Copper Wire | 117,375 | 76,543 | 1,234 | 1,344 | 1.1% | 1.8% | | Semi-finished Wires - Aluminum Rod | 55,479 | 92,430 | (188) | 3,033 | (0.3%) | 3.3% | | Cast-rolled Coils | 63,861 | — | (3,868) | — | (6.1%) | — | | Aluminum Products | — | 2,230 | — | 2 | — | 0.1% | | Other Products | 742 | 673 | 118 | 128 | 15.9% | 19.0% | | **Total** | **386,823** | **348,356** | **7,065** | **24,684** | **1.8%** | **7.1%** | [Cost of Sales](index=19&type=section&id=Cost%20of%20Sales) Cost of sales increased by **17.3%** to **RMB379.8 million**, primarily due to continuous inflation in the average market prices of raw materials such as copper and aluminum - Cost of sales increased by **17.3%** from approximately **RMB323.7 million** for the nine months ended September 30, 2020, to approximately **RMB379.8 million** for the nine months ended September 30, 2021[46](index=46&type=chunk) - The increase in cost of sales was mainly due to the continuous inflation in the average market prices of copper and aluminum during the period[46](index=46&type=chunk) [Gross Profit and Gross Margin](index=19&type=section&id=Gross%20Profit%20and%20Gross%20Margin) Gross profit decreased from **RMB24.7 million** to **RMB7.1 million**, with gross margin falling from **7.1%** to **1.8%**, primarily impacted by losses from new product rolled coils and increased raw material costs - For the nine months ended September 30, 2021, gross profit was **RMB7.1 million** (2020: **RMB24.7 million**), and gross margin was **1.8%** (2020: **7.1%**)[47](index=47&type=chunk) - The decrease in gross margin was mainly due to a loss of approximately **RMB3.9 million** from new product rolled coils and increased unit costs of raw materials, particularly copper and aluminum[47](index=47&type=chunk) [Other Income and Gains](index=20&type=section&id=Other%20Income%20and%20Gains) Other income and gains increased by approximately **RMB5.2 million** to **RMB9.3 million**, primarily benefiting from an increase in government grants and subsidies - Other income and gains increased from approximately **RMB3.7 million** to approximately **RMB9.3 million**, mainly due to an increase in government grants and subsidies of approximately **RMB5.2 million**[49](index=49&type=chunk) [Selling and Distribution Expenses](index=20&type=section&id=Selling%20and%20Distribution%20Expenses) Selling and distribution expenses decreased by **34.9%** to **RMB1.5 million**, primarily due to reduced travel by the sales team amidst the pandemic - Selling and distribution expenses decreased by **RMB1.5 million** or **34.9%**, attributed to reduced travel by the sales team during the pandemic[50](index=50&type=chunk) [Administrative and Other Expenses](index=20&type=section&id=Administrative%20and%20Other%20Expenses) Administrative and other expenses increased by **43.5%** to **RMB16.0 million**, mainly due to higher professional fees post-listing, increased provision for expected credit losses on trade receivables, and rising staff costs - Administrative and other expenses increased by **43.5%** from **RMB11.1 million** to **RMB16.0 million**[51](index=51&type=chunk) - The increase was primarily due to higher professional fees after listing, an increase in provision for expected credit losses on trade receivables of approximately **RMB0.3 million**, and an increase in staff costs of approximately **RMB2.0 million**[51](index=51&type=chunk) [Finance Costs](index=21&type=section&id=Finance%20Costs) Finance costs slightly decreased to approximately **RMB6.6 million**, mainly due to a reduction in the average borrowing amount - Finance costs decreased from approximately **RMB6.8 million** to approximately **RMB6.6 million**, primarily due to a reduction in the average borrowing amount[53](index=53&type=chunk) [Income Tax Credit](index=21&type=section&id=Income%20Tax%20Credit) The group recorded an income tax credit of approximately **RMB2.0 million** for the period, mainly due to the recognition of assessable losses - For the nine months ended September 30, 2021, the group recorded an income tax credit of approximately **RMB2.0 million**, primarily due to the recognition of assessable losses during the period[54](index=54&type=chunk) [Loss Attributable to Owners of the Company for the Period](index=21&type=section&id=Loss%20Attributable%20to%20Owners%20of%20the%20Company%20for%20the%20Period) For the nine months ended September 30, 2021, the loss attributable to owners of the Company was approximately **RMB6.5 million**, an increase of approximately **RMB4.8 million** from the prior year period, resulting from the combined effects of the aforementioned factors - For the nine months ended September 30, 2021, the loss attributable to owners of the Company was approximately **RMB6.5 million**, an increase of approximately **RMB4.8 million** compared to the same period in 2020[55](index=55&type=chunk) [Contingent Liabilities](index=22&type=section&id=Contingent%20Liabilities) As of September 30, 2021, the group had no significant contingent liabilities - The group had no significant contingent liabilities as of September 30, 2021[57](index=57&type=chunk) [Material Investments Held, Material Acquisitions or Disposals of Subsidiaries and Associates, and Plans for Material Investments or Capital Assets](index=22&type=section&id=Material%20Investments%20Held%2C%20Material%20Acquisitions%20or%20Disposals%20of%20Subsidiaries%20and%20Associates%2C%20and%20Plans%20for%20Material%20Investments%20or%20Capital%20Assets) The group acquired a **70%** equity interest in Ya'an Baosheng on May 27, 2021, making it a non-wholly owned subsidiary, with no other material investment or capital asset plans - On May 27, 2021, Shutower Enterprise Management (Guangyuan) Co., Ltd., a wholly-owned subsidiary of the Company, acquired a **70%** equity interest in Ya'an Baosheng for approximately **RMB9.8 million**, making it a non-wholly owned subsidiary of the Company[58](index=58&type=chunk) - Save for the acquisition and plans for material investments or capital assets disclosed in the prospectus, the group held no material investments, made no material acquisitions or disposals of subsidiaries, associates, and joint ventures during the nine months ended September 30, 2021, and had no plans for material investments or capital assets as of the date of this report[58](index=58&type=chunk) [Use of Net Proceeds from Listing](index=23&type=section&id=Use%20of%20Net%20Proceeds%20from%20Listing) Net proceeds from the listing, approximately **HKD20.6 million** (equivalent to approximately **RMB18.6 million**), were fully utilized as of September 30, 2021, in line with the proposed allocation in the prospectus - Net proceeds from the listing, approximately **HKD20.6 million** (equivalent to approximately **RMB18.6 million**), were fully utilized as of September 30, 2021, in accordance with the proposed allocation stated in the prospectus[60](index=60&type=chunk) [Use of Proceeds from Subscription](index=23&type=section&id=Use%20of%20Proceeds%20from%20Subscription) The net proceeds from the subscription, approximately **HKD8.9 million**, were fully used to pay the consideration for the acquisition of a **70%** equity interest in Ya'an Baosheng - The net proceeds from the subscription, approximately **HKD8.9 million**, were fully used to pay the consideration for the acquisition of a **70%** equity interest in Ya'an Baosheng[62](index=62&type=chunk) [Other Information](index=24&type=section&id=Other%20Information) This section covers additional corporate governance and shareholder-related information, including dividend policy, share transactions, and compliance with codes [Dividends](index=24&type=section&id=Dividends) The Board of Directors decided not to declare any dividends for the nine months ended September 30, 2021 - The directors resolved not to declare any dividends for the nine months ended September 30, 2021[64](index=64&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=24&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20the%20Company%27s%20Listed%20Securities) Neither the company nor its subsidiaries purchased, sold, or redeemed any shares during the nine months ended September 30, 2021, and up to the date of this report - Neither the company nor any of its subsidiaries purchased, sold, or redeemed any shares during the nine months ended September 30, 2021, and up to the date of this report[65](index=65&type=chunk) [Compliance with Corporate Governance Code](index=24&type=section&id=Compliance%20with%20Corporate%20Governance%20Code) The company has complied with the Corporate Governance Code provisions in Appendix 15 of the GEM Listing Rules, except for the combined roles of Chairman and Chief Executive Officer, which the Board believes is in the group's best interest - The company has complied with the provisions of the Corporate Governance Code, except for code provision A.2.1[66](index=66&type=chunk) - Mr. Dang Fei serves as both Chairman and Chief Executive Officer, an arrangement the Board believes maximizes the group's interests, ensuring effective management and business development[66](index=66&type=chunk) [Code of Conduct for Securities Transactions by Directors](index=25&type=section&id=Code%20of%20Conduct%20for%20Securities%20Transactions%20by%20Directors) The company has adopted the required standards set out in the GEM Listing Rules as the code of conduct for directors' securities transactions and confirms full compliance by all directors - The company has adopted the required standards set out in Rules 5.48 to 5.67 of the GEM Listing Rules as the code of conduct for directors' securities transactions in the company's shares[68](index=68&type=chunk) - All directors confirmed full compliance with the required standards of dealing as set out in the standard code for the nine months ended September 30, 2021, and up to the date of this report[68](index=68&type=chunk) [Compliance Adviser's Interests](index=25&type=section&id=Compliance%20Adviser%27s%20Interests) As of the report date, other than the compliance adviser agreement and financial adviser agreement, neither the compliance adviser nor its associates held any other interests related to the group - As of the date of this report, save for the compliance adviser agreement and financial adviser agreement, neither the compliance adviser nor its directors, employees, or close associates held any other interests in relation to the group that are required to be notified to the group under Rule 6A.32 of the GEM Listing Rules[69](index=69&type=chunk) [Directors' and Chief Executive's Interests and Short Positions in Shares, Underlying Shares and Debentures of the Company or its Associated Corporations](index=26&type=section&id=Directors%27%20and%20Chief%20Executive%27s%20Interests%20and%20Short%20Positions%20in%20Shares%2C%20Underlying%20Shares%20and%20Debentures%20of%20the%20Company%20or%20its%20Associated%20Corporations) This section discloses the long positions of directors and the chief executive in the company's shares as of September 30, 2021, with Mr. Dang Fei, Mr. Wang Xiaozhong, and Ms. Luo Qian holding significant interests through controlled corporations Directors' and Chief Executive's Long Positions in Shares (As of September 30, 2021) | Director/Chief Executive | Capacity/Nature of Interest | Number of Shares Interested | Approximate Percentage of Interest | | :--- | :--- | :--- | :--- | | Mr. Dang Fei | Interest in controlled corporation (Red Fly) | 351,280,000 | 43.91% | | Mr. Dang Fei | Interest held jointly with another person | 351,280,000 | 43.91% | | Mr. Wang Xiaozhong | Interest in controlled corporation (Xseven Investment) | 99,760,000 | 12.47% | | Ms. Luo Qian | Interest in controlled corporation (Lockxy Investment) | 6,350,000 | 0.79% | | Ms. Luo Qian | Beneficial owner | 2,160,000 | 0.27% | - Mr. Dang Fei and Mr. Dang Jun are parties acting in concert, jointly controlling **43.91%** of the company's entire issued share capital[72](index=72&type=chunk) [Substantial Shareholders' and Other Persons' Interests and Short Positions in Shares and Underlying Shares](index=27&type=section&id=Substantial%20Shareholders%27%20and%20Other%20Persons%27%20Interests%20and%20Short%20Positions%20in%20Shares%20and%20Underlying%20Shares) This section discloses the long positions of substantial shareholders and other persons in the company's shares as of September 30, 2021, including Red Fly, Mr. Dang Jun, Ms. Li Li, Xseven Investment, and Ms. Gao Hong Substantial Shareholders' and Other Persons' Long Positions in Shares (As of September 30, 2021) | Name of Shareholder | Capacity/Nature of Interest | Number of Shares Interested (Long Position) | Approximate Percentage of Interest | | :--- | :--- | :--- | :--- | | Red Fly | Beneficial owner | 351,280,000 | 43.91% | | Mr. Dang Jun | Interest held jointly with another person | 351,280,000 | 43.91% | | Ms. Li Li | Interest of spouse | 351,280,000 | 43.91% | | Xseven Investment | Beneficial owner | 99,760,000 | 12.47% | | Ms. Gao Hong | Interest of spouse | 99,760,000 | 12.47% | - Mr. Dang Jun and Mr. Dang Fei are parties acting in concert; Ms. Li Li is the spouse of Mr. Dang Jun, and Ms. Gao Hong is the spouse of Mr. Wang Xiaozhong, and are deemed to be interested in the relevant shares under the Securities and Futures Ordinance[75](index=75&type=chunk)[81](index=81&type=chunk) [Competing Interests](index=28&type=section&id=Competing%20Interests) For the nine months ended September 30, 2021, the directors confirmed that no controlling shareholders, directors, or their close associates held any interests competing with the group's business - For the nine months ended September 30, 2021, the directors confirmed that no controlling shareholders, directors, or their respective close associates held any interests in any business that directly or indirectly competes or may compete with the group's business[78](index=78&type=chunk) [Share Option Scheme](index=28&type=section&id=Share%20Option%20Scheme) The company adopted a share option scheme on June 10, 2020, but as of September 30, 2021, no share options were granted, exercised, cancelled, or lapsed - The company conditionally adopted a share option scheme on **June 10, 2020**[79](index=79&type=chunk) - As of September 30, 2021, no share options were granted, exercised, cancelled, or lapsed under the share option scheme[79](index=79&type=chunk) [Events After Reporting Period](index=28&type=section&id=Events%20After%20Reporting%20Period) Except for the investment agreement entered into on October 27, 2021, no other significant events occurred after the reporting period up to the date of this report - Save for the investment agreement dated **October 27, 2021**, no other significant events requiring disclosure occurred after September 30, 2021, up to the date of this report[80](index=80&type=chunk) [Audit Committee and Third Quarter Results](index=29&type=section&id=Audit%20Committee%20and%20Third%20Quarter%20Results) The Audit Committee has reviewed the group's unaudited condensed consolidated financial statements for the nine months ended September 30, 2021, and deemed them compliant with applicable accounting standards and disclosure requirements - The Audit Committee comprises three independent non-executive directors, with Mr. Chen Aifa serving as Chairman[82](index=82&type=chunk) - The Audit Committee has reviewed the group's unaudited condensed consolidated financial statements for the nine months ended September 30, 2021, and considers them to be prepared in compliance with applicable accounting standards, the GEM Listing Rules, and to have made adequate disclosures[82](index=82&type=chunk)

[Company Information](index=4&type=section&id=Company%20Information) [Board of Directors and Corporate Structure](index=4&type=section&id=Board%20of%20Directors%20and%20Corporate%20Structure) The company's Board of Directors comprises executive, non-executive, and independent non-executive directors, with audit, remuneration, and nomination committees ensuring robust corporate governance - Board members include **Mr. Dang Fei (Chairman and CEO)**, **Mr. Wang Xiaozhong**, **Ms. Luo Qian**, **Mr. Luo Qiang** as executive directors, **Mr. Wang Haichen** as a non-executive director, and **Dr. Zuo Xinzhang**, **Mr. Chen Aifa**, **Ms. Hu Xiaomin** as independent non-executive directors[7](index=7&type=chunk) - The company has an Audit Committee (Chairman: **Mr. Chen Aifa**), Remuneration Committee (Chairman: **Ms. Hu Xiaomin**), and Nomination Committee (Chairman: **Mr. Dang Fei**)[7](index=7&type=chunk) [Key Contact and Registration Information](index=4&type=section&id=Key%20Contact%20and%20Registration%20Information) The company is registered in the Cayman Islands, with primary operations in Sichuan Province, China, and a principal place of business in Hong Kong, stock code 8623 - The company's registered office is in the Cayman Islands, with its principal place of business in China in Guangyuan City, Sichuan Province, and in Hong Kong in Tsim Sha Tsui, Kowloon[7](index=7&type=chunk)[8](index=8&type=chunk) - The company's stock code is **8623**, and its official website is www.saftower.cn[8](index=8&type=chunk) [Unaudited Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=6&type=section&id=Unaudited%20Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) [Profit or Loss Overview](index=6&type=section&id=Profit%20or%20Loss%20Overview) For the six months ended June 30, 2021, the Group turned from profit to loss, recording a net loss of **RMB 5.392 million**, primarily due to a slight decrease in revenue, increased cost of sales leading to reduced gross profit, and higher administrative expenses and expected credit loss provisions Key Profit or Loss Data for the Six Months Ended June 30, 2021 | Indicator | 2021 (RMB '000) | 2020 (RMB '000) | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | 204,537 | 208,550 | -1.92% | | Cost of sales | (196,152) | (193,665) | +1.28% | | Gross profit | 8,385 | 14,885 | -43.79% | | Other income | 3,036 | 1,435 | +111.57% | | (Loss)/Profit before income tax expense | (6,283) | 1,582 | Turned from profit to loss | | Income tax credit/(expense) | 891 | (266) | Turned from expense to credit | | Total (loss)/profit for the period | (5,392) | 1,316 | Turned from profit to loss | | (Loss)/profit for the period attributable to owners of the company | (5,240) | 1,144 | Turned from profit to loss | - Basic and diluted loss per share was **RMB 0.65 cents**, compared to earnings per share of **RMB 0.19 cents** in the prior period[11](index=11&type=chunk) [Unaudited Condensed Consolidated Statement of Financial Position](index=8&type=section&id=Unaudited%20Condensed%20Consolidated%20Statement%20of%20Financial%20Position) [Asset and Liability Structure](index=8&type=section&id=Asset%20and%20Liability%20Structure) As of June 30, 2021, the Group's total assets grew to **RMB 421.533 million**, driven by increases in non-current and current assets; total liabilities significantly increased, reducing net current assets, but net assets still grew Key Financial Position Data as of June 30, 2021 | Indicator | June 30, 2021 (RMB '000) | December 31, 2020 (RMB '000) | Change | | :--- | :--- | :--- | :--- | | Total assets | 421,533 | 349,074 | +20.76% | | Non-current assets | 147,493 | 134,318 | +9.81% | | Current assets | 274,040 | 214,756 | +27.60% | | Total liabilities | 240,431 | 172,930 | +39.03% | | Current liabilities | 235,302 | 165,536 | +42.16% | | Net current assets | 38,738 | 49,220 | -21.30% | | Net assets | 181,102 | 176,144 | +2.82% | - The significant increase in current liabilities was primarily due to contract liabilities rising sharply from **RMB 3.021 million** to **RMB 46.881 million**, and amounts due to shareholders increasing from **RMB 0.160 million** to **RMB 11.872 million**[13](index=13&type=chunk) [Unaudited Condensed Consolidated Statement of Changes in Equity](index=10&type=section&id=Unaudited%20Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity) [Equity Movement Analysis](index=10&type=section&id=Equity%20Movement%20Analysis) For the six months ended June 30, 2021, total equity attributable to owners increased to **RMB 152.912 million**, primarily driven by proceeds from new share issuance, despite a loss and reduced exchange reserve during the period Equity Movements as of June 30, 2021 | Equity Item | January 1, 2021 (RMB '000) | June 30, 2021 (RMB '000) | Change | | :--- | :--- | :--- | :--- | | Share capital | 7,226 | 14,692 | +7,466 | | Share premium | 30,642 | 30,642 | 0 | | Capital reserve | 69,696 | 69,696 | 0 | | Exchange reserve | (535) | (834) | -299 | | Retained profits | 36,232 | 30,990 | -5,242 | | Statutory reserve | 7,724 | 7,726 | +2 | | Subtotal equity attributable to owners of the company | 150,985 | 152,912 | +1,927 | | Non-controlling interests | 25,159 | 28,190 | +3,031 | | Total equity | 176,144 | 181,102 | +4,958 | - New shares were issued via subscription during the period, with net proceeds of approximately **RMB 7.466 million**, increasing share capital[16](index=16&type=chunk)[17](index=17&type=chunk) - Acquisition of a subsidiary resulted in an increase in non-controlling interests of **RMB 3.183 million**[16](index=16&type=chunk) [Unaudited Condensed Consolidated Statement of Cash Flows](index=11&type=section&id=Unaudited%20Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) [Cash Flow Analysis](index=11&type=section&id=Cash%20Flow%20Analysis) For the six months ended June 30, 2021, the Group's cash and cash equivalents decreased by **RMB 2.001 million**, primarily due to increased cash outflows from operating and investing activities, despite significant cash inflows from financing activities Key Cash Flow Data for the Six Months Ended June 30, 2021 | Cash Flow Activity | 2021 (RMB '000) | 2020 (RMB '000) | Change | | :--- | :--- | :--- | :--- | | Net cash (used in)/generated from operating activities | (15,026) | 348 | Turned from inflow to outflow | | Net cash used in investing activities | (10,980) | (3,324) | Increased outflow | | Net cash generated from financing activities | 24,005 | 8,337 | Increased inflow | | Net (decrease)/increase in cash and cash equivalents | (2,001) | 5,361 | Turned from increase to decrease | | Cash and cash equivalents at end of period | 9,773 | 8,087 | +1,686 | | Cash and cash equivalents at beginning of period | 12,073 | 2,726 | +9,347 | - Cash outflow from operating activities was primarily due to an increase in cash used in operations to **RMB 14.482 million**[19](index=19&type=chunk) - Cash inflow from financing activities significantly increased, mainly from proceeds from borrowings of **RMB 52.3 million** and proceeds from share issuance of **RMB 7.466 million**[19](index=19&type=chunk) [Notes to the Unaudited Condensed Consolidated Financial Statements](index=12&type=section&id=Notes%20to%20the%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) [1. General Information](index=12&type=section&id=1.%20General%20Information) China Shutower International Holdings Group Limited, incorporated in the Cayman Islands, primarily engages in the production and sale of wires and cables and aluminum products in China, and was listed on GEM of the Stock Exchange on July 10, 2020 - The company's principal activities are the production and sale of **wires and cables** and the sale of **aluminum products**[20](index=20&type=chunk) - The company's shares were listed on GEM of the Stock Exchange on **July 10, 2020**[21](index=21&type=chunk) [2. Basis of Preparation](index=12&type=section&id=2.%20Basis%20of%20Preparation) The interim financial statements are prepared in accordance with HKAS 34 and GEM Listing Rules, using the historical cost basis and presented in RMB, with accounting policies consistent with the annual report, and new standards having no material impact - The financial statements are prepared in accordance with **HKAS 34** and the applicable disclosure requirements of the **GEM Listing Rules**[22](index=22&type=chunk) - Accounting policies are consistent with those used in the preparation of the accountant's report, and new and revised HKFRSs have no material impact on the interim financial statements[26](index=26&type=chunk) [3. Changes in Hong Kong Financial Reporting Standards](index=13&type=section&id=3.%20Changes%20in%20Hong%20Kong%20Financial%20Reporting%20Standards) The Group first applied new or revised HKFRSs issued by the HKICPA during this accounting period, but these changes had no material impact on the Group's accounting policies - The Group has first applied the amendments to **HKFRS 7, HKFRS 9 and HKAS 39: Interest Rate Benchmark Reform — Phase 2**[27](index=27&type=chunk) - The new or revised HKFRSs will not have a **material impact** on the Group's accounting policies[27](index=27&type=chunk) [4. Application of Judgements and Estimates](index=14&type=section&id=4.%20Application%20of%20Judgements%20and%20Estimates) In preparing the interim financial statements, the significant judgments made by management in applying accounting policies and the key sources of estimation uncertainty are the same as those in the annual accountant's report - The significant judgments made by management in applying accounting policies and the key sources of estimation uncertainty are the same as those in the accountant's report[29](index=29&type=chunk) [5. Financial Risk Management](index=14&type=section&id=5.%20Financial%20Risk%20Management) The Group's business involves credit risk, market risk (including foreign currency and interest rate risk), and liquidity risk, but it has historically not used derivatives for hedging or trading, and risk management policies have not changed since December 31, 2020 - The Group is exposed to **credit risk**, **market risk** (foreign currency risk and interest rate risk), and **liquidity risk**[30](index=30&type=chunk) - The Group has historically not used **derivative instruments** for hedging or trading purposes[30](index=30&type=chunk) - Risk management policies have remained **unchanged** since December 31, 2020[31](index=31&type=chunk) [6. Segment Reporting](index=14&type=section&id=6.%20Segment%20Reporting) The Group primarily engages in the production and sale of wires and cables and aluminum products in China, with only one reportable operating segment, thus no operating segment information is presented; all revenue and non-current assets are from China - The Group has only one reportable operating segment, which is the production and sale of **wires and cables** and the sale of **aluminum products**[32](index=32&type=chunk) - All of the Group's revenue and non-current assets are derived from **China**[33](index=33&type=chunk) Revenue Contribution by Major Customers (for the Six Months Ended June 30) | Customer | 2021 (RMB '000) | 2020 (RMB '000) | | :--- | :--- | :--- | | Customer B | 23,053 | Not applicable(1) | | Customer C | 28,290 | Not applicable(1) | (1) The corresponding revenue accounted for not more than 10% of the Group's total revenue [7. Revenue](index=15&type=section&id=7.%20Revenue) The Group's revenue primarily derives from the production and sale of wires and cables and aluminum products, with total revenue of **RMB 204.537 million** for the six months ended June 30, 2021 Revenue Sources (for the Six Months Ended June 30) | Product Type | 2021 (RMB '000) | 2020 (RMB '000) | | :--- | :--- | :--- | | Production and sale of wires and cables | 204,376 | 208,550 | | Sale of aluminum products | 161 | — | | **Total Revenue** | **204,537** | **208,550** | [8. Other Income](index=16&type=section&id=8.%20Other%20Income) For the six months ended June 30, 2021, the Group's other income significantly increased to **RMB 3.036 million**, primarily due to higher government grants and subsidies Other Income Details (for the Six Months Ended June 30) | Item | 2021 (RMB '000) | 2020 (RMB '000) | | :--- | :--- | :--- | | Interest income | 19 | 4 | | Government grants and subsidies | 2,347 | 1,190 | | Sale of scrap metal and consumables | 134 | 130 | | Rental income | 249 | — | | Others | 287 | 111 | | **Total** | **3,036** | **1,435** | - Government grants and subsidies increased by approximately **RMB 1.2 million**, mainly to support the Group's operations in China, purchase of plant and machinery, and employment of disabled persons[40](index=40&type=chunk) [9. Finance Costs](index=17&type=section&id=9.%20Finance%20Costs) For the six months ended June 30, 2021, the Group's finance costs slightly increased to **RMB 4.649 million**, primarily due to higher interest expenses on bank and other borrowings Finance Costs Details (for the Six Months Ended June 30) | Item | 2021 (RMB '000) | 2020 (RMB '000) | | :--- | :--- | :--- | | Interest expense on bank and other borrowings | 4,586 | 4,449 | | Interest expense on lease liabilities | 26 | 7 | | Others | 205 | — | | Finance costs capitalized in construction in progress | (168) | — | | **Finance costs recognized in profit or loss** | **4,649** | **4,456** | [10. (Loss)/Profit Before Income Tax Expense](index=18&type=section&id=10.%20(Loss)%2FProfit%20Before%20Income%20Tax%20Expense) For the six months ended June 30, 2021, the Group recorded a loss before income tax expense of **RMB 6.283 million**, primarily impacted by expenses such as inventory costs, depreciation, expected credit loss provisions, and employee costs Key Expense Items (for the Six Months Ended June 30) | Item | 2021 (RMB '000) | 2020 (RMB '000) | | :--- | :--- | :--- | | Cost of inventories recognized as expense | 196,152 | 193,665 | | Depreciation of property, plant and equipment | 3,816 | 3,372 | | Expected credit loss provision for trade receivables | 1,621 | 134 | | Employee costs (including directors' emoluments) | 5,061 | 4,662 | | Contributions to defined contribution retirement plans | 964 | 454 | | **Total employee costs** | **6,025** | **5,116** | [11. Income Tax (Credit)/Expense](index=19&type=section&id=11.%20Income%20Tax%20(Credit)%2FExpense) For the six months ended June 30, 2021, the Group recorded an income tax credit of **RMB 0.891 million**, mainly due to taxable losses recognized during the period; some PRC subsidiaries enjoy preferential corporate income tax rates of 15% or 10% Income Tax (Credit)/Expense (for the Six Months Ended June 30) | Item | 2021 (RMB '000) | 2020 (RMB '000) | | :--- | :--- | :--- | | Income tax expense | 60 | 506 | | Deferred tax (credit)/expense | (951) | (240) | | **Income tax (credit)/expense** | **(891)** | **266** | - Sichuan Shutower Industrial Co., Ltd., as a high-tech enterprise, is subject to a preferential corporate income tax rate of **15%**[49](index=49&type=chunk) - Guangyuan Tongchuang New Material Co., Ltd. is entitled to a reduced income tax rate of **10%** under the Western Development Tax Incentive Policy[51](index=51&type=chunk) [12. Dividends](index=20&type=section&id=12.%20Dividends) The Directors do not recommend the payment of an interim dividend for the six months ended June 30, 2021 - The Directors do not recommend the payment of an interim dividend for the six months ended **June 30, 2021**[52](index=52&type=chunk) [13. (Loss)/Earnings Per Share](index=20&type=section&id=13.%20(Loss)%2FEarnings%20Per%20Share) For the six months ended June 30, 2021, basic and diluted loss per share attributable to owners was **RMB 0.65 cents**, compared to earnings in the prior period, with no potential dilutive ordinary shares (Loss)/Earnings Per Share (for the Six Months Ended June 30) | Indicator | 2021 (RMB cents) | 2020 (RMB cents) | | :--- | :--- | :--- | | Basic and diluted (loss)/earnings per share | (0.65) | 0.19 | - (Loss)/earnings per share is calculated based on the loss attributable to owners of **RMB 5.24 million** and the weighted average of **809,282,000** ordinary shares outstanding[11](index=11&type=chunk)[53](index=53&type=chunk) [14. Property, Plant and Equipment](index=20&type=section&id=14.%20Property%2C%20Plant%20and%20Equipment) For the six months ended June 30, 2021, the Group's cost of acquiring machinery and office equipment was **RMB 6.274 million**, a significant increase from the prior period - For the six months ended June 30, 2021, the Group's cost of acquiring machinery and office equipment was **RMB 6,274,000**, compared to **RMB 101,000** in the prior period[54](index=54&type=chunk) [15. Trade and Other Receivables](index=21&type=section&id=15.%20Trade%20and%20Other%20Receivables) As of June 30, 2021, the Group's total trade receivables and bills receivable increased to **RMB 193.846 million**, with significant increases in prepayments, deposits, and other receivables; some trade receivables are pledged as collateral for borrowings Trade and Other Receivables (as of June 30) | Item | June 30, 2021 (RMB '000) | December 31, 2020 (RMB '000) | | :--- | :--- | :--- | | Trade receivables and bills receivable | 193,846 | 161,483 | | Prepayments, deposits and other receivables | 43,687 | 24,456 | | Non-current prepayments and deposits | 6,620 | 1,185 | | **Total** | **244,153** | **187,124** | - Expected credit loss provision for trade receivables increased from **RMB 2.463 million** to **RMB 4.084 million**[55](index=55&type=chunk) - Approximately **RMB 20.965 million** of trade receivables were pledged as collateral for other borrowings[56](index=56&type=chunk) [16. Trade and Other Payables](index=23&type=section&id=16.%20Trade%20and%20Other%20Payables) As of June 30, 2021, the Group's trade payables slightly decreased, but total accrued expenses and other payables increased, mainly due to the recognition of consideration payable Trade and Other Payables (as of June 30) | Item | June 30, 2021 (RMB '000) | December 31, 2020 (RMB '000) | | :--- | :--- | :--- | | Trade payables | 52,156 | 56,674 | | Accrued expenses and other payables | 14,904 | 6,989 | | **Total** | **67,060** | **63,663** | - Consideration payable (Note 20) was **RMB 9.8 million**, a major new payable in the current period[58](index=58&type=chunk) - The credit period for trade payables generally ranges from **0 to 120 days**[58](index=58&type=chunk) [17. Borrowings](index=24&type=section&id=17.%20Borrowings) As of June 30, 2021, the Group's total current borrowings increased to **RMB 107.515 million**, primarily comprising secured and guaranteed bank and other borrowings; various assets and related party properties are pledged or guaranteed Borrowings Details (as of June 30) | Item | June 30, 2021 (RMB '000) | December 31, 2020 (RMB '000) | | :--- | :--- | :--- | | Secured and guaranteed interest-bearing bank borrowings repayable within one year | 74,868 | 80,097 | | Secured and guaranteed interest-bearing other borrowings repayable within one year | 30,100 | 14,100 | | Sale and leaseback liabilities (current) | 2,547 | 3,101 | | **Total current borrowings** | **107,515** | **97,298** | - Borrowings are secured by **buildings**, **land use rights**, **plant and machinery**, **trade receivables**, **shareholders' inventories**, and properties of the company's directors and their close family members[62](index=62&type=chunk) - The Group's bank and other borrowings, totaling **RMB 104.968 million**, are repayable within one year or on demand[63](index=63&type=chunk) [18. Share Capital](index=27&type=section&id=18.%20Share%20Capital) As of June 30, 2021, the company's issued and fully paid share capital increased to **RMB 14.692 million**, primarily due to the allotment and issuance of **120,000,000** subscription shares to an independent third party Share Capital Movements (as of June 30) | Item | June 30, 2021 (Number of Shares) | June 30, 2021 (RMB '000) | | :--- | :--- | :--- | | Authorized share capital | 4,000,000,000 | 35,994 | | Issued and fully paid share capital | 920,000,000 | 14,692 | | **Of which:** | | | | As at December 31, 2020 | 800,000,000 | 7,226 | | New shares issued by way of subscription | 120,000,000 | 7,466 | - On **June 17, 2021**, **120,000,000** subscription shares were allotted and issued at a subscription price of **HKD 0.075** per share, with gross proceeds of approximately **HKD 9.0 million**[67](index=67&type=chunk) [19. Related Party Transactions](index=29&type=section&id=19.%20Related%20Party%20Transactions) Remuneration for key management personnel increased, and properties of the company's directors and their close family members, and key management personnel and their close family members, are pledged as collateral for bank and other borrowings Key Management Personnel Remuneration (for the Six Months Ended June 30) | Item | 2021 (RMB '000) | 2020 (RMB '000) | | :--- | :--- | :--- | | Salaries, allowances and other benefits | 533 | 315 | | Contributions to defined contribution retirement plans | 72 | 12 | | **Total** | **605** | **327** | - Properties of the company's directors and their close family members, and key management personnel and their close family members, have been pledged as collateral for **bank and other borrowings**[70](index=70&type=chunk)[71](index=71&type=chunk) [20. Acquisition of a Subsidiary](index=30&type=section&id=20.%20Acquisition%20of%20a%20Subsidiary) In May 2020, the Group acquired a **70% equity interest** in Ya'an Baosheng Metal Material Co., Ltd. for **RMB 9.8 million**, whose principal business is manufacturing and selling aluminum products; this acquisition generated **RMB 2.372 million** in goodwill - The Group acquired a **70% equity interest** in Ya'an Baosheng Metal Material Co., Ltd. for **RMB 9.8 million**, whose principal business is the manufacturing and sale of **aluminum products**[72](index=72&type=chunk) - The acquisition generated **RMB 2.372 million** in goodwill, which management believes will allow the Group to expand upstream, reduce production costs, and increase profit margins[75](index=75&type=chunk) - The acquisition was completed in **May 2021** and did not have a material impact on the revenue or profit for this interim period[76](index=76&type=chunk) [Management Discussion and Analysis](index=32&type=section&id=Management%20Discussion%20and%20Analysis) [Business Review and Outlook](index=32&type=section&id=Business%20Review%20and%20Outlook) The Group, a regional wire and cable manufacturer and supplier primarily operating in Sichuan Province, China, offers finished wires and cables, semi-finished wires, and aluminum products; it recorded a loss this period due to COVID-19, but successfully listed on GEM in July 2020 - The Group is primarily engaged in the manufacturing and sale of **wires and cables** and the sale of **aluminum products**[77](index=77&type=chunk) - For the six months ended June 30, 2021, the Group recorded a loss of approximately **RMB 5.4 million**, compared to a net profit of approximately **RMB 1.3 million** in the prior period, primarily impacted by the **COVID-19 pandemic**[77](index=77&type=chunk) - The company's shares were successfully listed on **GEM** on **July 10, 2020**[78](index=78&type=chunk) [Future Prospects](index=33&type=section&id=Future%20Prospects) The Group acquired a **70% equity interest** in Ya'an Baosheng using proceeds from new share allotment, aiming to expand upstream, reduce costs, and enhance profit margins; the company will capitalize on opportunities from Sichuan's Western Development Strategy and Guangyuan's aluminum industry growth, actively seeking geographical expansion to mitigate regional concentration risk, while remaining cautious about financial performance uncertainties due to the pandemic - The Group successfully allotted and issued **120,000,000 shares**, with net proceeds of approximately **HKD 8.9 million** used to acquire a **70% equity interest** in Ya'an Baosheng, aiming to expand upstream operations, reduce production costs, and increase profit margins[80](index=80&type=chunk) - Sichuan Province benefits from the **Western Development Strategy**, driving strong demand for wire and cable products, and the Guangyuan Municipal Government is actively developing the aluminum industry, which the company will leverage[80](index=80&type=chunk) - The Group is seeking business opportunities to expand its presence in Southwest China and reduce regional concentration, but anticipates potential impacts on second-half financial performance due to **pandemic uncertainties**[80](index=80&type=chunk)[82](index=82&type=chunk) [Financial Review](index=34&type=section&id=Financial%20Review) The Group's financial performance for the six months ended June 30, 2021, showed a slight decrease in revenue, with gross profit and margin significantly reduced due to rising raw material costs; increased administrative expenses and expected credit loss provisions led to a loss for the period [Revenue](index=34&type=section&id=Revenue) Revenue for the period was approximately **RMB 204.5 million**, a **1.9% decrease** from the prior period, primarily due to reduced aluminum product sales offsetting increased copper product sales Revenue and Gross Profit by Product Type (for the Six Months Ended June 30) | Product Type | 2021 Revenue (RMB '000) | 2020 Revenue (RMB '000) | 2021 Gross Profit (RMB '000) | 2020 Gross Profit (RMB '000) | 2021 Gross Margin | 2020 Gross Margin | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Classic finished wires and cables (Copper) | 17,943 | 16,806 | 1,038 | 2,357 | 5.8% | 14.0% | | Classic finished wires and cables (Aluminum) | 46,131 | 51,603 | 3,118 | 3,119 | 6.8% | 6.0% | | Special finished wires and cables (Copper) | — | 4,550 | — | 1,309 | — | 28.8% | | Special finished wires and cables (Aluminum) | 23,053 | 21,524 | 3,039 | 4,834 | 13.2% | 22.5% | | Semi-finished wires (Bare copper wire) | 75,278 | 44,243 | 1,085 | 651 | 1.4% | 1.5% | | Semi-finished wires (Aluminum rod) | 41,970 | 69,252 | 87 | 2,523 | 0.2% | 3.6% | | Others | 162 | 572 | 18 | 92 | 11.1% | 16.1% | | **Total** | **204,537** | **208,550** | **8,385** | **14,885** | **4.1%** | **7.1%** | - Revenue slightly decreased by approximately **1.9%**, with copper product sales increasing by approximately **RMB 27.6 million** and aluminum product sales decreasing by approximately **RMB 31.2 million**[85](index=85&type=chunk) [Cost of Sales](index=35&type=section&id=Cost%20of%20Sales) Cost of sales increased by **RMB 2.5 million** to **RMB 196.2 million**, a **1.28% increase**, primarily due to continuous inflation in average market prices of raw materials like copper and aluminum - Cost of sales increased from **RMB 193.7 million** to **RMB 196.2 million**, an increase of **1.28%**[86](index=86&type=chunk) - The increase in cost of sales was due to the continuous inflation in the average market prices of **copper and aluminum** for the six months ended June 30, 2021[86](index=86&type=chunk) [Gross Profit and Gross Margin](index=35&type=section&id=Gross%20Profit%20and%20Gross%20Margin) Gross profit decreased from **RMB 14.9 million** to **RMB 8.4 million**, and gross margin fell from **7.1%** to **4.1%**, primarily due to increased unit costs of raw materials, especially copper and aluminum - Gross profit decreased from **RMB 14.9 million** to **RMB 8.4 million**, and gross margin decreased from **7.1%** to **4.1%**[87](index=87&type=chunk) - The decrease in gross margin was primarily due to increased unit costs of raw materials, especially **copper and aluminum**[87](index=87&type=chunk) [Other Income and Gains](index=35&type=section&id=Other%20Income%20and%20Gains) Other income and gains increased from **RMB 1.4 million** to **RMB 3.0 million**, primarily due to an increase in government grants of approximately **RMB 1.2 million** - Other income and gains increased from **RMB 1.4 million** to **RMB 3.0 million**[88](index=88&type=chunk) - This increase was mainly due to an increase in government grants of approximately **RMB 1.2 million** related to supporting the Group's operations in China, purchasing plant and machinery, and employing disabled persons[88](index=88&type=chunk) [Selling and Distribution Expenses](index=36&type=section&id=Selling%20and%20Distribution%20Expenses) Selling and distribution expenses decreased by **RMB 0.9 million** or **37.4%**, primarily due to reduced travel by the sales team amidst the pandemic - Selling and distribution expenses decreased by **RMB 0.9 million** or **37.4%**[90](index=90&type=chunk) - The decrease was due to reduced travel by the sales team amidst the **pandemic**[90](index=90&type=chunk) [Administrative and Other Expenses](index=36&type=section&id=Administrative%20and%20Other%20Expenses) Administrative and other expenses increased by **RMB 4.6 million** or **66.1%** to **RMB 11.5 million**, primarily due to increased post-listing professional fees, expected credit loss provisions for trade receivables, and staff costs - Administrative and other expenses increased from **RMB 6.9 million** to **RMB 11.5 million**, an increase of **66.1%**[91](index=91&type=chunk) - Reasons for the increase include higher post-listing professional fees, an increase in expected credit loss provision for trade receivables of approximately **RMB 1.5 million**, and an increase in staff costs of approximately **RMB 0.9 million**[91](index=91&type=chunk) [Finance Costs](index=36&type=section&id=Finance%20Costs) Finance costs slightly increased to approximately **RMB 4.6 million**, primarily due to an increase in the average borrowing amount during the period - Finance costs increased from approximately **RMB 4.5 million** to approximately **RMB 4.6 million**[92](index=92&type=chunk) - This increase was mainly due to an increase in the **average borrowing amount** during the six months ended June 30, 2021[92](index=92&type=chunk) [Income Tax Expense](index=36&type=section&id=Income%20Tax%20Expense) The Group recognized a tax credit of approximately **RMB 0.9 million** during the period, primarily due to recording a taxable loss - The Group recorded a tax credit of approximately **RMB 0.9 million** for the six months ended June 30, 2021, due to the recognition of a **taxable loss** during the period[93](index=93&type=chunk) [(Loss)/Profit Attributable to Owners for the Period](index=37&type=section&id=(Loss)%2FProfit%20Attributable%20to%20Owners%20for%20the%20Period) The Group recorded a loss attributable to owners of approximately **RMB 5.2 million**, primarily due to reduced gross profit from increased raw material costs, higher expected credit loss provisions for trade receivables, and increased staff costs - The Group recorded a loss attributable to owners of approximately **RMB 5.2 million**, compared to a profit of approximately **RMB 1.1 million** in the prior period[95](index=95&type=chunk) - The increase in net loss was primarily due to a decrease in gross profit of approximately **RMB 6.5 million** from increased raw material costs, an increase in expected credit loss provision for trade receivables of approximately **RMB 1.5 million**, and an increase in staff costs of approximately **RMB 0.9 million**[95](index=95&type=chunk) [Liquidity, Financial Resources and Capital Structure](index=37&type=section&id=Liquidity%2C%20Financial%20Resources%20and%20Capital%20Structure) The Group primarily funds its operations through cash generated from operations, borrowings, and advances from shareholders; as of June 30, 2021, cash and cash equivalents were **RMB 9.8 million**, and the gearing ratio was **67.1%**, an improvement from year-end - The Group primarily funds its operations through **cash generated from operations**, **borrowings**, and **advances from shareholders**[96](index=96&type=chunk) - As of June 30, 2021, the Group's cash and cash equivalents were approximately **RMB 9.8 million** (December 31, 2020: **RMB 12.1 million**)[96](index=96&type=chunk) - The Group's gearing ratio as of June 30, 2021, was **67.1%** (December 31, 2020: **79.9%**)[96](index=96&type=chunk) [Subscription of Shares Under General Mandate](index=38&type=section&id=Subscription%20of%20Shares%20Under%20General%20Mandate) On June 17, 2021, the company completed the allotment and issuance of **120,000,000** subscription shares to an independent third party, with net proceeds of approximately **HKD 8.9 million**, primarily used to acquire a **70% equity interest** in Ya'an Baosheng - The company allotted and issued **120,000,000** subscription shares to **Mr. Fu Chuanrong** at a subscription price of **HKD 0.075** per share[98](index=98&type=chunk) - The gross and net proceeds from the subscription were **HKD 9.0 million** and approximately **HKD 8.9 million**, respectively[99](index=99&type=chunk) - The purpose of issuing the subscription shares was to fund the acquisition of a **70% equity interest** in Ya'an Baosheng[99](index=99&type=chunk) [Pledge of the Group's Assets](index=39&type=section&id=Pledge%20of%20the%20Group's%20Assets) As of June 30, 2021, the Group had pledged assets with a total net book value of approximately **RMB 85.447 million**, including buildings, land use rights, plant and machinery, and trade receivables, to secure bank and other borrowings Net Book Value of Pledged Assets (as of June 30) | Pledged Assets | June 30, 2021 (RMB '000) | December 31, 2020 (RMB '000) | | :--- | :--- | :--- | | Buildings | 48,334 | 48,650 | | Land use rights | 6,565 | 6,647 | | Plant and machinery | 9,583 | 3,418 | | Trade receivables | 20,965 | 20,965 | | **Total** | **85,447** | **79,680** | [Capital Commitments](index=39&type=section&id=Capital%20Commitments) As of June 30, 2021, the Group had no capital commitments - As of **June 30, 2021**, the Group had **no capital commitments**[102](index=102&type=chunk) [Contingent Liabilities](index=39&type=section&id=Contingent%20Liabilities) The Group had no significant contingent liabilities as of June 30, 2021 - The Group had **no significant contingent liabilities** as of **June 30, 2021**[103](index=103&type=chunk) [Principal Risks and Uncertainties](index=40&type=section&id=Principal%20Risks%20and%20Uncertainties) The Group faces several principal risks, including the impact of the pandemic on operations, raw material price fluctuations, customer demand dependency, changes in tax incentives, credit risk, and relatively low operating profit margins - The Group's business and operations may be materially affected by the **pandemic or public health events**[107](index=107&type=chunk) - The Group's operations may be materially affected by **fluctuations in the prices of principal raw materials**[107](index=107&type=chunk) - The Group's revenue is primarily derived from sales to customers without long-term contracts, and demand for products largely depends on **customer businesses** and the performance of their respective industries or markets[107](index=107&type=chunk) - The **preferential tax policies** and **government subsidies** currently enjoyed by the Group in China may be subject to adverse changes or termination[107](index=107&type=chunk) - The Group faces **credit risk** from customers and has relatively **low operating profit margins**[107](index=107&type=chunk) [Foreign Currency Risk](index=41&type=section&id=Foreign%20Currency%20Risk) The Group has no significant foreign currency risk, as most assets and liabilities are denominated in its functional currency, RMB, and no hedging instruments were used during the period - The Group has **no significant foreign currency risk**, as most recognized assets and liabilities are primarily denominated in its functional currency, **RMB**[108](index=108&type=chunk) - The Group did not use any **hedging instruments** to hedge other foreign currency transactions during the six months ended June 30, 2021[108](index=108&type=chunk) [Employees and Remuneration Policy](index=41&type=section&id=Employees%20and%20Remuneration%20Policy) As of June 30, 2021, the Group employed **254 full-time employees**, with total employee benefit expenses of approximately **RMB 6.0 million**; remuneration policy refers to market terms and individual performance - As of June 30, 2021, the Group employed a total of **254 full-time employees** (June 30, 2020: 243 employees)[109](index=109&type=chunk) - Total employee benefit expenses for the six months ended June 30, 2021, were approximately **RMB 6.0 million** (prior period 2020: approximately **RMB 5.1 million**)[109](index=109&type=chunk) - Remuneration is determined with reference to **market terms** and individual employees' **performance, qualifications, and experience**[109](index=109&type=chunk) [Material Investments Held, Material Acquisitions or Disposals of Subsidiaries and Associates, and Plans for Material Investments or Capital Assets](index=41&type=section&id=Material%20Investments%20Held%2C%20Material%20Acquisitions%20or%20Disposals%20of%20Subsidiaries%20and%20Associates%2C%20and%20Plans%20for%20Material%20Investments%20or%20Capital%20Assets) On May 27, 2021, the Group acquired a **70% interest** in Ya'an Baosheng, constituting a discloseable transaction; other than this, there were no other material investments, acquisitions or disposals of subsidiaries, associates, and joint ventures, nor any plans for material investments or capital assets during the period - The company's wholly-owned subsidiary, Shutower Enterprise Management (Guangyuan) Co., Ltd., acquired a **70% equity interest** in Ya'an Baosheng (a limited company incorporated in the PRC) for a consideration of approximately **RMB 9.8 million**[110](index=110&type=chunk) - This acquisition constituted a **discloseable transaction** under the GEM Listing Rules, and upon completion, Ya'an Baosheng became a non-wholly owned subsidiary of the company[110](index=110&type=chunk) - Save for the aforementioned acquisition, the Group held **no material investments**, made **no material acquisitions or disposals** of subsidiaries, associates, and joint ventures, and had **no plans for material investments or capital assets** as of the date of this report[112](index=112&type=chunk) [Use of Net Proceeds from Listing](index=42&type=section&id=Use%20of%20Net%20Proceeds%20from%20Listing) After deducting listing-related expenses, net proceeds from listing of approximately **HKD 20.6 million** (approximately **RMB 18.6 million**) were fully utilized as of June 30, 2021, in accordance with the proposed allocation outlined in the prospectus - Net proceeds from the listing were approximately **HKD 20.6 million** (equivalent to approximately **RMB 18.6 million**)[113](index=113&type=chunk) - The net proceeds were fully utilized as of **June 30, 2021**, in a manner consistent with the proposed allocation described in the section headed 'Future Plans and Use of Proceeds' in the prospectus[113](index=113&type=chunk) [Use of Proceeds from Subscription](index=42&type=section&id=Use%20of%20Proceeds%20from%20Subscription) Net proceeds from the subscription of approximately **HKD 8.9 million** were fully used to pay the consideration for acquiring a **70% equity interest** in Ya'an Baosheng - The gross and net proceeds from the subscription were **HKD 9.0 million** and approximately **HKD 8.9 million**, respectively[114](index=114&type=chunk) Use of Proceeds from Subscription (as of June 30) | Intended Use | Amount of Net Proceeds Allocated | Amount of Net Proceeds Used | Amount of Net Proceeds Unused | | :--- | :--- | :--- | :--- | | As consideration for the acquisition of 70% equity interest in Ya'an Baosheng | HKD 8.9 million | HKD 8.9 million | — | [Other Information](index=43&type=section&id=Other%20Information) [Interim Dividend](index=43&type=section&id=Interim%20Dividend) The Directors decided not to declare any interim dividend for the six months ended June 30, 2021 - The Directors decided **not to declare any interim dividend** for the six months ended **June 30, 2021**[118](index=118&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=43&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20the%20Company's%20Listed%20Securities) For the six months ended June 30, 2021, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities - For the six months ended June 30, 2021, neither the company nor any of its subsidiaries **purchased, sold, or redeemed** any of the company's listed securities[119](index=119&type=chunk) [Compliance with Corporate Governance Code](index=43&type=section&id=Compliance%20with%20Corporate%20Governance%20Code) The company has complied with the Corporate Governance Code in Appendix 15 of the GEM Listing Rules, with a deviation where the Chairman and CEO roles are held by the same person (**Mr. Dang Fei**), which the Board believes is in the Group's best interest - The company has complied with the provisions of the **Corporate Governance Code** from the six months ended June 30, 2021, up to the date of this report[120](index=120&type=chunk) - There is a deviation from code provision **A.2.1**, which states that the roles of chairman and chief executive should be separate, but **Mr. Dang Fei** holds both positions concurrently[120](index=120&type=chunk) - The Board believes that **Mr. Dang Fei** holding both positions maximizes the Group's interests, achieving effective management and business development[120](index=120&type=chunk) [Code of Conduct for Securities Transactions by Directors](index=44&type=section&id=Code%20of%20Conduct%20for%20Securities%20Transactions%20by%20Directors) The company has adopted the required standard of dealings set out in the GEM Listing Rules as the code of conduct for directors' securities transactions, with all directors fully complying during the period - The company has adopted the required standard of dealings set out in **Rules 5.48 to 5.67 of the GEM Listing Rules** as the code of conduct for directors' securities transactions[122](index=122&type=chunk) - All Directors have fully complied with the required standard of dealings set out in the Model Code for the six months ended June 30, 2021, and up to the date of this report[122](index=122&type=chunk) [Compliance Adviser's Interests](index=44&type=section&id=Compliance%20Adviser's%20Interests) The company appointed Tung Ren Finance as its compliance adviser; as of June 30, 2021, neither the compliance adviser nor its associates held any interests related to the Group, other than the compliance adviser agreement - The company has appointed **Tung Ren Finance** as its compliance adviser in accordance with **Rule 6A.19 of the GEM Listing Rules**[123](index=123&type=chunk) - As of June 30, 2021, neither the compliance adviser nor its directors, employees, or close associates held any interests in relation to the Group that are required to be notified to the Group under **Rule 6A.32 of the GEM Listing Rules**, other than the compliance adviser agreement[123](index=123&type=chunk) [Directors' and Chief Executive's Interests and Short Positions in Shares, Underlying Shares and Debentures of the Company or its Associated Corporations](index=45&type=section&id=Directors'%20and%20Chief%20Executive's%20Interests%20and%20Short%20Positions%20in%20Shares%2C%20Underlying%20Shares%20and%20Debentures%20of%20the%20Company%20or%20its%20Associated%20Corporations) As of June 30, 2021, several directors and the chief executive held long positions in the company's shares, primarily through controlled corporate interests or interests held jointly with other parties Directors' and Chief Executive's Long Positions in Shares (as of June 30, 2021) | Director/Chief Executive Name | Capacity/Nature of Interest | Number of Shares Held | Approximate Percentage of Interest | | :--- | :--- | :--- | :--- | | Mr. Dang Fei | Interest in controlled corporation | 351,280,000 | 38.18% | | Mr. Dang Fei | Interest held jointly with another person | 351,280,000 | 38.18% | | Mr. Wang Xiaozhong | Interest in controlled corporation | 99,760,000 | 10.84% | | Ms. Luo Qian | Interest in controlled corporation | 6,350,000 | 0.69% | | Ms. Luo Qian | Beneficial owner | 2,160,000 | 0.23% | - **Mr. Dang Fei** holds shares through **Red Fly Investment Limited** and, together with **Mr. Dang Jun** as parties acting in concert, jointly controls **38.18%** of the company's issued share capital[126](index=126&type=chunk) [Substantial Shareholders' and Other Persons' Interests and Short Positions in Shares and Underlying Shares](index=46&type=section&id=Substantial%20Shareholders'%20and%20Other%20Persons'%20Interests%20and%20Short%20Positions%20in%20Shares%20and%20Underlying%20Shares) As of June 30, 2021, besides the directors, **Red Fly**, **Mr. Dang Jun**, **Ms. Li Li**, **Mr. Fu Chuanrong**, **Xseven Investment**, and **Ms. Gao Hong** were substantial shareholders and other persons holding long positions in the company's shares Substantial Shareholders' and Other Persons' Long Positions in Shares (as of June 30, 2021) | Director Name | Capacity/Nature of Interest | Number of Shares Held (Long Position) | Approximate Percentage of Interest | | :--- | :--- | :--- | :--- | | Red Fly | Beneficial owner | 351,280,000 | 38.18% | | Mr. Dang Jun | Interest held jointly with another person | 351,280,000 | 38.18% | | Ms. Li Li | Interest of spouse | 351,280,000 | 38.18% | | Mr. Fu Chuanrong | Beneficial owner | 120,630,000 | 13.10% | | Xseven Investment | Beneficial owner | 99,760,000 | 10.84% | | Ms. Gao Hong | Interest of spouse | 99,760,000 | 10.84% | - **Mr. Fu Chuanrong** holds **120,630,000 shares** due to the subscription, representing approximately **13.10%** of the issued share capital[133](index=133&type=chunk) [Competing Interests](index=47&type=section&id=Competing%20Interests) For the six months ended June 30, 2021, neither the company's controlling shareholders nor directors, nor their respective close associates, held any interests in any business directly or indirectly competing with the Group's business - For the six months ended June 30, 2021, none of the company's controlling shareholders or directors and their respective close associates held any interests in any business that directly or indirectly competes with the Group's business[132](index=132&type=chunk) [Share Option Scheme](index=48&type=section&id=Share%20Option%20Scheme) The company conditionally adopted a share option scheme on June 10, 2020, but no share options have been granted, exercised, cancelled, or lapsed from the listing date up to the date of this report - The company conditionally adopted a share option scheme on **June 10, 2020**, whose terms comply with **Chapter 23 of the GEM Listing Rules**[134](index=134&type=chunk) - No share options have been granted, exercised, cancelled, or lapsed under the share option scheme from the listing date up to the date of this report[134](index=134&type=chunk) [Events After Reporting Period](index=48&type=section&id=Events%20After%20Reporting%20Period) No significant events requiring disclosure have occurred from June 30, 2021, up to the date of this report - No significant events requiring disclosure have occurred from **June 30, 2021**, up to the date of this report[135](index=135&type=chunk) [Audit Committee and Interim Business Review](index=48&type=section&id=Audit%20Committee%20and%20Interim%20Business%20Review) The company's Audit Committee has reviewed the unaudited condensed consolidated financial statements for the six months ended June 30, 2021, and believes they are prepared in compliance with applicable accounting standards and GEM Listing Rules, with adequate disclosures - The Audit Committee comprises **three independent non-executive directors**, with **Mr. Chen Aifa** serving as Chairman[136](index=136&type=chunk) - The Audit Committee has reviewed the accounting principles and practices adopted by the Group and the unaudited condensed consolidated financial statements for the six months ended **June 30, 2021**[138](index=138&type=chunk) - The Audit Committee believes that the preparation of these statements by the Group complies with applicable accounting standards, the **GEM Listing Rules**, and includes **adequate disclosures**[138](index=138&type=chunk)

中國蜀塔國際控股集團有限公司 China Saftower International Holding Group Limited ( 於開曼群島註冊成立的有限公司 ) 股份代號 : 8623 第一季度報告 2021 中國蜀塔國際控股集團有限公司 China Saftower International Holding Group Limited (Incorporated in the Cayman Islands with limited liability) Stock Code : 8623 2021 FIRST QUARTERLY REPORT 香港聯合交易所有限公司（「聯交所」）的GEM特徵 GEM的定位乃為較於聯交所上市的其他公司帶有更高投資風險的中小型公司提供上 市的市場。有意投資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。 鑒於在GEM上市的公司一般為中小型公司，在GEM買賣的證券可能會較在聯交所主 板買賣的證券承受較大市場波動風險，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 ...

中國蜀塔國際控股集團有限公司 China Saftower International Holding Group Limited China Saftower International Holding ( 於開曼群島註冊成立的有限公司 ) 股份代號 : 8623 2020 年度報告 中國蜀塔國際控股集團有限公司 China Saftower International Holding Group Limited (Incorporated in the Cayman Islands with limited liability) Stock Code : 8623 2020 ANNUAL REPORT Group Limited 中國蜀塔國際控股集團有限公 司 Annual Report 2020 年度報告 C M Y CM MY CY CMY K China Saftower AR2020 cover 12mm output.pdf 1 31/3/2021 下午2:36 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上市的市場，此等公司相比起其他聯交所上市的公司帶有較 ...