e 完光 9 CHINA HONGGUANG HOLDINGS LIMITED 中國宏光控股有限公司 (於開疊群島註冊成立的有限公司) 股份代號: 8646 / 第三季度 報告 e � 香港聯合交易所有限公司（「聯交所」）GEM之特色 GEM的定位，乃為中小型公司提供一個上市的市場，此等公司相比起其他在主板上 市的公司帶有較高投資風險。有意投資的人士應瞭解投資於該等公司的潛在風險， 並應經過審慎周詳的考慮後方作出投資決定。 由於GEM上市公司普遍為中小型公司，在GEM買賣的證券可能會較於主板買賣之 證券承受較大的市場波動風險，同時無法保證在GEM買賣的證券會有高流通量的市 場。 香港交易及結算所有限公司及聯交所對本報告的內容概不負責，對其準確性或完整 性亦不發表任何聲明，並明確表示，概不對因本報告全部或任何部分內容而產生或 因倚賴該等內容而引致的任何損失承擔任何責任。 本報告資料乃遵照聯交所GEM證券上巿規則（「GEM上市規則」）的規定而刊載，旨在 提供有關中國宏光控股有限公司（「本公司」連同附屬公司，統稱「本集團」）的資料； 本公司董事（統稱「董事」，各為一名「董事」）願就本報告共同及個別承擔全部責任。 各 ...

9 the with CHINA HONGGUANG HOLDINGS LIMITED 中國宏光控股有限公司 (於開疊群島註冊成立的有限公司) 股份代號: 8646 中期報告 e e e 香港聯合交易所有限公司（「聯交所」）GEM之特色 GEM的定位，乃為中小型公司提供一個上市的市場，此等公司相比起其他在主板上 市的公司帶有較高投資風險。有意投資的人士應了解投資於該等公司的潛在風險， 並應經過審慎周詳的考慮後方作出投資決定。 由於GEM上市公司普遍為中小型公司，在GEM買賣的證券可能會較於主板買賣之 證券承受較大的市場波動風險，同時無法保證在GEM買賣的證券會有高流通量的市 場。 香港交易及結算所有限公司及聯交所對本報告的內容概不負責，對其準確性或完整 性亦不發表任何聲明，並明確表示，概不對因本報告全部或任何部分內容而產生或 因倚賴該等內容而引致的任何損失承擔任何責任。 本報告資料乃遵照聯交所GEM證券上巿規則（「GEM上市規則」）的規定而刊載，旨在 提供有關中國宏光控股有限公司（「本公司」連同附屬公司，統稱「本集團」）的資料； 本公司董事（統稱「董事」，各為一名「董事」）願就本報告共同及個別承擔全部責任。 ...

Financial Performance - Revenue for the first quarter of 2021 reached RMB 33,495,000, an increase of 44% compared to RMB 23,226,000 in the same period of 2020[12] - Gross profit for the first quarter was RMB 8,694,000, representing a gross margin of approximately 26%[12] - Operating profit increased significantly to RMB 6,427,000, compared to RMB 2,642,000 in the previous year, marking a growth of 143%[12] - Profit before tax for the quarter was RMB 5,646,000, up from RMB 1,814,000, reflecting a year-over-year increase of 212%[12] - Net profit for the first quarter was RMB 4,797,000, compared to RMB 1,441,000 in the same quarter last year, indicating a growth of 233%[12] - Basic and diluted earnings per share for the quarter were RMB 0.016, up from RMB 0.005 in the previous year[12] - The company reported a total comprehensive income of RMB 4,797,000 for the quarter, compared to RMB 1,441,000 in the same period of 2020[12] Revenue Breakdown - For the three months ended March 31, 2021, the revenue from energy-saving safety glass products was RMB 30,378,000, an increase from RMB 20,732,000 in the same period of 2020, representing a growth of approximately 46.5%[28] - Revenue from smart glass products for the same period was RMB 3,117,000, up from RMB 2,494,000 in 2020, indicating a growth of about 25%[28] - Revenue from energy-saving safety glass products was RMB 30,378 thousand, accounting for 90.7% of total revenue, compared to RMB 20,732 thousand and 89.3% in the same period of 2020[75] Costs and Expenses - The cost of sales for the first quarter was RMB 24,801,000, which is an increase from RMB 16,667,000 in the previous year[12] - The company incurred finance costs of RMB 781,000, slightly down from RMB 828,000 in the same period last year[12] - Research and development costs for the three months ended March 31, 2021, were RMB 2,063 thousand, slightly down from RMB 2,166 thousand in the same period of 2020[48] - Sales cost rose significantly from RMB 16,734 thousand for the three months ended March 31, 2020, to RMB 24,801 thousand for the same period in 2021[80] - Employee costs for the three months ended March 31, 2021, were RMB 1,347,000, slightly up from RMB 1,277,000 in the same period of 2020, indicating an increase of approximately 5.5%[44] Shareholder Information - As of March 31, 2021, the major shareholders, including Mr. Wei and Ms. Lin, each hold 150,750,000 shares, representing 50.25% ownership[107] - The total shares held by Bright Global Limited, a major shareholder, is 150,750,000, also representing 50.25%[113] Corporate Governance - The financial statements were prepared in accordance with applicable Hong Kong Financial Reporting Standards, ensuring compliance with relevant regulations[21] - The company has adopted a code of conduct for securities trading that meets or exceeds the standards set by the GEM listing rules[107] - The company is committed to maintaining compliance with the standards of the code of conduct as confirmed by all directors[107] - The board believes that good corporate governance practices are essential for the company's sustainable development[130] Acquisition Plans - The company is seeking downstream acquisition opportunities to expand its business and optimize overall profitability[70] - The company plans to acquire 100% of the issued share capital of a newly registered company for HKD 64,200,000 to expand its downstream business[99] - The company entered into a share purchase agreement on April 13, 2021, to conditionally acquire 100% of the issued share capital of a newly registered company for HKD 64,200,000[121] - The acquisition will be paid through the issuance of 99,000,000 new shares at an issue price of HKD 0.32 per share, totaling HKD 31,680,000, and a zero-interest convertible bond of HKD 32,520,000[121] - The acquisition aims to expand the company's downstream business and ensure stable demand for glass products used in construction services[124] Market Outlook - The production of coated glass in China is expected to increase from 293 million square meters in 2018 to 427 million square meters in 2023, representing a compound annual growth rate (CAGR) of approximately 7.8%[104] - The demand for smart glass is projected to grow significantly, with the production of dimmable glass expected to rise from 254,000 square meters in 2018 to 675,000 square meters in 2023, reflecting a CAGR of 21.6%[104] - The economic situation in mainland China is gradually improving under government guidance, which is expected to benefit the construction glass industry[105] - The company is focused on leveraging its expertise in smart glass production to capitalize on the growing demand in the Chinese market[104] Other Information - The company did not recommend any dividend distribution for the three months ended March 31, 2021, consistent with the previous year[67] - No related party transactions were conducted during the three months ending March 31, 2021, as per GEM listing rules[119] - The company did not purchase, redeem, or sell any of its listed securities during the three months ending March 31, 2021[126] - The company has no significant contingent liabilities as of March 31, 2021[129] - The company is exploring new growth drivers to counteract the effects of the pandemic on its business operations[105]

9 el CHINA HONGGUANG HOLDINGS LIMITED 中國宏光控股有限公司 (於阿曼群島註冊成立的有限公司) 股份代號: 8646 2020 年 報 B e 香港聯合交易所有限公司（「聯交所」）GEM之特色 GEM的定位，乃為中小型公司提供一個上市的市場，此等公司相比起其他在主板上市的公司帶有較高投資風險。有意投 資的人士應了解投資於該等公司的潛在風險，並應經過審慎周詳的考慮後方作出投資決定。 由於GEM上市公司普遍為中小型公司，在GEM買賣的證券可能會較於聯交所主板買賣之證券承受較大的市場波動風險， 同時無法保證在GEM買賣的證券會有高流通量的市場。 香港交易及結算所有限公司及聯交所對本報告的內容概不負責，對其準確性或完整性亦不發表任何聲明，並明確表示， 概不對因本報告全部或任何部分內容而產生或因倚賴該等內容而引致的任何損失承擔任何責任。 本報告資料乃遵照聯交所GEM證券上巿規則（「GEM上市規則」）的規定而刊載，旨在提供有關中國宏光控股有限公司（「本 公司」，連同其附屬公司統稱「本集團」）的資料；本公司董事（統稱「董事」，各為一名「董事」）願就本報告共同及個別承擔 全部責任。各董事在 ...

[Company Information](index=4&type=section&id=%E5%85%AC%E5%8F%B8%E8%B3%87%E6%96%99) [Company Details](index=4&type=section&id=%E5%85%AC%E5%8F%B8%E8%B3%87%E6%96%99%E8%A9%B3%E6%83%85) This section details China Hongguang Holdings Limited's key information, including board members, committees, auditors, and business locations - The company's board members include Executive Directors **Mr. Wei Jiakun (CEO)**, **Ms. Lin Weishan (Chairperson)**, Mr. Chen Biming, Ms. Li Wanna, and Independent Non-Executive Directors **Ms. Chen Xiuyan**, **Mr. Jia Xiaogang**, **Mr. Wu Yong**[6](index=6&type=chunk) - The Audit Committee is chaired by **Ms. Chen Xiuyan**, the Remuneration Committee by **Mr. Wu Yong**, and the Nomination Committee by **Mr. Jia Xiaogang**[6](index=6&type=chunk) - The company's auditor is **KPMG**, with its registered office in the **Cayman Islands** and principal places of business in **Jieyang City, Guangdong Province, China**, and **Central, Hong Kong**[6](index=6&type=chunk) [Third Quarter Unaudited Results](index=6&type=section&id=%E7%AC%AC%E4%B8%89%E5%AD%A3%E5%BA%A6%E6%9C%AA%E7%B6%93%E5%AF%A9%E6%A0%B8%E6%A5%AD%E7%B8%BE) [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=6&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E6%90%8D%E7%9B%8A%E5%8F%8A%E5%85%B6%E4%BB%96%E5%85%A8%E9%9D%A2%E6%94%B6%E7%9B%8A%E8%A1%A8) This statement presents the unaudited consolidated profit or loss for the nine months ended September 30, 2020, highlighting significant declines in revenue and net profit Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (Nine Months Ended September 30) | Metric | 2020 (RMB thousands) | 2019 (RMB thousands) | Year-on-Year Change (%) | | :----------- | :------------------ | :------------------ | :------------- | | Revenue | 99,876 | 156,075 | -36.01% | | Cost of Sales | 72,111 | 109,120 | -33.91% | | Gross Profit | 27,765 | 46,954 | -40.87% | | Other Net Income | 871 | 2,855 | -69.56% | | Selling and Marketing Expenses | 209 | 192 | +8.85% | | General and Administrative Expenses | 10,572 | 17,239 | -38.68% | | Operating Profit | 17,854 | 32,378 | -44.86% | | Finance Costs | 1,790 | 865 | +106.94% | | Profit Before Tax | 16,064 | 31,513 | -49.02% | | Income Tax | 2,610 | 5,096 | -48.79% | | Profit for the Period | 13,455 | 26,417 | -49.07% | | Basic and Diluted Earnings Per Share (RMB) | 0.05 | 0.12 | -58.33% | [Condensed Consolidated Statement of Changes in Equity](index=8&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E6%AC%8A%E7%9B%8A%E8%AE%8A%E5%8B%95%E8%A1%A8) This section details the condensed consolidated statement of changes in equity for the nine months ended September 30, 2020, reflecting changes in total equity due to comprehensive income and share issuance Condensed Consolidated Statement of Changes in Equity (Nine Months Ended September 30) | Metric | Balance as at Jan 1, 2019 (RMB thousands) | Balance as at Sep 30, 2019 (RMB thousands) | Balance as at Jan 1, 2020 (RMB thousands) | Balance as at Sep 30, 2020 (RMB thousands) | | :--------------- | :---------------------------- | :---------------------------- | :---------------------------- | :---------------------------- | | Share Capital | - | - | - | 2,693 | | Share Premium | 11,464 | 11,464 | 11,464 | 49,892 | | Capital Reserve | (202) | (202) | (202) | (202) | | PRC Statutory Reserve | 2,190 | 2,190 | 2,190 | 2,190 | | Exchange Reserve | - | - | 182 | 666 | | Retained Profits | 70,815 | 97,232 | 97,472 | 110,927 | | Total Equity | 84,267 | 110,684 | 111,106 | 166,166 | | Total Comprehensive Income for the Period | - | 26,417 | - | 13,939 | | Capitalization Issue and Issue Costs | - | - | - | 41,121 | [Notes to the Unaudited Condensed Consolidated Results](index=9&type=section&id=%E6%9C%AA%E7%B6%93%E5%AF%A9%E6%A0%B8%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E6%A5%AD%E7%B8%BE%E9%99%84%E8%A8%BB) This section provides detailed notes to the condensed consolidated results, covering general information, accounting policies, revenue, profit before tax, income tax, earnings per share, and dividends [1. General Information](index=9&type=section&id=1.%20%E4%B8%80%E8%88%AC%E8%B3%87%E6%96%99) China Hongguang Holdings Limited was incorporated in the Cayman Islands on May 25, 2017, and listed on GEM of the Hong Kong Stock Exchange on January 13, 2020, primarily manufacturing and selling architectural glass products in China - The company was incorporated in the **Cayman Islands** on **May 25, 2017**, and completed its GEM listing on the Hong Kong Stock Exchange on **January 13, 2020**[17](index=17&type=chunk) - The Group primarily engages in the manufacturing and sale of **architectural glass products** in China[17](index=17&type=chunk) [2. Significant Accounting Policies](index=9&type=section&id=2.%20%E9%87%8D%E5%A4%A7%E6%9C%83%E8%A8%88%E6%94%BF%E7%AD%96) The Group's unaudited condensed consolidated results are prepared in accordance with applicable Hong Kong Financial Reporting Standards and the Hong Kong Companies Ordinance, presented in RMB on a historical cost basis - The unaudited condensed consolidated results are prepared in accordance with **Hong Kong Financial Reporting Standards**, **Hong Kong Generally Accepted Accounting Principles**, and the **Hong Kong Companies Ordinance**, complying with **GEM Listing Rules**[18](index=18&type=chunk) - The financial statements are presented in **RMB** and prepared on a **historical cost basis**[23](index=23&type=chunk)[24](index=24&type=chunk) [3. Revenue and Segment Reporting](index=11&type=section&id=3.%20%E6%94%B6%E7%9B%8A%E5%8F%8A%E5%88%86%E9%83%A8%E5%A0%B1%E5%91%8A) All Group revenue is derived from glass product sales in China, categorized into energy-saving safety glass and smart glass, with revenue recognized at a point in time under HKFRS 15, and the Group operates as a single business segment - All Group revenue is derived from **glass product sales in China**, recognized at a point in time in accordance with **HKFRS 15**[32](index=32&type=chunk) Revenue from Contracts with Customers by Major Product Line (Nine Months Ended September 30) | Product Line | 2020 (RMB thousands) | 2019 (RMB thousands) | Year-on-Year Change (%) | | :--------------- | :------------------ | :------------------ | :------------- | | Sale of Energy-Saving Safety Glass Products | 92,845 | 141,233 | -34.26% | | Sale of Smart Glass Products | 7,031 | 14,842 | -52.63% | | **Total Revenue** | **99,876** | **156,075** | **-36.01%** | - The Group has determined it operates in a single business segment: the **sale of glass products**[39](index=39&type=chunk) [4. Other Net Income](index=12&type=section&id=4.%20%E5%85%B6%E4%BB%96%E6%B7%A8%E6%94%B6%E7%9B%8A) The Group's other net income, primarily

完光 CHINA HONGGUANG HOLDINGS LIMITED 中國宏光控股有限公司 《於歸景群島註冊成立的有限公司》 股份代號: 8646 INTERIM REPORT # 2020 香港聯合交易所有限公司（「聯交所」）GEM之特色 GEM的定位，乃為中小型公司提供一個上市的市場，此等公司相比起其他在主板上 市的公司帶有較高投資風險。有意投資的人士應了解投資於該等公司的潛在風險， 並應經過審慎周詳的考慮後方作出投資決定。 由於GEM上市公司普遍為中小型公司，在GEM買賣的證券可能會較於主板買賣之 證券承受較大的市場波動風險，同時無法保證在GEM買賣的證券會有高流通量的市 場。 香港交易及結算所有限公司及聯交所對本報告的內容概不負責，對其準確性或完整 性亦不發表任何聲明，並明確表示，概不對因本報告全部或任何部分內容而產生或 因倚賴該等內容而引致的任何損失承擔任何責任。 本報告資料乃遵照聯交所GEM證券上巿規則（「GEM上市規則」）的規定而刊載，旨 在提供有關中國宏光控股有限公司（「本公司」，連同附屬公司，統稱「本集團」）的資 料；本公司董事（統稱「董事」，各為一名「董事」）願就本報告共同及個別承擔全部 ...

[Company Information](index=4&type=section&id=Company%20Information) [Board of Directors and Committee Members](index=4&type=section&id=Board%20of%20Directors%20and%20Committee%20Members) This section lists the executive directors, independent non-executive directors, and members of the audit, remuneration, and nomination committees of China Hongguang Holdings Limited, specifying the chairman for each committee - Executive Directors include Mr. Wei Jiakun (CEO), Ms. Lin Weishan (Chairperson), Mr. Chen Biming, and Ms. Li Wanna[6](index=6&type=chunk) - Independent Non-Executive Directors are Ms. Chen Xiuyan, Mr. Jia Xiaogang, and Mr. Wu Yong[6](index=6&type=chunk) - The Audit Committee is chaired by Ms. Chen Xiuyan, the Remuneration Committee by Mr. Wu Yong, and the Nomination Committee by Mr. Jia Xiaogang[6](index=6&type=chunk) [Company Contact and Professional Advisors](index=4&type=section&id=Company%20Contact%20and%20Professional%20Advisors) This section provides the company's key contact information and professional advisor details, including joint company secretaries, authorized representatives, auditor, registered office, headquarters, principal place of business, share registrar, principal bankers, company website, and legal counsel - Joint Company Secretaries are Mr. Wang Zhangqi and Mr. Weng Weilin, with Mr. Wei Jiakun and Mr. Weng Weilin as Authorized Representatives[6](index=6&type=chunk) - The auditor is KPMG, and the compliance advisor is Dongxing Securities (Hong Kong) Company Limited[6](index=6&type=chunk) - The company's registered office is in the Cayman Islands, its headquarters and principal place of business in China are in Jieyang City, Guangdong Province, China, and its principal place of business in Hong Kong is in Central, Hong Kong[6](index=6&type=chunk) - The Hong Kong Share Registrar is Computershare Hong Kong Investor Services Limited, and the company website is www.hongguang.hk[8](index=8&type=chunk) [Unaudited First Quarter Results](index=6&type=section&id=Unaudited%20First%20Quarter%20Results) [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=6&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) For the three months ended March 31, 2020, the Group's revenue and profit significantly decreased, primarily due to the COVID-19 pandemic, with profit for the period falling by approximately 80% year-on-year, and basic and diluted earnings per share decreasing accordingly Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (For the three months ended March 31) | Metric | 2020 (RMB '000) | 2019 (RMB '000) | Change Rate | | :----------- | :------------------ | :------------------ | :------- | | Revenue | 23,226 | 43,971 | -47.2% | | Cost of Sales | 16,667 | 30,869 | -46.0% | | Gross Profit | 6,559 | 13,102 | -50.0% | | Operating Profit | 2,642 | 8,969 | -70.6% | | Profit Before Tax | 1,814 | 8,420 | -78.5% | | Profit for the Period | 1,441 | 7,156 | -79.8% | | Earnings Per Share (RMB) | 0.006 | 0.032 | -81.25% | [Unaudited Condensed Consolidated Statement of Changes in Equity](index=7&type=section&id=Unaudited%20Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity) As of March 31, 2020, the Group's total equity significantly increased due to the total comprehensive income for the period and the issuance of shares after the initial public offering, despite a decrease in profit for the period Condensed Consolidated Statement of Changes in Equity (As of March 31) | Metric | Balance as of March 31, 2019 (RMB '000) | Balance as of March 31, 2020 (RMB '000) | | :----------- | :----------------------------- | :----------------------------- | | Share Capital | –* | 2,693 | | Share Premium | 11,464 | 53,664 | | Retained Earnings | 77,971 | 98,913 | | Total Equity | 91,423 | 157,440 | - The issuance of shares after the initial public offering, net of issuance costs, contributed to an increase of **RMB 44,893 thousand** in total equity[13](index=13&type=chunk) [Notes to the Unaudited Condensed Consolidated Results](index=8&type=section&id=Notes%20to%20the%20Unaudited%20Condensed%20Consolidated%20Results) This section provides detailed notes to the condensed consolidated results, covering general information, significant accounting policies, revenue and segment reporting, other net income, components of profit before tax, income tax, earnings per share, and dividend policy, offering deeper context and explanation for the financial statements [General Information](index=8&type=section&id=General%20Information) China Hongguang Holdings Limited was incorporated in the Cayman Islands on May 25, 2017, and listed on GEM of the Hong Kong Stock Exchange on January 13, 2020, with the Group primarily engaged in manufacturing and selling architectural glass products in China - The Company completed its listing on **January 13, 2020**[16](index=16&type=chunk) - The Group is principally engaged in the manufacture and sale of architectural glass products in the People's Republic of China[16](index=16&type=chunk) [Significant Accounting Policies](index=8&type=section&id=Significant%20Accounting%20Policies) The Group's unaudited condensed consolidated results are prepared in accordance with Hong Kong Financial Reporting Standards, with consistent application of all new and revised standards, including HKFRS 16 "Leases", presented in RMB and measured on a historical cost basis - The unaudited condensed consolidated results are prepared in accordance with all applicable Hong Kong Financial Reporting Standards issued by the Hong Kong Institute of Certified Public Accountants[17](index=17&type=chunk) - The Group has consistently applied all applicable new and revised Hong Kong Financial Reporting Standards, including HKFRS 16 "Leases"[19](index=19&type=chunk) - The financial statements are presented in **RMB** and prepared on a historical cost basis[21](index=21&type=chunk)[24](index=24&type=chunk) [Revenue and Segment Reporting](index=11&type=section&id=Revenue%20and%20Segment%20Reporting) All of the Group's revenue is derived from the sale of glass products in China, primarily categorized into energy-saving safety glass products and smart glass products, with the Group having only one operating segment and a diversified customer base where no single customer accounts for over 10% of revenue - All of the Group's revenue is derived from the sale of glass products in China[30](index=30&type=chunk) Revenue from Contracts with Customers by Major Product Line (For the three months ended March 31) | Product Type | 2020 (RMB '000) | 2019 (RMB '000) | | :--------------- | :------------------ | :------------------ | | Sale of energy-saving safety glass products | 20,732 | 40,752 | | Sale of smart glass products | 2,494 | 3,219 | | **Total** | **23,226** | **43,971** | - The Group has only one operating segment, which is the sale of glass products[37](index=37&type=chunk) [Other Net Income](index=12&type=section&id=Other%20Net%20Income) The Group's other net income primarily includes government grants and other income, totaling **RMB 278 thousand** for the three months ended March 31, 2020, a slight increase from the same period last year Other Net Income (For the three months ended March 31) | Item | 2020 (RMB '000) | 2019 (RMB '000) | | :------- | :------------------ | :------------------ | | Government grants | 240 | 254 | | Others | 38 | (12) | [Profit Before Tax](index=13&type=section&id=Profit%20Before%20Tax) Profit before tax is influenced by finance costs, staff costs, and other items such as depreciation, impairment losses, research and development costs, and inventory costs; for the three months ended March 31, 2020, finance costs increased, and impairment losses on trade and other receivables significantly rose Finance Costs (For the three months ended March 31) | Item | 2020 (RMB '000) | 2019 (RMB '000) | | :--------------- | :------------------ | :------------------ | | Interest on bank loans and other borrowings | 828 | 550 | Staff Costs (For the three months ended March 31) | Item | 2020 (RMB '000) | 2019 (RMB '000) | | :------------------- | :------------------ | :------------------ | | Contributions to defined contribution retirement plans | 53 | 73 | | Salaries, wages and other benefits | 1,224 | 1,173 | | **Total** | **1,277** | **1,246** | Other Items (For the three months ended March 31) | Item | 2020 (RMB '000) | 2019 (RMB '000) | | :----------------------- | :------------------ | :------------------ | | Depreciation of property, plant and equipment | 612 | 721 | | Depreciation of right-of-use assets | 37 | 13 | | Impairment losses on trade and other receivables | 3,613 | 2,249 | | Research and development costs | 2,166 | 2,235 | | Cost of inventories | 16,667 | 30,869 | [Income Tax in Condensed Consolidated Statement of Profit or Loss](index=15&type=section&id=Income%20Tax%20in%20Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss) The Group's income tax expense primarily consists of PRC income tax provision, with its PRC subsidiary, Hongguang Glass, enjoying a preferential income tax rate of 15% as a "High and New Technology Enterprise" Income Tax (For the three months ended March 31) | Item | 2020 (RMB '000) | 2019 (RMB '000) | | :------- | :------------------ | :------------------ | | Current tax | 373 | 1,264 | - The PRC subsidiary, Jieyang Hongguang Coated Glass Co., Ltd., enjoys a preferential income tax rate of **15%** due to its recognition as a "High and New Technology Enterprise"[60](index=60&type=chunk) [Earnings Per Share](index=16&type=section&id=Earnings%20Per%20Share) For the three months ended March 31, 2020, basic and diluted earnings per share significantly decreased to **RMB 0.006**, compared to **RMB 0.032** in the prior year, with diluted earnings per share being the same as basic earnings per share due to the absence of potentially dilutive ordinary shares - Basic and diluted earnings per share were **RMB 0.006** (2019: **RMB 0.032**)[63](index=63&type=chunk) - Earnings per share are calculated based on the profit attributable to equity holders of the Company of **RMB 1,441,000** and **225,000,000** ordinary shares issued for the three months ended March 31, 2020[63](index=63&type=chunk) - There were no potentially dilutive ordinary shares, so diluted earnings per share are the same as basic earnings per share[64](index=64&type=chunk) [Dividends](index=17&type=section&id=Dividends) The Board of Directors does not recommend the payment of any dividends for the three months ended March 31, 2020 - The Directors do not recommend the payment of any dividends for the three months ended March 31, 2020 (2019: nil)[66](index=66&type=chunk) [Approval of Financial Information](index=17&type=section&id=Approval%20of%20Financial%20Information) This financial information was approved and authorized for issue by the Board of Directors on May 13, 2020 - This financial information was approved and authorized for issue by the Board of Directors on **May 13, 2020**[67](index=67&type=chunk) [Management Discussion and Analysis](index=18&type=section&id=Management%20Discussion%20and%20Analysis) [Introduction](index=18&type=section&id=Introduction) The Group primarily manufactures and sells architectural glass products, including energy-saving safety glass and smart glass, under its "Hongguang" brand in Southern China, boasting a diversified product portfolio and strong R&D capabilities - The Group primarily manufactures and sells architectural glass products, including energy-saving safety glass products and smart glass products, under its own "Hongguang" brand in Southern China[70](index=70&type=chunk) - A diversified product portfolio helps enhance profitability and adapt to market conditions and industry trends[70](index=70&type=chunk) - The Group possesses strong R&D capabilities, particularly in patented technologies and technical expertise[70](index=70&type=chunk) [Business Review](index=18&type=section&id=Business%20Review) This section briefly reviews the Group's first-quarter performance for the three months ended March 31, 2020, providing comparative figures for the corresponding period last year - The Board is pleased to present the Group's first-quarter results for the three months ended March 31, 2020, along with comparative figures for the corresponding period ended March 31, 2019[71](index=71&type=chunk) [Financial Review](index=18&type=section&id=Financial%20Review) The Group faced significant challenges in Q1 2020, with total revenue and profit for the period sharply declining due to the COVID-19 pandemic; while gross margin remained largely stable, selling and marketing expenses decreased, finance costs rose due to increased bank loans, and income tax expense fell with reduced revenue [Revenue](index=18&type=section&id=Revenue) The Group's total revenue decreased by **47%** from **RMB 43,971 thousand** in the same period of 2019 to **RMB 23,226 thousand** in Q1 2020, primarily due to production and operational delays caused by the COVID-19 pandemic and disruptions to customer project commencement Revenue Breakdown by Product Type (For the three months ended March 31) | Product Type | 2020 (RMB '000) | % of Total Revenue | 2019 (RMB '000) | % of Total Revenue | | :--------------- | :------------------ | :------------- | :------------------ | :------------- | | Energy-saving safety glass products | 20,732 | 89.3% | 40,752 | 92.7% | | Smart glass products | 2,494 | 10.7% | 3,219 | 7.3% | | **Total** | **23,226** | **100.0%** | **43,971** | **100.0%** | - Total revenue decreased by **47%**, mainly due to delays in resuming production and operations caused by the COVID-19 pandemic, which also affected customer project progress and order fulfillment[74](index=74&type=chunk)[75](index=75&type=chunk) [Gross Profit and Gross Margin](index=20&type=section&id=Gross%20Profit%20and%20Gross%20Margin) The Group's gross profit decreased from **RMB 13,101 thousand** in the same period of 2019 to **RMB 6,559 thousand** in Q1 2020, primarily due to lower total revenue, while the gross margin remained largely stable, slightly decreasing to **28.2%** Gross Profit and Gross Margin by Product Type (For the three months ended March 31) | Product Type | 2020 Gross Profit (RMB '000) | 2020 Gross Margin | 2019 Gross Profit (RMB '000) | 2019 Gross Margin | | :--------------- | :---------------------- | :----------- | :---------------------- | :----------- | | Energy-saving safety glass products | 5,775 | 27.9% | 12,064 | 29.6% | | Smart glass products | 784 | 31.4% | 1,038 | 32.2% | | **Total Gross Profit/Gross Margin** | **6,559** | **28.2%** | **13,101** | **29.8%** | - The decrease in gross profit was mainly due to the decrease in total revenue during the period[78](index=78&type=chunk) - Gross margin remained largely stable with a slight decrease (2020: **28.2%**; 2019: **29.8%**)[78](index=78&type=chunk) [Other Net Income](index=20&type=section&id=Other%20Net%20Income) The Group's other net income slightly increased from **RMB 253 thousand** in the same period of 2019 to **RMB 272 thousand** in Q1 2020 - Other net income slightly increased from **RMB 253 thousand** to **RMB 272 thousand**[79](index=79&type=chunk) [Cost of Sales](index=20&type=section&id=Cost%20of%20Sales) The Group's cost of sales decreased from **RMB 30,908 thousand** in the same period of 2019 to **RMB 16,734 thousand** in Q1 2020, primarily due to a decrease in sales revenue - Cost of sales decreased, mainly due to the decrease in sales revenue[80](index=80&type=chunk) [Selling and Marketing Expenses](index=21&type=section&id=Selling%20and%20Marketing%20Expenses) The Group's selling and marketing expenses decreased from **RMB 366 thousand** in the same period of 2019 to **RMB 84 thousand** in Q1 2020, primarily due to reduced marketing efforts impacted by the COVID-19 pandemic - Selling and marketing expenses decreased, mainly due to reduced marketing efforts caused by delays in activity resumption due to the COVID-19 pandemic[82](index=82&type=chunk) [General and Administrative Expenses](index=21&type=section&id=General%20and%20Administrative%20Expenses) The Group's general and administrative expenses remained largely at a similar level, with a slight change from **RMB 4,009 thousand** in the same period of 2019 to **RMB 4,181 thousand** in Q1 2020, and R&D costs also remained stable - General and administrative expenses remained largely at a similar level[83](index=83&type=chunk) - Research and development costs remained stable, with a slight change from **RMB 2,235 thousand** to **RMB 2,166 thousand**[83](index=83&type=chunk) [Finance Costs](index=21&type=section&id=Finance%20Costs) The Group's finance costs increased from **RMB 550 thousand** in the same period of 2019 to **RMB 828 thousand** in Q1 2020, primarily due to an increase in bank loan amounts - Finance costs increased due to an increase in the amount of bank loans[84](index=84&type=chunk) [Staff Costs](index=21&type=section&id=Staff%20Costs) The Group's staff costs remained at a similar level to last year, with a slight change from **RMB 1,277 thousand** in the same period of 2019 to **RMB 1,246 thousand** in Q1 2020 - Staff costs remained at a similar level to last year[85](index=85&type=chunk) [Income Tax Expense](index=21&type=section&id=Income%20Tax%20Expense) The Group's income tax expense decreased from **RMB 1,264 thousand** in the same period of 2019 to **RMB 373 thousand** in Q1 2020, mainly due to the poorer revenue performance of its indirect wholly-owned subsidiary, Jieyang Hongguang Coated Glass Co., Ltd., compared to last year - Income tax expense decreased, mainly due to the poorer revenue performance of the indirect wholly-owned subsidiary, Jieyang Hongguang Coated Glass Co., Ltd., compared to last year[86](index=86&type=chunk) [Profit for the Period](index=22&type=section&id=Profit%20for%20the%20Period) Due to the aforementioned factors, the Group's after-tax profit for the three months ended March 31, 2020, was **RMB 1,370 thousand**, a decrease of approximately **80.9%** compared to **RMB 7,155 thousand** in the same period of 2019, primarily due to a significant decline in revenue while related expenses remained unchanged - After-tax profit for the period was **RMB 1,370 thousand**, a decrease of approximately **80.9%** compared to the same period last year[89](index=89&type=chunk) - The significant decrease in profit was mainly due to a substantial decline in revenue in the corresponding period of 2020 while related expenses remained unchanged[89](index=89&type=chunk) [Human Resources and Remuneration Policy](index=22&type=section&id=Human%20Resources%20and%20Remuneration%20Policy) As of March 31, 2020, the Group employed a total of **74** full-time employees, with staff costs amounting to approximately **RMB 1,246 thousand** - As of **March 31, 2020**, the Group employed a total of **74** full-time employees[90](index=90&type=chunk) - For the three months ended March 31, 2020, the Group's staff costs were approximately **RMB 1,246 thousand**[90](index=90&type=chunk) [Material Investments](index=22&type=section&id=Material%20Investments) For the three months ended March 31, 2020, the Group did not acquire or hold any material investments - For the three months ended March 31, 2020, the Group did not acquire or hold any material investments[91](index=91&type=chunk) [Material Acquisitions/Disposals](index=22&type=section&id=Material%20Acquisitions%2FDisposals) For the three months ended March 31, 2020, the Group did not make any material acquisitions or disposals of subsidiaries or associated companies - For the three months ended March 31, 2020, the Group did not make any material acquisitions or disposals of any subsidiaries or associated companies[92](index=92&type=chunk) [Foreign Exchange Risk](index=22&type=section&id=Foreign%20Exchange%20Risk) The Group's principal operations are conducted in China, with transactions denominated in RMB, and it does not have a foreign currency hedging policy; management monitors foreign exchange risk and will consider hedging when necessary - The Group's principal operations are conducted in China, and transactions are primarily denominated in **RMB**[93](index=93&type=chunk) - The Group does not have a foreign currency hedging policy, but management monitors foreign exchange risk and will consider hedging when necessary[93](index=93&type=chunk) [Key Risks and Uncertainties Facing the Company](index=23&type=section&id=Key%20Risks%20and%20Uncertainties%20Facing%20the%20Company) The Company faces key risks including the impact of local and international regulations and the effects of the COVID-19 pandemic, which has led to a slowdown in the development of China's real estate market and architectural glass industry - The Group's business operations are subject to government policies and relevant regulations and guidelines set by regulatory bodies, and non-compliance may result in penalties[95](index=95&type=chunk) - The COVID-19 pandemic has affected the resumption of work across various industries in mainland China, leading to a slowdown in the real estate market and the architectural glass industry[96](index=96&type=chunk) [Comparison of Business Objectives with Actual Business Development](index=23&type=section&id=Comparison%20of%20Business%20Objectives%20with%20Actual%20Business%20Development) Since its listing on January 13, 2020, the Company has begun implementing the business objectives outlined in its prospectus, with no significant post-reporting period events materially impacting operations and financial performance as of the financial statement date - Since the Company's shares were listed on GEM of the Stock Exchange on **January 13, 2020**, up to the date of this report, we have begun implementing our business objectives as set out in the "Statement of Business Objectives and Use of Proceeds" section of the Company's prospectus dated **December 31, 2019**[97](index=97&type=chunk) - As of March 31, 2020, and up to the date of this report, there have been no significant events that have had a material impact on the Group's operations and financial performance[97](index=97&type=chunk) [Prospects and Outlook](index=23&type=section&id=Prospects%20and%20Outlook) The Group is leveraging funds raised from its listing to lay a solid foundation for future development and anticipates continued growth in demand for coated and smart glass in the Chinese market; despite COVID-19 challenges, the Group will seek value-added acquisition or investment opportunities to strengthen its position and enhance value - Funds raised from the listing provide a solid foundation for the Group's future development[98](index=98&type=chunk) - China's production of coated glass is expected to increase from **293 million square meters** in 2018 to **427 million square meters** in 2023, representing a CAGR of approximately **7.8%**[101](index=101&type=chunk) - China's production of smart glass is expected to increase from **254,000 square meters** in 2018 to **675,000 square meters** in 2023, representing a CAGR of **21.6%**[101](index=101&type=chunk) - The Group will strive to identify acquisition or investment opportunities that add value to China Hongguang to mitigate the impact of the COVID-19 pandemic, thereby strengthening the Group's position and enhancing its value[102](index=102&type=chunk) [Dividends](index=24&type=section&id=Dividends) The Board of Directors does not recommend the payment of any dividends for the three months ended March 31, 2020 - The Directors do not recommend the payment of any dividends for the three months ended March 31, 2020 (2019: nil)[103](index=103&type=chunk) [Other Information](index=25&type=section&id=Other%20Information) [Directors' and Chief Executive's Interests and Short Positions in Shares, Underlying Shares, and Debentures of the Company or any Associated Corporation](index=25&type=section&id=Directors'%20and%20Chief%20Executive's%20Interests%20and%20Short%20Positions%20in%20Shares%2C%20Underlying%20Shares%2C%20and%20Debentures%20of%20the%20Company%20or%20any%20Associated%20Corporation) Mr. Wei Jiakun and Ms. Lin Weishan (Mr. Wei's spouse) are both deemed to have an interest in **150,750,000** shares held by Bright Global Limited, representing **50.25%** of the total share capital Directors' and Chief Executive's Shareholdings (As of March 31) | Name | Nature of Interest | Total Number of Shares Held (L) | Percentage of Shareholding | | :--------- | :---------------------------- | :--------------- | :--------- | | Mr. Wei Jiakun | Settlor of a discretionary trust; Spouse's interest | 150,750,000 | 50.25% | | Ms. Lin Weishan | Settlor of a discretionary trust; Spouse's interest | 150,750,000 | 50.25% | - These shares are held by Bright Global Limited, whose entire issued share capital is held by Wei Family Limited, which in turn is wholly owned by IQ EQ (BVI) Limited (as trustee of The Wei Family Trust)[105](index=105&type=chunk) [Directors' Rights to Acquire Shares or Debentures](index=26&type=section&id=Directors'%20Rights%20to%20Acquire%20Shares%20or%20Debentures) For the three months ended March 31, 2020, neither the Company nor any of its subsidiaries or associated corporations entered into any arrangements enabling directors and chief executives to acquire benefits by means of acquiring shares or debentures - At no time during the three months ended March 31, 2020, was the Company or any of its subsidiaries or associated corporations a party to any arrangement to enable the Directors and chief executive of the Company to acquire benefits by means of the acquisition of shares in, or debentures of, the Company or any other body corporate[109](index=109&type=chunk) [Substantial Shareholders' and Other Persons' Interests and Short Positions in Shares and Underlying Shares of the Company](index=26&type=section&id=Substantial%20Shareholders'%20and%20Other%20Persons'%20Interests%20and%20Short%20Positions%20in%20Shares%20and%20Underlying%20Shares%20of%20the%20Company) In addition to the directors, Bright Global Limited and its affiliates, Dongsheng Venture Capital Limited and its beneficial owner Ms. Wang Yaqing, and Liche International Holdings Limited and its beneficial owner Mr. Li Wei, all hold shares in the Company, constituting substantial shareholder interests Substantial Shareholders' and Other Persons' Shareholdings (As of March 31) | Name/Entity | Capacity/Nature of Interest | Total Number of Shares Held (L) | Percentage of Shareholding | | :------------------- | :-------------------- | :--------------- | :--------- | | Bright Global Limited | Beneficial owner | 150,750,000 | 50.25% | | Wei Family Limited | Interest in controlled corporation | 150,750,000 | 50.25% | | IQ EQ (BVI) Limited | Trustee of a trust | 150,750,000 | 50.25% | | Wei Jiakun | Settlor of a discretionary trust; Spouse's interest | 150,750,000 | 50.25% | | Lin Weishan | Settlor of a discretionary trust; Spouse's interest | 150,750,000 | 50.25% | | Liu Rong | Settlor of a discretionary trust | 150,750,000 | 50.25% | | Dongsheng Venture Capital Limited | Beneficial owner | 49,500,000 | 16.50% | | Wang Yaqing | Interest in controlled corporation | 49,500,000 | 16.50% | | Liche International Holdings Limited | Beneficial owner | 24,750,000 | 8.25% | | Li Wei | Interest in controlled corporation | 24,750,000 | 8.25% | - Shares of Bright Global Limited are held by entities related to The Wei Family Trust, with Mr. Wei Jiakun, Ms. Lin Weishan, and Ms. Liu Rong deemed to have interests[113](index=113&type=chunk) - Dongsheng Venture Capital Limited is beneficially owned by Ms. Wang Yaqing, and Liche International Holdings Limited is **50%** beneficially owned by Mr. Li Wei[113](index=113&type=chunk) [Related Party Transactions](index=28&type=section&id=Related%20Party%20Transactions) For the three months ended March 31, 2020, the Group did not enter into any related party transactions - For the three months ended March 31, 2020, the Group did not enter into any related party transactions[116](index=116&type=chunk) [Directors' Interests in Competing Businesses](index=28&type=section&id=Directors'%20Interests%20in%20Competing%20Businesses) The Directors are not aware of any business or interest of any Director, controlling shareholder, or their close associates that competes or may compete, directly or indirectly, with the Group's business - The Directors are not aware of any business or interest of any Director or controlling shareholder of the Company or any of their respective close associates that competes or may compete, directly or indirectly, with the Group's business[117](index=117&type=chunk) [Material Events After Reporting Period](index=28&type=section&id=Material%20Events%20After%20Reporting%20Period) Between March 31, 2020, and the date of this report, the Board of Directors is not aware of any material events concerning the Group that require disclosure - Between March 31, 2020, and the date of this report, the Board of Directors is not aware of any material events concerning the Group that require disclosure[118](index=118&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=28&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20the%20Company's%20Listed%20Securities) For the three months ended March 31, 2020, neither the Company nor any of its subsidiaries purchased, redeemed, or sold any of the Company's listed securities - For the three months ended March 31, 2020, neither the Company nor any of its subsidiaries purchased, redeemed, or sold any of the Company's listed securities[119](index=119&type=chunk) [Share Option Scheme](index=28&type=section&id=Share%20Option%20Scheme) As of March 31, 2020, the Company did not have a share option scheme - As of **March 31, 2020**, the Company did not have a share option scheme[120](index=120&type=chunk) [Directors' Securities Transactions](index=29&type=section&id=Directors'%20Securities%20Transactions) The Company has adopted a code of conduct for directors' securities transactions, and all directors have confirmed compliance with this code for the three months ended March 31, 2020, following specific inquiries - The Company has adopted a code of conduct for directors' securities transactions, the terms of which are no less exacting than the required standard of dealings set out in Rules 5.48 to 5.67 of the GEM Listing Rules[122](index=122&type=chunk) - All Directors have confirmed their compliance with the standards required by the Model Code for the three months ended March 31, 2020[122](index=122&type=chunk) [Compliance with Corporate Governance Code](index=29&type=section&id=Compliance%20with%20Corporate%20Governance%20Code) The Company is committed to high standards of corporate governance and has adopted the Corporate Governance Code set out in Appendix 15 of the GEM Listing Rules; the Board believes the Company has complied with all applicable code provisions throughout the three months ended March 31, 2020 - The Company has adopted the Corporate Governance Code set out in Appendix 15 of the GEM Listing Rules as its own corporate governance code[123](index=123&type=chunk) - The Directors believe that the Company has adopted the relevant principles and complied with all applicable code provisions set out in the Corporate Governance Code throughout the three months ended March 31, 2020[123](index=123&type=chunk) [Audit Committee](index=29&type=section&id=Audit%20Committee) The Group's unaudited condensed consolidated financial statements for the three months ended March 31, 2020, have been reviewed by the Audit Committee, which deemed them prepared in compliance with applicable accounting standards and GEM Listing Rules, with sufficient disclosures - The Group's unaudited condensed consolidated financial statements for the three months ended March 31, 2020, have been reviewed by the Audit Committee[124](index=124&type=chunk) - The Audit Committee is of the opinion that the financial statements were prepared in accordance with applicable accounting standards and the GEM Listing Rules, and that adequate disclosures have been made[124](index=124&type=chunk) [Dividends](index=30&type=section&id=Dividends) The Board of Directors does not recommend the payment of any dividends for the three months ended March 31, 2020 - The Directors do not recommend the payment of any dividends for the three months ended March 31, 2020[127](index=127&type=chunk) [Material Acquisitions and Disposals](index=30&type=section&id=Material%20Acquisitions%20and%20Disposals) For the three months ended March 31, 2020, the Group did not make any material acquisitions or disposals of subsidiaries, associated companies, or joint ventures - For the three months ended March 31, 2020, the Group did not make any material acquisitions or disposals of any subsidiaries, associated companies, and joint ventures[128](index=128&type=chunk) [Compliance Advisor's Interests](index=30&type=section&id=Compliance%20Advisor's%20Interests) The Company's compliance advisor, Dongxing Securities (Hong Kong) Company Limited, confirms that as of the date of this report, neither it nor any of its directors, employees, or close associates hold any interest in the Company's share capital or any member of the Group, or have any relationship with the Company requiring disclosure, other than compliance advisory services - Dongxing Securities (Hong Kong) Company Limited or any of its directors or employees or close associates do not have any interest in the share capital of the Company or any member of the Group, or any relationship with the Company that is notifiable to the Company under Rule 6A.32 of the GEM Listing Rules, save for the compliance advisory services provided by Dongxing Securities (Hong Kong) Company Limited[129](index=129&type=chunk) [Sufficiency of Public Float](index=30&type=section&id=Sufficiency%20of%20Public%20Float) Based on publicly available information and to the best of the Directors' knowledge, the Company has maintained the public float required by the GEM Listing Rules - Based on publicly available information of the Company and to the best of the Directors' knowledge as of the date of this report, the Company has maintained the public float required by the GEM Listing Rules[130](index=130&type=chunk)

CHINA HONGGUANG HOLDINGS LIMITED 中國宏光控股有限公司 (於開曼群島註冊成立的有限公司) 股份代號: 8646 ANNUAL REPORT #2019 香港聯合交易所有限公司（「聯交所」）GEM之特色 GEM的定位，乃為中小型公司提供一個上市的市場，此等公司相比起其他在主板上市的公司帶有較高投資風險。有意投 資的人士應了解投資於該等公司的潛在風險，並應經過審慎周詳的考慮後方作出投資決定。 由於GEM上市公司普遍為中小型公司，在GEM買賣的證券可能會較於主板買賣之證券承受較大的市場波動風險，同時無 法保證在GEM買賣的證券會有高流通量的市場。 香港交易及結算所有限公司及聯交所對本報告的內容概不負責，對其準確性或完整性亦不發表任何聲明，並明確表示， 概不對因本報告全部或任何部分內容而產生或因倚賴該等內容而引致的任何損失承擔任何責任。 本報告資料乃遵照聯交所GEM證券上巿規則（「GEM上市規則」）的規定而刊載，旨在提供有關中國宏光控股有限公司（「本 公司」）的資料；本公司董事（統稱「董事」，各為一名「董事」）願就本報告共同及個別承擔全部責任。各董事在作出一切合 理查詢後，確認就其深知 ...