[Corporate Information](index=2&type=section&id=Corporate%20Information) [Corporate Structure and Key Personnel](index=2&type=section&id=Corporate_Structure) The report details the company's board members, composition and chairs of various committees (Audit, Remuneration, Nomination, Corporate Governance), and key partners including legal advisors and auditors, along with registered and principal places of business - Executive Directors include Mr. Chan Yuk Bun, Chairman and Chief Executive Officer, and Mr. Chan Lung Bun[2](index=2&type=chunk) - The Audit Committee is chaired by Mr. Chan Hung Chun, the Remuneration Committee by Ms. Tam Ho Ting, the Nomination Committee by Mr. Chan Yuk Bun, and the Corporate Governance Committee by Mr. Chan Lung Bun[2](index=2&type=chunk) - The company's auditor is PricewaterhouseCoopers[6](index=6&type=chunk) [Interim Condensed Consolidated Financial Statements](index=5&type=section&id=Interim%20Condensed%20Consolidated%20Financial%20Statements) [Statement of Comprehensive Income](index=5&type=section&id=Statement%20of%20Comprehensive%20Income) For the six months ended June 30, 2024, the Group experienced a significant decline in revenue and profitability, with total revenue decreasing by **40.6%** and profit for the period falling from **HK$14.756 million** to **HK$9.949 million** Metric (Six Months Ended June 30) | Metric (Six Months Ended June 30) | 2024 (HK$ '000) | 2023 (HK$ '000) | Y-o-Y Change | | :--- | :--- | :--- | :--- | | **Revenue** | 45,999 | 77,437 | -40.6% | | **Gross Profit** | 18,031 | 31,838 | -43.4% | | **Operating Profit** | 10,843 | 18,343 | -40.9% | | **Profit for the Period** | 9,949 | 14,756 | -32.6% | | **Basic Earnings Per Share (HK cents)** | 1.2 | 1.8 | -33.3% | - Due to the depreciation of RMB against HKD, the company recorded a **HK$1.84 million** foreign currency translation difference loss, leading to a total comprehensive income for the period of **HK$8.109 million**[11](index=11&type=chunk) [Statement of Financial Position](index=7&type=section&id=Statement%20of%20Financial%20Position) As of June 30, 2024, the Group's total assets decreased primarily due to lower cash and cash equivalents, while total liabilities significantly reduced due to full repayment of bank borrowings, maintaining a stable overall financial structure Balance Sheet Item | Balance Sheet Item | June 30, 2024 (HK$ '000) | December 31, 2023 (HK$ '000) | Change | | :--- | :--- | :--- | :--- | | **Total Assets** | 145,559 | 164,857 | -11.7% | | Non-current Assets | 22,276 | 24,863 | -10.4% | | Current Assets | 123,283 | 139,994 | -11.9% | | **Total Liabilities** | 5,790 | 17,197 | -66.3% | | Bank Borrowings | - | 8,093 | -100% | | **Total Equity** | 139,769 | 147,660 | -5.3% | | **Cash and Cash Equivalents** | 38,748 | 54,891 | -29.4% | [Statement of Changes in Equity](index=9&type=section&id=Statement%20of%20Changes%20in%20Equity) In the first half of 2024, the Group's total equity decreased from **HK$147.7 million** to **HK$139.8 million**, primarily due to **HK$16 million** in dividends paid and **HK$1.84 million** in exchange losses, despite a **HK$9.95 million** profit for the period - Opening total equity was **HK$147,660 thousand**[16](index=16&type=chunk) - Profit for the period increased equity by **HK$9,949 thousand**[16](index=16&type=chunk) - Dividends declared during the period of **HK$16,000 thousand** reduced equity[16](index=16&type=chunk) - Foreign currency translation differences resulted in other comprehensive loss of **HK$1,840 thousand**[16](index=16&type=chunk) - Closing total equity was **HK$139,769 thousand**[16](index=16&type=chunk) [Statement of Cash Flows](index=11&type=section&id=Statement%20of%20Cash%20Flows) In the first half of 2024, the Group's cash and cash equivalents decreased by **HK$16.072 million**, primarily due to a significant **HK$24.247 million** net cash outflow from financing activities for bank loan repayments and dividend payments, despite **HK$8.304 million** net cash inflow from operating activities Cash Flow Item (Six Months Ended June 30) | Cash Flow Item (Six Months Ended June 30) | 2024 (HK$ '000) | 2023 (HK$ '000) | | :--- | :--- | :--- | | **Net Cash from Operating Activities** | 8,304 | 26,253 | | **Net Cash Used in Investing Activities** | (129) | (777) | | **Net Cash Used in Financing Activities** | (24,247) | (54) | | **Net (Decrease)/Increase in Cash and Cash Equivalents** | (16,072) | 25,422 | | **Cash and Cash Equivalents at End of Period** | 38,748 | 75,954 | - Cash outflow from financing activities primarily included **HK$8.093 million** for bank loan repayments and **HK$16 million** for dividend payments[22](index=22&type=chunk) [Notes to the Financial Information](index=13&type=section&id=Notes%20to%20the%20Financial%20Information) [Note 1: General Information](index=13&type=section&id=Note_1_General_Information) The company, incorporated in the Cayman Islands, transitioned its shares from GEM to the Main Board of HKEX on September 28, 2023, operating as an investment holding company with subsidiaries primarily engaged in manufacturing and trading slewing bearings, mechanical products, and parts - The company is primarily engaged in the manufacturing and trading of slewing bearings, mechanical products, and mechanical parts[23](index=23&type=chunk) - The company's shares were transferred from GEM to the Main Board of the Stock Exchange on **September 28, 2023**[23](index=23&type=chunk) [Note 4: Revenue and Segment Information](index=16&type=section&id=Note_4_Revenue_and_Segment_Information) Management considers the Group as a single operating segment, "manufacturing and trading a range of mechanical products and mechanical parts," with all revenue recognized at a point in time from contracts with customers - Management considers the Group to have only one operating segment: manufacturing and trading mechanical products and parts[36](index=36&type=chunk) - All revenue is recognized at a point in time[37](index=37&type=chunk) [Note 8: Dividends](index=19&type=section&id=Note_8_Dividends) The Board does not recommend the payment of any interim dividend for the reporting period ended June 30, 2024 - The Board does not recommend the payment of an interim dividend for the reporting period[49](index=49&type=chunk)[51](index=51&type=chunk) [Note 10: Trade Receivables](index=20&type=section&id=Note_10_Trade_Receivables) As of June 30, 2024, total trade receivables were **HK$41.449 million**, with receivables over three months significantly increasing to **HK$19.422 million**, representing **46.8%** of the total, indicating a potential extension of collection cycles, while sales credit terms are typically **60 to 120 days** Aging Analysis | Aging Analysis | June 30, 2024 (HK$ '000) | December 31, 2023 (HK$ '000) | | :--- | :--- | :--- | | Within 30 days | 16,169 | 38,104 | | 31 to 60 days | 288 | 2,274 | | 61 to 90 days | 5,570 | 1,901 | | Over 3 months | 19,422 | 2,012 | | **Total** | **41,449** | **44,291** | [Management Discussion and Analysis](index=23&type=section&id=Management%20Discussion%20and%20Analysis) [Business and Financial Review](index=23&type=section&id=Business_and_Financial_Review) In the first half of 2024, the Group's total revenue declined by **40.6%** to **HK$46 million** due to global economic uncertainties and high interest rates, with core businesses experiencing downturns, but the new mineral (nickel ore) trading business contributed **HK$8.6 million** in revenue, and reduced administrative expenses, partly due to lower one-off listing costs, mitigated the net profit decline [Business Overview](index=23&type=section&id=Business_Overview) As a leading Chinese slewing bearing manufacturer, the Group's revenue declined by **40.6%** in H1 2024 due to macroeconomic impacts and slowed construction in Hong Kong and ASEAN, prompting expansion into mineral and related product trading to seek new growth - In the first half of 2024, due to local and global economic uncertainties, the Group's revenue decreased by **40.6%** to **HK$46 million**, with gross profit at **HK$18 million**[79](index=79&type=chunk) - Key reasons for the revenue decline include reduced local construction activity, slower global demand for slewing bearings and other products, and customer project delays[79](index=79&type=chunk) - To address challenges, the Group expanded into mineral and related product trading in early 2024, aiming to create new business synergies and profit growth points[82](index=82&type=chunk)[83](index=83&type=chunk) [Revenue Analysis by Product](index=26&type=section&id=Revenue_Analysis_by_Product) In H1 2024, the Group's total revenue decreased by **40.6%**, with "Slewing Bearings" revenue sharply declining by **58.3%**, and "Mechanical Parts" and "Machinery" also falling by **43.4%** and **44.5%** respectively, while the newly expanded "Minerals" (nickel ore) business contributed **HK$8.601 million**, accounting for **18.7%** of total revenue Revenue Category (Six Months Ended June 30) | Revenue Category (Six Months Ended June 30) | 2024 (HK$ '000) | 2023 (HK$ '000) | Y-o-Y Change | | :--- | :--- | :--- | :--- | | **Slewing Bearings** | 17,298 | 41,521 | -58.3% | | **Mechanical Parts** | 8,689 | 15,351 | -43.4% | | **Machinery** | 11,411 | 20,565 | -44.5% | | **Minerals (Nickel Ore)** | 8,601 | - | N/A | | **Total** | **45,999** | **77,437** | **-40.6%** | - The decline in slewing bearing revenue was primarily due to the impact of manufacturing and construction downturns in Japan and ASEAN markets on ODM business, and customers shifting to direct orders of the company's self-produced high-quality products instead of procurement[101](index=101&type=chunk)[102](index=102&type=chunk) - The decrease in mechanical parts revenue was mainly due to reduced demand from a downturn in construction and mining businesses in the Philippines market[107](index=107&type=chunk) - The decline in machinery sales revenue was primarily due to fewer orders from Hong Kong contractor clients, linked to delays in projects such as the Hong Kong International Airport Third Runway[112](index=112&type=chunk) - The newly launched mineral trading business (nickel ore) generated **HK$8.601 million** in sales revenue during the period[116](index=116&type=chunk) [Cost, Expenses and Profitability Analysis](index=33&type=section&id=Cost_Expenses_and_Profitability) Cost of sales decreased by **38.7%** in line with revenue, while administrative expenses significantly dropped by **46.0%** due to the absence of **HK$6.8 million** in one-off listing expenses from the prior period, resulting in a profit attributable to shareholders of **HK$9.9 million**, compared to an adjusted profit of approximately **HK$21.6 million** in the prior period, indicating ongoing operational pressure - Cost of sales decreased by **38.7%** from **HK$45.6 million** to **HK$28 million**, primarily due to reduced revenue and changes in product mix[116](index=116&type=chunk) - Administrative expenses decreased by **46.0%** from **HK$13.9 million** to **HK$7.5 million**, mainly due to the absence of **HK$6.8 million** in listing-related expenses incurred in the prior period[118](index=118&type=chunk)[120](index=120&type=chunk) - Profit attributable to shareholders for the current period was approximately **HK$9.9 million**, compared to **HK$14.8 million** in the prior period[118](index=118&type=chunk) [Liquidity and Financial Resources](index=34&type=section&id=Liquidity_and_Financial_Resources) The Group maintains a robust financial position, primarily funded by internal cash flow and listing proceeds, with no bank borrowings as of June 30, 2024, and a strong current ratio of **21.3 times**, demonstrating excellent short-term solvency, with cash and cash equivalents totaling **HK$43.8 million** - As of June 30, 2024, the Group's cash and cash equivalents (including pledged deposits) amounted to **HK$43.8 million**[118](index=118&type=chunk) - The current ratio (current assets/current liabilities) significantly increased to **21.3 times** from **8.2 times** at the end of 2023[119](index=119&type=chunk) - The Group repaid all bank borrowings during the period and had no bank borrowings as of the period end[119](index=119&type=chunk) [Capital Management and Future Plans](index=35&type=section&id=Capital_Management_and_Future_Plans) The company completed a share subdivision in May 2024 to enhance stock liquidity, with most listing proceeds utilized as planned and the remaining **HK$1 million** allocated for ERP system, finance department expansion, and staff training, while future strategies include capacity enhancement, marketing, automation, and further expansion into mineral trading to address challenges and create shareholder value [Capital Structure and Use of Proceeds](index=35&type=section&id=Capital_Structure_and_Use_of_Proceeds) On May 21, 2024, the company completed a **1-for-2** share subdivision, and as of June 30, 2024, **HK$27.425 million** of the **HK$28.4 million** listing proceeds had been utilized, primarily for machinery and working capital, with the remaining **HK$0.975 million** earmarked for ERP system, finance department expansion, and staff training by Q4 2024 - The company completed a share subdivision on **May 21, 2024**, where each ordinary share of **HK$0.01** par value was subdivided into two shares of **HK$0.005** par value[122](index=122&type=chunk) Use of Proceeds | Use of Proceeds | Revised Allocation (HK$ '000) | Total Utilized (HK$ '000) | Remaining Amount (HK$ '000) | | :--- | :--- | :--- | :--- | | Acquisition and Replacement of Machinery and Equipment | 17,210 | 17,210 | - | | Market Share Expansion and Marketing | 1,246 | 1,246 | - | | Enhancement of Automation Level | 2,158 | 2,158 | - | | Establishment of ERP System | 1,704 | 873 | 831 | | Expansion of Finance Department | 1,420 | 1,420 | - | | Enhancement of Staff Training | 227 | 83 | 144 | | Maintenance of Working Capital | 4,435 | 4,435 | - | | **Total** | **28,400** | **27,425** | **975** | [Future Prospects and Strategy](index=41&type=section&id=Future_Prospects_and_Strategy) Despite global economic uncertainties, the Group aims to solidify its position as a quality slewing bearing manufacturer and expand its business by leveraging integrated advantages in mechanical parts and machinery supply, continuing strategies like capacity enhancement, marketing, automation, and ERP system establishment, while planning to expand mineral and related product procurement to boost revenue and profitability and maximize shareholder returns - The Group aims to consolidate its position as a quality slewing bearing manufacturer and enhance its competitiveness as an integrated product supplier[137](index=137&type=chunk) - Key future strategies include acquiring equipment to enhance production capacity, intensifying marketing efforts, improving automation levels, establishing an ERP system, expanding the finance department, and strengthening staff training[138](index=138&type=chunk) - The Group remains cautiously optimistic about the recovery of its procurement business and plans to expand the scope of mineral and related product procurement in the foreseeable future to enhance revenue and profitability[139](index=139&type=chunk)[140](index=140&type=chunk) [Other Information](index=43&type=section&id=Other%20Information) [Interests Disclosure](index=43&type=section&id=Interests_Disclosure) The report discloses shareholdings of directors, chief executives, and substantial shareholders, noting that as of June 30, 2024, Chairman Mr. Chan Yuk Bun, through C Centrum Holdings Limited, holds **75%** of the company's issued share capital as the controlling shareholder, with no share option scheme adopted or listed securities purchased, sold, or redeemed during the period - Chairman and Chief Executive Officer Mr. Chan Yuk Bun holds **600 million** shares through C Centrum Holdings Limited, representing **75%** of the company's issued share capital[143](index=143&type=chunk)[149](index=149&type=chunk) - During the reporting period, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities[152](index=152&type=chunk) [Corporate Governance and Compliance](index=46&type=section&id=Corporate_Governance_and_Compliance) The Group is committed to high corporate governance standards, complying with the Listing Rules' Corporate Governance Code during the period, with the only deviation being the combined roles of Chairman and Chief Executive Officer held by Mr. Chan Yuk Bun, an arrangement the Board deems in the Group's best interest, and the Audit Committee has reviewed this interim financial report - The company complied with the Corporate Governance Code, with one deviation: the roles of Chairman and Chief Executive Officer are not separate, both held by Mr. Chan Yuk Bun[159](index=159&type=chunk) - The Board believes this arrangement is currently most appropriate given Mr. Chan Yuk Bun's contributions to the Group's overall management[159](index=159&type=chunk) - The Audit Committee, comprising three independent non-executive directors, has reviewed the unaudited interim condensed consolidated financial information for the six months ended June 30, 2024[166](index=166&type=chunk)[168](index=168&type=chunk)

Financial Performance - For the six months ended June 30, 2024, the company reported revenue of HKD 45,999,000, a decrease of 40.60% compared to HKD 77,437,000 in the same period of 2023[1] - Gross profit for the same period was HKD 18,031,000, down 43.40% from HKD 31,838,000 year-on-year[1] - Operating profit decreased by 40.90% to HKD 10,843,000 from HKD 18,343,000 in the previous year[1] - Profit for the period was HKD 9,949,000, reflecting a decline of 32.60% compared to HKD 14,756,000 in 2023[1] - The profit attributable to the company's owners was also HKD 9,949,000, down 32.60% from HKD 14,756,000 year-on-year[1] - Basic and diluted earnings per share were HKD 1.2, a decrease of 33.30% from HKD 1.8 in the same period last year[1] Assets and Equity - Total current assets amounted to HKD 123,283,000, a decrease of 11.90% from HKD 139,994,000[2] - Total assets were reported at HKD 145,559,000, down 11.70% from HKD 164,857,000[2] - Net current assets stood at HKD 117,515,000, a decrease of 4.40% compared to HKD 122,945,000 in the previous year[2] - Total equity was HKD 139,769,000, reflecting a decline of 5.30% from HKD 147,660,000 year-on-year[2]

Financial Performance - Revenue for the six months ended June 30, 2024, was HKD 45,999 thousand, a decrease of 40.60% compared to HKD 77,437 thousand in the same period of 2023[1] - Gross profit decreased by 43.40% to HKD 18,031 thousand from HKD 31,838 thousand year-over-year[1] - Operating profit for the period was HKD 10,843 thousand, down 40.90% from HKD 18,343 thousand in the previous year[1] - Net profit attributable to shareholders was HKD 9,949 thousand, a decline of 32.60% compared to HKD 14,756 thousand in the same period last year[1] - Basic and diluted earnings per share decreased by 33.30% to HKD 1.2 from HKD 1.8 year-over-year[1] Assets and Equity - Total current assets decreased by 11.90% to HKD 123,283 thousand from HKD 139,994 thousand as of December 31, 2023[3] - Total assets decreased by 11.70% to HKD 145,559 thousand from HKD 164,857 thousand as of December 31, 2023[3] - Total equity decreased by 5.30% to HKD 139,769 thousand from HKD 147,660 thousand as of December 31, 2023[3] - As of June 30, 2024, the company's total equity amounted to HKD 139,769 million, a decrease from HKD 147,660 million as of January 1, 2024[5] Cash Flow and Reserves - The company reported a net cash position of HKD 38,748 thousand, down from HKD 54,891 thousand in the previous year[3] - The cash flow from operating activities for the six months ended June 30, 2024, was HKD 26,253 million, compared to HKD 8,304 million for the same period last year[9] - The company incurred a foreign exchange reserve loss of HKD 1,840 million during the period[5] - The company has a statutory reserve of HKD 7,016 million, which is required by Chinese law to allocate at least 10% of after-tax profits[7] Revenue Breakdown - ODM revenue decreased by 45.1% to HKD 16.8 million from HKD 30.6 million in the previous period[35] - OEM revenue decreased by 17.9% to HKD 0.1 million from HKD 0.2 million in the previous period[35] - OBM revenue saw a significant drop of 77.9% to HKD 0.4 million from HKD 1.7 million in the previous period[35] - Revenue from rotary bearings decreased from HKD 41.5 million in the first half of 2023 to HKD 17.3 million, a decline of 58.3%[41] Expenses and Cost Management - The company incurred a total tax expense of 1,309,000 HKD for the six months ended June 30, 2024, compared to 3,929,000 HKD for the same period in 2023[18] - The cost of goods sold and consumables amounted to 23,055,000 HKD for the six months ended June 30, 2024, compared to 40,374,000 HKD for the same period in 2023[17] - The group's selling costs decreased by approximately 38.7% to HKD 28.0 million, primarily due to reduced revenue and the need to produce different product combinations[48] - Administrative expenses were reduced by approximately 46.0% to about HKD 7.5 million, attributed to decreased office expenses and listing-related costs[49] Business Strategy and Market Outlook - The company anticipates that 2024 will be a challenging year due to economic recovery issues in several countries and high interest rates impacting the global business environment[32] - The company aims to further diversify its heavy machinery offerings to include pile drivers and wheeled unloaders[31] - The group decided to expand its product procurement range to include minerals and related products, responding to increasing customer inquiries for a broader product range[34] - The company is positioned as one of the fastest-growing "full-service product" suppliers in its field[68] Corporate Governance and Compliance - The company aims to adhere to the corporate governance code as per the Hong Kong Stock Exchange listing rules[81] - The board has established a corporate governance committee to review the company's governance policies and practices[81] - The Audit Committee was established on October 21, 2019, consisting of three independent non-executive directors[83] Employee and Operational Changes - The group had 82 employees as of June 30, 2024, a decrease from 96 employees as of December 31, 2023[60] - The company has expanded its finance department by hiring senior accountants to manage increased business scale and production capacity[57] - The company aims to increase market share and strengthen sales capabilities, having increased manpower in the sales department to enhance support for sales activities[56] Future Developments - The company plans to enhance automation levels by integrating intelligent automation solutions into the production process, including the installation of robotic arms and the purchase of an automatic packaging machine[57] - The company has set a goal to improve data management efficiency through the establishment of an ERP system, with components currently undergoing testing and expected to be operational in the second half of 2024[57]

Financial Performance - Revenue for FY2023 increased to HK$143,779,000, up 12.6% from HK$127,730,000 in FY2022[11] - Gross profit for FY2023 was HK$60,789,000, representing a 4.8% increase from HK$57,924,000 in FY2022[11] - Profit before taxation decreased to HK$28,103,000, down 32.2% from HK$41,432,000 in FY2022[11] - Profit for the year was HK$22,039,000, a decline of 36.6% compared to HK$34,929,000 in FY2022[11] - Total comprehensive income for the year was HK$20,095,000, down 33.1% from HK$30,034,000 in FY2022[11] - Basic and diluted earnings per share were approximately HK5.5 cents, down from HK8.7 cents in 2022[39] - Net profit attributable to equity holders for the year was approximately HK$22.0 million, and excluding non-recurring expenses, the profit would have been approximately HK$34.4 million[39] Assets and Liabilities - Non-current assets decreased to HK$24,863,000 from HK$26,422,000 in FY2022[16] - Current assets increased to HK$139,994,000, up from HK$122,766,000 in FY2022[16] - Current liabilities rose significantly to HK$17,049,000 from HK$5,544,000 in FY2022[16] - Net current assets improved to HK$122,945,000, compared to HK$117,222,000 in FY2022[16] - Net assets increased to HK$147,660,000 from HK$143,565,000 in FY2022[16] - The Group's total current assets were approximately HK$140.0 million, while current liabilities were HK$17.0 million, resulting in a current ratio of 8.2 times[133] - The current ratio decreased from 22.3 times in 2022 to 8.2 times in 2023, indicating a significant change in liquidity position[133] Revenue Breakdown - Revenue from slewing rings decreased by 6.7% to HK$70,302,000, with ODM revenue at HK$56,718,000, down 0.1%[18] - Revenue from machineries surged by 82.5% to HK$49,864,000, up from HK$27,320,000 in the previous year[18] - Revenue from mechanical parts and components slightly decreased by approximately 5.8% year-on-year, from HK$25.1 million in FY2022 to HK$23.6 million in FY2023[101] - Revenue from heavy-duty machinery sales increased by approximately HK$22.6 million, or 82.5%, from HK$27.3 million in FY2022 to HK$49.9 million for the Reporting Period[105] - Revenue from the Filipino market surged by approximately 162.7% or HK$20.8 million, increasing from approximately HK$12.8 million in FY2022 to approximately HK$33.6 million for the Reporting Period[113] - Revenue from the Singaporean market decreased by approximately 14.0% or HK$7.2 million, from approximately HK$51.2 million in FY2022 to approximately HK$44.0 million for the Reporting Period[113] Listing and Market Presence - The company successfully transferred its listing from GEM to the Main Board of The Stock Exchange of Hong Kong on September 29, 2023[22] - The Group successfully transferred its listing from GEM to the Main Board on September 29, 2023, with the last trading day on GEM being September 28, 2023[60] - The Group aims to promote its brand and seize more business opportunities in various regions following its listing[33] - The Group has established a strong international customer base, including leading Japanese manufacturers, enhancing its market position[68] Operational Developments - The Group expanded its manufacturing capabilities to include mechanical parts such as sprockets, track shoes, and rollers, in addition to slewing rings[46] - The Group plans to broaden its product coverage to include minerals and related products to enhance revenue and profitability in the foreseeable future[51] - The Group aims to enhance factory automation to mitigate the impact of rising labor costs and overheads in the PRC[52] - The Group has installed robotic arms and acquired an automatic packaging machine and a CNC Coordinate Measuring Machine to enhance automation and production efficiency[152] Strategic Initiatives - The Group is committed to enhancing its product offerings and expanding its market presence through strategic initiatives[85] - Strategies include acquiring and replacing machinery to enhance production capacity, increasing market share, and establishing an ERP system[184] - The Group intends to enhance its competitiveness in the fragmented slewing ring manufacturing industry through increased automation and staff training[184] Human Resources and Management - The Group increased its workforce in the sales department to strengthen sales support and hired a consultant for web page design and promotion strategies[149] - As of December 31, 2023, the Group had 96 employees, an increase from 82 employees as of December 31, 2022[160] - The company has a focus on human resources management under Mr. LP Chan's leadership[194] Corporate Governance - The company emphasizes the importance of corporate governance and independent advice through its committees[198] - Mr. LP Chan is also the chairman of the Corporate Governance Committee and a member of the Remuneration Committee[194] Dividends - A final dividend of HK4.0 cents per share has been recommended, subject to shareholder approval[40] - No interim dividend was paid during the year; a final dividend of HK4.0 cents per share is recommended, totaling HK$16,000,000 for the year ended December 31, 2023[177]

Dividend Proposal - Proposed final dividend of HKD 0.04 per share, amounting to HKD 16,000,000, based on 400,000,000 existing shares before the share split[1] - After the share split effective on May 21, 2024, the proposed final dividend will be HKD 0.02 per share for the new share count[1] - The proposed final dividend is subject to approval at the annual general meeting and may or may not be approved[8]

Financial Performance - Revenue for the year ended December 31, 2023, was HKD 143,779,000, an increase of 12.6% from HKD 127,730,000 in 2022[2] - Gross profit for the year was HKD 60,789,000, compared to HKD 57,924,000 in the previous year, reflecting a gross margin improvement[2] - Net profit attributable to equity holders for the year was HKD 22,039,000, down 36.8% from HKD 34,929,000 in 2022[7] - Operating profit before tax was HKD 28,103,000, a decrease of 32.2% from HKD 41,432,000 in the prior year[11] - The adjusted net profit for the year, excluding non-recurring items, was HKD 37,402,000, slightly down from HKD 38,828,000 in 2022[11] - Basic earnings per share fell to HKD 5.5 in 2023 compared to HKD 8.7 in 2022, a decrease of about 37%[17] - The company's profit attributable to equity holders decreased to HKD 22,039 thousand in 2023 from HKD 34,929 thousand in 2022, representing a decline of approximately 37%[17] - The income tax expense for 2023 was HKD 6,064 thousand, a decrease from HKD 6,503 thousand in 2022[122] Revenue Breakdown - Revenue from rotary bearings decreased by approximately HKD 5.0 million, or 6.7%, to HKD 70.3 million for the fiscal year ending December 31, 2023[64] - Revenue from machinery parts reached HKD 34.2 million, a decrease of 71.3% compared to the previous year[63] - Revenue from the Philippines significantly increased to HKD 33,637,000 in 2023, up from HKD 12,806,000 in 2022, marking a growth of approximately 162%[197] - Revenue from Singapore decreased to HKD 44,043,000 in 2023 from HKD 51,216,000 in 2022, a decline of about 14%[197] - Revenue from Hong Kong decreased to HKD 32,204,000 in 2023 from HKD 35,799,000 in 2022, a decline of about 10%[197] - Revenue from Taiwan surged to HKD 4,326,000 in 2023, compared to HKD 912,000 in 2022, reflecting a growth of approximately 375%[197] - Revenue from China increased to HKD 4,261,000 in 2023 from HKD 1,064,000 in 2022, representing a growth of about 300%[197] - Revenue from Japan rose to HKD 3,974,000 in 2023, up from HKD 3,030,000 in 2022, indicating an increase of approximately 31%[197] Expenses and Costs - Administrative expenses increased to HKD 30,962,000 from HKD 15,891,000, indicating a rise in operational costs[2] - Total expenses for sales, distribution, and administrative costs increased from HKD 88,384 thousand in 2022 to HKD 117,319 thousand in 2023, marking a growth of about 32.7%[120] - Direct labor costs increased by approximately 36.3% from HKD 4.7 million in FY2022 to HKD 6.4 million during the reporting period[85] - The cost of raw materials and consumables increased from HKD 56,999 thousand in 2022 to HKD 75,273 thousand in 2023, representing a rise of approximately 32%[120] Market and Product Development - The company plans to continue its market expansion and product development strategies in the upcoming fiscal year[9] - The market has shown strong recovery post-COVID-19, with increased demand for the company's products and services[40] - The company has expanded its product line to include machinery components, which are complementary to its rotary bearing business, enhancing customer relationships and generating recurring orders[58] - The company has developed new products and services since 2020, expanding beyond turntable bearings to include other machinery components[39] Customer and Sales Growth - The company has attracted several new ODM customers since 2021, contributing to revenue growth, including a theme park and resort in Hong Kong[55] - The company continues to expand its customer base, including partnerships with major theme parks and resorts in Hong Kong[65] - The total number of ODM customers increased to 23 during the reporting period, contributing approximately HKD 4.8 million in revenue[70] Financial Position and Assets - As of December 31, 2023, the group's cash and cash equivalents amounted to HKD 54.9 million, an increase of approximately 7.6% or HKD 3.9 million compared to HKD 51.0 million on December 31, 2022[89] - The total current assets and current liabilities as of December 31, 2023, were approximately HKD 140.0 million and HKD 17.0 million, respectively, resulting in a current ratio of 8.2 times, down from 22.3 times on December 31, 2022[90] - The total assets amounted to HKD 164,857,000, an increase from HKD 149,188,000 in the previous year[184] - The company's equity totalled HKD 147,660,000, up from HKD 143,565,000 year-over-year[184] Corporate Governance and Compliance - The audit committee, established on October 21, 2019, consists of three independent non-executive directors, ensuring compliance with corporate governance standards[176] - The company has adhered to all applicable corporate governance codes during the reporting period, with the exception of the separation of roles between the Chairman and CEO[175] - The company has adopted a securities trading policy for directors and relevant personnel, ensuring compliance with the standard rules[164] Future Plans and Investments - The company plans to utilize all net proceeds from the listing in 2024[95] - The company aims to expand its financial department, allocating 5.0% of the net proceeds (HKD 1.4 million) for this purpose, also expected to be completed in Q4 2024[100] - The company plans to reallocate funds from postponed training programs to strengthen market promotion efforts[131] Transition and Listing - The company successfully transitioned from GEM to the Main Board of the Hong Kong Stock Exchange on September 29, 2023[38] - The company was established in October 2018 and listed on the GEM of the Hong Kong Stock Exchange on October 31, 2019, later transferring to the main board on September 28, 2023[186]