Industry Overview - In 2024, the biopharmaceutical industry faced a complex situation with both challenges and opportunities, emphasizing the importance of developing first-class vaccines to protect human health [14]. Company Strategy and Goals - The company aims to create value and accumulate development potential during economic recession, focusing on the value release of its core products [14]. - Recbio is expected to submit the marketing application for its first strategic product in 2025, marking a significant milestone for the company [28]. - The company was recognized in the "2024 TOP10 China Listed Pharmaceutical Companies in ESG Competitiveness," reflecting its commitment to sustainable development [23]. - Recbio established the "Recbio College" to support employee education and integration of education, talent, industry, and innovation chains [24]. Clinical Trials and Vaccine Development - In 2024, Recbio's phase III clinical trial of the recombinant HPV 9-valent vaccine REC603 progressed well, completing the 36-month observation and initiating the 42-month observation [15]. - The phase I clinical study of REC610, a novel adjuvanted recombinant shingles vaccine, showed strong gE-specific immune response comparable to Shingrix®, with 24,640 subjects enrolled in the phase III trial in China within two months [15]. - The recombinant HPV 9-valent vaccine, REC603, is currently in the pivotal stage of Phase III clinical trial in China, with a clinical analysis report expected by August 31, 2025, and marketing application submission by December 31, 2025 [48][50]. - The novel adjuvanted recombinant shingles vaccine, REC610, received clinical trial approval in October 2023, with Phase III trials initiated in October 2024 and expected marketing approval by November 30, 2026 [52]. - The bivalent recombinant respiratory syncytial virus vaccine, REC625, is scheduled for completion of preclinical studies in 2025 [52]. - The novel adjuvanted recombinant HPV 9-valent vaccine, REC604c, was submitted for clinical trial application in February 2025 and accepted by the NMPA [52][53]. - The company is developing multiple vaccine candidates, including those for hepatitis B, herpes simplex, and influenza, with various adjuvant systems [50][52]. - The company emphasizes the importance of HPV vaccines in preventing cervical cancer, which is primarily caused by high-risk HPV types [53]. - The company is developing several early-stage vaccines, including REC609 for human cytomegalovirus, REC629 for hepatitis B virus, and REC630 for therapeutic hepatitis B virus, utilizing advanced technology platforms [108][109][110]. Financial Performance - The company reported a loss before tax of RMB 561,897,000 in 2024, a slight improvement from RMB 572,443,000 in 2023 [33]. - Loss per share for 2024 was RMB 1.16, compared to RMB 1.19 in 2023, indicating a reduction in losses [33]. - Total non-current assets increased to RMB 1,285,103,000 in 2024 from RMB 1,056,904,000 in 2023, representing a growth of 21.5% [34]. - Total current assets decreased to RMB 655,129,000 in 2024 from RMB 1,129,373,000 in 2023, a decline of 42% [34]. - Total current liabilities rose significantly to RMB 839,420,000 in 2024, up from RMB 444,235,000 in 2023, marking an increase of 88.9% [34]. - Net current assets turned negative at RMB (184,291,000) in 2024 compared to RMB 685,138,000 in 2023, indicating a substantial decline [34]. - Total (deficit)/equity decreased to RMB 529,324,000 in 2024 from RMB 1,070,944,000 in 2023, reflecting a drop of 50.7% [34]. Manufacturing and Production Capabilities - The HPV vaccine industrialization base can produce up to 20 million doses of the recombinant HPV 9-valent vaccine annually, complying with Chinese and international GMP standards [21]. - The innovative vaccines manufacturing facility, completed in November 2021, spans approximately 17,000 sq.m. and has received production licenses from Jiangsu MPA [41][43]. - The vaccine manufacturing facility in Taizhou City, Jiangsu Province, has established a complete quality system for large-scale commercial production, meeting both Chinese and EU GMP standards, and has a successful track record of large-scale batch production [107]. - The company has completed the construction of its HPV vaccine manufacturing facility in Taizhou, Jiangsu Province, which has a designed peak annual capacity of 20 million doses of HPV 9-valent vaccines [144]. Research and Development - Total research and development costs for the year ended December 31, 2024, amounted to RMB 476.1 million, with no costs capitalized during the same period [139]. - The company has developed four advanced technology platforms: novel adjuvant development, protein engineering, immunological evaluation, and process development, which enhance vaccine discovery and development [137]. - The in-house R&D team consists of over 100 personnel, most holding master's or doctoral degrees in relevant fields, ensuring a strong foundation for vaccine R&D [132]. - The company has established a systematic approach to vaccine development, integrating novel adjuvant development, protein engineering, and immunological evaluation [118]. Market and Competitive Landscape - There are significant opportunities for REC603 as it is the only domestic HPV 9-valent vaccine currently in development, which can prevent approximately 90% of cervical cancer cases [66]. - The first domestic HPV bivalent vaccine captured 66.7% of China's HPV bivalent vaccine market in its first year, despite being approved in 2019, while the first imported vaccine was approved in 2016 [72][76]. - The HPV 9-valent vaccine is expected to follow a similar trend in pricing as domestic products tend to be more cost-effective compared to global counterparts [72][76]. - The Chinese government has implemented favorable policies for domestic HPV vaccine developers, which the company expects to benefit from in the future [72][76]. Organizational Changes and Efficiency - The company has reorganized its clinical development, process development, and quality analysis departments to improve management efficiency and operational profitability [138]. - The number of research and development staff has decreased following organizational optimization, while efficiency has improved [138]. International Business Development - The company plans to build an international business development team to commercialize its vaccine candidates in international markets, with agreements signed with several countries for the development and commercialization of the recombinant HPV 9-valent vaccine REC603 [148]. Employee and Social Responsibility - The company has implemented training programs for employees and complies with social insurance and housing provident fund contributions as per PRC laws [153].

Media and Broadcasting - The Group's operating philosophy of "low cost, high efficiency" has been crucial in navigating the challenging economic environment, resulting in solid performance in both Media and Telecommunications sectors[11] - The Group successfully broadcasted the 19th Asian Games in Hangzhou and partnered with local TV stations for the 2024 Paris Olympic Games, enhancing community engagement[14] - HOY TV's live Olympic clips consistently ranked among the top five trending videos on YouTube, reflecting strong audience engagement and support for Hong Kong athletes[17] - The Group launched Hong Kong's first-ever television micro-drama "Love Suddenly," featuring two-minute episodes to attract younger viewers and enhance mobile viewing experiences[18] - The Group is actively producing a diverse range of variety shows and exploring innovative filming techniques to improve audience engagement and viewing experiences[18] - The Group has applied for broadcasting rights in the Greater Bay Area to introduce Hong Kong-style micro-dramas to the mainland market, aiming for market expansion[18] - The Group's media business provides a wide range of content, including entertainment, sports, and educational programs, fulfilling its civic responsibilities[13] - The Group's i-CABLE News team ensures the accuracy of information in its reports and produces informative programs to encourage public participation in community issues[13] - The Group's commitment to an omnimedia broadcasting model aims to meet post-pandemic viewing habits, including access via smart TVs[18] - The Group's efforts in sports broadcasting are seen as a means to bridge political differences and strengthen community bonds in Hong Kong[17] - During the Olympic broadcasting period, HOY TV's live segments consistently ranked among the top five on YouTube, reflecting strong engagement with Hong Kong audiences[20] - The Group's omni-media broadcast of the Hong Kong Olympic Team's highlights secured support from 53 sponsors, marking a significant milestone[37] - The Group plans to launch Hong Kong's first micro-drama series "My Family Has Joy" in 2025, featuring episodes of only 2 minutes each to cater to mobile viewers[20] - The Group's social media achieved over 32 million views on HOY YouTube during the Paris Olympics, with a year-on-year increase of more than 40% in subscribers[48] - The number of users on the hoy.tv website and HOY's official app reached over 780,000 during the most active month in 2024, with over 100 million views recorded[50] - The HOY Mobile App downloads increased by 45% as of December 31, 2024, with Instagram and YouTube followers growing by more than 130%[53] - The Group's three free-to-air TV channels and mobile applications achieved coverage of approximately 99% of the population in Hong Kong[47] - The "Undercover" travel series received strong support from the Hong Kong Tourism Board, leading to the launch of "Undercover Service Squad," which attracted over 1.85 million views in Guangdong province[41] - The "Railway Traveler" program garnered significant support from young audiences online and led to the launch of "Railway Traveler 2" within the same year[60] - The Group has actively expanded into the Mainland China market, collaborating with TV stations in the Greater Bay Area to enrich multimedia content[43] - The integration of HOY TV experience across various platforms has enhanced the effectiveness of streaming services and advertising[49] - The Group's branded content initiatives have resonated with diverse audience demographics, providing innovative promotional solutions[44] - The completion of large-scale event venues in Hong Kong has driven new marketing and promotion services related to international events and exhibitions[42] - HOY TV provided over 450 hours of live broadcasts for major international sports events in 2024, including the "FIVB Volleyball Nations League" and "Copa América USA 2024" [87] - The Group invested over 1,100 hours of live broadcasts of various world sports events on HOY 76, mobile applications, and official websites in 2024 [88] - The Group produced a unique Cantonese Spring Festival Gala programme, which was broadcasted live across the Greater Bay Area and Southeast Asia in February 2024 [72] - HOY TV launched three new episodes of the cooking series "Theme Cook," showcasing culinary skills in the Greater Bay Area [66] - The Group supported local consumption by producing several dining programmes, including "Dining Guide" and "Let's Eat 100 in Hong Kong" [70] - The new pet variety show "Stories from MEOW MEOW" features artists sharing their experiences with cats, enhancing audience engagement [75] - The Group's lifestyle programmes, such as "Good Old Days" and "Hints of Postnatal Care," focus on the daily lives of Hong Kong people [79] - HOY TV's health programme "Health Concern Group" addresses health myths and provides insights from various health experts [82] - The Group's infotainment programmes, including "Hong Kong Phenomenon 3," have become part of Hong Kong's distinctive television culture [80] - The Group's travel and dining programmes aim to boost consumption in Hong Kong, reflecting the trend of local spending [67] - Cable TV 18 Channel broadcasted 125 days of racing, including 37 overseas events, enhancing the viewing experience for horse racing enthusiasts[93] - In 2024, HOY TV broadcasted over 450 hours of major international sports events, including the World Volleyball League and the Copa America[91] - The mobile application "Racing GPS" provides subscribers with an additional platform to watch horse racing programs and features a YouTube channel with various programs[94] - The flagship program "City Focus" achieved a peak rating of 4.4, successfully uncovering livelihood issues and prompting government action[103] - The Group's "Hong Kong Cable News Express" serves as the sole distributor of advertisements for MTR In-train TV, contributing to advertising revenue growth[106] - The Group organized the "Season Opening Prelude Party" to engage horse racing enthusiasts and strengthen community ties[100] - The i-CABLE News team produced programs to help citizens understand the operations of government departments and the Constitution of China[107] - The documentary "Keep Pace with You" highlighted the inspirational story of trainer Danny Shum, showcasing dedication in the horse racing industry[95] - HOY TV plans to broadcast over 1,100 hours of various world sports events in 2024, expanding its sports content offerings[91] - The Group's collaboration with the Hong Kong Jockey Club included promotional activities to enhance community engagement and promote responsible gambling[96] Telecommunications - The telecommunications business serves over 2 million households in Hong Kong, maintaining stable results and exploring market opportunities[22] - The Group aims to enhance optical and 5G network coverage to support high-bandwidth and low-latency AI applications, attracting commercial customers[22] - The telecommunications network serves over 2 million households in Hong Kong, contributing positively to the Group's performance[117] - The Group has shifted its sales approach in the first half of 2024 to enhance flexibility and cope with market demands, resulting in improved customer retention and overall business revenue growth[118] - The Group is committed to providing diversified telecommunications products and services, launching several new packages for broadband and mobile services to attract new customers[119] - The expansion of the Gigabit Passive Optical Network (GPON) aims to enhance network coverage and capacities, meeting the increasing demand for high-speed broadband services[120] - A strategic cooperation agreement with China Mobile Hong Kong Co., Ltd. continues to strengthen the Group's partnership in telecommunications and media information services, supporting new business development[121] - The telecommunications segment is challenged by fast-changing technology and market saturation, necessitating innovative service approaches and competitive service packages[126] - The Group faces significant competition in the traditional free television sector due to changing viewer habits and the rapid growth of streaming platforms and social media[127] - The telecommunications division is challenged by rapid technological changes and market saturation, necessitating innovative service offerings and network enhancements[127] - The Group aims to strengthen its competitive position by investing in new market opportunities and updating non-competitive segments[127] Economic Environment - The economic recovery in Hong Kong in 2024 was less satisfactory than expected, with a slowdown in the retail market and rising operational costs[34] - The Group is actively undergoing strategic transformations to innovate in content, distribution, and marketing solutions to adapt to changing audience viewing habits[35] - The Group's business strategy includes integrating online, offline, and outdoor media platforms to enhance audience engagement and marketing efficiency[33] - The Group is focused on developing new profit models through collaboration in markets such as the Greater Bay Area and Mainland China[33] Environmental, Social, and Governance (ESG) - The ESG report covers the Group's key business operations in media and telecommunications in Hong Kong for the reporting period from January 1, 2024, to December 31, 2024[129] - The Group's ESG governance includes a dedicated working group that monitors ESG-related risks and opportunities, reporting to the Board[134] - The Board is responsible for overseeing the Group's sustainable development and ensuring effective risk management and internal controls related to ESG[134] - The Group has established key performance indicators (KPIs) to evaluate the effectiveness of its ESG policies and management systems[132] - The ESG working group conducts annual training to better understand climate-related risks and ensures these are considered in the annual risk assessment process[134] - The Group engages a professional consultant for ongoing assessment of internal control and risk management systems to identify deficiencies[134] - The management is responsible for executing ESG strategies and developing implementation plans that are tied to senior management compensation considerations[134] - The Group replaced 16 out of 23 Euro IV diesel vehicles, aiming to replace all by 2027 to reduce overall air emissions[138] - A policy to reduce paper usage was established in 2022, focusing on centralized sourcing and double-sided printing[138] - Diesel consumption was reduced by approximately 49%, achieving 28,686 liters in 2024 compared to 56,094 liters in 2021[138] - Water consumption intensity was maintained at 2,119 cubic meters in 2024, approximately 8% lower than 2,306 cubic meters in 2021[138] - The Group emphasizes ESG issues related to product responsibility, employee safety, supply chain management, and environmental protection[147] - The ESG working group validates key material ESG issues and their link to respective aspects and KPIs[146] - Stakeholder engagement includes internal emails, meetings, and corporate website updates to align sustainability goals[140] - The Group's environmental targets established since 2021 aim to enhance sustainability performance[137] - Continuous monitoring of ESG-related risks is conducted to ensure effective internal control measures[136] - The Group's management is responsible for executing the ESG strategy and integrating it into key performance indicators[136] Customer Service and Employee Welfare - The Group received ISO 9001:2015 and ISO 10002:2018 certifications for quality management and customer satisfaction, maintaining these standards during the reporting period[156] - A total of 115 written complaints were received during the reporting period, a decrease from 288 complaints in 2023, indicating improved customer service[157] - The Group has established policies to protect personal data, complying with the Personal Data (Privacy) Ordinance, with no incidents of non-compliance reported during the reporting period[164] - The Group is committed to employee health and safety, implementing four key policies to ensure a safe workplace[168] - The Group has a Corporate General IT Control Policies and Procedures in place to manage and protect IT systems, with no reported incidents of intellectual property rights breaches during the reporting period[159] - The Group emphasizes customer experience, implementing a quality management system to enhance hotline and customer care services[157] - The Group organized various recreational and leisure activities to promote employee wellbeing and mental health[175] - The injury rate for 2024 is 0.0088, an increase from 0.0083 in 2023, while the lost days decreased from 531 to 343[173] - The lost days rate for 2024 is 0.0015, down from 0.0020 in 2023, and the absentee rate is 0.0192, slightly lower than 0.0204 in 2023[173] - The Group sourced from 715 suppliers in Hong Kong (87%), 21 from Mainland China (3%), and 83 from other countries (10%) during the Reporting Period[178] Environmental Impact - The Group did not generate significant sewage discharge during the Reporting Period[181] - Air emissions for nitrogen oxides (NOX) decreased from 0.29 tonnes in 2023 to 0.21 tonnes in 2024, while particulate matter (PM) emissions reduced from 0.027 tonnes to 0.020 tonnes[193] - The Group strictly adheres to the Air Pollution Control Ordinance and Waste Disposal Ordinance, with no incidents of non-compliance reported during the Reporting Period[183] - The Group encourages suppliers to adopt green measures and products that fulfill the 4Rs Rule: "Reduce, Recycle, Reuse and Replace"[177] - The Group has implemented measures to reduce greenhouse gas emissions and energy consumption, including optimizing vehicle utilization and phasing out pre-Euro IV diesel vehicles[190] - There were no incidents of work-related fatalities reported in the past three reporting periods[174] - In 2024, the Group recorded a total CO2 emissions of 4,738 tonnes, a decrease of 10% from 5,258 tonnes in 2023[195] - Scope 1 CO2 emissions decreased from 233 tonnes in 2023 to 206 tonnes in 2024, representing a reduction of approximately 11.6%[195] - Scope 2 CO2 emissions decreased from 5,025 tonnes in 2023 to 4,532 tonnes in 2024, reflecting a decline of about 9.8%[195] - CO2 emissions intensity for Scope 1 was approximately 0.23 tonnes per employee in 2024, up from 0.21 tonnes per employee in 2023[197] - CO2 emissions intensity for Scope 2 was approximately 4.99 tonnes per employee in 2024, compared to 4.63 tonnes per employee in 2023[197] - The Group is actively collecting Scope 3 emissions data to enhance transparency and accountability in its environmental impact[198] - The Group has implemented waste management initiatives, focusing on reducing, reusing, and recycling waste to minimize landfill contributions[199] - Environmentally friendly recycling bins for metal, plastic, and Tetra Pak were placed on each floor starting January 2024 to promote waste sorting[200] - The Group encourages employees to adopt paperless practices and use electronic copies to reduce paper waste[199] - Training and education on waste reduction have been emphasized among employees to foster a culture of sustainability[199]

Financial Performance - The company's consolidated revenue for the fiscal year ended December 31, 2024, decreased by 36.1% to approximately HKD 456.86 million from HKD 714.49 million in 2023[20]. - The gross profit fell by 50.6% to HKD 152.37 million, resulting in a gross margin of 33.4%, down from 43.2% in the previous year[13]. - The loss attributable to the company's owners increased by 191.0% to HKD 298.57 million compared to a loss of HKD 102.60 million in 2023[20]. - Basic loss per share was HKD 39.5 cents, a 190.4% increase from HKD 13.6 cents in the prior year[13]. - The mid-term dividend paid was HKD 1.5 cents, a decrease of 70% from HKD 5.0 cents in the previous year[13]. - The company recorded a consolidated revenue of approximately HKD 456,859,000 for the year 2024, a decrease of about HKD 257,627,000 or 36.1% compared to HKD 714,486,000 in 2023[24]. - The loss attributable to the company's owners was approximately HKD 298,573,000, an increase of 191.0% from last year's loss of HKD 102,604,000, primarily due to the decline in revenue[24]. - Gross profit decreased by approximately 50.6% to about HKD 152,366,000 due to reduced sales[28]. - Distribution and selling costs decreased by approximately 6.7% to about HKD 181,074,000, mainly due to a reduction in royalty fees[29]. - Administrative expenses increased by 2.5% to HKD 160,096,000, which includes salaries, rent, and depreciation[30]. - Financial expenses increased by approximately 17.7% to about HKD 4,473,000 due to higher interest on bank loans and lease liabilities[31]. - As of December 31, 2024, the total assets of the group were approximately HKD 694,161,000, a decrease of about 32.6% from HKD 1,031,356,000 in 2023[40]. - The capital debt ratio rose to 16.3%, up from 5.8% in 2023, indicating a significant increase in leverage[13]. Strategic Focus and Operations - The company plans to focus on improving operational efficiency and optimizing organizational structure to maintain market position amid economic uncertainties[21]. - The company aims to enhance product innovation and marketing strategies to adapt to rapidly changing market conditions[21]. - The company has strategically expanded its development in Vietnam's real estate market through land acquisition in Da Nang[47]. - The group plans to engage in property development in Vietnam in 2024, considering various local conditions and strategic priorities[48]. - The company will continue to enhance automation in manufacturing to improve efficiency and maximize long-term returns for shareholders[54]. - The group is implementing flexible strategies to expand its product range and strengthen its customer base amid global economic uncertainties[53]. - The company has reduced capital investments in related development projects due to delays in land acquisition and a decline in core manufacturing operations[56]. Environmental, Social, and Governance (ESG) - The company emphasizes the importance of environmental, social, and governance (ESG) matters for sustainable development, integrating these principles into its mission[21]. - The group is focused on environmental responsibility by implementing green office measures and considering further eco-friendly practices in its operations[50]. - The company aims to minimize its environmental impact through resource management and efficiency measures[121]. - The total greenhouse gas emissions for the business in 2024 amounted to 12,160.93 tons of CO2 equivalent, a decrease from 12,421.81 tons in 2023[127]. - The annual emission density in 2024 was 0.0991 tons of CO2 equivalent per square meter, down from 0.1012 tons in 2023[130]. - The company implemented energy efficiency measures that resulted in a reduction of 17.760 tons of CO2 equivalent emissions in 2024, compared to 39.970 tons in 2023[131]. - The group has obtained certifications for social compliance standards, promoting safety and fair labor practices[121]. - The group has implemented various environmental protection measures to minimize greenhouse gas emissions, although climate change risks currently do not significantly impact business operations[140]. - The group actively promotes water-saving measures, including the installation of water meters and automatic valves to prevent wastage[138]. - The group has not reported any significant environmental incidents during the reporting period, indicating effective management of potential pollution risks[139]. Corporate Governance - The board consists of four executive directors and four independent non-executive directors, ensuring at least one-third of the board is independent[67]. - The company has adopted a corporate governance code in compliance with the Hong Kong Stock Exchange listing rules, reflecting its commitment to best practices[65]. - The independent non-executive directors have confirmed their independence according to the relevant listing rules, ensuring effective independent judgment[68]. - The company has a strong focus on risk management, identifying key risks and implementing appropriate measures and monitoring systems[66]. - The board is responsible for strategic development decisions and monitoring the management of the group's business and affairs[66]. - The company has established various committees, including audit, remuneration, and nomination committees, to assist the board in fulfilling its responsibilities[66]. - The independent non-executive directors possess appropriate professional qualifications and expertise in accounting and financial management[67]. - The company has a policy for directors to retire and seek re-election at least once every three years, promoting accountability[68]. - The board is committed to continuous review and enhancement of governance policies to align with regulatory changes and best practices[65]. - The company has a diverse board with members having extensive experience in finance, asset management, and corporate governance[69]. - The company held 32 board meetings during the year, with all directors receiving sufficient information to make informed decisions[71]. - The remuneration policy for executive directors and senior management is linked to performance, service tenure, and experience, with regular reviews based on market practices[76]. - The Nomination Committee is responsible for reviewing the board's structure and composition annually to ensure diversity in age, expertise, skills, experience, independence, knowledge, and gender[79]. - All directors participated in continuous professional development to stay updated on their responsibilities and the latest developments in laws and regulations applicable to the company[73]. - The company has adopted a code governing securities trading by directors, ensuring compliance with the required standards[72]. - The Remuneration Committee's primary role is to review the remuneration policies and structures for directors and senior management, ensuring the ability to attract and retain a high-quality team[74]. - The company’s chairman and CEO roles are held by different individuals, ensuring effective governance and operational management[70]. - The Nomination Committee evaluates the independence of independent non-executive directors and makes recommendations for appointments and reappointments[78]. - All members of the Remuneration Committee attended all meetings during the year, ensuring active participation in decision-making[75]. - The company provides directors with access to independent professional advice when necessary, with costs covered by the company[71]. - The board consists of six male directors and two female directors, meeting the minimum requirement set by rule 13.92[86]. - The company aims to maintain at least one female director over the next four years to enhance board diversity[86]. - The nomination committee will annually review measurable diversity goals and report progress to the board[85]. - The audit committee is responsible for reviewing the appointment of external auditors and ensuring their independence[89]. - The audit committee members include qualified accountants, ensuring compliance with accounting standards and regulations[90]. - The audit committee has conducted mid-year and year-end financial reviews, ensuring adherence to accounting policies and legal requirements[93]. - The company emphasizes transparency and fairness in the nomination process for board members[84]. - The nomination committee will focus on attracting diverse talent across various backgrounds to foster a more inclusive environment[85]. - The financial statements for the year ending December 31, 2024, have been reviewed by the audit committee and audited by external auditor KPMG (Hong Kong) with no significant uncertainties affecting the company's ability to continue as a going concern[94]. - The company paid approximately HKD 1,800,000 for statutory audit services provided by KPMG (Hong Kong) and around HKD 1,821,000 for audit and non-audit services to overseas subsidiaries[105]. - The internal audit function has been established since 2015, focusing on risk management and internal controls, with a dedicated internal audit team consisting of two members[102]. - The audit committee has conducted a review of the effectiveness of the internal control system, finding it to be effective and sufficient without any significant concerns affecting the company's financial status or operational performance[104]. - The company has implemented appropriate monitoring procedures to safeguard assets and ensure compliance with relevant regulations and accounting standards[100]. - The audit committee received reports on the performance of the internal audit function and identified key risks, ensuring that appropriate follow-up actions were taken[99]. - The board is responsible for maintaining proper accounting records and ensuring timely preparation of financial statements[96]. - The company actively enhances transparency and communication with shareholders and potential investors through mandatory interim and annual reports[109]. - The audit committee has established a whistleblowing policy to allow employees and stakeholders to report any misconduct, ensuring prompt and transparent investigations[103]. - The company has adopted various policies to assess and improve the effectiveness of its internal control and risk management functions[104]. - The company conducted a review of its shareholder communication policy, ensuring effective implementation during the review year[110]. - The annual general meeting provided a platform for shareholders to engage with the board, with all directors present except for two[112]. - The company expects to consider multiple factors when declaring dividends, including financial performance and capital needs[117]. Employee Relations and Workforce - The company operates four factories in Vietnam and employs approximately 2,200 staff across various regions including Hong Kong, China, and the US[7]. - As of December 31, 2024, the group has approximately 2,200 employees, a decrease from 2,310 in 2023, and offers competitive compensation aligned with market trends[49]. - The total number of employees as of December 31, 2024, was approximately 2,200, with 2,081 being factory employees, all of whom are full-time[141]. - The annual turnover rate for employees aged 18-25 was 21.2%, slightly up from 21.12% in the previous year, while the turnover rate for those aged 46-55 decreased from 21.19% to 12.50%[143]. - The total training hours for factory employees increased to 8 hours per employee in 2024, compared to 4 hours per employee in 2023[150]. - The number of work-related injuries resulting in lost workdays was 1 in 2024, down from 2 in 2023, with a total of 23 lost workdays compared to 45 in the previous year[147]. - The group has implemented strict measures to prevent child and forced labor in compliance with labor laws[154]. - The group maintains good relationships with suppliers to ensure stable services and product quality[155]. - There were no significant complaints regarding product quality and delivery during the reporting period[157]. - The group has approximately 500 suppliers across Hong Kong, China, and Vietnam[154]. Innovation and Product Development - The group is committed to providing innovative and quality products, investing significant resources in new equipment to enhance competitiveness[159]. - The group will continue to purchase energy-efficient appliances and materials, and review supplier sources[164]. - The group encourages reporting of any misconduct or fraud, ensuring confidentiality for whistleblowers[162]. - The top five customers accounted for approximately 59.0% of the group's revenue, with the largest customer representing about 32.8%[170]. - The total cash dividends paid during the year amounted to approximately HKD 34,029,000, with a proposed final dividend of HKD 0.01 per share, totaling around HKD 7,562,000[171]. - The company's distributable reserves as of December 31, 2024, were approximately HKD 186,137,000, a decrease from HKD 400,779,000 in 2023[175]. - The total remuneration for the eight directors amounted to HKD 10,812,000, with the highest individual remuneration being HKD 4,035,000[183]. - As of December 31, 2024, the company had issued shares totaling 538,573,569, with the largest shareholder holding 71.22% of the issued share capital[191]. - The company did not purchase, redeem, or sell any of its listed shares during the year[174]. - The board of directors has the discretion to recommend dividends based on various factors, including corporate governance considerations[172]. - There were no warrants or stock-linked agreements issued during the year[176]. - The company has no provisions regarding preemptive rights in its articles of association[177]. - The company has not entered into any management contracts related to its overall business during the year[178]. - Smart Forest holds 71.22% of the company's issued ordinary shares, totaling 538,573,569 shares[193]. - The company has received revised financing letters from banks for a total amount not exceeding HKD 70,000,000, effective from September 18, 2020[197]. - The company confirms that at least 25% of its issued shares are held by the public prior to the publication of the annual report[196]. - The company has established a remuneration committee to review the remuneration policy based on group performance and market statistics[194]. - The company appointed KPMG as the new auditor on October 24, 2024, following the resignation of another firm[199]. - The company has not changed its external auditor in the past three years, with KPMG auditing the financial statements for the fiscal year 2024[199]. - The company has disclosed that its controlling shareholder must maintain at least 51% ownership to avoid default on revised financing terms[197]. - The board has adopted corporate governance codes and has complied with them, except for a specific disclosure regarding independent non-executive directors' tenure[195]. - The company has not made any arrangements for its directors or their associates to benefit from the purchase of shares or debentures[192]. - The company has confirmed that there are no other known interests or short positions in its issued share capital as of December 31, 2024[193].

Financial Performance - The company's operating revenue for Q1 2025 reached RMB 717,806,101.77, representing a year-on-year increase of 45.47% compared to RMB 493,440,384.78 in Q1 2024[9] - Net profit attributable to shareholders for Q1 2025 was RMB 48,734,998.79, a significant increase of 123.77% from RMB 21,779,300.91 in the same period last year[9] - Basic and diluted earnings per share for Q1 2025 were both RMB 0.0592, reflecting a growth of 114.49% from RMB 0.0276 in Q1 2024[9] - Total operating revenue for Q1 2025 reached RMB 717.81 million, a significant increase of 45.6% compared to RMB 493.44 million in Q1 2024[20] - Net profit for Q1 2025 was RMB 52.95 million, up 106.8% from RMB 25.58 million in Q1 2024[21] Cash Flow and Liquidity - The net cash flow from operating activities surged to RMB 75,905,954.92, marking a dramatic increase of 1,714.77% compared to RMB 4,182,677.79 in Q1 2024[9] - Operating cash flow for Q1 2025 was $75,905,954.92, a significant increase from $4,182,677.79 in Q1 2024, reflecting strong sales growth[23] - Cash inflow from operating activities totaled $558,792,537.30 in Q1 2025, compared to $305,304,118.30 in Q1 2024, indicating a year-over-year increase of approximately 83%[23] - The net increase in cash and cash equivalents for Q1 2025 was $1,652,351.39, a decrease from $341,118,724.26 in Q1 2024, indicating tighter liquidity[23] - The company reported cash and cash equivalents at the end of Q1 2025 of $214,621,306.21, down from $460,950,534.36 at the end of Q1 2024[23] Assets and Liabilities - The company's total assets as of March 31, 2025, were RMB 3,289,665,874.93, a slight increase of 0.77% from RMB 3,264,667,069.57 at the end of 2024[9] - Total liabilities decreased to RMB 1.29 billion as of March 31, 2025, from RMB 1.31 billion at the end of 2024, indicating improved financial stability[19] - The net assets attributable to shareholders increased to RMB 1,991,814,731.15, up by 2.51% from RMB 1,943,079,732.36 at the end of 2024[9] Operational Efficiency - The company experienced a significant reduction in the proportion of operating expenses relative to revenue, contributing to the overall profit increase[13] - The company reported a gross profit margin of approximately 15.9% for Q1 2025, compared to 10.5% in Q1 2024, highlighting enhanced operational efficiency[20] Research and Development - Research and development expenses increased to RMB 37.69 million in Q1 2025, up from RMB 25.78 million in Q1 2024, reflecting a commitment to innovation[20] Shareholder Information - The total number of ordinary shareholders at the end of the reporting period was 67,102[14] Accounting Adjustments - The company has implemented adjustments in accounting standards affecting the profit statement, specifically impacting operating costs and sales expenses by RMB 8,972,218.95[13] Other Financial Activities - Cash outflow for investment activities in Q1 2025 was $207,124,553.35, up from $65,279,224.82 in Q1 2024, resulting in a net cash flow from investment activities of -$63,382,246.33[23] - Total cash inflow from financing activities was $427,387,745.02 in Q1 2024, while in Q1 2025, the net cash flow from financing activities was -$10,709,378.76, indicating a shift in financing strategy[23] - The company received $512,067,212.86 in cash from sales in Q1 2025, compared to $258,138,891.46 in Q1 2024, marking an increase of approximately 98%[23] - Cash received from investment returns in Q1 2025 was $2,795,095.28, compared to $894,992.72 in Q1 2024, showing a growth of about 212%[23] - The company paid $85,919,455.69 in cash for other operating activities in Q1 2025, up from $53,598,103.19 in Q1 2024, reflecting increased operational costs[23] - The company experienced a foreign exchange impact of -$161,978.44 on cash and cash equivalents in Q1 2025, compared to -$89,710.14 in Q1 2024, highlighting currency volatility effects[23] Strategic Overview - The company has no significant new strategies or important matters reported during the reporting period[16]

Financial Performance - For the year ended December 31, 2024, the Group reported revenue of HK$1,913,162,000, a slight decrease of 0.6% compared to HK$1,923,964,000 in 2023[14]. - The Group's gross profit decreased by 14.8% to HK$527,619,000 from HK$618,962,000 in 2023[14]. - The loss for the year attributable to equity holders of the Company was HK$135,163,000, a significant decline of 318.0% compared to a profit of HK$61,998,000 in 2023[14]. - Adjusted profit for the year increased by 11.9% to HK$89,410,000 from HK$79,916,000 in the previous year[14]. - Adjusted EBITDA rose by 2.5% to HK$344,211,000 compared to HK$335,794,000 in 2023[14]. - The gross profit margin decreased to 27.6% from 32.2%, reflecting a decline of 4.6 percentage points[14]. - The adjusted profit attributable to equity holders increased by 5.7% to HK$58.7 million in 2024, compared to HK$55.6 million in 2023[21]. - The adjusted profit attributable to equity holders of the Company for 2024 was HK$58.7 million, up from HK$55.6 million in 2023, while total revenue decreased to HK$1,913.2 million from HK$1,924.0 million[35][36]. - The overall loss for the Mainland China ophthalmic business decreased from HK$75.7 million in 2023 to HK$47.1 million in 2024, excluding impairment losses[50]. Revenue Breakdown - Core medical service revenue increased by 0.5% to HK$1,913,162,000 from HK$1,904,531,000 in the previous year[14]. - Revenue from the ophthalmic business decreased by 4.3% to HK$1.37 billion in 2024, primarily due to reduced demand for refractive surgeries[24]. - Revenue from Hong Kong decreased by 3.3% to HK$901.6 million in 2024 from HK$932.1 million in 2023, primarily due to cautious consumer trends[60]. - Revenue from ophthalmic services in Mainland China increased by 4.0% to HK$1,011.6 million in 2024 from HK$972.4 million in 2023, with a 6.1% increase in RMB terms[61]. - Revenue from dental services in Shenzhen surged by 20.8% to HK$464.6 million in 2024 from HK$384.7 million in 2023[65]. - Revenue from the use of Elderly Health Care Vouchers at Shenzhen CKJ Hospital amounted to HK$15.1 million from August 14 to December 31, 2024[53]. - Revenue from oncology and other medical services decreased to approximately HK$38.1 million, representing 2.0% of total revenue[91]. - Revenue from sales of vision aid products decreased by 3.8% to HK$156.4 million in 2024, mainly due to reduced demand in Mainland China[92]. Operational Challenges and Strategies - The Group faced challenges including a complex global macroeconomic environment and intense industry competition, prompting a refinement of business strategies[19]. - The Group aims to identify new avenues for growth amidst the evolving market landscape[19]. - The Group's operational strategy includes optimizing its organizational structure and refining management to improve profitability and efficiency[41][47]. - The company plans to invest in innovative healthcare solutions, including a fair value gain of HK$111.1 million from its investment in Health Hope Pharma Limited[30]. Capital Expenditures and Financial Position - Capital expenditures in 2024 totaled HK$444.7 million, primarily for the addition of right-of-use assets and equipment for hospitals and clinics[127]. - As of December 31, 2024, the Group's total capital commitments amounted to approximately HK$31.9 million, a decrease from HK$107.2 million in 2023, mainly related to property and hospital lease renovations in Shenzhen Ping Shan[133]. - The Group's debt-to-equity ratio is not applicable as of December 31, 2024, due to a net cash position, consistent with 2023[134]. - The Group reported cash and cash equivalents of HK$423.1 million, short-term bank deposits of HK$29.0 million, and bank borrowings of HK$29.2 million, with most borrowings denominated in US dollars, Renminbi, or Hong Kong dollars[155][158]. Future Outlook and Expansion Plans - The outlook for ophthalmic services in Hong Kong remains strong due to an aging population, while challenges persist in Mainland China's ophthalmic business due to changing consumer patterns[152]. - The Group plans to capitalize on business opportunities in the dental sector in Shenzhen and the medical business in Luohu, Shenzhen, driven by the trend of cross-border consumption[153]. - The C+ Health CKJ (Shenzhen) Hospital is set to open in January 2025, offering dental and multi-specialty medical services to meet the needs of Hong Kong's elderly population[28]. - A strategic agreement was signed for the construction of a "Hong Kong-style" private hospital near Luohu port, expected to open in January 2025[54]. Management and Governance - Dr. Dennis Lam has been appointed as a "Justice of the Peace" in Hong Kong since 2004 and has served as a Deputy of the National People's Congress of China since 2008[193]. - Ms. Li Xiaoting has been the general manager of the eye center in Hong Kong since January 2012 and the general manager of Shenzhen C-MER Hospital since March 2013[195]. - Dr. Lee Yau Wing Vincent has been practicing since January 2012 and is the Head of Hong Kong Operation[199].

Financial Performance - The company reported a total revenue of RMB 1.2 billion for the fiscal year 2024, representing a year-over-year growth of 15%[1]. - Total revenue for 2024 reached RMB 1,314,959,000, representing a year-on-year increase of 27.9%[15]. - Revenue from digital payment services amounted to RMB 1,150.6 million, reflecting a year-on-year increase of 31.6%[30]. - The adjusted net profit for the year was RMB 78,693,000, indicating a recovery trend in profitability[15]. - The company's loss for the year was RMB 166.5 million, a reduction of RMB 487.7 million compared to the previous year, representing a 74.5% decrease in losses[48]. - Adjusted EBITDA for the year was RMB (280,257,000), showing improvement from RMB (359,188,000) in 2023[15]. - The company achieved a gross profit of RMB 682,521,000, with a gross margin of 51.9%[15]. - Gross profit for the year was RMB 682.5 million, an increase of 18.2%, with a gross margin of 51.9%, down 4.2% year-over-year, primarily due to the growth of lower-margin domestic payment business[34]. User Growth and Market Expansion - User base expanded to 10 million active users, reflecting a growth rate of 25% year-over-year[1]. - Market expansion efforts include entering two new Southeast Asian countries by the end of 2025, targeting a 15% increase in user acquisition[1]. - The company plans to launch three new products in 2025, aiming to capture an additional 10% market share in the digital payment sector[1]. Investment and R&D - The company is investing RMB 200 million in R&D for new technologies, focusing on enhancing payment security and user experience[1]. - The company plans to enhance its global licensing layout and invest in emerging markets to strengthen its competitive advantage in cross-border payments[16]. - The company plans to enhance its global license layout and expand its business areas, leveraging technologies such as AI and blockchain[25]. Strategic Partnerships and Acquisitions - The company has completed the acquisition of a local fintech startup for RMB 50 million, expected to enhance its service offerings[1]. - A new strategic partnership with a major bank is expected to increase transaction volume by 30% over the next year[1]. - The company obtained 65 global payment licenses, enhancing its service capabilities in the European market[14]. Financial Position and Liquidity - The total assets increased to RMB 14,538,817,000, up from RMB 10,467,499,000 in 2023, marking a growth of 38.5%[12]. - Total liabilities rose to RMB 13,303,310,000, compared to RMB 9,873,855,000 in 2023, an increase of 34.6%[12]. - As of December 31, 2024, the company's cash and cash equivalents increased by RMB 327.0 million, totaling RMB 522.3 million[49]. - The company maintained sufficient liquidity to meet daily management and capital expenditure requirements[52]. Employee and Management Structure - The company employed a total of 1,103 employees as of December 31, 2024, with 91.30% based in China and 8.70% overseas[72]. - The workforce composition includes 34.90% in R&D, 33.00% in sales and marketing, and 32.09% in general and administrative roles[73]. - The company has established a union in China as of December 31, 2024, to represent employees in collective bargaining[74]. - The company appointed Mr. Sun Dali as President in April 2024, responsible for overall strategic planning and domestic operations management[95]. Shareholder and Equity Information - As of December 31, 2024, the total share capital of the company is RMB 1,079,060,000, divided into 1,079,060,000 shares with a par value of RMB 1.0 each, including 418,668,764 H shares and 660,391,236 unlisted shares[121]. - Major shareholder Mr. Lu Zhonglin holds 92,316,555 unlisted shares, accounting for 13.98% of the relevant shares and 8.56% of the total equity[148]. - The total number of unlisted shares issued as of December 31, 2024, is 660,391,236, while the total number of H shares is 418,668,764, leading to a total equity of 1,079,060,000 shares[145]. Risks and Challenges - The company faces significant risks related to product development and market adaptation, which could adversely affect its business and financial performance[110]. - The company has a history of net losses and may continue to incur losses in the future, impacting its financial stability[115]. Incentive Mechanisms and Employee Benefits - The company aims to enhance its incentive mechanisms to ensure the achievement of development goals[74]. - Employee benefits expenses totaled RMB 816.3 million, an increase of 21.6% from RMB 670.9 million in 2023[75]. - The company has adopted pre-IPO stock option plans and a first-phase incentive trust plan to attract and retain talent[74]. Compliance and Governance - The company confirmed compliance with legal responsibilities as per listing rules for newly appointed directors[103]. - The board consists of eight members, including five executive directors and three independent non-executive directors[78]. - The company has no disclosed interests in any competing businesses as per listing rules[102].

Financial Performance - As of December 31, 2024, the net asset value of the Group was approximately HK$31.9 million, a decrease of about HK$17.4 million compared to the previous year[11]. - The Group reported an operational loss of approximately HK$21.6 million for the year, compared to a loss of HK$6.3 million in 2023[11]. - The Group's investment portfolio value decreased by HK$11.2 million, totaling approximately HK$20.1 million, with current and non-current portions at about HK$11.7 million and HK$8.4 million, respectively[12]. - Gross proceeds from the disposal of investments for the year ended December 31, 2024, decreased to about HK$23.4 million, down from approximately HK$71.5 million in 2023[21]. - For the year ended 31 December 2024, the Group's revenue increased to approximately HK$0.3 million, up from HK$0.2 million in 2023, primarily from dividend income[26]. - The loss from operations rose significantly from HK$6.3 million in 2023 to about HK$21.6 million in 2024, with a fair value loss of approximately HK$10.4 million attributed to non-constituent stocks[23][27]. - The net fair value losses from the listed equity investment portfolio were approximately HK$10.4 million in 2024, compared to net fair value gains of about HK$13.0 million in the prior year[24][28]. - Total proceeds from the sale of investments decreased to approximately HK$23.4 million in 2024, down from HK$71.5 million in 2023, due to lower trading volumes in non-constituent stocks[25]. - As of 31 December 2024, bank and cash balances decreased to approximately HK$4.3 million, down from HK$12.2 million in 2023, primarily due to financing operational losses[45][49]. - The net current assets decreased to approximately HK$15.8 million as of 31 December 2024, compared to HK$31.6 million in 2023[45][49]. - The Group maintained a low gearing ratio of 0.2% as of 31 December 2024, a decrease from 1.2% in the previous year[46][50]. - Property, plant, and equipment amounted to approximately HK$7.8 million as of 31 December 2024, down from HK$8.3 million in 2023[47][51]. Market Conditions - The Hang Seng Index and Hang Seng TECH Index increased by 17.7% and 18.7%, respectively, during the year, reflecting improved market sentiment[18]. - The Dow, Nasdaq, and S&P500 rose by 12.9%, 28.6%, and 23.3%, respectively, indicating a bullish market sentiment in the US[17]. - The Federal Reserve lowered interest rates three times for a total of 100 basis points from September to December 2024, supporting technology stocks[17]. - The overall trading volume of the Group was affected by the inactive trading volume of non-constituent stocks in the market[21]. - The ongoing geopolitical conflicts and trade tensions are expected to remain major risks affecting market sentiment and investment strategies[39][41]. Investment Strategy - The Group's focus shifted towards index constituents of major Hang Seng indices to seek better returns amid market conditions[21]. - The Group plans to continue investing prudently while emphasizing diversification to enhance financial strength and overall performance[42][44]. - The investment portfolio primarily consists of listed equities in the Hong Kong stock market, with no significant exposure to foreign exchange fluctuations[61][67]. Shareholder Returns - The Group did not recommend the payment of a final dividend for the year ended December 31, 2024, consistent with the previous year[10]. - The Company has adopted a dividend policy aimed at providing stable returns to shareholders while maintaining a healthy financial position[195]. - The Board may propose final dividends annually and declare interim or special dividends based on operating results, accumulated earnings, and liquidity position[196]. - The dividend payout ratio may vary each year, with no assurance of specific amounts being paid[197]. - The Board will consider various factors including future earnings volatility and investment opportunities when determining dividends[200]. Corporate Governance - The Company aims to achieve capital appreciation and generate stable income from interests and dividends as its primary investment objective[116]. - The Investment Manager, Success Advance Investments Limited, receives a monthly fee of HKD32,500, with the appointment extended for an additional year after the initial term[118]. - The Board consists of five Directors, including one Executive Director and three Independent non-executive Directors, ensuring a balance of skills and experience[131]. - The Company emphasizes a culture of inclusion and sustainable performance aligned with good governance practices[122]. - The Board diversity policy aims to enhance performance quality and maintain high standards of corporate governance, considering factors such as gender, age, and professional experience[136]. - The Nomination Committee will review the diversity policy and its effectiveness annually, with a target to maintain at least one female director on the Board[138]. - The Company recognizes the importance of continuous professional development for Directors to ensure informed contributions to the Board[129]. - The Company integrates Environmental, Social, and Governance (ESG) factors into its investment processes[116]. - The Board regularly reviews its composition to ensure it meets the requirements of the investment business[131]. - The Board held six meetings for all directors and one meeting between the Chairman and all Independent Non-executive Directors during the year ended December 31, 2024[143]. - The attendance of the Chairman, Dr. Lam Man Chan, at Board meetings was 7 out of 7, and he attended 1 Annual General Meeting (AGM)[146]. - The Company has at least three independent non-executive directors, representing at least one third of the Board, in compliance with Listing Rules[147]. - The Nomination Committee reviewed the Board size and composition to ensure diversity of skills, experience, and gender representation[154]. - The Directors confirmed their responsibilities for the preparation of financial statements in accordance with statutory requirements and applicable accounting standards[155]. - The external auditor, RSM Hong Kong, provided a report on their responsibilities regarding the Company's financial statements[156]. - The Company received written annual confirmations of independence from each independent non-executive director[148]. - The Board is not aware of any material uncertainties that may cast significant doubt on the Company's ability to continue as a going concern[157]. - The current Non-executive Directors are not appointed for a specific term and are subject to retirement by rotation at the AGM[153]. - The Chairman and Chief Executive Officer roles are separated, with Dr. Lam Man Chan serving as Chairman[162]. - The Audit Committee held four meetings during the year, with all members attending each meeting[172]. - The Remuneration Committee conducted one meeting to review the remuneration of Independent Non-executive Directors, with all members present[178]. - The Nomination Committee held two meetings to review the board's composition and diversity, with all members attending both meetings[185]. - The Company Secretary has complied with professional training requirements for the year ended December 31, 2024[187]. Employee Information - The company had 15 employees and directors as of December 31, 2024, an increase from 13 in 2023[63][69]. Capital Management - The company raised approximately HK$4.12 million from the placement of 28,284,000 new ordinary shares at a price of HK$0.153 each[52][58]. - As of December 31, 2024, HK$0.68 million of the net proceeds has been utilized, leaving HK$3.44 million unutilized, which is planned to be used by June 30, 2025[54]. - The total number of issued shares increased to 169,707,187 as of December 31, 2024, up from 141,423,187 shares in 2023[58]. - The company did not engage in any significant acquisitions or disposals during the year, aside from the deregistration of inactive subsidiaries[55][56]. - The net gains on financial assets at fair value through profit or loss amounted to approximately HK$2.2 million as of December 31, 2024[60]. - The office premises with a carrying amount of about HK$7.8 million were pledged for an installment loan as of December 31, 2024[62].

Financial Performance - Total revenue for 2024 was HKD 223,604,000, a decrease of 27.3% compared to HKD 307,263,000 in 2023[6] - Operating loss for 2024 was HKD 51,672,000, compared to a loss of HKD 39,339,000 in 2023, indicating a worsening performance[10] - The total assets decreased to HKD 1,042,235,000 in 2024 from HKD 1,153,702,000 in 2023, reflecting a decline of 9.7%[11] - Total liabilities increased to HKD 565,390,000 in 2024, up from HKD 516,963,000 in 2023, marking an increase of 9.4%[11] - The net cash flow from operating activities was a negative HKD 71,565,000 in 2024, an improvement from a negative HKD 112,295,000 in 2023[9] - The company reported a basic and diluted loss per share of HKD 0.106 for 2024, compared to HKD 0.066 in 2023[6] - The total equity decreased to HKD 476,845,000 in 2024 from HKD 636,739,000 in 2023, a decline of 25.1%[11] - The group recorded a gross loss of approximately HKD 13,920,000 for the reporting period, with the cement segment contributing a gross loss of about HKD 5,570,000, an increase of approximately 129.1% compared to 2023[41] - The rare earth segment reported a gross loss of approximately HKD 8,408,000, which is an increase of about 303.1% compared to the same period in 2023, resulting in a gross margin of -21.7%[41] - The group’s net profit margin for the reporting period was approximately -30.9%, a decline of about 17.5% compared to -13.4% in 2023[48] Cement Segment Performance - The cement production for 2024 reached 775,000 tons, with a significant decline in output compared to the previous year, marking the lowest production level in 15 years[12] - The cement sales volume for the year was approximately 778,000 tons, resulting in a revenue of about HKD 184,712,000, a decrease of approximately 30.5% compared to the previous year[13][20] - The group recorded total revenue of approximately HKD 223,604,000 for the reporting period, with the cement segment contributing about HKD 184,782,000, down by HKD 81,347,000 or 30.6% from the previous year[17] - The cement segment recorded total revenue of approximately HKD 184,712,000, a decrease of about 30.5% compared to HKD 265,908,000 in 2023, primarily due to intensified market competition and a downturn in the real estate sector[36] - The average sales price of PO 32.5 cement was HKD 217 per ton, while PO 42.5 cement was HKD 223 per ton, contributing to a total cement sales volume of approximately 777,000 tons in 2024, down 17.3% from 2023[36] - The company plans to enhance internal management and cost control in the cement segment to improve profitability amidst a challenging market environment[22] Rare Earth Segment Performance - The rare earth segment generated revenue of approximately HKD 38,764,000, with magnetic material sales accounting for about 47.0% of this revenue[14][20] - The average price of metal neodymium decreased by approximately 25% in 2024, impacting the overall profitability of the rare earth segment[14] - The company has implemented a series of technological upgrades in the rare earth materials production workshop, which commenced production in February 2024[15] - The rare earth segment is expected to grow, driven by technological innovation and market orientation, with a focus on cost reduction and efficiency improvement[23] - The company aims to innovate and improve product quality in the rare earth segment, responding to increasing customer expectations[67] Market Conditions - In 2024, the cement industry faced a nearly double-digit decline in demand due to ongoing adjustments in the real estate sector, leading to significant price drops and profit declines[25] - The national cement production in 2024 was 1.825 billion tons, a year-on-year decrease of 9.5%, marking the lowest production level in 15 years[26] - The average national cement market price in 2024 was 384 RMB/ton, a year-on-year decline of 2.6%[27] - The real estate development investment in 2024 was 1,002.8 billion RMB, a decline of 10.6% compared to the previous year[26] - The real estate market is expected to stabilize in 2025, with policies aimed at boosting market confidence, although cement demand indicators have not yet improved[65] Cash Flow and Investments - Investment activities generated a net cash flow of HKD 149,505,000 in 2024, an increase from HKD 125,533,000 in 2023[9] - As of December 31, 2024, the group’s cash and cash equivalents were approximately HKD 135,495,000, an increase of about 518.8% from HKD 21,895,000 in 2023[51] - The group’s total borrowings increased by approximately 14.7% to HKD 299,755,000 as of December 31, 2024, compared to HKD 262,641,000 in 2023[52] - The capital expenditure for the group in 2024 was approximately HKD 33,963,000, an increase from HKD 15,210,000 in 2023, primarily due to increased construction in the cement segment[56] Corporate Governance and Management - The company has established an ESG working group to oversee and align ESG strategies with operational strategies[98] - The company has adopted a long-term incentive plan linking part of the executive directors' remuneration to corporate and individual performance[119] - The independent non-executive directors have confirmed their independence according to the listing rules, ensuring compliance with the independence guidelines[115] - The company has established a risk prevention strategy by purchasing liability insurance for all directors[167] - The board of directors is responsible for maintaining an effective internal control system to safeguard the group's assets and shareholders' interests, ensuring the system is adequate and effective as of December 31, 2024[185] Shareholder Information - The company declared a special dividend of HKD 0.136 per share, which will be distributed on March 31, 2025, due to tax processing delays[94] - As of December 31, 2024, the company's distributable reserves amounted to approximately HKD 5,437,000, a significant decrease from HKD 139,144,000 on December 31, 2023[108] - The company has not proposed a final dividend for the year ending December 31, 2024[95] - The largest customer accounted for 4.60% of total sales, while the top five customers combined represented 18.12%[144] - The largest supplier contributed 32.96% of total procurement, with the top five suppliers together accounting for 51.47%[144] Management Team - Liu Dong has over 10 years of experience in the Hong Kong capital market and investor relations[77] - Wu Junxian has been with the group since March 2009, holding various management positions[78] - Jiang Xueming has served as chairman of Dongfang Holdings International Group since 1995[79] - Xie Yingxia has held multiple roles including financial director and vice president at Dongfang Holdings Group[80] - Cao Guanyu has extensive banking and financial experience, previously serving as deputy general manager at Bank of China Singapore Branch[81] - Yu Xiaoying has over 20 years of accounting and finance experience, previously working at Deloitte and Visa[82] - Suo Suo has over 25 years of experience in banking, private equity, and asset management[83] - Yu Liwen has over 20 years of accounting, finance, and investment experience, previously working at PwC and Citigroup[84] Audit and Compliance - The company’s financial statements for the year ending December 31, 2024, were audited by Hong Kong Lixin Dehao CPA Limited[145] - The independent auditor, Hong Kong Li Xin De Hao CPA Limited, received a total remuneration of HKD 1,512,000 for the fiscal year ending December 31, 2024, which includes HKD 1,362,000 for audit services and HKD 150,000 for non-audit services[199] - The audit committee ensures that internal and external auditors' work is coordinated and that the internal audit function has sufficient resources and appropriate status[190] Future Outlook - The company expects to continue facing challenges in the upcoming year, with a focus on cost management and operational efficiency[10] - The group anticipates that stimulus policies for equipment updates and recycling will drive new demand in consumption and industrial sectors by 2027[23] - The company plans to achieve breakthroughs in oil pump motors, water pump motors, and elevators by 2025, expanding its product offerings in the direct current brushless permanent magnet synchronous motor sector[33]

Financial Performance - The company's revenue decreased by 3.2% from approximately HKD 843 million for the year ended December 31, 2023, to approximately HKD 815 million for the year ended December 31, 2024[12]. - The company's revenue for the year ending December 31, 2024, was approximately HKD 81.5 million, a decrease of about 3.2% from approximately HKD 84.3 million for the same period in 2023[16]. - Revenue from the sale of industrial aluminum electrolytic capacitors decreased from approximately HKD 73.6 million in 2023 to approximately HKD 68.7 million in 2024, a decline of about 4.9 million HKD[16]. - The net loss for the year ending December 31, 2024, was approximately HKD 5.5 million, a reduction from a loss of approximately HKD 12.2 million in 2023[24]. - Basic loss per share for the year ending December 31, 2024, was approximately HKD 0.019, compared to approximately HKD 0.0423 for the year ending December 31, 2023[25]. - Total assets as of December 31, 2024, were approximately HKD 96.6 million, down from HKD 107.6 million in 2023[26]. - The company did not recommend a final dividend for the year ending December 31, 2024, consistent with the previous year[29]. - The company reported no final dividend for the year ending December 31, 2024, consistent with the previous year where no dividend was declared[122]. Strategic Initiatives - The company successfully expanded into the high-end smart electronic devices and artificial intelligence sectors, leveraging its experience in electronic component production[12]. - The integration of AI technology into products aims to create data-driven added value for customers[12]. - The company plans to increase innovation investment to promote the synergy of electronic components, smart hardware, and AI algorithms[13]. - The strategic implementation is expected to create sustainable long-term value for shareholders[13]. - The company is focused on developing a comprehensive solution from underlying technology to application scenarios[13]. Corporate Governance - The company has a strong governance structure with independent non-executive directors overseeing audit and remuneration committees[42]. - The company has adhered to the corporate governance code throughout the fiscal year ending December 31, 2024, with the exception of deviation from code provision C.2.1[52]. - The board consists of five members, including two executive directors and three independent non-executive directors[57]. - The company has adopted the GEM Listing Rules regarding the minimum appointment of three independent non-executive directors, ensuring compliance with independence guidelines[61]. - The board has established an independence assessment mechanism to enhance its effectiveness and identify areas for improvement[62]. - The independence assessment report for the board was presented and the results were satisfactory for the fiscal year ending December 31, 2024[63]. - The company aims to provide satisfactory and sustainable returns to shareholders while safeguarding the interests of business partners[54]. - The company will continue to strengthen its corporate governance practices to align with its business operations and development[52]. Risk Management - The company has implemented a risk management and internal control system to identify, assess, and manage risks affecting operational efficiency and effectiveness[97]. - The board has adopted a credit risk management policy to mitigate financial risks, including continuous credit assessments and monitoring of significant overdue payments[98]. - The company has established a whistleblowing policy for employees and stakeholders to report misconduct confidentially and anonymously[98]. - The board confirmed that there are no significant uncertainties that may cast doubt on the company's ability to continue as a going concern[101]. Environmental, Social, and Governance (ESG) Practices - The company emphasizes sustainable development and stakeholder engagement in its environmental, social, and governance (ESG) practices[169]. - The group adheres to ISO 9001:2015 quality standards and has implemented a comprehensive quality control system[176]. - The board is responsible for overseeing the group's ESG strategies and performance, with a dedicated ESG working group assisting in implementation[178]. - The total greenhouse gas emissions for the reporting year amounted to 4,404.90 tons of CO2 equivalent, a slight increase from 4,328.70 tons in the previous year[191]. - The company aims to maintain stable levels of waste and greenhouse gas emissions in the next reporting year, targeting a density of 80% to 120% of the current year's recorded density[190]. - The company achieved ISO14001:2015 certification, ensuring minimal negative environmental impact during major production processes[187]. - The company has implemented an environmental management system to guide the R&D, production, and sales of aluminum electrolytic capacitors[187]. Shareholder Relations - The company has a shareholder communication policy to ensure that shareholder opinions and concerns are properly addressed[111]. - The independent non-executive directors attended the annual general meeting to gather shareholder feedback[95]. - The company has received annual confirmations from former controlling shareholders regarding compliance with non-competition agreements[73]. Board Composition and Diversity - The company has adopted a board diversity policy on October 24, 2017, which emphasizes the importance of a diverse board for maintaining competitive advantage[81]. - The board consists of 5 members, with 4 male and 1 female, achieving a gender diversity target of at least 20% female directors[86]. - The company aims for female employees, including senior management, to represent at least 40% of the workforce, which has been met[86]. - The nomination committee will regularly review the board diversity policy to ensure its effectiveness[84]. Operational Performance - The company operates in a highly competitive aluminum electrolytic capacitor industry, with significant reliance on the Chinese market for revenue[124]. - The company has established a good reputation for producing high-quality and reliable products, which is crucial for customer satisfaction[127]. - The company has fully utilized funds to increase production capacity for aluminum electrolytic capacitors and establish a second production facility in Dongguan, Guangdong Province[162].

Financial Performance - The company's operating revenue for Q1 2025 reached RMB 32,968,196 thousand, representing a 7.82% increase compared to RMB 30,578,301 thousand in Q1 2024[10] - Net profit attributable to ordinary shareholders decreased by 10.50% to RMB 2,453,172 thousand from RMB 2,740,979 thousand year-on-year[10] - The company's basic and diluted earnings per share both decreased by 10.53% to RMB 0.51 from RMB 0.57 year-on-year[10] - Net profit for Q1 2025 was RMB 2,464,117 thousand, down 10.8% from RMB 2,761,185 thousand in Q1 2024[25] - Total operating profit for Q1 2025 was RMB 2,912,938 thousand, a decrease of 9.5% from RMB 3,216,306 thousand in Q1 2024[25] - The company’s total profit for Q1 2025 was RMB 2,928,391 thousand, compared to RMB 3,206,793 thousand in Q1 2024, reflecting a decline of 8.7%[25] - The company’s total comprehensive income for Q1 2025 was RMB 2,428,225 thousand, down from RMB 2,709,941 thousand in Q1 2024[25] Cash Flow and Financial Position - The net cash flow from operating activities fell by 37.93% to RMB 1,851,253 thousand, down from RMB 2,982,601 thousand in the same period last year[10] - Operating cash flow decreased by 37.93% to 1,851,253 from 2,982,601 year-on-year, mainly due to increased cash payments for purchases and services[15] - Cash flow from operating activities generated RMB 1,851,253 thousand in Q1 2025, a significant decline from RMB 2,982,601 thousand in Q1 2024[27] - Cash and cash equivalents at the end of Q1 2025 totaled RMB 33,392,385 thousand, compared to RMB 44,943,538 thousand at the end of Q1 2024[27] Assets and Liabilities - Total assets as of March 31, 2025, increased by 5.11% to RMB 217,918,283 thousand from RMB 207,323,230 thousand at the end of 2024[10] - Current assets totaled RMB 151,359,279 thousand, up from RMB 141,787,346 thousand, indicating a growth of about 6.5%[21] - Total liabilities amounted to RMB 145,350,129 thousand, compared to RMB 134,212,948 thousand, reflecting an increase of approximately 8.4%[23] - The company's total equity reached RMB 72,568,154 thousand, up from RMB 73,110,282 thousand, indicating a decrease of approximately 0.7%[23] - Non-current assets totaled RMB 66,559,004 thousand, an increase from RMB 65,535,884 thousand, indicating a growth of about 1.6%[21] Shareholder Information - The total number of shareholders as of March 31, 2025, was 542,757, with 542,461 being A-share shareholders[17] - The largest shareholder, ZTE Corporation, holds 20.09% of the shares, amounting to 958,940,400 shares[17] Other Financial Metrics - The weighted average return on equity declined by 0.56 percentage points to 3.38% from 3.94% in the previous year[10] - Research and development expenses amounted to RMB 5,946,993 thousand in Q1 2025, a decrease of 6.5% compared to RMB 6,375,823 thousand in Q1 2024[25] - Other income increased by 90.72% to 16,642 from 8,726 year-on-year, primarily due to increased external compensation income[15] - Financial expenses surged by 432.98% to RMB (340,005) thousand, attributed to increased net interest income and foreign exchange gains compared to losses in the previous year[14] - Credit impairment losses increased by 263.81% to (117,240) compared to (32,226) in the same period last year, primarily due to increased provisions for accounts receivable[15] - The company reported a 78.86% decrease in asset impairment losses to (80,064) from (378,745) year-on-year, mainly due to reduced provisions for inventory write-downs[15] - Foreign currency translation losses decreased by 33.77% to (35,708) from (53,913) year-on-year, attributed to fluctuations in exchange rates[15] - Minority shareholders' profit decreased by 45.83% to 10,945 from 20,206 year-on-year, mainly due to reduced profits from subsidiaries with higher minority ownership[15] Investment Activities - Investment cash flow net outflow decreased by 90.81% to (1,383,661) from (15,060,862) year-on-year, indicating reduced investment outflows[15]