Business Development and Strategy - The company successfully developed its own network infrastructure, the Netsis Security Hub in Hong Kong, expanding revenue sources despite challenges from political restrictions and emerging technologies[13]. - The company is focusing on accelerating the development of its Software as a Service (SaaS) platform to maintain competitiveness in the growing Chinese market, aiming to make SaaS a significant revenue growth driver[13]. - The company plans to diversify its customer base and complete a series of marketing and engineering appointments to seize opportunities in the network infrastructure and security solutions business[14]. - The company is considering investing in technology to supplement its existing capabilities due to rapidly changing customer demands[14]. - The company aims to enhance its corporate image and brand among existing and potential customers through its mature network infrastructure and strong R&D capabilities[14]. - The company is expanding its SaaS business in China, with a strategic focus on daily operations and overall development[26]. - The company is focused on expanding its market reach and exploring potential mergers and acquisitions to drive growth[26]. - The company is actively involved in developing new technologies and products in the cybersecurity space, which is critical for future growth[34]. - The company has established partnerships with suppliers to enhance its product offerings and market presence[40]. - The company is exploring potential mergers and acquisitions to accelerate growth and expand its service capabilities[36]. - The company has a strategic plan to enhance its data monitoring and collection services, which is essential for maintaining competitive advantage[35]. Financial Performance - The total revenue for the year ended December 31, 2019, was approximately $5,815,000, a decrease from $8,573,000 in 2018[53]. - The network infrastructure solutions segment generated approximately $1,308,000 in revenue, down from $4,313,000 in 2018, while the network security solutions segment generated approximately $2,055,000, down from $4,260,000 in 2018[53]. - The SaaS segment reported an adjusted EBITDA of approximately $496,000 for the year ended December 31, 2019, with significant developments in the SaaS system and joint ventures established[51]. - The cost of goods sold decreased from approximately $3,134,000 in 2018 to about $722,000 in 2019, primarily due to reduced hardware procurement for network infrastructure projects[54]. - Employee costs and related expenses decreased to approximately $1,243,000 in 2019 from $1,705,000 in 2018, attributed to a reduction in average employee numbers[56]. - Sales and marketing expenses increased significantly to approximately $1,679,000 in 2019 from about $21,000 in 2018, mainly due to advertising costs for promoting the SaaS business in China[58]. - General and administrative expenses rose to approximately $2,101,000 in 2019 from about $840,000 in 2018, influenced by losses from the sale of subsidiaries and costs associated with the expansion of the SaaS business[59]. - The group reported total assets of approximately $17,736,000 and total liabilities of approximately $2,591,000 as of December 31, 2019, compared to $17,941,000 and $2,047,000 in 2018, respectively[60]. - The company completed a placement of 120,000,000 new shares at a price of HKD 0.09 per share, raising approximately HKD 10,800,000 (about $1,385,000) to improve financial conditions and expand into the Chinese market[69]. - The net proceeds from the placement are intended for developing information and communication technology services in China and general working capital[70]. Corporate Governance - The company is committed to maintaining high standards of compliance and governance, as evidenced by its independent non-executive directors with legal and financial expertise[27][28]. - The board consists of six members, including three executive directors and three independent non-executive directors, ensuring a balanced governance structure[102]. - The board held a total of 16 meetings during the year ending December 31, 2019, with full attendance from most directors[109]. - Independent non-executive directors represent at least one-third of the board, providing independent judgment in decision-making processes[110]. - The company has established three committees: audit, remuneration, and nomination, each with clear written terms of reference[115]. - The audit committee is responsible for reviewing financial statements and internal control procedures, ensuring compliance with GEM listing rules[116]. - The remuneration committee reviews performance-based remuneration and ensures no director determines their own pay[117]. - The nomination committee evaluates the board's structure and recommends suitable candidates for board positions[122]. - The company confirmed that all directors received appropriate training throughout the year[114]. - The company has implemented a compliance officer role, with an executive director serving in this capacity[143]. Employee and Management - The company has over 30 years of experience in the information technology industry, with a focus on providing IT services to both private and government sectors[20]. - The Chief Technology Officer, Mr. Gonzales, has over 19 years of experience in the IT sector, overseeing marketing, sales, and product support[22]. - The management team includes professionals with extensive backgrounds in finance, law, and technology, enhancing the company's strategic capabilities[27][28][29]. - The R&D director has over 25 years of experience in network design and management, indicating a robust technical foundation for product development[34]. - The marketing director has a background in establishing and managing businesses in surveillance and communication products, enhancing market outreach capabilities[36]. - The finance director has over 10 years of experience in financial management, ensuring sound financial oversight for the company[41]. - The company has a strong emphasis on product and technology research and development, aiming to innovate and improve service offerings[32]. - The company has maintained a competitive compensation structure to attract and retain high-quality employees[163]. - The company plans to continue evaluating the need for hiring new engineers after three engineers resigned during the year[85]. - The company has outsourced part of its development and upgrade work to technology providers during the year[85]. Risk Management and Compliance - The company identified several key risks, including the recoverability of trade receivables, which may impact cash flow[158]. - The company has no internal audit unit, as the board believes it is not cost-effective given the current operational scale[151]. - The company’s risk management activities are ongoing, with a focus on identifying and managing operational risks[159]. - The company has established a rigorous internal policy to manage insider information and securities trading by employees and directors[151]. - The company is committed to environmental sustainability and regularly reviews its internal policies and employee feedback[162]. Shareholder Relations - The company expresses gratitude to shareholders and partners for their trust and support, emphasizing the commitment to optimizing corporate strategies for exceptional performance[17]. - The company aims to maintain effective communication with shareholders and potential investors through quarterly, interim, and annual reports[148]. - The company’s dividend policy aims to provide stable and sustainable returns to shareholders, considering various financial factors[131]. - The company did not recommend the payment of a final dividend for the year ended December 31, 2019, compared to no dividend in 2018[134]. - As of December 31, 2019, the company's share premium and capital reserves were approximately $10,851,000 and $3,922,000 respectively, available for distribution to shareholders[182].
NEXION TECH(08420) - 2019 - 年度财报