中国蜀塔(08623) - 2021 - 中期财报

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