Financial Performance - The company recorded revenue of approximately HKD 41,485,000 for the year, a decrease of about 15.7% compared to HKD 49,228,000 in the previous year[13] - Gross profit for the year was approximately HKD 22,398,000, with a gross margin of about 54.0%, an increase from 45.8% in the previous year[13] - The loss attributable to equity holders for the year was approximately HKD 37,634,000, compared to a loss of HKD 20,876,000 in the previous year, primarily due to fair value losses on investment properties increasing from HKD 5,536,000 to HKD 20,617,000[13] - The group’s revenue for 2024 is approximately HKD 41,485,000, a decrease of 15.7% from HKD 49,228,000 in 2023, mainly due to reduced sales of computer hardware and software[49] - The group’s cost of sales and services for 2024 is approximately HKD 19,087,000, a decrease of 28.4% from HKD 26,660,000 in 2023, attributed to decreased transactions in computer hardware and software[50] - The group’s gross profit for 2024 is approximately HKD 22,398,000, a slight decrease of about HKD 170,000 from HKD 22,568,000 in 2023[51] - Other income and gains for the fiscal year ending December 31, 2024, is approximately HKD 1,031,000, down from HKD 3,472,000 in 2023, primarily due to a decrease in other interest income[52] - The group’s administrative expenses for 2024 are approximately HKD 34,076,000, a decrease of 12.6% from HKD 38,979,000 in 2023, due to reduced advertising and legal costs[54] - The loss attributable to owners of the company in 2024 was approximately HKD 37,634,000, an increase from approximately HKD 20,876,000 in 2023, primarily due to the increase in fair value losses on investment properties[58] - As of December 31, 2024, the group's cash and bank balances decreased to approximately HKD 5,371,000 from about HKD 11,595,000 as of December 31, 2023[59] - The total borrowings of the group as of December 31, 2024, were approximately HKD 60,740,000, down from HKD 65,033,000 in 2023, with a debt-to-equity ratio of 0.25[59] Strategic Initiatives - The company strategically focused on technological advancements in cloud computing, Web 3.0, and AI to meet evolving customer needs[14] - The company acquired Popsible Limited, which provides IT and public relations services aligned with customer strategic goals, broadening revenue sources[14] - The company aims to leverage resources more efficiently across its subsidiaries following the acquisition[14] - The company has established a joint venture to promote sustainable changes in the ESG sector in Dubai[15] - A strategic partnership was formed with Masary Capital in September 2024 to promote AI predictive solutions in the Gulf Cooperation Council region[34] - The group plans to leverage technological advancements and the growing demand for digital transformation across industries, focusing on AI, cybersecurity, and machine learning for future growth[47] - The group aims to diversify revenue sources and reduce risks associated with domestic market fluctuations by expanding into potential international markets like the UAE through localized AI solutions and blockchain partnerships[48] Audit and Compliance - The independent auditor expressed a qualified opinion due to insufficient audit evidence regarding the service agreements[19] - The company has implemented remedial measures to address internal control deficiencies identified during the audit process[24] - The management has made efforts to provide all available information for the audit, but was unable to supply all requested documents[23] - The audit committee has agreed with management's position regarding the audit qualification, which will be fully removed from the financial statements for the year ending December 31, 2025[28] - The Audit Committee confirmed that the financial statements for the year accurately reflect the company's performance and comply with applicable standards[200] Market Conditions - The global AI market grew by over USD 184 billion in 2024, a significant increase of nearly USD 50 billion from 2023, indicating strong demand for innovative solutions[14] - The geopolitical tensions and economic challenges in 2024 are expected to impact the global market, prompting the company to adopt a cautious approach[15] - The company is focusing on risk management and exploring potential acquisitions to enhance its artificial intelligence and IT business amidst geopolitical and macroeconomic challenges[29] Share Capital and Stock Options - The company plans to issue 12,353,000 subscription shares at HKD 6.31 each, representing approximately 16.86% of the existing issued share capital[37] - The expected total proceeds from the subscription are approximately HKD 77,950,000, with net proceeds of about HKD 77,750,000 allocated for operational funding in the UAE and Hong Kong[39] - The company has granted a total of 23,900,000 stock options on May 13, 2021, and an additional 16,360,000 stock options on June 16, 2022, under the 2012 Stock Option Plan[111] - The 2012 Stock Option Plan allows for a maximum of 34,314,132 stock options to be granted, equivalent to 10% of the total shares issued as of November 5, 2021[114] - The company has granted a total of 4,102,775 stock options, with 3,835,213 options remaining unexercised as of the report date[122] - A total of 1,568,000 stock options have been granted under the 2023 stock option plan, which allows for a maximum of 6,176,523 options to be issued[125] - The exercise price for stock options granted in 2021 was HKD 2.19, while options granted in 2022 had an exercise price of HKD 1.40[121] Corporate Governance - The company is committed to maintaining high standards of business ethics and corporate governance[157] - The company has complied with the corporate governance code as per GEM listing rules, except for the separation of roles between the chairman and CEO[155] - The board consists of eight directors, including three executive directors, two non-executive directors, and three independent non-executive directors[159] - The board has established a written remuneration committee in compliance with GEM listing rules[178] - The company has adopted a code of conduct for securities trading by directors, ensuring compliance with GEM listing rules[163] - The company has arranged appropriate liability insurance for directors to cover liabilities arising from company activities[176] Employee and Diversity Initiatives - The total employee benefits expenses for the year ended December 31, 2024, were approximately HKD 24,216,000, compared to HKD 21,744,000 in 2023[68] - The group employed 70 staff as of December 31, 2024, an increase from 61 in 2023[68] - The company successfully attracted female talent in the traditionally male-dominated IT industry, achieving a gender diversity ratio of 54% female to 46% male among employees[192] - The company is committed to maintaining gender diversity in hiring practices and aims to recruit more female talent[193] - The board diversity analysis as of December 31, 2024, indicates a balanced representation across different age groups and genders[189] Events and Future Outlook - The company is considering a potential dual listing on the Abu Dhabi Securities Exchange (ADX) or the Dubai Financial Market (DFM) to leverage opportunities in the UAE market[15] - The company has not had any directors waive their remuneration for the year ending December 31, 2024[110] - There were no significant violations or non-compliance with applicable laws and regulations during the year[144] - The company has not made any charitable donations during the year ending December 31, 2024[147] - There are no significant post-reporting period events disclosed in the annual report[153]
中国信息科技(08178) - 2024 - 年度业绩