Financial Performance - For the six months ended June 30, 2025, the Group's revenue decreased by approximately 30.2% to approximately RMB21.7 million from approximately RMB31.1 million in the same period of 2024[19] - The Group's non-5G business revenue decreased by approximately 34.3% from approximately RMB31.1 million for the six months ended June 30, 2024, to approximately RMB20.4 million for the same period in 2025[20] - The Group's gross profit decreased by approximately 51.2% to approximately RMB0.6 million for the six months ended June 30, 2025, compared to approximately RMB1.3 million for the same period in 2024[21] - The Group recorded a net loss of approximately RMB34.0 million for the six months ended June 30, 2025, compared to a net loss of approximately RMB30.7 million for the same period in 2024[21] - The decline in revenue was primarily due to delays in projects from IoT clients amid cash flow concerns and macroeconomic uncertainty[19] - Revenue for the six months ended June 30, 2025, was RMB 21,668,000, a decrease of 30.4% compared to RMB 31,050,000 in the same period of 2024[198] - Gross profit for the same period was RMB 646,000, down 51.3% from RMB 1,325,000 in 2024[198] - Loss before taxation increased to RMB 33,961,000, compared to a loss of RMB 30,742,000 in the prior year, reflecting a 7.2% increase in losses[198] - Total comprehensive expense for the period was RMB 34,413,000, compared to RMB 31,356,000 in 2024, indicating an increase of 9.8%[198] Market and Business Strategy - The Group has been operating in the rapidly growing IoT market in the PRC since 2012 and expanded into the private 5G network market in 2020[15] - The Group's focus is on leveraging AI, blockchain, and other cutting-edge technologies to drive digital asset and Web3 project development[14] - The IoT market in China is projected to grow at a CAGR of approximately 13.3% from 2021 to 2026, reaching approximately RMB5,466.0 billion by 2026, with the 5G-based IoT market expected to grow at a CAGR of approximately 62.2% during the same period[43] - The private 5G network market in China is expected to reach approximately RMB236.1 billion in 2026, with a CAGR of approximately 108.2% from 2021 to 2026[44] - The Group aims to enhance transparency, security, and reduce fraud through integrated AI and blockchain solutions based on existing IoT capabilities[33] - The Group's one-stop solution and diversified product portfolio are expected to help it stand out in the competitive IoT market, which has over 30,000 participants[48] Investments and Asset Management - The Group plans to strategically invest in innovative AI and Web3 projects while prudently allocating resources into high-potential digital assets for long-term growth[28] - As of June 30, 2025, the Group has purchased 4,880 units of Solana (SOL), recognizing its foundational role in decentralized applications and Web3 innovation[38] - The Group acquired 4,880 units of Solana at an aggregate cost of approximately RMB5.0 million, classified as intangible assets[77] - As of June 30, 2025, the fair value of the acquired Solana was approximately RMB5.5 million, representing approximately 2.3% of the Group's total assets[78] - The Group made a significant investment in Etic International Limited, subscribing for 111,270 new ordinary shares for a cash consideration of RMB 13,513,000, which represents approximately 2.18% of ETIC's issued share capital[118] - The fair value of the equity investment in ETIC as of June 30, 2025, was approximately RMB 12.6 million, accounting for about 6.2% of the Group's net assets and 5.3% of total assets[120] Corporate Governance and Compliance - The Group's corporate governance practices are based on the principles and code provisions set out in part 2 of the CG Code, ensuring transparency and accountability to shareholders[125] - The Company has complied with all applicable code provisions during the reporting period, except for the deviation regarding the roles of chairman and CEO being held by the same individual[128] - The audit committee, composed of three independent non-executive directors, reviewed the unaudited interim results and confirmed compliance with applicable accounting principles and standards[182] Shareholder and Capital Management - The Company proposed a rights issue to raise up to approximately HK$154.8 million, with a subscription price representing a discount of approximately 49.7% to the closing price on June 4, 2025[84] - The rights issue was over-subscribed, with valid acceptances and applications received for 1,305,750,344 rights shares, representing approximately 1,064.53% of the total available[92] - The net proceeds from the rights issue, after deducting all related expenses, were approximately HK$152.96 million, which will be used as outlined in the prospectus[94] - The authorized share capital was proposed to increase from US$3,000,000 to US$10,000,000 by creating an additional 700,000,000 shares, which was approved by shareholders[185] - The Company did not declare any interim dividend for the six months ended June 30, 2025[176] Employee and Operational Insights - The company recognized staff costs of approximately RMB12.8 million for the six months ended June 30, 2025, representing an increase of approximately 10.3% compared to the same period in 2024[113] - The company had a total of 33 employees as of June 30, 2025, an increase from 30 employees as of December 31, 2024[113] - The Group's management believes that attracting and retaining high-quality talent is a core advantage, supported by competitive compensation and performance evaluations[117] Auditor and Financial Review - Ernst & Young resigned as auditor, and Deloitte Touche Tohmatsu was appointed as the new auditor effective July 22, 2025[139][142] - The independent auditor reviewed the condensed consolidated financial statements and found no issues that would indicate non-compliance with HKAS 34[192] - Deloitte Touche Tohmatsu reviewed the unaudited condensed consolidated financial statements for the six months ended June 30, 2025[178]
迷策略(02440) - 2025 - 中期财报