Financial Performance - For the three months ended March 31, 2022, the revenue was approximately HKD 20,887,000, a decrease of 15.15% compared to HKD 24,617,000 in the same period last year[16]. - The loss attributable to the owners of the company for the same period was approximately HKD 3,880,000, compared to a loss of HKD 4,104,000 in the previous year[16]. - The loss per share for the three months ended March 31, 2022, was approximately HKD 0.0113, compared to a loss of HKD 0.0171 in the previous year[16]. - The group recorded revenue of approximately HKD 20,887,000 for the first quarter of 2022, a decrease of 15.15% compared to approximately HKD 24,617,000 in the same period last year[41]. - The group incurred a loss attributable to owners of the company of approximately HKD 3,880,000 for the first quarter of 2022, an improvement from a loss of approximately HKD 4,104,000 in the previous year[42]. - The company reported a pre-tax loss of HKD 3,863,000 for Q1 2022, compared to a loss of HKD 4,285,000 in Q1 2021, indicating a slight improvement[55]. - The company reported a loss attributable to owners of HKD 3,880,000 for Q1 2022, slightly improved from a loss of HKD 4,104,000 in Q1 2021[65]. Dividend and Shareholder Information - The company did not recommend the payment of an interim dividend for the three months ended March 31, 2022[16]. - The company did not recommend an interim dividend for the three months ended March 31, 2022, compared to no dividend in the previous year[70]. - As of March 31, 2022, the company had a total of 343,141,329 issued ordinary shares[77]. - The total issued ordinary shares of the company as of March 31, 2022, is 343,141,329, which is the basis for calculating the ownership percentages[98]. - As of the report date, the total number of shares issued by the company is 514,711,993 shares[114]. - Major shareholders include Mr. Zhang with 11.03% of shares (37,843,333 shares) and Mr. Lin with 7.39% (25,342,000 shares), highlighting significant ownership concentration[91]. Research and Development - The company is focusing on the development of advanced technologies, particularly in AI and cloud technology, while prudently controlling and allocating resources[18]. - The company is investing approximately HKD 4,320,000 in research and development for its smart retail cloud platform and IoT cloud platform network security[16]. - The group plans to invest more resources in the research and development of IoT, AI, cloud, and other technologies to enhance service quality and business efficiency[37]. - The company is developing the AI Booster solution, which includes a simplified AI solution for small and medium-sized enterprises, focusing on logistics and customer relationship management systems[34]. - The AI Booster solution aims to provide real-time information sharing and personalized recommendations for clients, enhancing their operational efficiency[34]. - The CRM system, part of the AI Booster solution, is expected to launch in the second half of 2022, optimizing customer management processes[34]. Market and Economic Environment - The geopolitical environment, including the impact of the Russia-Ukraine war, has contributed to a pessimistic macroeconomic sentiment affecting business activities[17]. - The board will continue to monitor market conditions and assess the impact of COVID-19 on the group's financial position and operations[37]. - The company is preparing to meet future challenges while seizing sustainable growth opportunities[18]. Operational Performance - Revenue from IT solutions and maintenance services in Q1 2022 was HKD 16,856,000, down from HKD 23,321,000 in Q1 2021, representing a decline of 27.8%[59]. - Rental income for Q1 2022 was HKD 3,114,000, compared to HKD 226,000 in Q1 2021, showing significant growth[58]. - The cost of sales and services for the first quarter of 2022 was approximately HKD 13,922,000, down 34.17% from approximately HKD 21,149,000 in the previous year, primarily due to a reduction in project numbers[41]. - Gross profit for the first quarter of 2022 was approximately HKD 6,965,000, compared to approximately HKD 3,468,000 in the same period last year, mainly due to rental income of approximately HKD 3,114,000 from properties leased to an independent third party[41]. - Employee benefits expenses totaled approximately HKD 4,263,000 for the three months ended March 31, 2022, compared to approximately HKD 4,047,000 in the previous year[39]. - Administrative expenses for the first quarter of 2022 were approximately HKD 5,978,000, a decrease of 22.1% from approximately HKD 7,674,000 in the previous year[41]. Corporate Governance and Compliance - The company has maintained compliance with the GEM listing rules and corporate governance code, except for the combined roles of the chairman and CEO, which the board believes is in the best interest of the company[104]. - The audit committee, consisting of independent non-executive directors, has reviewed the unaudited condensed consolidated financial statements for the three months ending March 31, 2022, ensuring compliance with applicable accounting standards[108]. - The board is responsible for ensuring the group maintains a robust and effective internal control and risk management system to protect shareholder investments and group assets[111]. - The audit committee reviews the effectiveness of the internal control and risk management systems and reports to the board at least annually[111]. Legal and Regulatory Matters - The company is seeking legal advice regarding ongoing litigation involving its subsidiary, which is scheduled for a hearing in June 2022[28]. - The company has confirmed that the previously forfeited deposit of RMB 13,000,000 has been recognized as other income for the group[28]. Share Options and Incentives - The company granted a total of 23,900,000 share options on May 13, 2021, with an exercise price of HKD 0.245[81]. - The maximum number of shares that may be issued under the share option plan is capped at 10% of the total issued shares as of the adoption date[82]. - The board believes that granting share options to employees will incentivize them to strive for the company's goals[87]. - The exercise price of unexercised share options was adjusted from HKD 0.245 to HKD 0.219, and the number of shares to be issued upon exercise of unexercised options increased from 23,100,000 to 25,842,465 shares[113].
中国信息科技(08178) - 2022 Q1 - 季度财报