Financial Performance - For the year ended December 31, 2023, the company's revenue increased by approximately RMB 29.5 million or 13.0% to approximately RMB 256.0 million compared to the year ended December 31, 2022[8]. - The company's profit for the year decreased by approximately RMB 3.9 million or 16.0% to RMB 20.4 million, primarily due to increased subcontracting costs[8]. - The operating profit for the year was RMB 23.961 million, compared to RMB 30.070 million in the previous year[15]. - The financial income for the year was RMB 205,000, an increase from RMB 94,000 in the previous year[15]. - The income tax expense for the year was RMB 2.686 million, down from RMB 5.009 million in the previous year[15]. - Revenue from wireless telecom network optimization services decreased by approximately RMB 7.2 million or about 7.1% to RMB 94.9 million in 2023 from RMB 102.1 million in 2022[28]. - Revenue from telecom network infrastructure maintenance and engineering services decreased by approximately RMB 0.7 million or about 1.6% to RMB 43.8 million in 2023 from RMB 44.5 million in 2022[29]. - Revenue from ICT integration services increased by approximately RMB 38.7 million or about 70.9% to RMB 93.3 million in 2023 from RMB 54.6 million in 2022[31]. - Revenue from software-related business decreased by approximately RMB 1.3 million or about 5.2% to RMB 24.0 million for the year ended December 31, 2023[32]. - Other income decreased by approximately RMB 1.6 million or about 47.1% to RMB 1.8 million for the year ended December 31, 2023, mainly due to reduced government subsidies[33]. - Subcontracting costs increased by approximately RMB 32.2 million or about 26.5% to RMB 153.8 million for the year ended December 31, 2023, driven by increased subcontracting costs in ICT integration services[34]. - Employee benefits expenses decreased by approximately RMB 2.9 million or about 14.5% to RMB 17.1 million for the year ended December 31, 2023, due to a decline in average employee numbers[36]. - Operating profit decreased by approximately RMB 6.1 million or about 20.3% to RMB 24.0 million for the year ended December 31, 2023, primarily due to increased subcontracting and material costs[44]. - Net profit margin declined from approximately 10.7% to about 8.0% for the year ended December 31, 2023, mainly due to increased listing and operating expenses[45]. - Cash and cash equivalents decreased by approximately 43.6% to RMB 23.8 million as of December 31, 2023, compared to RMB 42.2 million in 2022[49]. - Total bank borrowings amounted to approximately RMB 28.0 million as of December 31, 2023, down from RMB 30.0 million in 2022[50]. - The debt-to-equity ratio was 32.9% as of December 31, 2023, compared to 37.2% as of December 31, 2022[54]. - The company did not recommend a final dividend for the year ended December 31, 2023[46]. - As of December 31, 2023, the group had 121 employees, a decrease from 145 employees as of December 31, 2022[59]. - Total wages and salaries for the year ended December 31, 2023, amounted to approximately RMB 136 million, down from RMB 164 million for the year ended December 31, 2022[59]. Strategic Outlook - The company plans to focus on developing its business in selected markets over the next few years, emphasizing efficient business processes for sustainable performance[9]. - There is an optimistic outlook for the demand for ICT integration services, driven by favorable government policies promoting rapid growth in integrated services[9]. - The development of 5G technology is expected to create new software demands from downstream customers, leading to increased demand for telecom network-related software[9]. - The company anticipates continued growth in the Chinese telecom industry driven by technological advancements and increasing demand for digital services[25]. - The company successfully listed on the main board of the Stock Exchange on January 12, 2024, enhancing its cash flow and capacity to undertake larger projects[25]. - The company is committed to implementing its future plans as outlined in the prospectus to enhance its workforce[25]. - The company will allocate more resources to the development of ICT integration services and software development, as detailed in its prospectus published on December 28, 2023[9]. Corporate Governance - The company emphasizes a culture of integrity and ethical behavior, with training programs to reinforce ethical standards and compliance policies[109]. - The company has established an anti-corruption policy to maintain high standards of business ethics and compliance with applicable laws[110]. - An audit committee was formed on December 15, 2023, to oversee financial reporting and internal control systems, consisting of three members[119]. - The company has set up three functional committees to assist the board in fulfilling its responsibilities, including an audit committee, a remuneration committee, and a nomination committee[118]. - All directors have participated in appropriate ongoing professional development to ensure they are informed and capable of contributing effectively[114]. - The company has engaged an independent internal control consultant to review key business processes and internal control systems continuously[139]. - The board and audit committee believe that the group's risk management and internal control systems are effective and adequate[154]. - The company has established a whistleblowing policy to promote openness, integrity, and accountability, with no reported incidents of fraud or misconduct affecting the financial statements during the reporting period[153]. - The company aims to minimize risks through a risk management system that involves risk assessment and the identification of appropriate risk mitigation strategies[138]. - Risk assessments are submitted to the Audit Committee for review every six months[138]. - The company secretary has completed no less than 15 hours of relevant professional training as required by the listing rules[135]. - The Audit Committee has recommended the reappointment of PwC as the external auditor for 2024, pending shareholder approval[124]. Shareholder Information - The company will not recommend a final dividend distribution to shareholders for the reporting period[160]. - The group operates as an investment holding company, with subsidiaries providing telecommunications network support services, information and communication technology integration services, and telecommunications network-related software development services[158]. - The company has not established a predetermined dividend payout ratio and will assess its dividend policy based on financial performance and current economic conditions[146]. - Major shareholders, including Jingwei Tiandi Group Limited and Li Chao Limited, each hold 375,000,000 shares, representing 75% of the company's issued share capital[190]. - Revenue from the top five customers accounted for 45.4% of total revenue in 2023, down from 51.0% in 2022[193]. - The largest customer contributed 21.4% to total revenue in 2023, compared to 23.8% in the previous year[193]. - The top five subcontractors accounted for 43.1% of subcontracting costs in 2023, a decrease from 56.5% in 2022[193]. - The largest subcontractor's share of subcontracting costs was 13.0% in 2023, down from 19.9% in 2022[193]. - The top five suppliers contributed 69.8% to material, supplies, and other item costs, a reduction from 79.7% in 2022[193]. - The largest supplier accounted for 33.0% of material costs in 2023, significantly down from 61.4% in the previous year[193]. Board Composition and Appointments - Appointment of Mr. Hu Yongquan as an independent non-executive director on December 15, 2023, with over six years of experience in corporate governance[78]. - Dr. Liang Guangxi appointed as an independent non-executive director on December 15, 2023, bringing over 30 years of experience in computer science and engineering[79]. - Mr. Yu Zhirong appointed as the chairman of the audit, remuneration, and nomination committees on December 15, 2023, with over 15 years of experience in consulting, accounting, and auditing[83]. - Ms. Chen Shenmao serves as the deputy general manager and CFO, overseeing financial, administrative, and HR functions, with over 16 years of experience in accounting and finance[85]. - Mr. Yao Min, deputy general manager, responsible for overseeing business in Central China, has over 13 years of experience in network computing and telecommunications[88]. - Mr. Xu Shengjian, supervisor and regional manager, responsible for business in Hunan Province, has over 13 years of experience in network computing and telecommunications[89]. - The board consists of seven members, including three executive directors and three independent non-executive directors, ensuring a balanced experience across various sectors[105]. - The board currently has one female director, achieving gender diversity at the board level, with a commitment to increase female representation in the future[106]. - The company aims to improve gender diversity within its board, with a target of increasing female representation to 30% by 2025[105]. - As of December 31, 2023, the employee gender ratio is 72.7% male to 27.3% female among 121 employees, including senior management[106]. Future Plans and Investments - The net proceeds from the share issuance on January 12, 2024, were approximately HKD 606 million (equivalent to about RMB 560 million) after deducting underwriting commissions and related expenses[62]. - The planned use of the net proceeds includes 20.5% (RMB 11.5 million) for future ICT integration projects, expected to be utilized by the end of 2027[66]. - 34.6% (RMB 19.4 million) of the proceeds will be allocated to new R&D projects, also expected to be utilized by the end of 2027[66]. - 19.8% (RMB 11.1 million) will be used to strengthen the project management team to support anticipated expansion plans and business growth, expected by the end of 2026[66]. - 12.9% (RMB 7.2 million) of the proceeds will be used to repay part of the bank loans, expected by the end of 2025[66]. - The company has committed to exploring potential investments and business opportunities for sustainable growth and attractive returns for shareholders[109]. Non-Competition Agreement - The parties involved in the non-competition agreement irrevocably and unconditionally guarantee not to engage in any business that competes directly or indirectly with the group's operations in China[200]. - The non-competition clause applies to any member of the group and their close associates, prohibiting them from participating in restricted businesses[200]. - The agreement covers any current or future business activities that may be conducted by the group in China[200]. - The definition of "restricted business" includes any business that may constitute competition with the group's existing or planned operations[200]. - The commitments made under the non-competition agreement are binding and enforceable against the parties involved[200]. - The agreement aims to protect the group's market position and prevent conflicts of interest[200]. - The parties are required to ensure that their associates also comply with the non-competition terms[200]. - The non-competition obligations are designed to last for the duration specified in the agreement[200]. - The agreement emphasizes the importance of maintaining competitive integrity within the market[200]. - The non-competition terms are a strategic measure to safeguard the group's business interests in China[200].
经纬天地(02477) - 2023 - 年度财报