Financial Performance - The company's revenue for the year ended December 31, 2023, was approximately $101.0 million, a decrease of about 20.2% compared to approximately $126.6 million for the same period in 2022[7]. - Adjusted net profit (non-IFRS measure) for the year was approximately $0.9 million, down from approximately $4.6 million in the previous year[8]. - Revenue for the year ended December 31, 2023, decreased by approximately 20.2% (about $25.6 million) to $101.0 million, primarily due to declines in Europe, North America, and Latin America[21]. - The adjusted net profit for the year ended December 31, 2023, was approximately $0.9 million, a decrease of about 80.4% compared to approximately $4.6 million for the year ended December 31, 2022[19]. - The company recorded a net loss of approximately $1.6 million for the year ended December 31, 2023, a decrease of about $4.6 million compared to a net profit of approximately $6.2 million for the year ended December 31, 2022[37]. - Basic and diluted loss per share for the year ended December 31, 2023, was (0.32) cents, compared to earnings of 0.91 cents for the year ended December 31, 2022[38]. Revenue Breakdown - Revenue from North America decreased by approximately 8.4% to about $34.8 million[9]. - Sales in Europe decreased by approximately 30.4% to about $32.6 million[10]. - Revenue from Latin America decreased by approximately 45.1% to about $10.6 million[11]. - North America accounted for 34.5% of total revenue in 2023, down from 30.1% in 2022, with a revenue decrease of $3.2 million (8.4%)[24]. - Europe saw a significant revenue decline of 30.4%, dropping from $46.8 million in 2022 to $32.6 million in 2023[24]. Operational Highlights - The new digital automation production facility in Hunan, China, commenced scale production as planned, enhancing operational excellence[12]. - The company is expanding its sales team to explore multiple business-related areas while improving its existing supply chain[12]. - Continued investment in R&D, particularly in sustainable development, IoT, and other new business sectors[12]. - The company has over 200 invention patents and one of the most comprehensive infrared and code databases in the world[16]. - The new Simple Setup Hybrid with cloud functionality has been launched in collaboration with a major pan-European operator, generating meaningful on-site data to enhance user experience[16]. Cost and Expenses - The cost of sales for the year ended December 31, 2023, was approximately $77.7 million, representing about 76.9% of total revenue, compared to $98.9 million (78.1%) in 2022[25]. - Gross profit decreased from approximately $27.6 million in 2022 to about $23.3 million in 2023, a decline of approximately 15.6%[27]. - Other income fell from approximately $0.3 million in 2022 to about $0.2 million in 2023, primarily due to a reduction in government subsidies[28]. - Selling and distribution expenses decreased from approximately $7.2 million in 2022 to about $6.4 million in 2023, mainly due to lower distribution costs[29]. Cash Flow and Financial Position - As of December 31, 2023, the company's cash and cash equivalents amounted to approximately $16.9 million, indicating a stable financial position[39]. - Net cash generated from operating activities for the year ended December 31, 2023, was approximately $14.1 million, significantly up from $1.4 million in the previous year[41]. - The company reported a net cash outflow from investing activities of approximately $0.7 million, primarily due to the purchase of property, plant, and equipment[43]. - Net cash used in financing activities was approximately $11.9 million, mainly due to repayment of interest-bearing bank loans totaling about $17.1 million[45]. - The company's current assets decreased from approximately $24.9 million as of December 31, 2022, to approximately $21.9 million as of December 31, 2023[46]. Debt and Financing - The debt ratio as of December 31, 2023, was approximately 25.1%, a decrease from 35.7% as of December 31, 2022[52]. - Interest-bearing bank loans amounted to approximately $15.0 million as of December 31, 2023, down from $24.5 million in the previous year[53]. - The group aims to diversify its borrowing relationships and replace existing financing with new credit facilities that have lower borrowing costs and more flexible terms[181]. Employee and Management - As of December 31, 2023, the group had 150 employees, a decrease from 178 employees as of December 31, 2022[54]. - Employee benefits expenses for the year ended December 31, 2023, were approximately $12.6 million, compared to $12.9 million in 2022[54]. - The company recognizes employees as one of its most valuable assets and promotes a diverse and inclusive work environment[90]. Corporate Governance - The company is committed to maintaining high standards of corporate governance and has not reported any serious violations of applicable laws and regulations during the year[178]. - The board actively adheres to corporate governance principles to ensure transparency and accountability in operations[193]. - The company has a balanced board composition that is suitable for its business[141]. Shareholder Information - The company has issued a total of 506,650,000 shares as of December 31, 2023, with 2,508,171 shares granted under the share incentive plan[118]. - Major shareholders include Morgan Stanley and its affiliates, collectively holding 375,000,000 shares, which accounts for 74.02% of the issued share capital[157]. - Sales to the top five customers accounted for approximately 49.8% of the total sales for the year, with the largest customer contributing about 18.3%[162]. Future Plans and Investments - The company plans to utilize the IPO proceeds for strategic investments or acquisitions in OTT systems and smart home security products, with an allocation of HKD 23.01 million (USD 2.93 million)[100]. - The company aims to strengthen its supply chain management and investment outside of China with an allocation of HKD 6.57 million (USD 0.84 million)[100]. - The company expects to fully utilize the unallocated IPO proceeds by 2024[98].
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