Financial Performance - Revenue for the fiscal year 2023 was HKD 192.6 million, a decrease of 13.7% compared to HKD 223.2 million in 2022[21]. - The operating loss for 2023 was HKD 131.9 million, improved from a loss of HKD 262.1 million in 2022[21]. - The net loss attributable to shareholders for 2023 was HKD 113.7 million, compared to a loss of HKD 290.1 million in the previous year[21]. - The total assets decreased to HKD 2,103.3 million in 2023 from HKD 2,255.1 million in 2022[22]. - The equity attributable to shareholders was HKD 1,705.7 million in 2023, down from HKD 1,827.2 million in 2022[22]. - The group reported a gross profit of approximately HKD 53.7 million in the fiscal year 2023, representing a 92.8% increase from approximately HKD 27.8 million in the fiscal year 2022[42]. - The group recorded a net income of approximately HKD 60.5 million from other income and net gains/losses in the fiscal year 2023, compared to a net loss of approximately HKD 84.8 million in the fiscal year 2022[43]. - General and administrative expenses increased by 27.6% to approximately HKD 122.6 million in the fiscal year 2023, up from approximately HKD 96.1 million in the fiscal year 2022[47]. - Other operating expenses for the fiscal year 2023 amounted to approximately HKD 64.2 million, a significant increase of 279.9% compared to HKD 16.9 million in the fiscal year 2022[48]. - The group reported a loss attributable to owners of approximately HKD 113.7 million in fiscal year 2023, down from approximately HKD 290.1 million in fiscal year 2022[56]. Business Operations - The group achieved stable operational performance in the fiscal year ending December 31, 2023, driven by advancements in information appliances and strategic positioning in the IDC business[4]. - The global set-top box market is expected to present further opportunities, with a focus on improving product functionality to meet growing consumer expectations in the next fiscal year[5]. - The group has strategically exited the IDC market in the United States due to ongoing political tensions, reallocating resources to more stable markets[5]. - The company is prioritizing the development of core business through enhanced competitiveness while maintaining a cautious approach to entering new fields[7]. - The information appliance business generated revenue of approximately HKD 152.3 million in 2023, a decline of 26.8% from the previous fiscal year[27]. - The IDC business recorded revenue of approximately HKD 39.6 million in 2023, an increase of 163.9% compared to 2022[29]. - The company plans to sell its IDC in the U.S. for USD 110 million (approximately HKD 858 million), pending shareholder approval[30]. - The group aims to continue developing new products and expanding into new markets in Europe and Asia to diversify revenue sources[28]. Investments and Financial Assets - Investment activities in the listed securities portfolio were profitable, with a shift in focus from the stock market to the digital asset market for the next fiscal year[6]. - The group recorded a fair value net gain of approximately HKD 54.2 million in the fiscal year 2023, compared to a net loss of approximately HKD 32.3 million in the fiscal year 2022, primarily from private equity investments in aircraft leasing and pharmaceutical R&D[34]. - The group realized a gain of approximately HKD 27.6 million from the sale of listed securities, including Tencent Holdings and Apple Inc., during the fiscal year 2023[35]. - The cryptocurrency market rebound resulted in a recovery of approximately HKD 50.0 million in the fiscal year 2023, compared to a loss of approximately HKD 50.4 million in the fiscal year 2022[36]. - The expected credit loss provision for receivables was approximately HKD 55.2 million in fiscal year 2023, down from HKD 83.1 million in fiscal year 2022[50]. - Trade and other receivables provision was approximately HKD 41.7 million in fiscal year 2023, compared to zero in fiscal year 2022, due to increased credit risk[50]. Risk Factors - The group faces revenue unpredictability due to tight supply of microchips for information appliance business, leading to potential fluctuations in any reporting period[77]. - Rapid changes in product innovation and features may intensify competition, risking market share loss and reduced profit margins[77]. - Increasing customer preference for streaming services and demand for smart home integration could adversely impact the set-top box market and the group's financial performance[77]. - The group is exposed to risks from protectionism and unilateralism affecting global conditions, which may lead to operational challenges and increased costs due to regulatory measures[77]. - Investments held by the group worldwide may be influenced by local, national, or international political, social, legal, tax, regulatory, and environmental changes[77]. - The value of the group's digital assets may fluctuate due to market price volatility, impairment, and unique loss risks such as cyberattacks and human errors[77]. - The group's digital asset investments may face regulatory challenges or restrictions[77]. Corporate Governance - The company emphasizes the importance of sound corporate governance for sustainable growth and shareholder value[150]. - The board consists of executive directors and independent non-executive directors, with their biographies available on pages 15 and 16 of the annual report[113]. - The board is responsible for the overall leadership and strategic direction of the company, overseeing financial and operational performance[156]. - The company has established procedures for handling and disclosing inside information in compliance with the Securities and Futures Ordinance and GEM Listing Rules[189]. - The board conducted an annual review of the effectiveness of the risk management and internal control systems, covering financial, operational, compliance, and risk management functions[188]. - The company has established a formal and transparent new director appointment process, ensuring compliance with its articles of association[165]. - The company has adopted a diversity policy, emphasizing the importance of diverse skills, experience, and perspectives among its members[168]. - The company has implemented appropriate policies and controls to safeguard assets and ensure compliance with relevant laws and regulations[175]. Employee and Supplier Relations - The group has 100+ full-time employees as of December 31, 2023, down from 130+ in the previous year, with employee costs amounting to approximately HKD 57.5 million[75]. - The company has maintained stable and good relationships with its major suppliers and customers throughout the year[131]. - The largest supplier accounts for 60.1% of the company's total purchases, while the top five suppliers combined account for 88.2%[131]. - The largest customer accounts for 38.4% of sales, while the top five customers together represent 92.9% of total sales[132]. - The company has adopted a compensation policy that aligns with market practices to attract and retain talent[118]. - The company emphasizes performance and responsibilities in its compensation structure to incentivize outstanding individuals[118]. Miscellaneous - The group reported a charitable donation of HKD 10,000 for the year ending December 31, 2023, compared to zero in 2022[97]. - The board does not recommend the payment of a final dividend for the year ending December 31, 2023, consistent with no dividend in 2022[100]. - The company has not made any significant investments or acquisitions during the year, aside from the aforementioned property sale[69]. - The company has not encountered any significant events affecting its business or reliance on its success from major customers[131].
裕兴科技(08005) - 2023 - 年度财报