Financial Performance - The company recorded revenue of approximately HKD 49,228,000 for the year, a decrease of about 17.0% compared to HKD 59,324,000 in the previous year[9]. - Gross profit for the year was approximately HKD 22,568,000, with a gross margin of about 45.8%, an increase from 29.3% in the previous year[9]. - Loss attributable to equity holders for the year was approximately HKD 20,876,000, a significant reduction from a loss of HKD 82,548,000 in the previous year[9]. - The decrease in loss was primarily due to a reduction in fair value losses on investment properties from HKD 49,393,000 to HKD 5,536,000[9]. - The company sold a subsidiary for a revenue of approximately HKD 7,156,000 during the year[9]. - Financial costs decreased from approximately HKD 11,545,000 in the previous year to HKD 5,589,000 in the current year[9]. - The company's revenue for 2023 was approximately HKD 49,228,000, a decrease of 17.0% compared to HKD 59,324,000 in 2022, primarily due to a focus on the metro company's projects[75]. - The total sales and service costs for 2023 were approximately HKD 26,660,000, a reduction of 36.4% from HKD 41,923,000 in 2022, attributed to a decrease in computer hardware and software transactions[76]. - The gross profit for 2023 was approximately HKD 22,568,000, an increase of about HKD 5,167,000 from HKD 17,401,000 in 2022, driven by economic recovery and a focus on IT services[77]. - Other income and gains for the fiscal year ending December 31, 2023, were approximately HKD 914,000, down from HKD 1,555,000 in 2022, mainly due to government subsidies recognized in the previous year[78]. - The administrative expenses for 2023 were approximately HKD 38,979,000, an increase of 38.6% from HKD 28,124,000 in 2022, due to the resumption of business meetings and travel, as well as increased advertising and legal costs[80]. - The company reported a loss attributable to owners of approximately HKD 20,876,000 in 2023, a significant decrease from HKD 82,548,000 in 2022, mainly due to reduced fair value losses on investment properties[85]. - As of December 31, 2023, the company's cash and bank balances decreased to approximately HKD 11,595,000 from HKD 13,877,000 in 2022[86]. - The total borrowings as of December 31, 2023, were approximately HKD 65,033,000, down from HKD 136,960,000 in 2022, resulting in a debt ratio of 0.25 compared to 0.50 in the previous year[86]. Strategic Initiatives - The company plans to strengthen its existing artificial intelligence business and explore higher growth potential projects in AI and cloud technology[13]. - The company has sold two properties and a subsidiary engaged in lending business to reallocate resources towards more promising projects[13]. - The company anticipates that regions like the UAE will become focal points in the international technology sector, particularly in AI[11]. - The company has established a joint venture, Petaverse, focusing on e-commerce and marketing of pet-related products in both the real world and the metaverse[14]. - The company plans to pursue selective acquisitions and strategic alliances to strengthen its leadership position in the Hong Kong IT solutions industry amid uncertain macroeconomic conditions[15]. - The company aims to leverage advanced AI technology in traditional products and services, diversifying risks and reducing investment costs[14]. - The company has engaged in successful AI technology development, evidenced by a collaboration with a metro company[15]. - The company is exploring the tokenization of corporate bonds, enhancing market efficiency and convenience[14]. - The company has entered into a share exchange agreement with Bonanza Goldfields Corp., exchanging 26,520,387 shares at HKD 0.135 per share for 218,574,618 shares of Bonanza at USD 0.0021 per share, totaling approximately HKD 3,580,252 (USD 459,007)[28]. - The share exchange agreement with Bonanza is seen as a strategic alliance to share expertise in artificial intelligence and blockchain, with anticipated growth in demand for Bonanza's services[30]. - The company completed the share exchange on April 17, 2023, issuing 2,652,038 shares, representing approximately 4.29% of the company's issued share capital post-exchange[31]. - The company has agreed to sell its entire equity interest in Rosy Ridge Investments Limited for HKD 28,000,000, which is classified as a major transaction under GEM listing rules[32]. - The proposed sale was approved by shareholders at a special meeting held on April 28, 2023[33]. - The company has signed a non-binding memorandum of understanding with Autostereoscopic 3D Limited to enhance 3D technology using proprietary AI and big data[35]. - The company has entered into a placement agreement to issue up to 7,642,000 shares at HKD 1.93 per share, representing approximately 12.93% of the company's issued share capital post-placement[37]. - The net proceeds from the placement amount to approximately HKD 14,340,000, with HKD 7,600,000 allocated for IT infrastructure development, HKD 3,400,000 for repaying a shareholder loan, and the remainder for general working capital[38]. - The company issued zero-coupon bonds totaling HKD 100,000,000, utilizing Distributed Ledger Technology, with a net proceeds of approximately HKD 31,500,000 intended for Web3.0 and blockchain business development[44][46]. - The company has entered into an agreement to acquire 100% of Autostereoscopic 3D Limited for a total consideration of HKD 100,000,000, which will be settled through a combination of promissory notes and the issuance of shares[48]. - A joint venture named Petaverse was established to manage an e-commerce platform focused on pet-related products, with the company holding a 30% stake[52][54]. - The company completed the sale of its subsidiary engaged in lending activities for HKD 24,500,000, aimed at streamlining operations and focusing on core business[56]. - The company has decided to terminate its lending business in 2023 to focus on existing operations and pursue selective acquisitions and strategic alliances[73]. - The company aims to strengthen its position in the Hong Kong IT solutions industry by fostering a strong corporate culture and enhancing cohesion among employees[73]. Governance and Compliance - The company has implemented remedial measures to address internal control deficiencies identified during the audit process[23]. - The company is committed to making timely business and investment decisions based on market conditions to create greater value for shareholders[15]. - The company has faced audit reservations due to insufficient audit evidence regarding service agreements with suppliers[18]. - The company is addressing audit reservations that will continue to appear in the consolidated financial statements for the year ending December 31, 2024, and will remove comparative figures from the year ending December 31, 2023[26]. - The company has identified major risks including foreign exchange rate risk, liquidity risk, and price risk, with no current foreign currency hedging policy in place[96][97][98]. - The company has a governance report detailing its adherence to the GEM listing rules and corporate governance code[200]. - The audit committee reviewed the audited consolidated financial statements before submission to the board[120]. - The company has complied with all relevant laws and regulations impacting its business and operations during the fiscal year, with no significant violations reported[189]. - The company will propose the reappointment of its auditor at the upcoming annual general meeting[196]. Employee and Shareholder Information - The company employs 61 staff members as of December 31, 2023, an increase from 59 in the previous year[99]. - Total employee benefit expenses for the year amounted to approximately HKD 21,744,000, with HKD 931,000 related to equity-settled share-based payments[99]. - The company has granted a total of 23,900,000 stock options in May 2021 and an additional 16,360,000 stock options in June 2022 under the 2012 Stock Option Plan[147]. - As of December 31, 2023, there are 3,982,775 stock options available for issuance, representing 6.45% of the total shares issued[151]. - The 2012 Stock Option Plan allows for a maximum of 10% of the total issued shares to be granted as stock options, with a cap of 1% for any individual participant within a 12-month period[152]. - The company has not paid any compensation to directors or the top five highest-paid individuals as a reward for joining or leaving the group[145]. - The company has purchased appropriate directors and officers liability insurance to protect its directors and personnel[138]. - The company reviews employee performance annually to assess and adjust compensation based on specific responsibilities and performance[145]. - The company has granted stock options to 18 employees in the first batch, with some options becoming invalid due to resignations[161]. - The exercise period for stock options is set at ten years from the grant date, with no vesting period or performance targets specified[161]. - The company has a total of 785,374 stock options allocated to directors, with no options exercised or canceled during the reporting period[160]. - The company has a total of 2,717,335 unexercised stock options from various batches, with specific allocations to employees and consultants[160]. - The company has adjusted the number and exercise price of unexercised stock options following a rights issue and share consolidation completed in 2022[161]. - The company has a total of 61,765,237 shares issued, with significant ownership stakes held by directors, including Huang Jingzhao with 0.98% and Zhang Qishen with 0.99%[143]. - The company recorded major shareholders holding 5% or more of the issued share capital, with Zhang Rong holding 24.33%[180]. - The company has not entered into any equity-linked agreements during the year ending December 31, 2023[125]. - The company’s organizational documents do not require offering existing shareholders preemptive rights for new shares[126]. - The company has no distributable reserves as of December 31, 2023[129]. - The top five customers accounted for 35.2% of total sales, with the largest customer contributing 21.5%[130]. - The top five suppliers represented 53.9% of total purchases, with the largest supplier accounting for 22.6%[130]. Market Outlook and Trends - The global economic outlook for 2024 is expected to be a slow recovery post-pandemic, with high uncertainty due to high interest rates and geopolitical tensions[71]. - The company continues to focus on digital transformation in the Hong Kong enterprise market, receiving recognition as a "Nutanix Certified Sales Expert" and achieving "Master Partner" status[58]. - The company aims to enhance customer confidence in virtual work environment solutions through its Tsim Sha Tsui experience center[60]. - The company is committed to maintaining high environmental and social standards to ensure sustainable business practices[186]. - The company has encouraged stakeholder participation in environmental and social activities, benefiting the entire community[186]. - The company has established a joint venture with Kilimanjaro Energy Group and Marvion Inc. to promote sustainable changes in the ESG sector, focusing on tokenization of carbon credits[104]. Miscellaneous - The company has not repurchased, purchased, or redeemed any of its listed securities during the year[103]. - The company has no significant investment or capital asset plans as of the report date[91]. - The company has no significant post-reporting date events other than those disclosed[106]. - No final dividend is recommended for the year ending December 31, 2023[121]. - There were no waivers of director remuneration during the year ended December 31, 2023[146]. - The company has not entered into any management or administrative contracts concerning its major business operations during the year[140]. - The company has not made any charitable donations during the fiscal year ending December 31, 2023[192].
中国信息科技(08178) - 2023 - 年度财报