Company Overview and Structure - LX Technology Group Limited was incorporated in the Cayman Islands on January 10, 2022, and its shares are listed on the Main Board (Stock Code: 2436)[15] - The company's main business location and headquarters are located at 5th Floor, Building 501, Cuilin Building, No. 10 Kaifeng Road, Meilin Subdistrict, Futian District, Shenzhen, China[4] - The company's IPO was completed on November 24, 2022, marking its listing date[22] - The company's major shareholders include Bear Family, Little Bear, LX Brothers, and Beauty Bear[16] - The company's website is www.bearrental.com[7] - The company's compliance advisor is Haitong International Capital Limited, and its legal advisor for Hong Kong law is Sidley Austin LLP[6] - The company's major banks include Bank of China Limited, Shenzhen Branch, and China Merchants Bank, Shenzhen Branch[7] Financial Performance and Metrics - Revenue increased by 7.8% to RMB 1,793.1 million, driven by growth across all three service lines: equipment recycling, equipment subscription, and IT technology subscription services[31][41] - Equipment recycling business revenue grew by 8.1% to RMB 1,286.4 million, with the number of recycling customers increasing by 86.8% to 1,980[32][33] - Equipment subscription service revenue rose by 9.0% to RMB 347.9 million, with total equipment subscriptions increasing by 15.9% to 5,744,050 units[34][35] - IT technology subscription service revenue increased by 2.4% to RMB 158.8 million, with long-term subscriptions growing by 3.3%[36][37] - Revenue from long-term equipment subscriptions increased by 13.5% to RMB 292.8 million, while short-term equipment subscriptions declined by 10.1% to RMB 55.1 million[41] - Equipment recycling revenue increased by 8.1% to RMB 1,286.39 million in 2023, driven by higher sales of laptops and other IT equipment[43] - Sales cost increased to RMB 1,645.5 million in 2023, representing 91.8% of revenue, up from 88.0% in 2022[48] - Gross profit decreased by 25.9% to RMB 147.6 million in 2023, with gross margin dropping from 12.0% to 8.2%[49] - Equipment subscription service gross margin declined from 23.1% in 2022 to 20.7% in 2023, despite an increase in average utilization rate from 85.3% to 87.9%[51] - IT technology subscription service gross margin fell from 71.1% in 2022 to 65.1% in 2023, due to lower average subscription prices and increased employee costs[52] - R&D expenses decreased by 7.3% to RMB 25.5 million in 2023, accounting for 1.4% of revenue, down from 1.7% in 2022[55] - Administrative expenses rose by 18.1% to RMB 102.5 million in 2023, primarily due to increased professional fees and employee salaries[54] - Net loss for the year was approximately RMB 131.03 million, compared to a net profit of RMB 99.95 million in the previous year, primarily due to the absence of fair value gains on financial liabilities and increased administrative expenses[58] - Adjusted loss (non-IFRS) for the year was approximately RMB 67.4 million, compared to an adjusted profit of RMB 10.9 million in the previous year[59] - Adjusted EBITDA (non-IFRS) decreased by 15.5% from RMB 285.1 million in the previous year to RMB 241.0 million this year[60] - Share-based payment expenses for the year were approximately RMB 60.6 million, with RMB 17.8 million allocated to distribution and sales expenses, RMB 37.6 million to administrative expenses, and RMB 5.2 million to R&D expenses[61] - The company did not recommend paying any final dividend for the year ended December 31, 2023[140] Business Operations and Growth - The company's equipment lifecycle management solutions aim to improve the return on investment for enterprises and ensure the quality and efficiency of equipment operation[17] - Customer numbers increased significantly in 2023, with 1,980 customers in equipment recycling, 26,028 in equipment subscription, and 24,699 in IT technology subscription, representing year-on-year growth of 86.8%, 52.8%, and 63.3% respectively[26] - The company acquired 12,343 new long-term equipment subscription customers in 2023, a 112.0% increase compared to the previous year[26] - The business expanded to 10 new cities in 2023, including Tianjin, Shijiazhuang, Taiyuan, Shenyang, Hefei, and Chongqing[27] - The company refurbished over 1.33 million devices in 2023, reducing carbon emissions by 17,052.7 tons[29] - The company collaborated with industry leaders to penetrate the IT equipment subscription market for printing and copying devices[27] - The company participated in the drafting of national standards for enterprise credit evaluation indicators and guidelines[28] - The company aims to strengthen standardized business models to reduce initial IT equipment investment and maintenance costs for customers[28] - The company expects stable revenue and profit contributions from new customers in 2024 and 2025[26] - The company provided short-term equipment subscription services for major events, including the 19th Asian Games in Hangzhou and the 31st World University Summer Games in Chengdu[31] - The company aims to expand its IT equipment subscription scope, invest in cutting-edge IT technology solutions, and strengthen its equipment recycling business to promote environmental practices[39] - The company plans to further penetrate core cities and expand services to meet evolving customer needs in various business scenarios[39] - Long-term equipment subscription customers grew from 13,326 in 2022 to 21,615 in 2023, with total equipment subscriptions increasing from 4,957,703 to 5,744,050 units[44] - IT technology subscription service customers increased from 15,121 in 2022 to 24,699 in 2023, with monthly average subscriptions rising from 285,310 to 337,334 units[45] - Revenue from Shenzhen accounted for 82.9% of total revenue in 2023, up from 80.0% in 2022[47] Corporate Governance and Board Structure - The company's ESG (Environmental, Social, and Governance) initiatives are aligned with the Corporate Governance Code effective from January 1, 2023[14] - The company has adopted the Corporate Governance Code and complies with its provisions, with some deviations such as the Chairman also serving as the CEO, which is deemed appropriate for the company's management continuity and strategic implementation[89] - The Board of Directors is responsible for the overall leadership of the group, overseeing strategic decisions, and monitoring business performance, with daily management delegated to senior management[91] - The company has established three Board Committees: Audit Committee, Remuneration Committee, and Nomination Committee, to oversee specific areas of the company's affairs[91] - The company has adopted a comprehensive Code of Conduct for Securities Transactions by Directors, and all directors confirmed strict compliance with the applicable standards during the year[89] - The company has implemented measures to ensure that employees who may have access to unpublished inside information comply with the Standard Code of Conduct for Securities Transactions[90] - The company has strengthened its corporate governance practices and will continue to review and enhance them to ensure compliance with the Corporate Governance Code[89] - The company's Board consists of three executive directors, one non-executive director, and three independent non-executive directors, ensuring a high level of independence[89] - The company has rectified the oversight of not providing monthly updates to the Board and now distributes updates in accordance with the Corporate Governance Code[89] - The board of directors consists of 7 members, including 3 executive directors, 1 non-executive director, and 3 independent non-executive directors as of December 31, 2023[92] - The company has 3 independent non-executive directors, exceeding one-third of the total board members, with at least one possessing appropriate professional qualifications or accounting/financial management expertise[94] - All directors have participated in continuous professional development activities to update their knowledge and skills during the year[95] - Directors received training including attending briefings, lectures, meetings, and reading materials related to their duties and responsibilities[96] - The board is responsible for overseeing the preparation of financial statements to ensure they present a true and fair view of the company's financial position[97] - The board must hold at least 4 meetings annually, with notices sent at least 14 days in advance and agendas distributed 3 days prior to meetings[98] - All directors attended 8 out of 8 board meetings and 1 out of 1 annual general meeting, demonstrating full participation[100] - The audit committee held 9 meetings to review annual and interim financial reports, internal controls, and external auditor independence[101][102] - The audit committee members attended all scheduled meetings, with 9/9 attendance for Xu Nailing and Gan Zhicheng, and 6/6 for Yao Zhengwang[102] - The remuneration committee held 2 meetings to review and approve executive compensation policies and performance-based pay[104][105] - The nomination committee held 2 meetings to evaluate board structure, independence, and diversity policies[106][107] - The board ensures independence by including at least 3 independent non-executive directors, representing one-third of the board[99] - Directors with conflicts of interest are required to disclose and abstain from voting, ensuring impartial decision-making[99] - The audit committee reviewed financial reporting processes, risk management systems, and compliance procedures[102] - The remuneration committee members attended all meetings, with 2/2 attendance for Hu Zuoxiong and Xu Nailing, and 1/1 for Yao Zhengwang[105] - The nomination committee members attended all meetings, with 2/2 attendance for Hu Zuoxiong and Xu Nailing, and 1/1 for Yao Zhengwang[107] - The company aims to increase the proportion of female representation on the board to at least 20% within four years[108] Risk Management and Internal Controls - The company has established a risk management policy and internal audit mechanism to oversee and evaluate risk management and internal controls[116][117] - The company's internal legal department is responsible for reviewing and updating contracts, ensuring compliance with regulations, and obtaining necessary government approvals[118] - The company experienced equipment loss or damage incidents during the subscription period, with customer compensation amounting to RMB 7.2 million (2022: RMB 1.5 million)[119] - A risk control system model was developed, integrating an online intelligent credit evaluation system and offline manual assistance mechanisms to assess customer creditworthiness and potential risks[119] - The company has established internal control policies and procedures for idle cash management and investment management[120] - Internal control policies and procedures for the use, management, and supervision of IPO proceeds have been implemented, including monthly reviews and reports on actual usage[121][122] - A dedicated team has been assigned to determine credit limits and approvals, utilizing proprietary software for credit assessment of new clients[122] - The company has adopted credit management policies and procedures, including monitoring overdue payments and taking corrective actions such as legal proceedings[122] - An independent internal control review was conducted, and measures were taken to mitigate potential internal control risks[122] - The company has established a "Major Matters Reporting System" and "Announceable Transactions Management Measures" to regulate the identification, reporting, and disclosure of significant matters[123][124] - A succession plan for senior management and directors has been developed, including selection criteria, training, and promotion procedures[125] - The company has updated its anti-bribery and anti-corruption policies, establishing a dedicated email address for reporting and improving confidentiality procedures for whistleblowers[126] - The company has strengthened its related party transaction policies and procedures to ensure compliance with listing rules, with the enhanced policies approved by management and distributed to relevant employees[129] - The company has implemented specific anti-corruption and anti-bribery policies, including procedures to identify potential corruption and assign responsibilities to relevant personnel[129] - The company has adopted a whistleblowing policy to establish procedures for reporting suspicious misconduct, ensuring protection for whistleblowers and confidentiality of information[129] - The company has implemented internal policies for handling and disclosing inside information, including control procedures to prevent unauthorized access and use of such information[130] Shareholder and Investor Relations - The company's dividend policy outlines principles for distributing profits as dividends, subject to factors such as financial performance, cash flow, and capital requirements[131] - The company maintains multiple communication channels with shareholders, including annual and interim reports, announcements, and investor meetings[132] - Shareholders holding at least 10% of voting rights can request a special general meeting, with procedures outlined in the company's articles of association[134] - The company encourages shareholder participation in annual and special general meetings, providing opportunities to address questions to the board and external auditors[135] - The company has established a website (www.bearrental.com) as a primary channel for communication, financial disclosures, and investor relations[137] - The company will propose special resolutions at the annual general meeting to amend certain provisions of its articles of association, as detailed in announcements dated March 22 and April 26, 2024[138] Market and Competitive Landscape - The company's equipment recycling business faces uncertainties in gross margin due to factors such as demand for specific types and conditions of equipment, second-hand market IT equipment prices, and ESG awareness in China[144] - The company's future growth depends on the penetration rate of IT equipment subscription services, acceptance of equipment maintenance by third-party IT technology subscription service providers, and the digitalization of equipment management among SMEs in China[145] - The company's target customer base, primarily SMEs, may be more sensitive and vulnerable to economic downturns, which could significantly impact financial performance and future growth[146] - The company's equipment lifecycle management solutions market in China is still in its early stages, and demand may be affected by economic conditions, reduced corporate spending, and competition[145] Employee and Compensation Details - The company had 1,143 full-time employees as of December 31, 2023, an increase from 761 in the previous year, driven by the expansion of the sales and marketing team[75] - Employee compensation (excluding director compensation) amounted to RMB 192.1 million for the year ended December 31, 2023, slightly up from RMB 191.5 million in the previous year[75] - The company granted 3,251,389 restricted shares to 245 awardees under the Beauty Bear Employee Incentive Plan on January 12, 2024[76] - As of December 31, 2023, male employees accounted for 73.8% (843 employees) and female employees accounted for 26.2% (300 employees) of the total workforce[110] - Employees aged 30 and below made up 57.9% (662 employees), those aged 31-40 accounted for 37.4% (427 employees), and those aged 41 and above represented 4.7% (54 employees) of the total workforce[110] - All senior management members were male as of December 31, 2023[110] - The company's mandatory provident fund (MPF) plan requires a minimum statutory contribution of 5% of the relevant income for eligible employees, with a maximum contribution of HK30,000 per month[187] Shareholding and Ownership Structure - Bear Family holds 75,107,558 shares, representing 21.26% of the company's issued share capital[195] - Beauty Bear holds 30,000,000 shares, representing 8.49% of the company's issued share capital[195] - Little Bear holds 19,063,215 shares, representing 5.40% of the company's issued share capital[195] - LX Brothers holds 17,880,602 shares, representing 5.06% of the company's issued share capital[195] - Hunan Dian Guang Media Co., Ltd. holds 46,335,877 shares, representing 13.12% of the company's issued share capital[195] - Shenzhen Dachen Caizhi Venture Capital Management Co., Ltd. holds 46,335,877 shares, representing 13.12% of the company's issued share capital[195] - Shanghai Tongyun Information Technology Partnership holds 32,941,239 shares, representing 9.32% of the company's issued share capital[195] - UBS Trustees (B.V.I.) Limited holds 39,645,668 shares, representing 11.22% of the company's issued share capital[195] - Mr. Liu Qiangdong holds 39,645,668 shares, representing 11.22% of the company's issued share capital[195] - Mr. Chen Wei holds 36,910,391 shares, representing 10.45% of the company's issued share capital[195] - Shanghai Yujun Enterprise Management Partnership holds 36,910,391 shares, managed by Shenzhen Fuhai SME Development Fund Equity Investment Management Co., Ltd., with SME Development Fund (Shenzhen Nanshan Limited Partnership) holding over one-third of the interests[197] - Beauty Bear's entire issued share capital is held by Teeroy Trust, with voting rights exercised by Mr. Hu, who is deemed to have an interest in the shares held by Beauty Bear under the Securities and Futures Ordinance[197] - Little Bear is owned by Mr. Hu (8.78%), Mr. He Jingwei (51.56%), Mr. Tang Youyuan (24.91%), and Mr. Cao Weijun (14.75%), with Mr. Hu exercising voting rights and thus deemed to have an interest in Little Bear's shares[197] - Gold Bear Technology Limited is wholly owned by Mr. Hua, who is deemed to have an interest in the shares held by Gold Bear Technology Limited under the Securities and Futures Ordinance[197] - Mr. Hua was granted 6,000,000 shares under the restricted share award plan, currently held by Teeroy Trust[197][198] - LX Brothers' entire issued share capital is held by Tricor Trust, with voting rights exercised by Mr. Hu, who is deemed to have an interest in the shares held by LX Brothers under the Securities and Futures Ordinance[198] - No directors or their close associates have any interests in businesses directly or indirectly competing with the company's business[200] Financial Position and Liabilities - Current assets increased by 11.2% to approximately RMB 808.7 million as of December 31, 2023, compared to RMB 727.1 million in the previous year[65] - Trade and
凌雄科技(02436) - 2023 - 年度财报