Voicecomm Technology Co., Ltd. - Interim / Quarterly Report 2024

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

==> picture [203 x 46] intentionally omitted <==

**Shanghai Voicecomm Information Technology Co., Ltd.* 上海聲通信息科技股份有限公司**

(A joint stock company incorporated in the People’s Republic of China with limited liability)

(Stock Code: 2495)

INTERIM RESULTS ANNOUNCEMENT FOR THE SIX MONTHS ENDED JUNE 30, 2024

The Board hereby announces the unaudited consolidated interim results of the Group for the six months ended June 30, 2024 together with the comparative figures for the six months ended June 30, 2023, as follows:

HIGHLIGHTS

Key Financial Data

The table below sets forth our key financial data for the Reporting Period together with the change (expressed in percentages) from the six months ended June 30, 2023 to the corresponding period in 2024.

	For the six	months	Period-
	ended June 30,		on-period
	2024	2023	change
	RMB’000	RMB’000	%
	(unaudited)	(unaudited)
Revenue	371,173	280,843	32.2
– Enterprise-level solutions	366,455	272,769	34.3
– Others(1)	4,718	8,074	(41.6)
Gross profit	162,366	138,055	17.6
Gross profit margin(2)	43.7%	49.2%	(5.5)
			percentage
			points
(Loss)/profit for the period	(589,774)	1,908	(31,010.6)
Adjusted net profit (a non-IFRS measure)(3)	43,046	70,795	(39.2)
Adjusted net margin (a non-IFRS measure)(4)	11.6%	25.2%	(13.6)
			percentage
			points

Notes:

(1) Primarily related to promoting products empowered by our conversational AI technologies for our customers, from which we generated revenue.
(2) Gross profit margin equals gross profit divided by revenue for the period and multiplied by 100%.
(3) We define the adjusted net profit (a non-IFRS measure) as profit for the period by eliminating the impacts of changes in carrying amount of redeemable capital contributions.
(4) Adjusted net margin (a non-IFRS measure) equals adjusted net profit (a non-IFRS measure) divided by revenue for the period and multiplied by 100%.

Revenue

For the Reporting Period, we recorded a total revenue of RMB371.2 million, representing an increase of RMB90.3 million or 32.2% from RMB280.8 million for the corresponding period in 2023, primarily due to efforts of maintaining existing customers, continuous exploration of new business channels and customers, and expansion of the Company’s business scale and customer base. Among which, revenue generated from enterprise-level solutions approximately amounted to RMB366.5 million, representing a period-on-period increase of 34.3%.

Gross profit and gross profit margin

For the Reporting Period, we recorded a consolidated gross profit of RMB162.4 million, representing an increase of RMB24.3 million or 17.6% from RMB138.1 million for the corresponding period in 2023, primarily due to the overall growth of our revenue.

Our gross profit margin decreased from 49.2% for the corresponding period in 2023 to 43.7% for the Reporting Period primarily due to a number of new large-scale projects consisting of both software and hardware solutions, in which the customers typically purchase hardware at the early stage in preparation for the subsequent construction of interactive AI capabilities, and will purchase software systems at the later stage of the projects. As a result, the hardware delivered upfront contributes to a larger portion of our revenue, which in turn impacts our gross profit margin. We expect that the gross profit margin will recover in the second half of 2024 when the projects continue to progress and the software systems are delivered.

Adjusted net profit and net margin (non-IFRS measures)

For the Reporting Period, our adjusted net profit (a non-IFRS measure) amounted to RMB43.0 million, representing a period-on-period decrease of 39.2%. Our adjusted net margin (a non-IFRS measure) was 11.6%, representing a decrease of 13.6 percentage points compared to the corresponding period in 2023. The main reasons for the fluctuation of the net profit and net margin (non-IFRS measures) were significant increases in research and development expenses and other expenses.

Key Operating Data

The following table sets forth the number of our projects and the rolling backlog of our projects by outstanding contract sum at the end in each period presented.

	For the six months	For the six months	Period-
	ended June 30,		on-period
	2024	2023	change
			%
Number of ongoing projects at the beginning of
the period	150	84	78.6
Add: Number of newly awarded projects	160	106	50.9
Less: Number of projects completed	132	92	43.5
Number of ongoing projects at the end of
the period	178	98	81.6
	(RMB’000)	(RMB’000)
Outstanding balance at the beginning of
the period	500,850	388,564	28.9
Add: Contract value of newly awarded projects	545,816	417,396	30.8
Less: Revenue (VAT inclusive) recognized
during the period(1)	405,234	298,594	35.7
Outstanding contract sum at the end of
the period	641,432	507,366	26.4

Note:

(1) As the contract value according to the agreement is inclusive of VAT, for the purposes of calculating the project backlog, the revenue recognized during the relevant year/period also includes VAT.

BUSINESS REVIEW AND OUTLOOK

I. BUSINESS REVIEW

We, an IT solution provider in China, are committed to providing services for enterprise-level users to improve the level of convenience and intelligence for their information exchanges and business interactions. Based on unified communication technologies, core conversational AI technologies and product engine technologies, we are capable of addressing enterpriselevel users’ demand of “communication”, “thinking” and “execution”, respectively, thus facilitating a complete enterprise-level conversational AI experience.

Amid the global trend of digitalization and intelligent transformation, AI has been widely used and integrated across different industries, leading towards global technological innovations and development of new application scenarios. Being the “next-generation infrastructure”, AI is widely applied in areas including city management and administrative services, transportation, telecommunications, finance, healthcare and education.

The Chinese government has laid a solid foundation for the prosperous development of AI enterprises in China through favourable policies such as the “Plan for the Overall Layout of Building a Digital China (《數字中國建設整體佈局規劃》)” issued by the Central Committee of the Communist Party of China and the State Council of the PRC and the “Notice on Supporting the Construction of a New Generation of AI Exemplary Application Scenarios 《關於支持建設新一代人工智能示範應用場景的通知》( )” issued by the Ministry of Science and Technology of the PRC. These policy documents set out the overall strategic blueprint for digital transformation in China and provide important institutional guidance and policy support for the innovative development and commercialization of AI technology. The issuance of these documents not only reflects the government’s attention and support for the field of artificial intelligence, but also provides strong guidance and incentives for enterprises in technological innovation and commercial applications.

Against the backdrop of favourable policies support and rapid technological advancements, we continued to show strong performance growth momentum during the Reporting Period. During the Reporting Period, we recorded a total revenue of RMB371.2 million, representing an increase of 32.2% as compared with the same period in 2023. At the same time, we recorded a gross profit of RMB162.4 million, representing an increase of 17.6% as compared with the corresponding period in 2023. Our sustained and steady performance growth signifies the success of our commercialization strategy in the enterprise-level conversational AI solution market, demonstrating our unique industry insights that allow us to grasp changes in the market and highlighting our excellent execution and innovation capabilities.

Our outstanding performance not only brings continuous improvement to our business profile, but also highlights our remarkable strength, market performance and innovation capabilities in the field of AI. Earning widespread recognition and acclaim in the industry, we have been listed on the “Representative List of Vendors in the Chinese AI Software Market” in the “Market Guide for AI Software, China” published by Gartner, an internationally renowned IT consulting organization, as well as the “2024 Forbes China Top 50 Artificial Intelligence Technology Enterprises” list, consolidating our leading position in the market. Our market presence and influence is further enhanced with vast opportunities for future business development. Leveraging the enhanced market presence and influence which create vast opportunities for future business development, we will uphold the spirit of innovation, invest in research and development of cutting-edge technologies, and thereby attain greater commercial achievements and social value, contributing to the robust development of the AI industry as a whole.

Originated from our long-term and sustained investment in research and development, we have established influence in the AI industry and have placed innovation as our core competitive strength as well as the main driver for business development. During the Reporting Period, our research and development expenses were approximately RMB64.3 million, representing an increase of 26.9% as compared with the same period in 2023. In addition to commercializing conversational AI solutions, we are also actively involved in the exploration and research of cutting-edge conversational AI technologies. We were on the TOP 50 list at “The 4th Competition on Best Practices of Applied Algorithms (BPAA)”, which is one of the four major brand competitions and events of World AI Conference. It represents the recognition of our Company in the AI industry and showcases our innovation and achievement in the field of algorithms.

We take the initiative to participate in conferences and activities in the AI industry. Our chief scientist, academician He Jifeng, was invited to attend the opening ceremony of the 2024 World AI Conference, where our chairman, Mr. Tang Jinghua was invited to take part in the “AI + Cultural Creativity “ forum. In the conference, we, as a key exhibitor in the metaverse technology exhibition area, displayed technologies and products in areas such as digital human, human-machine interactions, and virtual reality.

Continuously enrich solutions based on technology platforms and functional modules

Our solution offerings are enabled by Voicecomm Brain, our technology infrastructure, and Voicecomm Suites, our comprehensive functional modules. Voicecomm Brain is underpinned by our core technologies in both unified communications and AI, and is able to connect stably to enterprise-level users’ various types of operating systems. On top of our robust Voicecomm Brain, we have developed a full set of Voicecomm Suites which comprehensively cover various steps of enterprise-level users’ end-to-end information exchanges and business interactions. The modular combination of such highly standardized, highly scalable and lowcode Voicecomm Suites allows us to offer different types of solutions to address the pain points experienced by enterprise-level users.

==> picture [510 x 344] intentionally omitted <==

----- Start of picture text -----

Voicecomm
City
Management and Automotive and Telecommunications Finance Solutions
Administration Transportation
Speech Emotion
Recognition Recognition
Intelligent Product
Softswitch Language Language Tools Voicecomm
Understanding Generation
Suites
Multi-Media Speech Knowledge Workflow
Go to ways Synthesis Graphs Tools
Communication Thinking Execution
Voicecomm
Unified Product
Artificial Intelligence
Communications Engine Brain
----- End of picture text -----

Through continuous research and development, the advancement of our Voicecomm Brain and Voicecomm Suites in terms of functions and performance enables us to enrich our products and enterprise-level solutions for multiple end-customer industries. During the Reporting Period, we mainly launched and optimized the following products:

(1) Voice over Long-Term Evolution (VoLTE) video customer service, which uses advanced video communication technology to achieve real-time, face-to-face communication experience on top of the functions of traditional call centers. This product can be widely applied in various scenarios such as video marketing services, remote car insurance loss assessment, remote medical consultation, and video after-sales services.
(2) Internet video customer service, which uses the internet as a transmission medium to overcome the limitations of traditional telephone lines and provide enterprise customers with multi-channel (official website, official WeChat account, mini program, enterprise WeChat account, etc.), multi-modal (text, pictures, voice, video, etc.) and round the clock (7 × 24 hours) customer support services. This product has been widely used in all aspects of enterprise customer service such as business consultation, automatic business operation, personalized business inquiry and human-machine collaborative reception.
(3) Intelligent video inspection platform, which integrates the latest computer vision AI technology and internet video technology to realize video linkage and multi-person collaboration. This digitizes traditional manual inspection work and renders such work intelligent in various industries. This technology improves the efficiency and accuracy of inspections, reduces labor costs and minimizes error rates. This product can be used in scenarios such as aviation inspections, equipment inspections and chemical industry inspections.
(4) Digital human all-in-one machine: In order to meet the needs of different customers, based on our in-depth market research and real-life project experience, we have launched three sets of solutions in different versions, namely digital human interaction software, standard version digital human all-in-one machine and professional version digital human all-in-one machine, which are respectively targeted at enterprise customers tapping into digital human products with lower requirements for image customization, customers who require display in a specific physical space, and high-end customers who pursue perfect execution effects. Meanwhile, we have released a new purchase platform for digital human configurations, which is equipped with a diverse 3D digital human image library to assist channel partners efficiently complete digital human configuration selection within two minutes.

Continuously enhancing the ability to commercialize solutions

City Management and Administration

We have developed an integrated intelligent community ecosystem, covering diverse application scenarios ranging from community property owners and property service companies to public areas and surrounding businesses. Through this platform, property owners can enjoy convenient services such as smart home control, online payment and community interaction, while property service companies can make use of digitalization to achieve efficient property management and resource scheduling. In addition, the Internet of Things and 5G technology are used to realize the interconnection and interoperability of all smart devices in the community, including smart access control, elevator control and parking management. Residents in the community can remotely control their equipment at home through the one-stop service mobile application and enjoy seamless property services, such as online repair reports, payment notifications and community activity participation. Public areas in the community are equipped with intelligent surveillance systems and emergency alarm devices, combined with AI technology for real-time analysis and risk warning to ensure a safe environment for the community. The overall convenience of the community surges with the integration of emerging services such as unmanned delivery and smart retail.

Jinxun Digital Intelligence, a non-wholly-owned subsidiary of our Company, concentrates on the field of public services, such as enterprise customer services hotlines, government affairs hotlines, emergency smart dispatch hotlines, and smart elderly care services. It focuses on data governance and assists enterprises and institutions in realizing the transformation and upgrading of AI and data intelligence for their hotlines. Aligned with the national digital intelligence governance strategy, we are devoted to the empowerment of governmental public services products with AI technology and improve governance efficiency and transparency through digital means. On top of our existing products, we have launched digital governance tools for data governance, generating intelligent specialty reports, taking action before complaint, and communicating public information, providing a wealth of technical tools for digital transformation of the government.

Automotive and Transportation

We kickstarted and implemented the first local unmanned driving project, one of our important practices in the field of intelligent transportation, in the Mianyang Sci-Tech City New Area (綿陽市科技城新區). The integration of conversational AI technologies and unmanned driving technologies provides a wide range of development opportunities for the construction of smart city in the Mianyang Sci-Tech City New Area. Setting self-driving public transportation and self-driving connection as the main application scenarios, the project covers 36.6 square kilometers in the Mianyang Sci-Tech City New Area with three self-driving public transportation vehicles, two self-driving passenger vehicles, 19 selfdriving shuttle vehicles, six unmanned retail vehicles, four unmanned sweeping vehicles, twelve outdoor unmanned delivery vehicles, nine indoor unmanned delivery vehicles, two unmanned security patrol vehicles, 13 routes, and 17 stations, covering over 10,000 kilometers mileage and serving more than 20,000 passengers.

We also hosted a delegation jointly led by the Malaysia Automotive Robotics & IoT Institute (MARii) and ACO TECH, an ICV company in Malaysia, and introduced our emergency call system (E-call) solution for internet of vehicles, which provides emergency call services to ensure traffic safety. The main objective of the system is to promptly send relevant information to the emergency services in case of accidents or emergencies, so as to speed up rescue operations and minimize the consequences caused by accidents. We have entered into a partnership with ACO TECH to provide solutions for the automotive industry. Focusing on revolutionizing the driving experience through digital connectivity, ACO TECH is committed to leading the breakthrough of ICV technologies in Malaysia and the ASEAN. By exploring and innovating in areas such as digital connectivity, intelligent driving and safety data analytics, we provide consumers with a more convenient, safe and efficient driving experience. Through the cooperation with ACO TECH, our technology and products can be expanded to the Malaysian and ASEAN markets, which is conducive for the establishment of our market presence and brand image in overseas markets.

Communication

We continue the upgrade and iteration of our intelligent work badge products, which have the functions of speaker identification, attendance management, and integration of the AI voice quality inspection system to achieve automation of the service quality supervision process. Employee communication is recorded in real time and analyzed by the intelligent work badge, which provides data for performance assessment. In addition, the intelligent work badge supports internal communication and adopts multi-level encryption technology to ensure the safe transmission and storage of data. The product has recently been applied at a stateowned pharmaceutical group, which has significantly improved their operational efficiency, increased their satisfaction rate and strengthened their confidence in data security.

We have entered into a strategic cooperation framework agreement with Microware Group Limited (1985.HK), which is principally engaged in the provision of IT infrastructure solutions services and IT infrastructure management services in Hong Kong, China, with over 2,000 corporate clients and serves more than 60% of Hong Kong’s top 100 listed companies, having a rich client base and professional market development experience in Hong Kong, China and ASEAN region. The cooperation between the Company and Microware Group Limited is expected to allow both parties to leverage complementary strengths in their respective technical resources, market resources and service resources, jointly build a specialized and market-oriented technical service consortium and promote the joint development of both parties’ technical services and research and development systems.

Finance

Our intelligent financial solutions in the financial sector combines three core functions: video-information integrated media customer service platform, intelligent voice quality inspection and data analysis, and multi-channel integration and security protection. The platform helps banks and insurance companies improve customer experience services through the integration of audio and video conversations, remote wealth management consultation, and remote signature with facial recognition in video conferences. The AI-driven voice quality inspection enables real-time monitoring and analysis of customer interactions to ensure service quality, while the system’s multi-channel support and strong data encryptions provide financial institutions with secure and compliant digital services. Such solutions simplify business process and promote intelligent transformation of the finance industry.

In addition, We attach great importance to the maintenance of long-term, stable and favorable relationships with our business partners to jointly promote cooperation in the technical and commercial fields. During the Reporting Period, we joined the Urban Digital Innovation and Development Alliance initiated by China Communications Construction Company Limited to work with its partners on the construction and development of digital cities. In addition, we have also officially become the “2024 cloud-based customer service ICT business partner” of China Mobile Online, a wholly-owned subsidiary of China Mobile in the field of digital services, to jointly promote the development of cloud-based customer service ICT business. In addition, we were awarded as Baidu Intelligent Cloud Application Partner of the Year, which represents a milestone of our in-depth cooperation with leading companies in the field of AI. Through the establishment of these partnerships, we can expand our business scope, strengthen our technological innovation, and demonstrates our proactive attitude and competitive strengths in business and industry cooperation, laying a solid foundation for our future business development. We strive to work with our business partners on a continuous basis and utilize the synergies of our cooperations to explore and develop a broader market space, achieve mutual benefit and win-win results, and facilitate the development of the entire industry.

II. OUTLOOK

Smart city and ICV: vitality of innovation inspired by integration of Double Intelligence

The Outline of the 14[th] Five-Year Plan for National Economic and Social Development of the People’s Republic of China and Outlines of Objectives in Perspective of the Year 2035 中華人民共和國國民經濟和社會發展第十四個五年規劃和2035年遠景目標綱要》 sets out the policy goals of “promoting the construction of new smart cities at different levels” and “actively and steadily developing the industrial internet and the Internet of Vehicles”. The synergetic development of intelligent city infrastructure and ICVs (“ Double Intelligence ”) (雙智) is essential for solving the problem of traffic congestion and improving urban governance capabilities effectively, which serves as a core element for building a new ecosystem of green, safe, convenient and efficient smart travel services, and plays a vital role for the construction of digital China featuring smart cities with well-developed transportation systems.

We resolutely support the national strategy of Double Intelligence to attain the ultimate goal of coordinated development and independent control over core technologies. Making use of our experience and competitive advantages in the urban and automobile sectors, we strive to build a platform for smart cities and smart communities as well as a cloud control platform for ICVs, facilitating the realization of Double Intelligence through the application of new quality productive forces as the driving forces in the high-quality synergistic development of smart city infrastructure and ICVs. We will focus on technological innovation and research and development investment in the Double Intelligence sectors, and actively explore business models related to automobile-city network, such as commercialized operation of autonomous driving, smart travel services and smart parking services. At the same time, we will ensure data security, privacy protection and compliance on the basis of data interconnection, establishing a sound data governance mechanism.

Metaverse and digital human: dual engines to lead the future economy

The metaverse industry is at a critical stage of accelerated development. According to the research report issued by Bain & Company in August 2023, the market size of the metaverse industry is expected to reach US$700-900 billion in 2030. The Chinese government attaches great importance to this emerging technology and has issued the Three-year Action Plan for the Innovation and Development of the Metaverse Industry (2023-2025) 《元宇宙產業創新發展三年行動計劃(2023-2025年)》, which aims to promote metaverse as an important driver for the growth of the digital economy.

Under this macro background, we will actively participate in and make full use of our technological advantages and market experience to contribute to the development of the metaverse industry. We plan to lead the future development of the industry through indepth cooperation with the government and industry partners to promote the application of metaverse technologies in fields such as smart city, industrial Internet of Things and digital living.

We are committed to integrating metaverse and digital human technologies into our existing solutions, especially in the fields of smart city and smart community. We target to build an immersive city management and community service platform through virtual reality (VR) and augmented reality (AR) technologies to provide users with a more intuitive, interactive and personalized digital experience.

Digital human technology is a core component of metaverse. We intend to increase our research and development investment in this field to optimize the interactive ability and emotion recognition function of digital human. We plan to promote digital human applications in various scenarios such as finance, education and cultural tourism to improve service efficiency and user experience, which will allow us to secure a strategic position in the metaverse and digital human market and drive our transformation from a traditional technology provider to an innovative technology enterprise.

In the second half of 2024, we will continue to implement the following strategies to achieve greater progress in the field of enterprise-level conversational AI technologies and solutions:

Continue to upgrade and iterate Voicecomm Brain and Voicecomm Suites to persistently diversify product functions and improve product experience to meet the growing requirements of users;
Continue to develop products and solutions for different vertical scenarios, fully utilize our technological advantages to meet the growing and changing needs of customers, and acquire more high-quality users through developing and promoting a wider range of tool products;
Increase research and development investment, reasonably invest in commercialization and exploration of cutting-edge technologies to maintain our technological advancement;
Continue to expand business development channels, combine vertical customer exploration with horizontal customer expansion, continuously improve our own competitiveness and increase the scale of revenue;
Actively expand overseas markets, explore the potential of enterprise-level AI solutions in emerging markets, strengthen market channel expansion in overseas markets such as the ASEAN region, and promote the local applications of our technologies and products through cooperation with leading local technology companies, so as to continuously improve our international reputation and brand recognition;
Continue to attract talents and professionals and establish long-term and stable cooperative relationships with business partners; and
Pursue investment and acquisition opportunities of upstream and downstream enterprises in the industry chain.

MANAGEMENT DISCUSSION AND ANALYSIS

The following table sets forth our unaudited condensed consolidated statements of profit or loss for the Reporting Period together with the change (expressed in percentages) from the six months ended June 30, 2023 to the corresponding period in 2024:

Revenue Cost of revenue Gross profit Other revenue Other net gain Research and development expenses Selling and marketing expenses Administrative and other operating expenses Impairment loss on trade receivables Profit from operations Net finance costs Changes in carrying amount of redeemable capital contributions Changes in fair value of financial assets measured at fair value through profit or loss Share of loss of associates (Loss)/profit before taxation Income tax (Loss)/profit for the period Attributable to Non-controlling interests Equity shareholder of the Company	For the six months ended June 30, 2024 2023 RMB’000 RMB’000 (unaudited) (unaudited) 371,173 280,843 (208,807) (142,788) 162,366 138,055 5,732 17,843 2 30 (64,345) (50,719) (7,753) (3,923) (33,816) (29,545) (11,670) (818) 50,516 70,923 (7,755) (5,318) (632,820) (68,887) (2,291) 8,441 (15) (204) (592,365) 4,955 2,591 (3,047) (589,774) 1,908 3,131 3,336 (592,905) (1,428)	Period- on-period change % 32.2 46.2 17.6 (67.9) (93.3) 26.9 97.6 14.5 1,326.7 (28.8) 45.8 818.6 (127.1) (92.6) (12,054.9) (185.0) (31,010.6) (6.1) 41,420.0

Revenue

During the Reporting Period, we generated our revenue on a project basis mainly from offering enterprise-level solutions enabled primarily by our technologies on unified communications and AI to our customers. Depending upon specific users’ concrete needs, the extent to which a certain solution involves each category of technologies may vary. The following table sets forth a breakdown of our total revenue by offering categories for the periods indicated:

Enterprise-level solutions Others(1) Total	For the six months ended June 30, 2024 2023 RMB’000 RMB’000 (unaudited) (unaudited) 366,455 272,769 4,718 8,074 371,173 280,843	Period- on-period change % 34.3 (41.6) 32.2

Note:

(1) Primarily related to promoting products empowered by our conversational AI technologies for our customers, from which we generated revenue.

During the Reporting Period, our customers for our solutions included: (i) system integrators that embedded our solutions into their offerings to enterprise-level users; and (ii) enterprise-level users that used our solutions directly. The following table sets forth a breakdown of our revenue generated from offering solutions by customer types, in absolute amounts and as a percentage of total solution revenue, for the periods indicated:

Revenue from – System integrators – Enterprise-Level users Total	For the six months ended June 30, 2024 2023 RMB’000 RMB’000 (unaudited) (unaudited) 287,051 235,566 79,404 37,203 366,455 272,769	Period- on-period change % 21.9 113.4 34.3

Our total revenue increased from RMB280.8 million for the six months ended June 30, 2023 to RMB371.2 million for the same period in 2024, representing a period-on-period increase of 32.2%, primarily due to the continued optimization and launch of new innovative products and solutions. The revenue from city management and administration as well as automobile and transportation had increased significantly. At the same time, our strong customer stickiness has ensured the continued contribution of stable income from other revenue sources. Continuous and stable customer repurchase, and rapid development of new customer channels constituted the dual drivers for revenue growth.

During the Reporting Period, we generated our revenue primarily from providing our solutions in a number of end-customer industries, mainly including city management and administration, automotive and transportation, telecommunications, and finance. The following table sets forth a breakdown of our revenue generated from offering solutions by end-customer industries, in absolute amounts and as a percentage of total solution revenue, for the period indicated:

City management and administration Automotive and transportation Telecommunications Finance Other industries Total	For the 2024 RMB’000 (unaudited) 126,893 114,484 39,916 32,646 52,516 366,455	six months ended June 30, 2023 % RMB’000 % (unaudited) 34.6 108,327 39.7 31.3 69,808 25.6 10.9 49,849 18.3 8.9 37,456 13.7 14.3 7,329 2.7 100.0 272,769 100.0	Period- on-period change % 17.1 64.0 (19.9) (12.8) 616.5 34.3

Our revenue from city management and administration increased from RMB108.3 million for the six months ended June 30, 2023 to RMB126.9 million for the same period in 2024, representing a period-on-period increase of 17.1%, primarily due to a continuous effort to enrich our products and solutions for smart city construction and digital government governance, and a continuous drive to develop new customers.

Our revenue from automotive and transportation increased from RMB69.8 million for the six months ended June 30, 2023 to RMB114.5 million for the same period in 2024, representing a period-on-period increase of 64.0%, primarily due to the business expansion of existing customers which drove higher demand for the Company’s products and served as an important engine of revenue contribution. Moreover, the automotive and transportation industry is the focus of the Company’s business expansion. The Company has invested more resources to expand market channels and successfully achieved revenue conversion.

Our revenue from telecommunications decreased from RMB49.9 million for the six months ended June 30, 2023 to RMB39.9 million for the same period in 2024, representing a period-on-period decrease of 19.9%. Our revenue from the finance industry decreased from RMB37.5 million for the six months ended June 30, 2023 to RMB32.6 million for the same period in 2024, representing a period-on-period decrease of 12.8%. The decreases in revenue from the telecommunications and finance industries in the Reporting Period were primarily due to our focus on business expansion in the two major industries of city management and administration as well as automotive and transportation, aligning with the national Double Intelligence policy. For telecommunications and finance industry, we mainly relied on the periodic repurchase of existing customers.

With the steady increase in the Company’s market presence and strengthening of our brand image, we have earned a high level of customer recognition in the market. This significant increase in recognition has consolidated our leading position in the four major end-customer industries and stimulated strong interest from customers in other different sectors. The trust and reliance of these customers on our products further proves that our products not only have excellent applicability in specific fields, but also have the potential for a wide range of cross-industry and cross-domain applications.

Costs and Expenses

During the Reporting Period, our cost of revenue primarily consisted of (i) equipment costs in relation to hardware devices such as communication devices, servers and computers that were integrated into our solutions; (ii) network and other telecommunication resource costs, which primarily represented the network resources we procured for our city management and administration projects; (iii) employee benefit expenses; (iv) depreciation and amortization; (v) costs mainly in relation to providing promotion services for the sales of telecommunications terminals and other telecommunications resources and services; (vi) externally outsourced services primarily on developing project-specific software tailoring to certain customers’ specific demand on functionalities that are incidental to our technologies in order to enable offering total solutions; and (vii) other costs.

The following table sets forth a breakdown of our cost of revenue by nature, in absolute amounts and as a percentage of total cost of revenue for the periods indicated:

	For the six months ended June 30,	For the six months ended June 30,	For the six months ended June 30,
	2024		2023
	RMB’000	%	RMB’000	%
	(unaudited)		(unaudited)
Equipment costs	75,327	36.1	54,611	38.2
Network and other telecommunication	50,178	24.0	50,174	35.1
resource costs
Employee benefit expenses	2,997	1.4	5,191	3.6
Depreciation and amortization	7,212	3.5	1,983	1.4
Promotion service costs	7,829	3.7	6,518	4.6
Costs of outsourced services	58,560	28.0	16,414	11.5
Others	6,704	3.2	7,897	5.5
Total	208,807	100.0	142,788	100.0

Our cost of revenue increased from RMB142.8 million for the six months ended June 30, 2023 to RMB208.8 million for the same period in 2024, representing a period-on-period increase of 46.2%, which was generally in line with the growth of our revenue.

Gross Profit and Gross Profit Margin

As a result of the foregoing, for the Reporting Period, we recorded a gross profit of RMB162.4 million, representing a period-on-period increase of 17.6%, due to the overall growth of our revenue. Our gross profit margin decreased by 5.5 percentage points from 49.2% for the six month ended June 30, 2023 to 43.7% for the same period in 2024.

Other Revenue

Our other revenue decreased from RMB17.8 million for the six months ended June 30, 2023 to RMB5.7 million for the same period in 2024, primarily due to (i) the Company receiving a tax refund of approximately RMB12.9 million in early 2023 and (ii) the one-off government subsidy of approximately RMB4.8 million received by the Company in 2023. Excluding these two factors, the overall other revenue remained consistent.

Research and Development Expenses

Our research and development expenses increased from RMB50.7 million for the six months ended June 30, 2023 to RMB64.3 million for the same period in 2024, primarily due to the continuous increase in our research and development efforts to enhance our technological capabilities and to meet the needs of our business growth, including the addition of property and equipment such as servers and intangible assets that incurred more depreciation and amortization.

Selling and Marketing Expenses

Our selling and marketing expenses increased from RMB3.9 million for the six months ended June 30, 2023 to RMB7.8 million for the same period in 2024, primarily due to (i) the increased headcounts and compensation level of our selling and marketing staff as a result of the expansion of our sales team and (ii) increased travel and hospitality expenses to further develop customers and markets.

Administrative and Other Operating Expenses

Our administrative and other operating expenses remained stable from RMB29.5 million for the six months ended June 30, 2023 to RMB33.8 million for the same period in 2024.

Impairment Loss on Trade Receivables

Our impairment loss on trade receivables increased from RMB0.8 million for the six months ended June 30, 2023 to RMB11.7 million for the same period in 2024, primarily due to an increase in trade receivable balances in line with the increase in revenue.

Net Finance Costs

Our net finance costs increased from RMB5.3 million for the six months ended June 30, 2023 to RMB7.8 million for the same period in 2024, primarily due to an increase in bank loans and a corresponding increase in interest on bank loans.

Changes in Carrying Amount of Redeemable Capital Contributions

Our changes in carrying amount of redeemable capital contributions increased from RMB68.9 million for the six months ended June 30, 2023 to RMB632.8 million for the same period in 2024, primarily due to an increase in valuations which led to more impairment losses being recorded. We expect to substantially improve our net position and net current position, as carrying amount of such redeemable capital contributions will be reclassified from financial liabilities to equity as a result of the termination of the preferred rights of investors.

Changes in Fair Value of Financial Assets Measured at Fair Value through Profit or Loss

Our changes in fair value of financial assets measured at fair value through profit or loss decreased from a fair value gain of RMB8.4 million for the six months ended June 30, 2023 to a fair value loss of RMB2.3 million for the same period in 2024. During the Reporting Period, our financial assets measured at fair value through profit or loss arose from our strategic investment in a private company incorporated in PRC that primarily engages in the manufacturing and sales of AI hardware. During the Reporting Period, the market capitalization of comparable companies of the private company in the market decreased, and, for the sake of prudence, we have decreased the fair value of our strategic investment in the private company.

Income Tax

Our income tax changed from a tax charge of RMB3.0 million for the six months ended June 30, 2023 to a tax credit of RMB2.6 million for the same period in 2024, primarily due to the reduction of income tax expenses as a result of the effects of deferred income taxes, and losses incurred by certain subsidiaries.

(Loss)/profit for the period

As a result of the foregoing, our profit for the period decreased from RMB1.9 million for the six months ended June 30, 2023 to a loss of RMB589.8 million for the same period in 2024.

Non-IFRS Measure

To supplement our consolidated financial statements which are presented in accordance with IFRS, we also use the adjusted net profit (a non-IFRS measure) as an additional financial measure, which is not required by, or presented in accordance with, IFRS. We believe that such non-IFRS measure facilitates comparisons of operating performance from period to period and company to company by eliminating potential impacts of certain items. We believe that such measure provides useful information to investors and others in understanding and evaluating our consolidated results of operations in the same manner as it helps our management. However, our presentation of the adjusted net profit (a non-IFRS measure) may not be comparable to similarly titled measures presented by other companies. The use of such non-IFRS measure has limitations as an analytical tool, and you should not consider it in isolation from, or as substitute for analysis of, our results of operations or financial condition as reported under IFRS.

We define the adjusted net profit (a non-IFRS measure) as profit for the period by eliminating the impacts of changes in carrying amount of redeemable capital contributions. The following table reconciles our adjusted net profit (a non-IFRS measure) presented to the financial measure calculated and presented in accordance with IFRS, namely profit/loss for the period:

Reconciliation of profit/loss for the period and adjusted net profit (a non-IFRS measure) (Loss)/profit for the period Add: Changes in carrying amount of redeemable capital contributions Adjusted net profit (a non-IFRS measure)	For the six months ended June 30, 2024 2023 RMB’000 RMB’000 (unaudited) (unaudited) (589,774) 1,908 632,820 68,887 43,046 70,795	Period- on-period change % (31,010.6) 818.6 (39.2)

Our management considers that changes in carrying amount of redeemable capital contributions is a non-cash item, primarily due to which we incurred net loss for the six months ended June 30, 2024 and such amount will reclassify from financial liabilities to equity upon completion of the Listing and the Global Offering. Therefore, by eliminating the impacts of the said item in the calculation of the adjusted net profit (a non-IFRS measure), such measure could better reflect our underlying operating performance and could better facilitate the comparison of operating performance from year to year.

Liquidity and Capital Resources

We have maintained a comprehensive treasury policy detailing specific functions and internal control measures for capital use. These functions and measures include but are not limited to procedures of capital management and liquidity management. We manage and maintain our liquidity through the use of internally generated cash flows from operations and bank borrowings. We regularly review our major funding positions to ensure that we have adequate financial resources in meeting our financial obligations.

For the Reporting Period, we funded our working capital and other capital expenditure requirements through a combination of income generated from operations and investments received. The following table sets forth a summary of our cash flows for the periods indicated:

Net cash used in operating activities Net cash used in investing activities Net cash generated from financing activities Net increase in cash Cash at beginning of the period Cash at the end of the period	For the six months ended June 30, 2024 2023 RMB’000 RMB’000 (unaudited) (unaudited) (65,221) (24,766) (183,162) (146,843) 252,992 202,453 4,609 30,844 46,876 20,434 51,485 51,278

Cash

For the Reporting Period, our net cash used in operating activities was RMB65.2 million, which was primarily attributable to the increase in our trade and other receivables and prepayments, offsetting our loss before taxation adjusted for non-cash and non-operating items in a positive net effect.

For the Reporting Period, our net cash used in investing activities was RMB183.2 million, primarily as a result of payment for the acquisition of property and equipment and intangible assets of RMB180.2 million.

For the Reporting Period, our net cash generated from financing activities was RMB253.0 million, primarily as a result of proceeds from bank loans of RMB441.3 million, partially offset by repayment of bank loans of RMB177.0 million.

As a result of the foregoing, our cash, which were primarily held in Renminbi, increased by 9.8% from RMB46.9 million as of December 31, 2023 to RMB51.5 million as of June 30, 2024.

As of June 30, 2024, we are not exposed to significant foreign currency risk since financial assets and liabilities denominated in currencies other than the functional currencies of the Company and its subsidiaries are not significant. We currently do not have a foreign currency hedging policy. However, our management monitors foreign exchange exposure and will consider appropriate hedging measures in the future should the need arise.

Indebtedness

During the Reporting Period, our indebtedness mainly included bank loans, lease liabilities, and redeemable capital contributions. The following table sets forth the components of our indebtedness as of the dates indicated:

Current Trade and other payables Contract liabilities Bank loans Lease liabilities Redeemable capital contributions Taxation payable Non-current Bank loans Lease liabilities Deferred tax liabilities Deferred income	At 30 June 2024 RMB’000 (unaudited) 35,686 47,690 606,289 9,256 1,485,732 4,243 10,000 11,124 2,611 1,929 2,214,560	At 31 December 2023 RMB’000 (unaudited) 43,389 97,423 342,000 8,115 852,912 3,169 10,000 10,684 2,832 2,036
		1,372,560

As of June 30, 2024, as we had utilized a credit limit of RMB616.3 million for bank borrowings, our unutilized banking facilities were RMB119.7 million, bank loans carried an interest rate ranging from 2.70% to 7.00% per annum.

Gearing Ratio

As of June 30, 2024, our gearing ratio, being total liabilities divided by total assets and multiplied by 100%, was 135.5%.

Capital Expenditures

We regularly incur capital expenditures to purchase our property and equipment, as well as intangible assets, in order to enhance our research and development and commercialization capabilities, and expand our business operations. The following table sets forth our capital expenditure for the periods indicated:

Payment for the acquisition of property, equipment and intangible assets Total	As of June 30, 2024 2023 RMB’000 RMB’000 (unaudited) (unaudited) 180,185 145,565 180,185 145,565	As of June 30, 2024 2023 RMB’000 RMB’000 (unaudited) (unaudited) 180,185 145,565 180,185 145,565
		145,565

Contingent Liabilities

As of June 30, 2024, we did not have any material contingent liabilities.

Significant Investments and Future Plans for Material Investments or Capital Assets

As of June 30, 2024, we did not hold any significant investment. In addition, save for the expansion plans as disclosed in the sections headed “Business” and “Future Plans and Use of Proceeds” in the Prospectus, we have no future plans for material investments or capital assets.

Material Acquisitions and Disposals

For the Reporting Period, we did not conduct any material acquisitions or disposals of subsidiaries, associates or joint ventures.

Charges on Group Assets

As of June 30, 2024, we did not have any charged assets.

Interim Dividend

The Board has resolved not to declare any interim dividend for the Reporting Period.

Employees

As of June 30, 2024, we had 282 full-time employees, the majority of which were based in our headquarter in Shanghai. We conduct new staff training regularly to guide new employees and help them adapt to the new working environment. In addition, we provide online and in-person comprehensive and formal company-level and department-level training to our employees on a quarterly basis in addition to on-the-job training. We also encourage our employees to attend external seminars and workshops to enrich their technical knowledge and develop competencies and skills, and provide training and development programs as well as external training sessions to our employees from time to time to improve their technical skills and ensure their awareness and compliance with our various policies and procedures.

The remuneration of our employees is determined with reference to market conditions and individual employees’ performance, qualification and experience. In line with the performance of us and individual employees, a competitive remuneration package is offered to retain employees, including salaries, discretionary bonuses and benefit plans.

Significant Events After the Reporting Period

The Company’s H shares were listed on the Main Board on July 10, 2024. On August 2, 2024, the Over-allotment Option (as described in the Prospectus) has been partially exercised by the Sole Overall Coordinator, on behalf of the International Underwriters, pursuant to which the Company raised additional capital. Further details of the partial exercise of the Over-allotment Option are set out in the announcement of the Company dated August 4, 2024. Save as the above, there are no material events subsequent to June 30, 2024 which could have a material impact on our operating and financial performance as of the date of this announcement.

ROUNDING

Certain amounts and percentage figures included in this announcement have been subject to rounding adjustments. Any discrepancies in any table between totals and sums of amounts listed herein are due to rounding.

CONSOLIDATED STATEMENT OF PROFIT OR LOSS

for the six months ended 30 June 2024 – unaudited (Expressed in Renminbi)

Note
Revenue
4
Cost of sales
Gross profit
Other revenue
5(a)
Other net gain
5(b)
Research and development expenses
Selling and marketing expenses
Administrative and other operating expenses
Impairment losses on trade receivables
Profit from operations
Net finance costs
6(a)
Changes in carrying amount of
redeemable capital contributions
Changes in fair value of financial assets measured
at fair value through profit or loss
17
Share of loss of associates
(Loss)/profit before taxation
6
Income tax
7
(Loss) /profit for the period
Attributable to:
Equity shareholders of the Company
Non-controlling interests
(Loss)/profit for the period
Loss per share
8
Basic
Diluted

Six months ended 30 June
2024
2023
RMB’000
RMB’000
371,173
280,843
(208,807)
(142,788)
162,366
138,055
5,732
17,843
2
30
(64,345)
(50,719)
(7,753)
(3,923)
(33,816)
(29,545)
(11,670)
(818)
50,516
70,923
(7,755)
(5,318)
(632,820)
(68,887)
(2,291)
8,441
(15)
(204)
(592,365)
4,955
2,591
(3,047)
(589,774)
1,908
(592,905)
(1,428)
3,131
3,336
(589,774)
1,908
RMB(19.09)
RMB(0.05)
RMB(19.09)
RMB(0.05)

CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

for the six months ended 30 June 2024 – unaudited

(Expressed in Renminbi)

Note
(Loss)/profit for the period
Other comprehensive income for the period
(after tax and reclassification adjustments):
Items that will not be reclassified to profit or loss:
Equity investments at FVOCI – net movement
in fair value reserves (non-recycling)
(net of tax RMB14,000 (2023: RMB34,000))
17
Other comprehensive income for the period
Total comprehensive income for the period
Attributable to:
Equity shareholders of the Company
Non-controlling interests
Total comprehensive income for the period

Six months ended 30 June
2024
2023
RMB’000
RMB’000
(589,774)
1,908
(78)
193
(78)
193
(589,852)
2,101
(592,983)
(1,235)
3,131
3,336
(589,852)
2,101

CONSOLIDATED STATEMENT OF FINANCIAL POSITION at 30 June 2024 – unaudited

(Expressed in Renminbi)

Note
Non-current assets
Property and equipment
9(b)
Right-of-use assets
9(a)
Intangible assets
Goodwill
Interests in associates
Equity securities designated at fair value through
other comprehensive income (“FVOCI”)
17
Financial assets measured at fair value through profit
or loss (“FVPL”)
10&17
Prepayments
12
Deferred tax assets
Current assets
Inventories and other contract costs
11
Trade and other receivables
12
Prepayments
12
Cash
13
Current liabilities
Trade and other payables
14
Contract liabilities
Bank loans
Lease liabilities
Taxation payable
Redeemable capital contributions
15
Net current liabilities
Total assets less current liabilities

At 30 June
2024
At 31 December
2023
RMB’000
RMB’000
88,675
96,647
15,876
14,616
142,046
110,682
39,168
39,168
215
230
679
771
26,304
28,595
307,133
179,956
25,292
18,399
645,388
489,064
10,417
7,653
672,329
602,705
254,661
233,834
51,485
46,876
988,892
891,068
35,686
43,389
47,690
97,423
606,289
342,000
9,256
8,115
4,243
3,169
1,485,732
852,912
2,188,896
1,347,008
(1,200,004)
(455,940)
(554,616)
33,124

Note Non-current liabilities Bank loans Lease liabilities Deferred tax liabilities Deferred income NET (LIABILITIES)/ASSETS CAPITAL AND RESERVES Share capital Reserves Total deficit attributable to equity shareholders of the Company Non-controlling interests TOTAL (DEFICIT)/EQUITY	At 30 June 2024 At 31 December 2023 RMB’000 RMB’000 10,000 10,000 11,124 10,684 2,611 2,832 1,929 2,036 25,664 25,552 (580,280) 7,572 31,059 31,059 (635,725) (42,742) (604,666) (11,683) 24,386 19,255 (580,280) 7,572

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY for the six months ended 30 June 2024 – unaudited

(Expressed in Renminbi)

Attributable to equity shareholders of the Group

Note Balance at 1 January 2023 Changes in equity for the six months ended 30 June 2023: (Loss)/profit for the period Other comprehensive income Total comprehensive income Issue of ordinary shares Recognition of redeemable capital contributions as current liabilities Balance at 30 June 2023 and 1 July 2023 Changes in equity for the six months ended 31 December 2023: (Loss)/profit for the period Other comprehensive income Total comprehensive income Balance at 31 December 2023	Share capital RMB’000 28,290 – – – 2,769 – 31,059 – – – 31,059	Capital reserve RMB’000 (10,949) – – – 177,231 (178,050) (11,768) – – – (11,768)	PRC statutory reserves RMB’000 8,495 – – – – – 8,495 – – – 8,495	Fair value reserve (non- recycling) Accumulated losses RMB’000 RMB’000 51 (5,946) – (1,428) 193 – 193 (1,428) – – – – 244 (7,374) – (32,326) (13) – (13) (32,326) 231 (39,700)	Total RMB’000 19,941 (1,428) 193 (1,235) 180,000 (178,050) 20,656 (32,326) (13) (32,339) (11,683)	Non- controlling interests RMB’000 14,702 3,336 – 3,336 – – 18,038 1,217 – 1,217 19,255	Total equity RMB’000 34,643 1,908 193 2,101 180,000 (178,050) 38,694 (31,109) (13) (31,122) 7,572

Attributable to equity shareholders of the Group

Note Balance at 1 January 2024 Changes in equity for the six months ended 30 June 2024: (Loss)/profit for the period Other comprehensive income Total comprehensive income Capital contribution from non-controlling interests Balance at 30 June 2024	Share capital RMB’000 31,059 – – – – 31,059	Capital reserve RMB’000 (11,768) – – – – (11,768)	PRC statutory reserves RMB’000 8,495 – – – – 8,495	Fair value reserve (non- recycling) Accumulated losses RMB’000 RMB’000 231 (39,700) – (592,905) (78) – (78) (592,905) – – 153 (632,605)	Total RMB’000 (11,683) (592,905) (78) (592,983) – (604,666)	Non- controlling interests RMB’000 19,255 3,131 – 3,131 2,000 24,386	Total equity/ (deficit) RMB’000 7,572 (589,774) (78) (589,852) 2,000 (580,280)

CONDENSED CONSOLIDATED CASH FLOW STATEMENT

for the six months ended 30 June 2024 – unaudited

(Expressed in Renminbi)

Note
Operating activities
Cash used in operations
Tax paid
Net cash used in operating activities
Investing activities
Payment for the acquisition of property and equipment
and intangible assets
Acquisition of subsidiary, net of cash acquired
Other cash flows arising from investing activities
Net cash used in investing activities
Financing activities
Proceeds from new bank loans
Repayment of bank loans
Capital contribution from non-controlling interests
shareholder
Other cash flows arising from financing activities
Net cash generated from financing activities
Net increase in cash
Cash at 1 January
Cash at 30 June
13

Six months ended 30 June
2024
2023
RMB’000
RMB’000
(50,638)
(23,702)
(6,583)
(1,064)
(65,221)
(24,766)
(180,185)
(145,565)
(3,000)
(1,295)
23
17
(183,162)
(146,843)
441,289
147,000
(177,000)
(101,650)
2,000
–
(13,297)
157,103
252,992
202,453
4,609
30,844
46,876
20,434
51,485
51,278

NOTES TO THE UNAUDITED INTERIM FINANCIAL REPORT (Expressed in Renminbi unless otherwise indicated)

1 GENERAL INFORMATION

Shanghai Voicecomm Information Technology Co., Ltd. (the “ Company ”) was incorporated in the People’s Republic of China (the “ PRC ”) on 5 December 2005 as a limited liability company under the Company Law of the PRC, with its registered office at Unit 418, Building 2, No. 508, Chundong Road, Minhang District, Shanghai. Upon approval by the Company’s board meeting held on 26 April 2015, the Company was converted from a limited liability company into a joint stock limited liability company. The Company’s H shares are listed on the Main Board of the Stock Exchange of Hong Kong Limited on 10 July 2024.

The Company and its subsidiaries (collectively referred to as “ the Group ”) are principally engaged in the provision of enterprise-level solutions including audio and video communication hardware and software to enterprise customers. The Group’s principal operations and geographic markets are in the People’s Republic of China (“ PRC ”).

2 BASIS OF PREPARATION

This preliminary announcement of the Company’s interim results has been prepared in accordance with the applicable disclosure provisions of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited.

The financial information relating to the financial year ended 31 December 2023 that is included in this preliminary announcement of the interim results as comparative information does not constitute the Company’s statutory annual consolidated financial statements for that financial year but is derived from those financial statements.

The 2024 unaudited interim financial report should be read in conjunction with the 2023 annual financial statements.

The International Accounting Standard Board (“ IASB ”) has issued a number of amendments to International Financial Reporting Standards (“ IFRSs ”) that are first effective for the current accounting period of the Group. Details of any changes in accounting policies are set out in note 3.

The accounting policies adopted for the preparation of the interim financial report are the same as those adopted in the preparation of the 2023 annual financial statements.

The interim results set out in this preliminary announcement do not constitute the Group’s interim financial report for the six months ended 30 June 2024 but are extracted from that interim financial report.

The interim financial report for the six months ended 30 June 2024 is unaudited, but has been reviewed by the Company’s auditor, KPMG, in accordance with Hong Kong Standard on Review Engagements 2410 “Review of Interim Financial Information Performed by the Independent Auditor of the Entity” issued by the Hong Kong Institute of Certified Public Accountants (“HKICPA”). The unmodified review report of KPMG is included in the interim report to be sent to shareholders. The interim financial report has also been reviewed by the Company’s Audit Committee.

3 CHANGES IN ACCOUNTING POLICIES

The Group has applied the following amendments to IFRSs issued by the IASB to the interim financial report for the current accounting period:

Amendments to IAS 1, Classification of liabilities as current or non-current
Amendments to IAS 1, Non-current liabilities with covenants
Amendments to IFRS 16, Lease liability in a sale and leaseback
Amendments to IAS 7 and IFRS 7, Supplier finance arrangements

None of these developments had a material effect on how the Group’s results and financial position for the current or prior periods have been prepared or presented in this interim financial report. The Group has not applied any new standard or interpretation that is not yet effective for the current accounting period.

4 REVENUE AND SEGMENT REPORTING

The principal activities of the Group are provision of on-premised integrated Conversational AI solutions including software license, hardware and services. All of the Group’s revenues from contracts with customers within the scope of IFRS 15.

(a) Disaggregation of revenue

Disaggregation of revenue from contracts with customers by major business lines of revenue recognition

Revenue from contracts with customers within the scope of IFRS 15 Enterprise-level solutions Others	Six months ended 30 June 2024 2023 RMB’000 RMB’000 366,455 272,769 4,718 8,074 371,173 280,843	Six months ended 30 June 2024 2023 RMB’000 RMB’000 366,455 272,769 4,718 8,074 371,173 280,843
		280,843

Disaggregation of revenue from contracts with customers by the timing of revenue recognition

Disaggregated by timing of revenue recognition Revenue over time Revenue at a point in time	Six months ended 30 June 2024 2023 RMB’000 RMB’000 54,834 63,488 316,339 217,355 371,173 280,843	Six months ended 30 June 2024 2023 RMB’000 RMB’000 54,834 63,488 316,339 217,355 371,173 280,843
		280,843

(b) Segment reporting

IFRS 8, Operating Segments, requires identification and disclosure of operating segment information based on internal financial reports that are regularly reviewed by the Group’s chief operating decision maker for the purpose of resources allocation and performance assessment. On this basis, the Group has determined that it only has one operating segment.

(c) Geographic information

The following table sets out information about the geographical location of the Group’s revenue from external customers. The geographical location of customers is based on the location at which the solution or services were accepted.

Chinese Mainland Other countries	Six months ended 30 June 2024 2023 RMB’000 RMB’000 369,993 276,343 1,180 4,500 371,173 280,843	Six months ended 30 June 2024 2023 RMB’000 RMB’000 369,993 276,343 1,180 4,500 371,173 280,843
		280,843

5 OTHER REVENUE AND OTHER NET GAIN (a) Other revenue

Government grants (b) Other net gain Net gain on disposal of property and equipment and right-of-use assets 6 (LOSS)/PROFIT BEFORE TAXATION (Loss)/profit before taxation is arrived at after (crediting)/charging: (a) Net finance costs Interest income from bank deposits Finance income Interest on bank loans Interest on lease liabilities Finance costs	Six months ended 30 June 2024 2023 RMB’000 RMB’000 5,732 17,843 Six months ended 30 June 2024 2023 RMB’000 RMB’000 2 30 Six months ended 30 June 2024 2023 RMB’000 RMB’000 (23) (17) (23) (17) 7,427 5,054 351 281 7,778 5,335 7,755 5,318	Six months ended 30 June 2024 2023 RMB’000 RMB’000 5,732 17,843 Six months ended 30 June 2024 2023 RMB’000 RMB’000 2 30 Six months ended 30 June 2024 2023 RMB’000 RMB’000 (23) (17) (23) (17) 7,427 5,054 351 281 7,778 5,335 7,755 5,318
		(17)
		5,054 281
		5,335

		5,318

		Six months ended 30 June	Six months ended 30 June
		2024	2023
		RMB’000	RMB’000
(b)	Other items
	Depreciation charge
	– property and equipment	10,675	858
	– right-of-use assets	2,508	1,848
	Amortisation of intangible assets	17,693	12,008
	Listing expenses	8,456	13,696

7 INCOME TAX

(a) Taxation in the consolidated statement of profit or loss represents:

Current tax Provision for the period Under/(over)-provision in respect of prior years Deferred tax	Six months ended 30 June 2024 2023 RMB’000 RMB’000 4,290 236 220 (375) 4,510 (139) (7,101) 3,186 (2,591) 3,047	Six months ended 30 June 2024 2023 RMB’000 RMB’000 4,290 236 220 (375) 4,510 (139) (7,101) 3,186 (2,591) 3,047
		(139) 3,186
		3,047

The Company and subsidiaries were all incorporated in PRC. The Company and subsidiaries are subject to the PRC Corporate Income Tax Law (“ CIT Law ”) at the statutory income tax rate of 25%, except for following specified:

According to the Administrative Measures for Determination of High-Tech Enterprises (Guokefahuo [2016] No. 32), the Company obtained the qualification as high-technology enterprise and was entitled to a preferential income tax rate of 15% from the years from 2021 to 2024. Shanghai Yuanya Information Technology Co., Ltd. obtained the qualification as high-technology enterprise and was entitled to a preferential income tax rate of 15% from the years from 2023 to 2026.

According to Announcement [2023] No. 6, “The Announcement of Implementation of Income Tax Incentives for Micro and Small Enterprises and Individually-owned Businesses” issued by Ministry of Finance of the PRC and National Tax Bureau on 26 March 2023, the small-scaled minimal profit enterprise with an annual taxable income below RMB1,000,000 (RMB1,000,000 included) is entitled to a preferential tax treatment of 75% exemption of taxable income and application of income tax rate as 20% during the periods ended 30 June 2024 and 2023.

Certain subsidiaries in the Group meet the conditions as small-scaled minimal profit enterprise were qualified for the entitlement of such preferential tax treatment during the Relevant Periods.

According to Announcement [2023] No. 7 of the Ministry of Finance and the State Taxation Administration, the enterprises entitled to the current additional tax deduction ratio of 100% for research and development expenses during the periods ended 30 June 2024 and 2023.

8 LOSS PER SHARE

(a) Basic loss per share

The calculation of the basic loss per share for the six months ended 30 June 2024 and 30 June 2023 are calculated by dividing the loss attributable to the ordinary shareholders of the Group by the weighted average number of ordinary shares in issue during the Relevant Periods, calculated as follows:

Loss attributable to equity shareholders of the Company
Allocation of profit for the period attributable to equity
shareholders of redeemable capital contributions
Loss attributable to ordinary equity shareholders of
the Company for the purpose of basic loss per share
Weighted average number of ordinary shares
Issued ordinary shares at the beginning of the period
Effect of ordinary shares issued for redeemable capital contributions
Weighted average number of ordinary share at
the end of the period for the purpose of basic loss per share
Loss attributable to the ordinary shareholders of
the Company (in RMB’000)
Weighted average number of ordinary shares in issue
(number of shares)
Basic loss per share (in RMB)

Six months ended 30 June
2024
2023
RMB’000
RMB’000
(592,905)
(1,428)
263,993
564
(328,912)
(864)
Six months ended 30 June
2024
2023
31,059,230
28,290,000
(13,829,230)
(11,088,333)
17,230,000
17,201,667
Six months ended 30 June
2024
2023
(328,912)
(864)
17,230,000
17,201,667
(19.09)
(0.05)

Effect of ordinary shares issued for redeemable capital contributions represent the weighted average number of ordinary shares of the Group associated with the redeemable capital contributions at 30 June 2024 and 2023, which are subject to redemption and excluded from the calculation of the basic loss per share.

(b) Diluted loss per share

Diluted earnings/(loss) per share is calculated by adjusting the weighted average number of ordinary shares outstanding to assume conversion of all dilutive potential ordinary shares.

The effect of redeemable capital contributions is anti-dilutive during the six months ended 30 June 2024 and 2023, therefore is not included calculation of diluted earnings per share of the Company. Accordingly, diluted loss per share during the six months ended 30 June 2024 and 2023 are the same as basic earnings/(loss) per share.

On 10 July 2024, the Company’s H shares are listed on the Main Board of the Stock Exchange of Hong Kong Limited. The special rights associated with the Series A-1, Series B, Series B+ and Series C financing are unconditionally terminated and the redeemable capital contributions are reclassified as equity upon the listing of the Company’s H shares.

9 PROPERTY AND EQUIPMENT, RIGHT-OF-USE ASSETS AND INTANGIBLE ASSETS

(a) Right-of-use assets

During the six months ended 30 June 2024, the Group entered into a number of lease agreements for use of office buildings, and therefore recognised the additions to right-of-use assets of RMB3,840,000 (six months ended 30 June 2023: RMB4,616,000).

(b) Acquisitions and disposals of property and equipment and intangible assets

During the six months ended 30 June 2024, the Group acquired items of property and equipment and intangible assets with a cost of RMB51,760,000 (six months ended 30 June 2023: RMB6,461,000). Items of property and equipment with a net book value of RMBnil were disposed of during the six months ended 30 June 2024 (six months ended 30 June 2023: RMBnil), resulting in a loss on disposal of RMBnil(six months ended 30 June 2023: RMBnil).

10 FINANCIAL ASSETS MEASURED AT FAIR VALUE THROUGH PROFIT OR LOSS

	At 30 June	At 31 December
	2024	2023
	RMB’000	RMB’000
Financial assets at FVPL
Unlisted equity securities	26,304	28,595

In June 2021, the Group invested 3.95% of the equity interest in another private company, which is incorporated in the PRC and principally engaged in the AI hardware manufacturing and sales, for a consideration of RMB20,000,000 in cash.

The investment was classified as financial assets measured at FVPL, because the investment contain substantive liquidation preference and are redeemable at the option of the Group if the investee is liquidated in the future. The redeemable amount is calculated by investment consideration plus remaining net assets on pro rata basis.

During the six months ended 30 June 2024, the Group recognised loss in amount of RMB2,291,000 (six months ended 30 June 2023: gain in amount of RMB8,441,000) in the changes in fair value of financial assets measured at fair value through profit or loss.

11 INVENTORIES AND OTHER CONTRACT COSTS

Communication devices Servers and computers Others Other contract cost 12 TRADE AND OTHER RECEIVABLES AND PREPAYMENTS Trade and other receivables Trade receivables Less: loss allowance on trade receivables Value added tax (“VAT”) recoverable Taxation recoverable Capitalization of listing expenses Other deposit and receivable Prepayments Current Prepayments for goods and services Non-current Prepayments for purchase of property and equipment and intangible assets Prepayments for services	At 30 June 2024 RMB’000 351 393 281 1,025 9,392 10,417 At 30 June 2024 RMB’000 780,985 (133,528) 647,457 13,123 3,797 4,770 3,182 672,329 254,661 269,339 37,794 307,133	At 31 December 2023 RMB’000 – 593 36 629 7,024 7,653 At 31 December 2023 RMB’000 704,682 (121,858) 582,824 13,430 650 3,564 2,237 602,705 233,834 145,002 34,954 179,956

As at 30 June 2024 and 31 December 2023, except for the rental deposits of RMB1,213,000 and RMB921,000, respectively, all of the Group’s trade and other receivables are expected to be recovered or recognised as expense within a year.

As of the end of the reporting period, the ageing analysis of trade debtors (which are included in trade and other receivables), based on the invoice date and net of loss allowance, is as follows:

Within 1 year After 1 year but within 2 years After 2 years but within 3 years	At 30 June 2024 RMB’000 560,496 82,518 4,443 647,457	At 31 December 2023 RMB’000 505,107 72,420 5,297
		582,824

Trade receivables are due within 180 to 270 days from the date of billing.

13 CASH

	At 30 June	31 December
	2024	2023
	RMB’000	RMB’000
Cash at bank	51,485	46,876

(i) As of the end of the reporting period, cash situated in Chinese Mainland amounted to RMB51,478,000 (2023: RMB46,870,000). Remittance of funds out of Chinese Mainland is subject to relevant rules and regulations of foreign exchange control.

14 TRADE AND OTHER PAYABLES

Trade payables Accrued payroll and benefits Other taxes payable Consideration payable for business combination Payable for acquisition of property and equipment Payable for acquisition of service Accrual listing expenses Deposits received Other payables and accrual expenses	At 30 June 2024 RMB’000 12,211 7,739 2,293 – 2,469 334 9,052 60 1,528 35,686	At 31 December 2023 RMB’000 14,402 8,493 3,680 3,000 6,557 213 5,829 60 1,155
		43,389

All of the trade and other payables are expected to be settled or recognised as income within one year.

As of the end of the reporting period, the ageing analysis of trade payables (which are included in trade and other payables), based on the invoice date, is as follows:

Within 6 month After 6 months but within 1 year After 1 year	At 30 June 2024 RMB’000 11,800 318 93 12,211	At 31 December 2023 RMB’000 13,806 477 119
		14,402

15 REDEEMABLE CAPITAL CONTRIBUTIONS

In 2020, the Company entered into investment agreements with Series A investors, pursuant to which, these investors agreed to subscribe 4,960,000 shares of the Company at a consideration of RMB74,400,000 (referred as “ Series A Financing ”).

Pursuant to the Series A investment agreements, two of Series A investors (“ Series A-1 investor ”) are entitled to the redemption rights, liquidation preference and anti-dilution rights, while the remaining two Series A investors (“ Series A-2 investor ”) are entitled to the liquidation preference and one director nomination rights for each investors.

In 2021, the Company entered into investment agreements with Series B investors, pursuant to which, these investors agreed to subscribe 3,510,000 shares of the Company at a consideration of RMB140,400,000 (referred as “ Series B Financing ”).

In 2022, the Company entered into investment agreements with Series B+ investors, pursuant to which, these investors agreed to subscribe 2,620,000 shares of the Company at a consideration of RMB104,800,000 (referred as “ Series B+ Financing ”).

In 2023, the Company entered into investment agreements with Series C investors, pursuant to which, these investors agreed to subscribe 2,769,230 shares of the Company at a consideration of RMB180,000,000 in which 2,739,230 shares of the Company at a consideration of RMB178,049,940 are entitled to the redemption rights, liquidation preference and anti-dilution rights (referred as “ Series C Financing ”).

The Series A, Series B, Series B+ and Series C investors (collectively refer to “ the investors ”) are entitled to the same voting rights and dividend rights as other founding shareholders of the Company. Certain key special rights attributable to the investors of the investments are summarized as follows:

Redemption rights

Shares issued by the Company for the Series A-1, Series B, Series B+ and Series C shall be redeemable by the Company and the founder of the Company upon the occurrence of certain events, with the main conditions being:

(i) a qualified IPO does not occur within 31 December 2024 for Series A-1, Series B, Series B+ and Series C Financing.
(ii) the Company didn’t meet guaranteed profit from 2020 to 2025; or
(iii) changes to the Company’s controlling shareholder.

The redemption price of the shares issued in the investments shall equal to the higher of (i) the aggregate of the original issue price for the respective series plus an amount accruing daily at 8% of the original preferred shares issue price per annum minus all paid dividends (ii) fair market value of the shares of relevant series on the date of redemption.

Liquidation preference

In the event of any liquidation including deemed liquidation, dissolution, bankruptcy, acquisitions, sale or transfer of all or part of the core assets, winding up of the Company, the founder of the Company and the Company shall ensure that the investors of the investments are entitled to receive, prior and in preference to any distribution of any of the assets or surplus funds of the Company to founder in order of priority, an amount equals to the aggregate of the original issue price for the respective series plus an amount declared but not paid dividends and the remaining assets of the Company available for distribution shall be distributed rateably among the shareholders.

Anti-dilution right

If the Company increases its share capital at a price lower than the price paid by the investors of the investments on a per share capital basis prior to a qualified IPO, the investors have a right to require the founding shareholders of the Company to transfer for nil consideration to the investors, so that the total amount paid by the investors divided by the total amount of share capital obtained is equal to the price per share capital in the new issuance.

Presentation and classification

The Company recognized the financial instruments issued to investors as financial liabilities, because not all triggering events mentioned in the key terms above are within the control of the Company and these financial instruments did not meet the definition of equity for the Company. The financial liabilities are measured at the higher amount expected to be paid to the investors upon redemption or liquidation which is assumed to be at the dates of issuance and at the end of each reporting period. Any changes in the carrying amount of the financial liabilities were recorded in “Changes in carrying amount of redeemable capital contributions”.

The movements of the redeemable capital contributions are set out below:

At the beginning of the year Changes in carrying amount of redeemable capital contributions Issuance for cash At the ending of the year	At 30 June 2024 RMB’000 852,912 632,820 – 1,485,732	At 31 December 2023 RMB’000 527,970 146,892 178,050
		852,912

The fair market value of the shares were valued by the directors of the Company with reference to valuation reports carried out by an independent qualified professional valuer. The Company used market approach to determine the total share value of the Company and applied the equity allocation model to determine the fair market value of the redeemable capital contribution at the end of each reporting period upon redemption.

Key valuation assumptions used to determine the fair market value of the shares are as follows:

	At	30	June	At	31	December
			2024			2023
Discounts for lack of marketability (“DLOM”)			2%			7.0%

If the Company’s significant unobservable inputs applied in the valuation had been 1% lower or higher than management’s estimation as at 30 June 2024 and 31 December 2023, the present value of the redeemable preferred shares would increase/(decrease) by the amounts listed in table below:

	At 30 June 2024
	DLOM
	RMB’000
Impact on the profit/(loss) before income tax due to estimated
changes in carrying amount of redeemable capital contributions
Add 1%	280
Reduce 1%	(280)
	At 31 December 2023
	DLOM
	RMB’000
Impact on the profit/(loss) before income tax due to estimated
changes in carrying amount of redeemable capital contributions
Add 1%	7,656
Reduce 1%	(7,658)

16 CAPITAL, RESERVES AND DIVIDENDS

(a) Dividends

No dividends were paid or declared by the Company or any of its subsidiaries during the period.

17 FAIR VALUE MEASUREMENT OF FINANCIAL INSTRUMENTS

(a) Financial assets and liabilities measured at fair value

(i) Fair value hierarchy

The following table presents the fair value of the Group’s financial instruments measured at the end of the reporting period on a recurring basis, categorised into the three-level fair value hierarchy as defined in IFRS 13, Fair value measurement. The level into which a fair value measurement is classified is determined with reference to the observability and significance of the inputs used in the valuation technique as follows:

Level 1 valuations: Fair value measured using only Level 1 inputs i.e. unadjusted quoted prices in active markets for identical assets or liabilities at the measurement date
Level 2 valuations: Fair value measured using Level 2 inputs i.e. observable inputs which fail to meet Level 1, and not using significant unobservable inputs. Unobservable inputs are inputs for which market data are not available
Level 3 valuations: Fair value measured using significant unobservable inputs

Fair value measurements as at 30 June 2024 categorised into

Fair value at 30 June 2024 RMB’000 Recurring fair value measurement Assets: Financial assets at FVOCI – Unlisted equity securities 679 Financial assets at FVPL – Unlisted equity securities 26,304 Liability: Redeemable capital contributions 1,485,732 Fair value at 31 December 2023 RMB’000 Recurring fair value measurement Assets: Financial assets at FVOCI – Unlisted equity securities 771 Financial assets at FVPL – Unlisted equity securities 28,595 Liability: Redeemable capital contributions 852,912	Level 1 Level 2 Level 3 RMB’000 RMB’000 RMB’000 – – 679 – – 26,304 – – 1,485,732 Fair value measurements as at 31 December 2023 categorised into
	Level 1 Level 2 Level 3 RMB’000 RMB’000 RMB’000 – – 771 – – 28,595 – – 852,912

Fair value at
30 June
2024
RMB’000
Recurring fair value measurement
Assets:
Financial assets at FVOCI
– Unlisted equity securities
679
Financial assets at FVPL
– Unlisted equity securities
26,304
Liability:
Redeemable capital contributions
1,485,732
Fair value at
31 December
2023
RMB’000
Recurring fair value measurement
Assets:
Financial assets at FVOCI
– Unlisted equity securities
771
Financial assets at FVPL
– Unlisted equity securities
28,595
Liability:
Redeemable capital contributions
852,912

Level 1
Level 2
Level 3
RMB’000
RMB’000
RMB’000
–
–
679
–
–
26,304
–
–
1,485,732
Fair value measurements as at
31 December 2023 categorised into

Level 1
Level 2
Level 3
RMB’000
RMB’000
RMB’000
–
–
771
–
–
28,595
–
–
852,912

During the six months ended 30 June 2024, there were no transfers, or transfers into or out of Level 3 (2023: nil). The Group’s policy is to recognise transfers between levels of fair value hierarchy as at the end of the reporting period in which they occur.

(ii) Information about Level 3 fair value measurements

		Significant
		unobservable
	Valuation techniques	inputs
Unlisted equity securities (i)	The comparable company approach	DLOM
Unlisted equity securities (ii)	Market Approach Backsolve Method	Volatility
Redeemable capital contributions (iii)	Market approach	DLOM

(i) The fair value of certain unlisted equity security is determined average market multiples of comparable companies. As at 30 June 2024, it is estimated that with all other variables held constant, an increase/decrease in change of DLOM by 5% would have increased/decreased the Group’s other comprehensive income by RMB34,000 (2023: RMB39,000).
(ii) The fair value of certain unlisted equity security is determined by market approach using latest round financing price and applied the equity allocation model. As at 30 June 2024, it is estimated that with all other variables held constant, an increase/decrease in volatility by 5% would have decreased/increased the Group’s profit by RMB211,000 and RMB277,000.

(iii) The sensitivity analysis for redeemable capital contributions was disclosed in Note 15.

The movement during the period in the balance of Level 3 fair value measurements is as follows:

Financial assets at FVOCI: At 1 January Net realized and unrealized gains on financial assets at fair value other comprehensive income At 30 June Financial assets at FVPL: At 1 January Net realized and unrealized losses on financial liabilities at fair value through profit or loss At 30 June	At 30 June 2024 RMB’000 771 (92) 679 28,595 (2,291) 26,304	At 30 June 2023 RMB’000 560 227
		787

		28,337 8,441
		36,778

Any gains or losses arising from the remeasurement of the Group’s unlisted equity securities held for strategic purposes are recognised in the fair value reserve (non-recycling) in other comprehensive income. Upon disposal of the equity securities, the amount accumulated in other comprehensive income is transferred directly to retained earnings.

The gains arising from the financial assets at FVPL are presented in the “Changes in fair value of financial assets measured at fair value through profit or loss” line item in the consolidated statement of profit or loss.

18 COMMITMENTS

Commitments outstanding at 30 June 2024 not provided for in the interim financial report

	At 30 June	At 31 December
	2024	2023
	RMB’000	RMB’000
Purchase of network and other telecommunication resource costs	140,306	180,306
Purchase of property, equipment and intangible assets	98,522	95,300

19 CONTINGENT ASSETS AND LIABILITIES

As at 30 June 2024 and 31 December 2023, the Group does not have any material contingent liabilities.

20 NON-ADJUSTING EVENTS AFTER THE REPORTING PERIOD

On 10 July 2024, the Company issued a total of 4,356,660 shares at the offering price of HK$152.10 per share, which were listed on the Main Board of The Stock Exchange of Hong Kong Limited. In addition, 8,625,913 Unlisted Shares were converted to H Shares. The over-allotment option described in the prospectus dated on June 28, 2024 was exercised in respect of an aggregate of 99,320 shares until 2 August 2024.

As agreed in the related investment agreements, all the issued redeemable preferred shares were converted into the ordinary shares at a conversion ratio 1 to 1 on the listing date 10 July 2024. Upon the completion of listing, the Redeemable capital contributions were reclassified from the current liabilities to the equities.

OTHER INFORMATION

PURCHASE, SALE OR REDEMPTION OF THE COMPANY’S LISTED SECURITIES

The H Shares had not been listed on the Stock Exchange as of June 30, 2024, and there were no other listed securities issued by the Company or any of its subsidiaries. Accordingly, there was no purchase, sale or redemption of any of the listed securities of the Company during the six months ended June 30, 2024.

COMPLIANCE WITH THE CORPORATE GOVERNANCE CODE

The Company is committed to maintaining and promoting stringent corporate governance. The principle of the Company’s corporate governance is to promote effective internal control measures, uphold a high standard of ethics, transparency, responsibility and integrity in all aspects of business, to ensure that its affairs are conducted in accordance with applicable laws and regulations and to enhance the transparency and accountability of the Board to all Shareholders.

As the H Shares had not been listed on the Stock Exchange as of June 30, 2024, the CG Code as set out in Appendix C1 to the Listing Rules was not applicable to the Company during the Reporting Period. The Board is of the view that, since the Listing Date and up to the date of this announcement, the Company has complied with all applicable code provisions as set out in part 2 of the CG Code.

COMPLIANCE WITH THE MODEL CODE FOR SECURITIES TRANSACTIONS BY DIRECTORS

The Company has adopted the Model Code as set out in Appendix C3 to the Listing Rules as the Company’s code of conduct regarding the Directors’ and Supervisors’ securities transactions. As the H Shares had not been listed on the Stock Exchange as of June 30, 2024, the Model Code was not applicable to the Company during the Reporting Period. Having made specific enquiry of all the Directors and Supervisors, all the Directors and Supervisors confirmed that they have strictly complied with the Model Code since the Listing Date and up to the date of this announcement.

The Board has also adopted written guidelines (the “ Employees Written Guidelines ”) no less exacting than the Model Code to regulate all dealings by relevant employees who are likely to be in possession of unpublished inside information of the Company in respect of securities in the Company as referred to in code provision C.1.3 in part 2 of the CG Code. No incident of non-compliance with the Employees Written Guidelines by the Group’s relevant employees had been noted since the Listing Date and up to the date of this announcement.

AUDIT COMMITTEE AND REVIEW OF FINANCIAL INFORMATION

As of the date of this announcement, the Audit Committee consists of two members, namely Mr. Wu Haipeng and Mr. Yang Xiaoyuan. The primary duties of the Audit Committee include, without limitation, assisting the Board by providing an independent view of the effectiveness of the financial reporting process, internal control and risk management systems of the Group and overseeing the audit process.

The Audit Committee has reviewed the Group’s unaudited interim financial information for the Reporting Period. The Audit Committee has also reviewed the accounting principles adopted by the Group and discussed auditing, internal control, risk management and financial reporting matters.

The interim results for the six months ended 30 June 2024 is unaudited, but has been reviewed by the Company’s auditor, KPMG, in accordance with Hong Kong Standard on Review Engagements 2410 “Review of Interim Financial Information Performed by the Independent Auditor of the Entity” issued by the Hong Kong Institute of Certified Public Accountants.

PUBLICATION OF INTERIM RESULTS ANNOUNCEMENT AND INTERIM REPORT

This interim results announcement is published on the website of the Stock Exchange (www.hkexnews.hk) and the website of the Company (www.voicecomm.cn). The interim report of the Company for the Reporting Period containing all the information required by the Listing Rules will be dispatched to the Shareholders who requested for a printed copy and made available on the above websites in due course.

NON-COMPLIANCE WITH THE LISTING RULES

Following the resignation of Mr. Sinn Wai Kin Derek with effect from August 1, 2024, (a) the Board comprises two executive directors, four non-executive directors and three INEDs; (b) the Audit Committee comprises a non-executive director and an INED with the position of chairman being vacated; (c) the Remuneration Committee comprises an INED and an executive director; and (d) none of the INEDs is an ordinarily resident in Hong Kong. As a result of the foregoing, the Company does not comply with the requirements of (i) Rule 3.21 of the Listing Rules that the Audit Committee must comprise a minimum of three members, at least one of whom is an INED with appropriate professional qualifications or accounting or related financial management expertise as required under Rule 3.10(2) of the Listing Rules, the majority of the Audit Committee members must be INEDs and the Audit Committee must be chaired by an INED; (ii) Rule 3.25 of the Listing Rules that the Remuneration Committee must comprise a majority of INEDs; and (iii) Rule 19A.18(1) of the Listing Rules that at least one of the INEDs must be ordinarily resident in Hong Kong.

In order to fill the vacancies of the Audit Committee and the Remuneration Committee and procure the Company to re-comply with Rules 3.21, 3.25 and 19A.18(1) of the Listing Rules as soon as practicable, the Nomination Committee has recommended the Board to propose the appointment of Mr. Leung Kin Hong (“ Mr. Leung ”) as an INED after taking into account his qualification, work experience and his expected devotion to the Company in terms of time and effort. The appointment of Mr. Leung as an INED is subject to the approval of the Shareholders at a general meeting of the Company. For details of the biographical details of Mr. Leung, please refer to our announcement dated August 1, 2024.

By order of the Board

Shanghai Voicecomm Information Technology Co., Ltd.* 上海聲通信息科技股份有限公司 TANG JINGHUA Chairman

Hong Kong, August 20, 2024

As of the date of this announcement, the Board comprises Mr. TANG Jinghua and Mr. SUN Qi as executive Directors, Mr. YANG Xiaoyuan, Mr. TAN Xiaobo, Mr. CHEN Yulei, and Ms. MA Tiantian as non-executive Directors, and Mr. LIU Rong, Mr. WU Haipeng and Mr. MU Binrui as independent non-executive Directors.

DEFINITIONS

In this announcement, unless the context otherwise requires, the following expressions shall have the following meanings:

“AI” artificial intelligence “Audit Committee” the audit committee of the Board “Board” or “Board of our board of Directors Directors” “CG Code” the Corporate Governance Code set out in Appendix C1 to the Listing Rules
“China” or “PRC” the People’s Republic of China, for the purposes of this announcement only, excluding Hong Kong, Macau Special Administrative Region and Taiwan
“Company”, “our Shanghai Voicecomm Information Technology Co., Ltd.* (上海聲通 Company”, or “the 信息科技股份有限公司), a joint stock company incorporated in the Company” PRC with limited liability on May 7, 2015 and the H Shares of which are listed on the Main Board of the Stock Exchange on July 10, 2024 (Stock Code: 2495), or, where the context requires (as the case may be), its predecessor with the same English name (上海聲通信息科技有限公司), a limited liability company established in the PRC on December 5, 2005
“Director(s)” the director(s) of our Company or any one of them
“Group”, “our Group”, the Company and all of its subsidiaries, or any one of them as the “our”, “we”, or “us” context may require or, where the context refers to any time prior to its incorporation, the business which its predecessors or the predecessors of its present subsidiaries, or any one of them as the context may require, were or was engaged in and which were subsequently assumed by it
“H Share(s)” overseas listed foreign invested ordinary share(s) in the ordinary share capital of our Company, with a nominal value of RMB1.00 each, which are subscribed for and traded in Hong Kong dollars
“Hong Kong”

the Hong Kong Special Administrative Region of the PRC

“Hong Kong dollars” Hong Kong dollars and cents respectively, the lawful currency of Hong or “HK dollars” Kong or “HK$”
“Hong Kong Stock The Stock Exchange of Hong Kong Limited, a wholly owned subsidiary Exchange” or “Stock of Hong Kong Exchanges and Clearing Limited Exchange”

“ICV(s)” intelligent connected vehicle(s) “IFRS” the International Financial Reporting Standards, which include standards, amendments and interpretations promulgated by International Accounting Standards Board (IASB) and the International Accounting Standards (IAS) and interpretations issued by the International Accounting Standards Committee (IASC) “INED(s)” independent non-executive Director(s) “Jinxun Digital XianJinxun Digital Intelligence Information Technology Co., Ltd. (西 Intelligence” 安金訊數智信息技術有限公司), a limited liability company established under the laws of PRC, being a non-wholly-owned subsidiary of our Company “Listing” listing of the H Shares on the Main Board of the Stock Exchange “Listing Date” July 10, 2024, on which the H Shares were listed and dealings in the H Shares first commenced on the Stock Exchange “Listing Rules” the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (as amended, supplemented or otherwise modified from time to time) “Main Board” the stock market (excluding the option market) operated by the Hong Kong Stock Exchange which is independent from and operated in parallel with the GEM of the Stock Exchange “Model Code” the Model Code for Securities Transactions by Directors of Listed Issuers contained in Appendix C3 to the Listing Rules “Nomination Committee” the nomination committee of the Board “Prospectus” the prospectus issued by the Company dated 28 June 2024 “Reporting Period” the six months ended June 30, 2024 “RMB” or “Renminbi” Renminbi, the lawful currency of the PRC

“Share(s)”

“Share(s)” ordinary share(s) in the capital of our Company with a nominal value of RMB1.00 each, comprising Unlisted Shares and H Shares “Shareholder(s)” holder(s) of the Share(s) “subsidiary(ies)” has the meaning ascribed thereto under the Listing Rules “Supervisor(s)” member(s) of our board of supervisors of our Company “United States” the United States of America, its territories, its possessions and all or “U.S.” areas subject to its jurisdiction “Unlisted Shares” ordinary share(s) issued by our Company, with a nominal value of RMB1.00 each, which is/are not listed on any stock exchange “U.S. dollars”, United States dollars, the lawful currency of the United States “US$” or “USD” “VAT” value-added tax “%” per cent

For identification purposes only

AI assistant

Voicecomm Technology Co., Ltd. — Interim / Quarterly Report 2024

50625_rns_2024-08-20_624bc4c6-218f-474f-8946-a4502f3c3427.pdf

Shanghai Voicecomm Information Technology Co., Ltd.* 上海聲通信息科技股份有限公司

INTERIM RESULTS ANNOUNCEMENT FOR THE SIX MONTHS ENDED JUNE 30, 2024

HIGHLIGHTS

Key Financial Data

Notes:

Revenue

Gross profit and gross profit margin

Adjusted net profit and net margin (non-IFRS measures)

Key Operating Data

BUSINESS REVIEW AND OUTLOOK

I. BUSINESS REVIEW

Continuously enrich solutions based on technology platforms and functional modules

Continuously enhancing the ability to commercialize solutions

City Management and Administration

Automotive and Transportation

Communication

Finance

II. OUTLOOK

Smart city and ICV: vitality of innovation inspired by integration of Double Intelligence

Metaverse and digital human: dual engines to lead the future economy

MANAGEMENT DISCUSSION AND ANALYSIS

Revenue

Costs and Expenses

Gross Profit and Gross Profit Margin

Other Revenue

Research and Development Expenses

Selling and Marketing Expenses

Administrative and Other Operating Expenses

Impairment Loss on Trade Receivables

Net Finance Costs

Changes in Carrying Amount of Redeemable Capital Contributions

Changes in Fair Value of Financial Assets Measured at Fair Value through Profit or Loss

Income Tax

(Loss)/profit for the period

Non-IFRS Measure

Liquidity and Capital Resources

Cash

Indebtedness

Gearing Ratio

Capital Expenditures

Contingent Liabilities

Significant Investments and Future Plans for Material Investments or Capital Assets

Material Acquisitions and Disposals

Charges on Group Assets

Interim Dividend

Employees

Significant Events After the Reporting Period

ROUNDING

CONSOLIDATED STATEMENT OF PROFIT OR LOSS

CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY for the six months ended 30 June 2024 – unaudited

Attributable to equity shareholders of the Group

CONDENSED CONSOLIDATED CASH FLOW STATEMENT

for the six months ended 30 June 2024 – unaudited

1 GENERAL INFORMATION

2 BASIS OF PREPARATION

3 CHANGES IN ACCOUNTING POLICIES

4 REVENUE AND SEGMENT REPORTING

(a) Disaggregation of revenue

(b) Segment reporting

(c) Geographic information

5 OTHER REVENUE AND OTHER NET GAIN (a) Other revenue

7 INCOME TAX

(a) Taxation in the consolidated statement of profit or loss represents:

(a) Basic loss per share

(b) Diluted loss per share

9 PROPERTY AND EQUIPMENT, RIGHT-OF-USE ASSETS AND INTANGIBLE ASSETS

(a) Right-of-use assets

(b) Acquisitions and disposals of property and equipment and intangible assets

10 FINANCIAL ASSETS MEASURED AT FAIR VALUE THROUGH PROFIT OR LOSS

11 INVENTORIES AND OTHER CONTRACT COSTS

13 CASH

14 TRADE AND OTHER PAYABLES

15 REDEEMABLE CAPITAL CONTRIBUTIONS

Redemption rights

Liquidation preference

Anti-dilution right

Voicecomm Technology Co., Ltd. Interim / Quarterly Report 2024

**Shanghai Voicecomm Information Technology Co., Ltd.* 上海聲通信息科技股份有限公司**