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Dear shareholders,

On behalf of the Board of Directors, we are pleased to present to you the annual report of World Precision Machinery Limited (“World Precision” and together with its subsidiaries, the “Group”) for the financial year ended 31 December 2022 (“FY2022”).


China experienced a significant decline in economic growth in 2022, with GDP growth only reaching 3.0%. This marks one of the lowest rates in nearly 50 years, due to the impact of strict COVID-19 measures and a downturn in the property market. Government policies to combat the COVID-19 pandemic resulted in widespread lockdowns and reduced economic activities in major urban areas during spring and summer. However, the economy is expected to recover in the near future as the country has lifted its zero-COVID policy and has reopened its borders1.

Financial Performance
On the backdrop of tough business environment due to the resurgence of COVID-19 in China, the Group’s revenue decreased by 15.5% from RMB1,318.2 million in FY2021 to RMB1,113.8 million in FY2022. This was largely attributable to the decrease in number of units sold in conventional stamping machines and high performance and high tonnage stamping machines, which was partially offset by an upward revision in the average selling prices of the stamping machines. In tandem with the drop in revenue, the Group’s gross profit for FY2022 decreased by 22.7% to RMB186.1 million from RMB240.8 million in FY2021 while gross profit margin for FY2022 decreased by 1.6 percentage points to 16.7% from 18.3% in FY2021.

Other income decreased to RMB19.0 million in FY2022, representing a decrease of 72.0%. The decrease was mainly due to a decrease in grants received from government and a gain from disposal of subsidiary of RMB42.3 million in FY2021. In FY2022, administrative expenses rose by 16.3% to RMB94.4 million from RMB81.2 million in FY2021, mainly due to an increase in research and development costs for stamping machines and staff salaries and its related costs. In addition, other expenses increased by 216.6% to RMB11.4 million from RMB3.6 million in FY2021. The increase was mainly due to an increase in foreign exchange loss and bad debts written off which was partially offset by a donation to a charity foundation in FY2021.

As a result, the Group’s net profit attributable to equity holder for FY2022 decreased by 78.3% to RMB24.6 million from RMB113.3 million in FY2021, which translated into basic earnings per ordinary share of RMB0.06 for its shareholders.

Geographic and Asset Diversification
On 13 October 2022, the Board adopted a Group Strategy Plan (”Plan”), which outlines the Group's investment strategy for the next 5 to 10 years. The Plan establishes guidelines for the Group's future investments that align with the Group's long-term business and investment strategies, to utilise cash in excess of the Group’s short to medium term budgeted working capital and long-term capital expenditure requirements. The Group has been actively seeking new business opportunities in various geographic locations and asset classes. As part of this effort, the Group has proposed to acquire of a plot of industrial land in Thailand and a hotel in Hainan, China, details of which are set out in the paragraphs below. These acquisitions are aimed at increasing shareholder value and achieving long-term growth through a more diverse business and income portfolio. Additionally, the Group intends to reduce its dependence on its core business for revenue streams. By diversifying geographically and across different asset classes, the Group hopes to minimise the risk of exposure to any particular market and asset type.

On 24 November 2022, the Group entered into an Agreement with Rojana Industrial Park Public Co., Ltd. (”Rojana”), a company listed on the Stock Exchange of Thailand, to acquire 3 adjacent plots of land in Rojana Industrial Park Ayutthaya (the “Land”) with the intention to set up a manufacturing facility. The Land is currently vacant and designated for industrial use, with no existing buildings or structures on the property. Total consideration for the Land amounts to THB153.6 million which is equivalent to about RMB30.9 million, which will be paid in cash using internal resources.

The Group also proposed to acquire Wanning Yinhu Hot Spring Holiday Hotel Co., Ltd. (the “WYHSHH”) for a total consideration of RMB155.0 million on 6 January 2023. The consideration will be made in four instalments, fully funded by internally generated cash. The WYHSHH is dormant but holds the land use right, the 54,430.0 square meter (“sqm”) state-owned land in Xinglong Hot Spring Tourism Zone, Wanning City, in Hainan province of China until 1 April 2050. Furthermore, the WYHSHH also owns buildings and fixtures on the land and has a lease over the water surface of 41.72 mu or 27,813.3 sqm till 31 March 2050.


The Chinese government announced sweeping changes to its COVID-19 pandemic restrictions, shifting away from its previously strict zero-COVID policy. Among these measures includes the easing of travel restrictions for inbound and outbound travellers, which is expected to stimulate consumer spending. Though the COVID-19 situation in China has gradually stabilised, there remains a need for continued vigilance and precautionary measures to prevent any resurgence of the virus and to address the ongoing economic challenges. In addition, the ongoing war between Russia and Ukraine has created an unstable geopolitical situation that has added pressure and uncertainty to the global political and economic landscape.

In 2022, Chinese carmakers produced 27.0 million units, representing a 3.4% year-on-year increase, while sales rose by 2.1% to 26.9 million units. Despite facing multiple headwinds, such as the resurgence of COVID-19, semiconductor chip shortages, high battery raw materials prices, and an unstable geopolitical situation, China's auto industry still recorded year-on-year growth in both output and sales2.

Significantly, the new energy vehicle (“NEV”) market in China posted another stellar performance in 2022, driven by rising market demand and sound policy measures. NEV output in China totalled 7.1 million units in 2022, an increase of 96.9% year-on-year, while sales of such vehicles rose by 93.4% to reach 6.9 million units. In 2022, NEVs accounted for 27.6% of all vehicles shipped to dealerships, nearly double the share in 20213. The Chinese government halved the purchase tax for eligible passenger vehicles last year, among other supportive measures, to spur auto sales and underpin consumption. Hence, China's passenger car market grew steadily, with sales of passenger cars reaching 23.6 million units last year, representing a 9.5% year-on-year increase and exceeding 20.0 million units for an eighth consecutive year4.

According to the China Association of Automobile Manufacturers (“CAAM”), China has overtaken Germany to become the world's second-largest car exporter after recording a 54.4% year-on-year increase in mainland exports to 3.1 million vehicles in 2022. This extended China's auto exports boom in 2021, which surpassed two million units for the first time and marked a significant leap for the auto sector5. The prospects of China’s automotive industry are promising given the recovery of the overall macroeconomy and relative policies to boost consumption and the vitality of market entities.

Despite the challenges posed by the COVID-19 pandemic, sales of small home appliances like air fryers, robot vacuums, dishwashers, and clothes dryers have witnessed robust growth, particularly among younger generations. China has also introduced a range of stimulus measures, including encouraging the replacement of old household appliances with new ones and promoting the consumption of green and smart home appliances in rural areas6. With the country's population aging at a rapid pace, there is also an inevitable trend towards the adoption of smart home appliances designed for the elderly. This fast-growing market is expected to be boosted by retirees, pensioners, and the aging population in general. In fact, the elderly has become a key demographic for smart home appliance manufacturers7. The home appliance industry in China is expected to grow in 2023, as consumers increasingly favour high-end and intelligent products with innovative technologies. This trend is being driven by the optimisation of COVID-19 response measures and supportive policies aimed at boosting consumption.

We are dedicated to improving our market competitiveness and increasing our market share in the industry. At the same time, we recognise the importance of optimising our operations to enhance productivity and efficiency, and we will take steps to streamline our processes accordingly. In pursuing expansion and growth, we will continue to seek new opportunities that align with our strategic objectives. We will explore new markets, invest in research and development, and pursue partnerships and acquisitions that complement our existing capabilities.


Firstly, we warmly welcome Ms. Low Mui Kee as an Independent Director of the Company. With extensive experience in the accounting industry and a successful track record as the Managing Director and Chief Financial Officer of Noorvit Pte. Ltd. and Algattas Pte. Ltd, as well as the Chief Financial Officer of Time Watch Investments Limited, we are confident that Ms. Low will provide valuable insights and guidance to the Group.

We would also like to express our heartfelt gratitude to Mr. Phang Kin Seng (Lawrence), who will be stepping down as the Lead Independent Director of the Company at the conclusion of the forthcoming annual general meeting, for his contributions and efforts driving the growth of the Group over the years.

Next, we would like to express our heartfelt gratitude to Mr. Zhuang Guosheng, who has stepped down as Chief Executive Officer of the Company and Chief Deputy General Manager of World Precise Machinery (China) Co., Ltd ("WPM (China)"). The Board would like to express their heartfelt appreciation to Mr. Zhuang for his contributions to the Group and wish him all the best for his future endeavour.

We would also like to welcome Mr. Wen Hui who has been appointed as the Chief Executive Officer of the Company and General Manager of WPM (China). He will be leading the overall operations of the Group.

Our sincere appreciation goes out to our employees for their unwavering commitment and hard work during this trying period. We also extend our thanks to our business partners and customers for their steadfast support. Additionally, we are grateful to our Board of Directors for their valuable guidance and counsel.

Lastly, we thank our shareholders for their trust and support during this challenging period. Let's continue working together to achieve even greater success!

Mr. Shao Jianjun
Executive Chairman

Mr. Wen Hui
Chief Executive Officer

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