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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 2023 (“FY2023”).


In 2023, China narrowly surpassed its economic growth target of 5.00%, achieving a gross domestic product growth of 5.20%, which stands as one of its lowest benchmarks in decades. The pace of recovery has been sluggish, accompanied by faltering business sentiment. Deepening property crises, escalating deflationary risks, and subdued demand had clouded the outlook for FY2023. Initial hopes for a robust post-COVID rebound were swiftly dashed as weak consumer and business confidence, mounting local government debts, and decelerating global growth exerted significant pressure on jobs, economic activities, and investments1.

Financial Performance
The business landscape has been challenging, largely due to the sluggish economic conditions prevailing in China. The Group registered a decrease of 3.19% in revenue to RMB1,078.26 million in FY2023 from RMB1,113.85 million in FY2022. This was largely due to a decrease in number of units sold for conventional stamping machines and a downward revision in the average selling prices of stamping machines, which were partially offset by an increase in number of units sold in high performance and high tonnage stamping machines. Despite a drop in revenue, the Group’s gross profit increased by 0.52% to RMB187.07 million in FY2023 from RMB186.11 million in FY2022, while the gross profit margin for FY2023 improved by 0.64 percentage points to 17.35% from 16.71% in FY2022. This improvement was mainly attributable to a decrease in raw materials costs and an increase in the production of high performance and high tonnage stamping machines, which were partially offset by a decrease in production of conventional stamping machines and a downward revision in the average selling prices of the stamping machines.

In FY2023, other income experienced a notable uptick of 7.46% to RMB20.41 million, primarily attributed to an increase in grants received from the Chinese Governmnet. Meanwhile, administrative expenses saw a 4.60% rise to RMB98.74 million from RMB94.39 million in FY2022, driven by an increase in entertainment expenses, depreciation of property, plant and equipment and amortisation of land use rights. In addition, depreciation and amortisation expenses increased by 15.58% to RMB78.98 million from RMB68.34 million in FY2022, primarily due to additional depreciation and amortisation of property, plant and equipment and intangible assets from a subsidiary acquired during the period. Other expenses increased by 12.56% to RMB12.80 million in FY2023 due to a donation to hospital of RMB4.20 million and an increase in foreign exchange loss.

As a result, the Group’s net profit attributable to equity holder for FY2023 decreased by 75.52% to RMB6.02 million from RMB24.58 million in FY2022, translating into basic earnings per ordinary share of RMB0.02 for its shareholders.

Corporate Developments
The Group proposed to acquire 100.00% equity of a to-be-incorporated project company which will hold certain hospitality assets and liabilities transferred from Hainan Xinglong Pearl Investment Co., Ltd ("Target Company"). This acquisition will be fully funded by internally generated cash and bank borrowings of the Group. The Target Company possesses land use rights over a parcel of land situated on the south side of Pearl Avenue, Xinglong Hot Spring Tourism City, Wanning City, Hainan Province, covering an area of 52,668sqm ("Land"), with a tenure of 39 years and 3 months expiring on 31 December 2037. The Land is designated for tourism-related purposes only and features various building structures, including 40 hotel villa properties and other buildings. This proposed acquisition aligns with the Group Strategy Plan’s objective to utilise cash in excess of the Group’s short to medium term budgeted working capital and long-term capital expenditure requirements.

The Chinese government has unveiled its master plan to transform Hainan into a world-class free trade port ("FTP") by 2025, positioning it to rival established free trade ports such as Singapore and Hong Kong. As part of this initiative, a zero-tariff regime will be fully implemented by 2025, enabling a broad spectrum of goods to be imported into the FTP without tariffs. Additionally, import value-added tax and consumption tax exclusions may apply2. Thus, this favourable policy environment is expected to significantly benefit the Group's investments in Hainan.

Regarding the acquisition of three adjoining plots of land in Rojana Industrial Park Ayutthaya (“Plots of Land”), the Group has secured a certificate from the Thailand Board of Investment entitling it to tax incentives for investing in Thailand. The Group intends to build a factory on the Plots of Land for the manufacturing of its stamping machines, thus expanding its geographical footprint beyond its existing factories in China. This strategic move aims to diversify the Group's manufacturing locations, with facilities currently situated in Danyang and Shenyang, the northern and southern regions of the in China respectively. Additionally, the new factory serves to facilitate the export of the Group's stamping machines to Southeast Asia and other global markets.


China is actively advancing new industrialisation and industrial upgrading initiatives which is in line with its commitment to fostering high-quality development in the manufacturing sector. Efforts are underway to implement advanced standards of the country's quality management system within manufacturing, aimed at enhancing overall product quality and competitiveness. Furthermore, the focus is on supporting small and medium-sized enterprises in improving their business performance through quality enhancement and brand building strategies3.

In 2023, China's automotive industry achieved significant milestones, with both sales and production of automobiles reaching unprecedented heights. According to the China Association of Automobile Manufacturers (CAAM), car sales and production volumes in China soared to 30.09 million and 30.16 million units, respectively, marking year-on-year (“yoy”) increases of 12.00% and 11.60%. Additionally, China's total auto exports surged to RMB4.91 million units, representing a remarkable 58.00% increase compared to the previous year and surpassing Japan's RMB3.99 million units exports. This growth trajectory positions China on the path to potentially becoming the world's leading car exporter4.

In 2023, China's new energy vehicles (”NEVs”) sector experienced continuous and rapid expansion, propelled by a combination of supportive policies and a robust market. Sales and production of NEVs surged to 9.50 million and 9.59 million units, respectively, marking impressive yoy increases of 37.90% and 35.80%5. The central government has introduced a new initiative aims to stimulate the adoption of NEVs across various public sector entities and enhance their use in public services. This initiative spans 15 cities nationwide and underscores efforts to broaden the NEV market6. Other favourable policies includes exemption from vehicle purchase tax for NEVs purchased by 31 December 2025, amounting to as much as RMB30,000.00 (US$4,170.00) per vehicle, while NEVs bought between 1 January 2026 and 31 December 2027 will have their purchase tax reduced by half7.

Furthermore, China has established itself as the world's largest consumer market for smart home devices, accounting for about a 50.00-60.00% share in the global smart home sector8. The demand for intelligent home appliance products, such as robot vacuum cleaners and smart dishwashers, has surged among Chinese consumers, marking a significant trend in the market. This is driven by continuous advancements in product functionalities and technologies as well as a series of supportive measures aimed at stimulating the consumption of home appliances. In addition, major Chinese home appliance manufacturers have also expanded their presence in lower-tier cities and townships to tap on the opportunities9. Thus, smart home appliances industry in China is poised for substantial growth in the coming years, with consumers increasingly embracing innovative solutions for their household needs.

Given the current complex domestic and global economic conditions, including ongoing conflicts such as the Russia-Ukraine war and the Israel-Hamas conflict, along with increased external uncertainties and downward pressure on the Chinese domestic economy, the business environment is anticipated to be challenging. The Group will closely monitor the evolving business landscape and will adjust existing strategies accordingly to better mitigate these challenges.


We are delighted to extend a warm welcome to our esteemed new directors, Ms. Yap Ming Choo and Mr. Ngo Yit Sung, as they join our esteemed team at World Precision Machinery. With a wealth of experience and expertise in their respective fields, Ms. Yap and Mr. Ngo bring valuable insights and fresh perspectives that will undoubtedly enrich our boardroom discussions and strategic decisions. We look forward to their contributions in steering the Group towards continued growth and success.

Our heartfelt gratitude goes to Ms. Low Mui Kee, who has stepped down from her role as the Lead Independent Director of the Company. We extend our best wishes to her for their future endeavours.

We would like to express our heartfelt gratitude to Mr. Lim Yoke Hean, who will be stepping down as an Independent Director of the Company at the conclusion of the Company’ forthcoming annual general meeting, for his contributions and efforts driving the growth of the Group over the years.

We would also like to express appreciation to our fellow directors for their valuable contributions at the Board and Board Committees’ meetings and steadfast support of the management team as we navigate through these difficult times together.

To our dedicated employees, we extend our deepest gratitude for your unwavering commitment during these challenging times. Your dedication forms the foundation of our success.

We also extend our sincere thanks to our business partners and customers for their steadfast support. Your collaboration and loyalty are greatly appreciated.

Last but not least, we thank our shareholders for their trust and support, especially during these trying times. Together, let us continue working towards achieving even greater success in the future.

Mr. Wang Weiyao
Executive Chairman

Mr. Wen Hui
Chief Executive Officer

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