Productive tech (00650.HK) announced that despite the steady growth of the revenue from the equipment business from HKD 379.2 million for the year ended on March 31, 2023 to approximately HKD 385.9 million for the fiscal year 2023, the Group expects to record a net loss attributable to shareholders of approximately HKD 347.5 million (2022 fiscal year: HKD 222.5 million).

The net loss attributable to shareholders is mainly due to the rapid development and expansion of the company's semiconductors and cecep solar energy businesses, which resulted in R&D and administrative expenses of approximately HKD 339.9 million, including share-based incentives to employees and depreciation and amortization expenses incurred from the acquisition of a solar energy company in the 2022 fiscal year, both of which are non-cash in nature. In addition, from the beginning of the 2023 fiscal year to the date of this announcement, the company has delivered 95 sets of equipment to customer sites. Currently, 8 sets of semiconductor equipment are in the final acceptance stage, with a contract value of approximately RMB 134.5 million (excluding VAT). The net loss has increased by approximately HKD 125 million compared to the 2022 fiscal year, mainly due to the increase in the above-mentioned R&D and administrative expenses by approximately HKD 123 million.

The board of directors would also like to remind shareholders that following the recent completion of a RMB 70 million financing from third-party investors, the pre-investment equity valuation of a joint venture company engaged in the dry etching equipment and epitaxial equipment businesses of semiconductors, in which the company is one of the founding shareholders, has increased from RMB 50 million to RMB 350 million. However, according to current accounting standards, the company records a net loss of approximately HKD 5.3 million from the joint venture company, rather than recognizing a fair value gain of approximately HKD 100.9 million.

Looking ahead, despite the current undervaluation of the cecep solar energy industry, the board of directors remains optimistic about the company's business performance due to the long-term market outlook, especially in the semiconductor industry and the competitive advantages of the company's products.