“Internet Plus" Business

The “Internet Plus” business has become the main source of revenue to the Group. The continuous recurrence of the Pandemic in Hong Kong resulted in a strong demand for pandemic prevention materials, which contributed revenue to the related supply chain business of the Group. The Company leverages on its own experience and advantages in supply chain business and material procurement to provide customers with prompt supply chain services.

The anti-counterfeiting business of the “Internet Plus” segment also made steady progress. In July 2021, Shenzhen Guoke Anti-counterfeiting Technology Company Limited* ( 深圳國科防偽科技有限公司) (“Guoke Anti- counterfeiting”), a direct wholly-owned subsidiary of the Company, and Shenzhen Ficus Technology Holdings Ltd. (深圳細葉榕科技控股有限公司) (“Ficus”), the holder of patented technologies, entered into a licensing and master service agreement in relation to the provision of total solutions by Ficus to Guoke Anti-counterfeiting. The entering into the agreement allows the Group to obtain proper authorization on legally using the anti-counterfeiting total solutions and device to comply with the requirement of necessary approval for conducting the relevant business and gain business support.

Since then, taking into account the newly added provinces, the Group has entered into commercial contracts with corporate users in various regions for the provision of Guoke innovative anti- counterfeiting products (Anti-counterfeiting device with lottery of Guoke Anti-counterfeiting, “ACL”), covering a number of industries, such as tea leaves and health food products. The Group has completed the delivery of several batches of ACL. In addition to traditional consumer products, ACL can also be applied to digital collectibles and derivatives.

Personal Protection Equipment Business

The revenue from the personal protective equipment business recorded a contraction as compared with the same period of last year, which was attributable to the completion of the Group’s participation in the one-year Local Mask Production Subsidy Scheme launched by the Hong Kong Special Administrative Region Government in the last financial year. Meanwhile, there has been a continuous demand for personal protective equipment in the market due to the recurrence of the Pandemic. Depending on the actual situation of the market, the Group will make active deployment on machine capacity, production line and product style and configuration, labor arrangement and other aspects, in order to meet market demand on the premise of maximizing efficiency.

All of the Group’s personal protective equipment was supplied to the local market in Hong Kong. The sales channel for institutional customers remained stable, which is believed to generate steady revenue for the Group. The Group will continue to improve the quality and workmanship of its products and expand its sales channels in all aspects to provide safe and reliable products for institutional customers.

Owing to the Pandemic, the increase in transportation costs since September 2021 has led to an increase in the cost of personal protective equipment business, but the cost has returned to a stable trend after April 2022.