Your Location：To Our Shareholders:
On behalf of the Board (the “Board”) of Directors (the“Directors”), I am pleased to present the annual report of Pan Asia Environmental Protection Group Limited (“Pan Asia” or the“Company”) and its subsidiaries (collectively referred to as the“Group”) for the year ended 31 December 2023.
In 2023, the Chinese economy showed signs of recovery following the easing of the COVID-19 pandemic, despite challenges such as pressure on foreign trade and exports and a downturn in the real estate sector. The government took proactive measures to stimulate economic activity by promoting consumption and encouraging investment, thereby creating numerous opportunities for various industries, including environmental protection (“EP”) solutions and services. In addition, the Chinese government maintained its commitment to building a Beautiful China and propelling the country’s development into a modern powerhouse, with a focus on transforming it into a green, low-carbon, and circular economy. Compliance with environmental policies became increasingly important for companies operating in the country. During the
year, the Group stepped up its efforts to expand its business operations, securing more projects and achieving a turnaround with a net profit of RMB1.5 million.
The Group also demonstrated its keen insight into the immense potential of artificial intelligence (AI) and made a strategic decision to enter this rapidly growing market. With a vision to diversify its business, the Group actively pursued opportunities to leverage AI technology, driving innovation and opening up new avenues of growth. The Group made a significant achievement last year by successfully establishing a strategic cooperation agreement with Chengdu Qingshu Technology Co., Ltd, a high-tech enterprise in the PRC specializing in the research and application of big data and intelligent computing, with a computing cloud platform that provides comprehensive infrastructure and application programming interface (API) services. This collaborative venture not only solidified the Company’s position in the AI market but also provided invaluable access to cutting-edge AI solutions and expertise. By leveraging this strategic partnership, the Group is well positioned to capitalize on the transformative power of AI to unlock new opportunities and create more value for potential customers.
FINANCIAL REVIEW
During the year under review, the Group generated total revenue of RMB220.3 million, a surge of 41.6% compared with RMB155.6 million recorded in 2022, which was attributable to the Group’s business development efforts as well as the continuous growth in demand for eco-friendly and low-carbon solutions. Gross profit increased significantly by 56.7% to RMB31.4 million (2022: RMB20.0 million) with the gross profit margin of 12.9% (2022: 12.9%) on the back of continuous portfolio management.
Profit attributable to owners of the Company amounted to RMB1.5 million for the year ended 31 December 2023, turning around from a net loss of RMB0.9 million for the year ended 31 December 2022. Basic and diluted earnings per share was RMB0.17 cents (2022: basic loss per share of RMB0.11 cents).
PROSPECTS
Given the government’s policy directives to accelerate the development of an eco-friendly and low-carbon circular economy, the Group remains positive about the prospects of the EP industry in the near future. As highlighted in the State Council’s recent Opinions on Comprehensively Promoting the Construction of a Beautiful China, the country aims to continuously reduce major pollutant emissions and improve ecological environmental quality by 2027, and sets a target for carbon emissions to peak and steadily decline by 2035, resulting in a fundamental improvement of the country’s ecological environment.
To capitalize on these opportunities, the Group intends to leverage its expertise and experience in these areas to enhance its services and improve efficiency. By expanding its business portfolio and capitalizing on its strong network of industry partners, the Group aims to diversify its income streams and achieve sustained growth in line with the evolution of the EP market. These strategic endeavors will enable the Group to contribute to the realization of the government’s environmental goals while driving its own success in the EP sector.
Recognizing the pivotal role of AI in propelling China’s economy towards high-quality development, the Group is dedicated to diversifying its business through the provision of accelerated computing services. This strategic move is in line with the country’s vision to advance the planning and building of a Digital China, and to promote new levels of productivity driven by AI.
Our collaboration with Chengdu Qingshu allows both parties to combine expertise, resources, and market insights to maximize synergies and capitalize on the immense opportunities presented by the AI industry. By working closely together, we are poised to realize the potential of AI. With a steadfast commitment to collaboration and a profound understanding of market dynamics, the Group is primed to make significant strides within the AI industry and capitalize on its promising future.
Embracing the future, the Group has started to leverage the most advanced technologies and applications to boost its business relevance and viability. By combining the strong foundation of its current EP business operations with a proactive approach to identifying and pursuing more eco-friendly and operation-efficient business opportunities in the burgeoning AI market of the rapidly expanding digitalized world, the Group aims to become a highly valuable enterprise that maximizes returns for shareholders and makes a positive contribution to society
APPRECIATION
On behalf of the Board and management, I would like to express my heartfelt gratitude to our staff for their total dedication over the past year. I also wish to extend my appreciation to the Group’s shareholders for their continued support, which has enabled the Group to steadily develop its ongoing EP business and seek strategic investment opportunities. The Group, as always, will continue to make unremitting efforts to achieve stable growth while creating long-term value for shareholders.
Guo Jiannan
Chairman
Hong Kong, 26 March 2024