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Public company info - Maxnerva Technology Services Ltd. , 01037.HK
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Maxnerva Technology Services Ltd., 01037.HK - Company Profile
Chairman Chien Yi-Pin Mark
Share Issued (share) 702,000,000
Par Currency Hong Kong Dollar
Par Value 0.1
Industry System Applications & IT Consulting
Corporate Profile Business Summary: As at 31 December 2020, the Group is principally engaged in sales of I.T. products and software applications, and the provision of system and network integration, information technology solutions development and implementation, and related maintenance services to office, industrial and retail customers. Performance for the year: Revenue and net profit increased 21% and 26% to RMB523.4 million and RMB14.6 million respectively for the year ended 2020. Business Review The outbreak of COVID-19 at Wuhan City of the PRC in late 2019 and the widespread contagion of the disease in the PRC and the rest of the world throughout the reporting year certainly impacted the Group's businesses. To slow the spread of the pandemic, the PRC government unprecedentedly prolonged the Chinese New Year holiday and halted the intercity transportation of major cities for a protracted period. The plague drastically distorted the normal operation of the Group's customers and the Group's office at Wuhan had been closed till late March 2020. the Group's two other PRC offices in Shenzhen and Chongqing were only able to resume operation in mid-February 2020. the Group's operations and business development activities in the PRC were being notably distorted in the first quarter of 2020. The World Health Organization declared the outbreak a global pandemic on 11 March 2020. Cities and countries in the globe were locked down one after another. Central banks and governments in the world loosened monetary policies and released stimulus packages respectively to shield the economies from the pandemic. However, the demand of video conference and related software application, virtual desktop infrastructure solutions, and other smart office equipment have increased tremendously during the outbreak and the performance of the Group's overseas businesses has been satisfactory, which partly offset the adverse impact of COVID-19 on the Group's business in the PRC in the first half of the reporting year. When overseas markets were ravaged by the pandemic in the second half of the reporting year, the Group's operations in the PRC have been recovering and managed to relieve some of the negative impacts of COVID-19 from the Group's overseas businesses. Smart Office Business Smart office business consists of video conference and related solutions, plus brand licensing and supply chain management of smart office equipment. Segment revenue and profit soared 40% and 142% to RMB233.2 million and RMB8.7 million respectively during the reporting year when compared with the year of 2019. Since February 2020, the Group has commenced a trial run operation of Personify business through licensing the intellectual properties from Hon Hai Group. The business mainly develops and promotes two software applications, namely Presenter and ChromaCam, in US, Europe and selected Asia regions for the purpose of enhancing video conference or streaming services. Presenter uses sophisticated computer vision and deep learning technique to digitally extract users’ face on top of any application or website running on the computer. It creates intimacy and surprise to the audience and improves engagement. ChromaCam creates a virtual “webcam” for PCs and Macs that can be used in any application to blur or replace the background. A US professor, who is the co-founder of the original business, has been appointed as adviser for Personify business since 2020. Under his leadership, Personify has built a team of over 30 technical experts in maintaining and developing the software applications and related platform. Personify serves two group of customers, namely B2C and B2B customers. B2C customers subscribe the software applications through periodic or oneoff subscription while B2B customers subscribe the applications or embed the technology in their own existing software or web-based products on negotiated fees. Demand for the applications increased dramatically since video conferencing becomes a part of the new normal following the pandemic induced lockdown and people are largely required to work from home. The performance of this trial run attempt was above the Group's expectation and the Group plans to devote more resources to further develop this business. Although certain new market development and marketing plans have been postponed under the headwinds of COVID-19, the brand licensing and supply chain management business continued to perform well in 2020. Industrial Solution Business The Group provides full range of smart industrial solutions and services to the Group's customers, including the implementation of a combination of software system and robotic automation equipment into the production lines to enable smart processes that lower costs and increase operational effectiveness and efficiency, as well as the implementation of facility monitor and control system for monitoring the efficiency of the usage of water, power and gas for production plants, and facial recognition system for labour and security management. The Group also provides daily I.T. operating services and after-installation maintenance work in relation to those industrial solutions. Due to the adverse impact of COVID-19 in the Group's operation in the PRC, segment revenue and profit fell 5% and 4% to RMB250.5 million and RMB31.6 million respectively during the reporting year when compared with 2019. Despite the challenges of travelling under the pandemic, the Group expanded the Group's footprints beyond the PRC market and delivered the Group's industrial solutions to the Group's clients in Vietnam and Mexico during the year according to their global production capacity diversification strategy. New Retail Business Trial runs of the Group's interactive marketing platform in the liquor stores in US, one of the Group's new retail advertising initiatives, were halted during the lockdown in the first quarter of 2020. Fortunately, there were only minor delays in the Group's digital retail signage project in Taiwan and the Group completed the installation of the Group's proprietary solutions into 600 retail stores operated by a preeminent supermarket player in Taiwan during the reporting year. Segment revenue and profit were RMB39.7 million and RMB5.5 million respectively. Prospects: There have been over 127 million COVID-19 confirmed cases and over 2.7 million fatalities officially reported worldwide up until the reporting date. The good news is a number of vaccines, which are proven to be effective to immunize COVID-19, have been developed and gone through the phase 3 efficacy trials. Massive vaccination programs have been rolled out in western countries in the first quarter of 2021 and over 410 million shots have been administrated across over 132 countries worldwide until the reporting date. The Group believes vaccination programs will eventually rollout to the rest of the world after the vaccine production is able to ramp up to sufficiently meet the global demand. Market expects the pandemic will be largely under control in the developed countries by the end of 2021 and economies in those countries will be stabilized by that time. Smart Office Business The Group may have seen the light at the end of the dark tunnel but market anticipates that the ways to work and conduct business meetings will change fundamentally after the pandemic. The Group shall devote more R&D and sales and marketing efforts to develop the Group's Personify business in a bid to cater for the business needs under the new normal. the Group announced the Group's decision to acquire the intellectual properties related to Personify business from Hon Hai Group on 27 December 2020 and the transaction was approved by the independent shareholders of the Company (the “Independent Shareholders”) in the special general meeting (the “SGM”) held on 15 March 2021. By owning those assets, the Group is eligible to derive new business model, and have more incentives and less uncertainties to deploy resources for developing new software products from the existing technology. For the brand licensing and supply chain management business, the Group will accelerate the global market development efforts when there are signs that the pandemic has been stabilized. the Group remain cautiously positive on its overall performance in 2021. Industrial Solution Business The economy in the PRC has been recovering in the second half of 2020. Market does not expect the new US government will immediately remove the previous tariffs imposed on China goods and is still observing the policies on China of the new administration of the US government. With labour shortage, constant rising labour costs and geopolitical risk, sizable manufacturers are moving their production capacities from the PRC to overseas to mitigate risks and regain cost competitiveness. There are the new opportunities for the industrial solution business although the PRC market will remain the core market for this segment in the near future. New Retail Business The Group is delving into new opportunities for the Group's digital signage solutions in retail sector in Taiwan. With the rollout of the vaccination programs, the overall retail sector is expected to gradually improve in the second half of 2021. We, together with the Group's business partners, shall continue to seek other retail opportunities in the Greater China regions in a bid to grow this business in the forthcoming years.

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