China U Ton Future Space Industrial : ANNOUNCEMENT OF UNAUDITED ANNUAL RESULTS FOR THE YEAR ENDED 31 DECEMBER 2020

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

CHINA U-TON中FUTURE國優通未SPACE來空間INDUSTRIAL產業集團控股GROUP有限公HOLDINGS司 LTD.

(incorporated in the Cayman Islands with limited liability)

(Stock Code: 6168)

ANNOUNCEMENT OF UNAUDITED ANNUAL RESULTS

FOR THE YEAR ENDED 31 DECEMBER 2020

The board of directors (the "Board") of China U-Ton Future Space Industrial Group Holdings Ltd. (the "Company") announces the unaudited consolidated results and financial position (Note 1) of the Company and its subsidiaries (the "Group") for the year ended December 31, 2020, together with the comparative figures for the corresponding period in 2019 as follows:

HIGHLIGHTS

• The Group's revenue was RMB48,223,000 for the year ended 31 December 2020 (2019: RMB99,043,000), representing a decrease of RMB50,820,000 as compared with the previous financial year.
• The Company reported a loss attributable to the owners of the Company of RMB380,877,000 for the year ended 31 December 2020 (2019: loss of RMB166,516,000), representing an increase of loss of RMB214,361,000 as compared with the corresponding period of the previous financial year.
• Loss per share for the year ended 31 December 2020 was RMB15.59 cents, representing an increase of RMB7.90 cents as compared to RMB7.69 cents for the corresponding period of the previous financial year.
• The Board does not recommend payment of dividend for the year ended 31 December 2020 (2019: nil).

1

Note:

1. Due to the recent epidemic of the COVID-19 and the curbing and quarantine policies adopted and/or implemented by the Chinese government, ZHONGHUI ANDA CPA Limited, the auditor of the Company, encountered significant practical difficulties in compiling its report as it was unable to perform audit work on schedule. Accordingly, it was unable to complete the audit of the Group's annual results for the year ended December 31, 2020 by March 31, 2021 in accordance with the requirements of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the "Listing Rules").

For the reasons explained above, the unaudited annual results contained herein have not yet been agreed with the Company's auditors as required under Rule 13.49(2) of the Listing Rules. An announcement relating to the audited results will be made when the auditing process has been completed in accordance with Hong Kong Standards on Auditing issued by Hong Kong Institute of Certified Public Accountants.

2

CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

For the year ended 31 December 2020

		2020			2019
	Note	RMB'000	RMB'000
		(Unaudited)	(Audited)
Revenue	4	48,223			99,043
Cost of sales/services		(60,459)	(105,186)
Gross loss		(12,236)	(6,143)
Interest income		162			4,662
Other income		9,671			3,766
Other (losses)/gains	5	(365,609)	(4,748)
Selling expenses		(2,756)	(7,487)
Administrative expenses		(36,255)	(92,832)
Research and development expenses		(2,190)	(7,168)
Operating loss from operations		(409,213)	(109,950)
Finance costs		(23,697)	(50,651)
Loss before taxation		(432,910)	(160,601)
Income tax	6	(2,233)	(3,065)
Loss for the year		(435,143)	(163,666)
Other comprehensive loss for the year
(after tax):
Item that will not be reclassified to profit or loss:
- Fair value changes of equity investment at fair
value through other comprehensive income		(39,215)	(11,325)
Item that may be reclassified to profit or loss:
- Exchange differences on translation of
financial statements into presentation currency		452			769
Total comprehensive loss for the year		(473,906)	(174,222)

3

CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

For the year ended 31 December 2020 (Continued)

		2020		2019
	Note	RMB'000	RMB'000
		(Unaudited)	(Audited)
Loss for the year attributable to:
Owners of the Company		(380,877)	(166,516)
Non-controlling interests		(54,266)	2,850
		(435,143)	(163,666)
Total comprehensive loss attributable to:
Owners of the Company		(419,640)	(177,072)
Non-controlling interests		(54,266)	2,850
		(473,906)	(174,222)
Loss per share (RMB cents)	8
Basic		(15.59)	(7.69)
Diluted		(15.59)	(7.69)

4

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

As at 31 December 2020

		As at	As at
		31 December	31 December
		2020		2019
	Notes	RMB'000	RMB'000
		(Unaudited)	(Audited)
Non-current assets
Property, plant and equipment		123,758		125,106
Investment properties		25,549		25,786
Intangible assets		4,501		5,997
Right-of-use assets		4,471		7,378
Goodwill		-	66,708
Equity investments at fair value through other
comprehensive income		22,036		61,251
Loan to customers	10	-	57,577
Contract assets		-	98,522
Prepayments, deposits and other receivables		-	44,473
		180,315		492,798
Current assets
Investments at fair value through profit or loss		34,831		37,292
Inventories		4,501		1,710
Trade and bill receivables	9	18,294		177,571
Loan to customers	10	48,533		85,093
Contract assets		69,789		17,008
Prepayments, deposits and other receivables		52,895		80,844
Amount due from a director		5,151		5,818
Cash at bank and on hand		21,652		29,384
		255,646		434,720

5

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

As at 31 December 2020 (Continued)

		As at	As at
		31 December	31 December
		2020					2019
	Notes	RMB'000	RMB'000
		(Unaudited)	(Audited)
Current liabilities
Trade and other payables	11	229,226					208,745
Payables for acquisition of a subsidiary		27,500					27,500
Bank and other borrowings		50,707					68,707
Corporate bonds		153,110					146,010
Guaranteed notes		91,907					97,819
Lease liabilities		1,063					3,804
Income tax payable		23,231					21,218
Provision for warranties		785					771
		577,529					574,574
Net current liabilities		(321,883)	(139,854)
Total assets less current liabilities		(141,568)	352,944
Non-current liabilities
Corporate bonds		116,055					136,794
Lease liabilities		3,848					4,200
Deferred tax liabilities		-	57
		119,903					141,051
NET (LIABILITIES)/ASSETS		(261,471)	211,893
Capital and reserves
Share capital	12	203,023					203,023
Reserves		(469,176)	(49,587)
Equity attributable to owners of the Company		(266,153)	153,436
Non-controlling interests		4,682					58,457
TOTAL EQUITY		(261,471)	211,893

6

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended 31 December 2020

1. GENERAL INFORMATION
   China U-Ton Future Space Industrial Group Holdings Ltd. (the "Company") was incorporated in the Cayman Islands as an exempted company with limited liability. The address of the registered office is Clifton House, 75 Fort Street, P.O. Box 1350, Grand Cayman KY1-1108, Cayman Islands. The address of the principal place of business is Room 2404, 24/F, Great Eagle Centre, 23 Harbour Road, Wanchai, Hong Kong. The Company's shares are listed on the Main Board of The Stock Exchange of Hong Kong Limited (the "Stock Exchange").
   The Company is an investment holding company. The Group and its subsidiaries (together the "Group") are principally engaged in the provision of design, deployment and maintenance of optical fibers services, the provision of other communication networks services, the provision of environmentally intelligent technical products and services and the money lending services.
2. GOING CONCERN BASIS
   The Group incurred a loss of RMB435,143,000 for the year ended 31 December 2020 and as at 31 December 2020 the Group had net current liabilities and net liabilities of RMB321,883,000 and RMB261,471,000 respectively. These conditions indicate the existence of a material uncertainty which may cast significant doubt on the Company's ability to continue as a going concern. Therefore, the Company may be unable to realise its assets and discharge its liabilities in the normal course of business.
   In order to improve the Group's financial position, to provide liquidity and cash flows and sustain the Group as a going concern, the Group has been implementing a number of measures, including but not limited to:
3. 1. The Group is negotiating with lenders to extend repayment of loans and interests;
   2. The Group is negotiating with the debtors to accelerate the settlement of receivables; and
   3. The Group is looking for opportunity for disposal of certain assets of the Group.

In addition, the management of the Group is also implementing cost-saving measures to improve its operating cash flows and financial position.

On the basis that the Group can successfully complete the certain measures as mentioned above to improve its operating results and cash flows, the directors of the Company believe that the Group will have sufficient funds to finance its current working capital requirements in the next twelve months from the end of the reporting date. Accordingly, the consolidated financial statements have been prepared on a going concern basis.

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1. ADOPTION OF NEW AND REVISED INTERNATIONAL FINANCIAL REPORTING STANDARDS
   In the current year, the Group has adopted all the new and revised International Financial Reporting Standards ("IFRSs") issued by International Accounting Standards Board that are relevant to its operations and effective for its accounting year beginning on 1 January 2020. IFRSs comprise International Financial Reporting Standards ("IFRS"); International Accounting Standards ("IAS"); and Interpretations. The adoption of these new and revised IFRSs did not result in significant changes to the Group's accounting policies, presentation of the Group's financial statements and amounts reported for the current year and prior years.
   The Group has not applied the new and revised IFRSs that have been issued but are not yet effective. The Group has already commenced an assessment of the impact of these new and revised IFRSs but is not yet in a position to state whether these new and revised IFRSs would have a material impact on its results of operations and financial position.
2. REVENUE AND SEGMENT INFORMATION
   The principal activities of the Group are the provision of design, deployment and maintenance of optical fibers services, the provision of other communication networks services, environmentally intelligent technical products and services, and money lending services.
   Revenue mainly represents contract revenue from the design, deployment and maintenance of optical fibers services, contract revenue from the other communication networks services, contract revenue from the environmentally intelligent technical products and services, and money lending.
   The amount of each significant category of revenue recognised during the period is as follows:

	2020	2019
	RMB'000		RMB'000
	(Unaudited)		(Audited)
Revenue from the provision of design, deployment and
maintenance of optical fibers services	28,099	46,319
Revenue from other communication networks services	-	3,056
Revenue from environmentally intelligent technical
products and services	3,282	30,686
Revenue from contracts with customers	31,381	80,061
Revenue from the provision of money lending services	16,842	18,982
	48,223	99,043

For the year ended 31 December 2020, revenue from transactions with three (2019: two) customers have exceeded 10% of the Group's revenue. Revenue from these customers amounted to RMB23,418,000 (2019: RMB41,156,000) for the year ended 31 December 2020.

Geographic information and timing of revenue recognition

At 31 December 2020 and 2019, substantially all of the Group's non-current assets are physically located or allocated to operations in the People's Republic of China (the "PRC"). The following table sets out information about the geographic location of the Group's revenue from external customers. The geographical location of customers is based on the location at which the services provided or the goods delivered.

8

Disaggregation of revenue from contracts with customers:

					2020
								Environmentally
									intelligent
									technical
			Communication					products and
Segments	Optical fibers		networks		Money lending		services	Total
		RMB'000		RMB'000		RMB'000		RMB'000	RMB'000
		(Unaudited)		(Unaudited)		(Unaudited)		(Unaudited)	(Unaudited)
Geographical markets
The PRC including Hong Kong	28,099		-	16,842	3,282	48,223
Africa	-		-		-		-	-
Total	28,099		-	16,842	3,282	48,223
Timing of revenue recognition
At a point in time	7,087		-		N/A	793	7,880
Over time	21,012		-		N/A	2,489	23,501
Total	28,099		-		N/A	3,282	31,381
					2019
									Environmentally
									intelligent
									technical
				Communication					products and
Segments	Optical fibers		networks		Money lending		services	Total
		RMB'000		RMB'000		RMB'000		RMB'000	RMB'000
		(Audited)		(Audited)		(Audited)		(Audited)	(Audited)
Geographical markets
The PRC including Hong Kong	46,319		-	18,982	30,686	95,987
Africa	-	3,056		-		-	3,056
Total	46,319	3,056	18,982	30,686	99,043
Timing of revenue recognition
At a point in time	-		-		N/A	11,887	11,887
Over time	46,319	3,056		N/A	18,799	68,174
Total	46,319	3,056		N/A	30,686	80,061

9

5.	OTHER (LOSSES)/GAINS
		2020		2019
		RMB'000	RMB'000
		(Unaudited)	(Audited)
	Impairment losses on trade and bill receivables	(126,645)	(9,476)
	Impairment losses on prepayment, deposits and other receivables	(73,899)	(22,518)
	Impairment losses on loan to customers	(99,857)	(11,111)
	Impairment losses on prepayments for investments
	at fair value through profit or loss	-	(2,300)
	Impairment losses on goodwill	(66,708)	(91,000)
	Changes in fair value of investment
	at fair value through profit or loss	1,500		5,982
	Changes in fair value of contingent consideration	-	125,675
		(365,609)	(4,748)
6.	INCOME TAX
		2020		2019
		RMB'000	RMB'000
		(Unaudited)	(Audited)
	Current tax－Hong Kong Profits Tax	2,216
	- provision for the year		3,069
	Current tax－PRC Corporate Income Tax	74
	- provision for the year		382
	Deferred tax	(57)	(386)
		2,233		3,065

The Company and the subsidiaries of the Group incorporated in the British Virgin Islands are not subject to any income tax pursuant to the rules and regulations in their respective jurisdictions of incorporation.

The Company and the subsidiaries of the Group incorporated in Hong Kong are subject to Hong Kong Profits Tax rate of 16.5% for the year ended 31 December 2020 (2019: 16.5%).

The subsidiaries of the Group established in the PRC (excluding Hong Kong) are subject to PRC Corporate Income Tax rate of 25% for the year ended 31 December 2020 (2019: 25%).

One of the subsidiaries of the Group established in the PRC have obtained approvals from the tax bureaux to be taxed as enterprises with advanced and new technologies. As a result, the subsidiary enjoyed a preferential PRC Corporate Income Tax rate of 15% for the three years ended 31 December 2022.

One of the subsidiaries of the Group established in the PRC have obtained approvals from the tax bureau to be taxed as enterprises registered in Khorgos of Xinjiang province. As a result, the subsidiary is exempted from enterprise income tax for the five years ended 31 December 2022.

One of the subsidiaries of the Group established in the PRC have obtained approvals from the tax bureau to be taxed as Small Low-Profit Enterprises. As a result, the subsidiary enjoyed a preferential PRC Corporate Income Tax rate of 20% for the three years ended 31 December 2021.

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1. DIVIDENDS
   The directors of the Company do not recommend the payment of a final dividend for the year ended 31 December 2020 (2019: nil).
2. LOSS PER SHARE Basic loss per share
   The basic loss per share for the year ended 31 December 2020 is calculated based on the loss attributable to the equity shareholders of the Company and the weighted average number of ordinary shares in issue during the year, calculated as follows:
   Loss attributable to owners of the Company:

	2020		2019
	RMB'000	RMB'000
	(Unaudited)	(Audited)
From operations	(380,877)	(166,516)
Weighted average number of ordinary shares:
	2020		2019
	'000	'000
	(Unaudited)	(Audited)
Issued ordinary shares at 1 January	2,442,674		2,086,345
Effect of shares issued to owners
of the Company in 2019	-	79,555
Weighted average number of ordinary shares
for the year ended 31 December
	2,442,674		2,165,900

Diluted loss per share

There were no dilutive potential shares outstanding during the years ended 31 December 2020 and 2019. The Group's convertible bonds and share options could potentially dilute basic loss per share in the future, but were not included in the calculation of diluted loss per share because they are antidilutive during the years ended 31 December 2020 and 2019.

11

9. TRADE AND BILL RECEIVABLES

	2020		2019
	RMB'000	RMB'000
	(Unaudited)	(Audited)
Trade and bill receivables	176,503		209,135
Less: allowance for doubtful debts	(158,209)	(31,564)
	18,294		177,571

1. Ageing analysis

	2020	2019
	RMB'000		RMB'000
	(Unaudited)		(Audited)
Within 90 days	10,290	60,280
91 to 180 days	3,329	17,120
181 to 365 days	3,707	39,158
Over 1 year	968	61,013
	18,294	177,571

The credit period of individual customer is considered on a case-by-case basis.

1. Impairment of trade and bill receivables
   Impairment losses in respect of trade and bill receivables are recorded using an allowance account unless the Group is satisfied that recovery of the amount is remote, in which case the impairment loss is written off against trade and bill receivables directly.
   The movements in the allowance for doubtful debts during the year are as follows:

	2020	2019
	RMB'000		RMB'000
	(Unaudited)		(Audited)
At 1 January	31,564	22,088
Impairment losses recognised	126,645	9,476
At 31 December	158,209	31,564

The Group applies the simplified approach under IFRS 9 to provide for expected credit losses using the lifetime expected loss provision for all trade and bill receivables. To measure the expected credit losses, trade and bill receivables have been grouped based on shared credit risk characteristics and the days past due. The expected credit losses also incorporate forward looking information.

12

		Within 90	91 to 270	271 to 365	Over
		days past	days past	days past	1 year
	Current	due	due	due	past due	Total
At 31 December 2020
(Unaudited)
Weighted average
expected loss rate	0%	0%	0%	98%	100%	90%
Receivable amount
(RMB'000)	10,290	3,329	3,707	50,880	108,297	176,503
Loss allowance (RMB'000)	-	-	-	49,912	108,297	158,209
At 31 December 2019
(Audited)
Weighted average
expected loss rate	0%	0%	0%	0%	60%	15%
Receivable amount
(RMB'000)	60,280	17,120	39,158	40,078	52,499	209,135
Loss allowance (RMB'000)	-	-	-	-	31,564	31,564

1. Retentions receivable
   The amount of retentions receivable from customers, recorded within "trade and bill receivables" at 31 December 2020 is RMB6,922,000 (2019: RMB13,806,000). The amount of those retentions receivable expected to be recovered after more than one year is RMB6,409,000 (2019: RMB4,484,000).

13

10. LOAN TO CUSTOMERS
	2020		2019
	RMB'000	RMB'000
	(Unaudited)	(Audited)
Loan to customers	159,501		153,781
Less: allowance for doubtful debts	(110,968)	(11,111)
	48,533		142,670
Analysed as:
Current assets	48,533		85,093
Non-current assets	-	57,577
	48,533		142,670

Loan to customers is denominated in HK$. The loan to customers carries a fixed effective interest rate at 15% per annum with credit terms mutually agreed with the customers.

1. Ageing analysis
   The maturity profile of loan to customers net of allowance at the end of reporting period, analysed by the remaining period to the contractual maturity date is as follows:

	2020	2019
	RMB'000		RMB'000
	(Unaudited)		(Audited)
Within 1 year	48,533	85,093
1-2 years	-	57,577
	48,533	142,670

The credit period of individual customer is considered on a case-by-case basis.

1. Impairment of loan to customers
   Impairment losses in respect of loan to customers are recorded using an allowance account unless the Group is satisfied that recovery of the amount is remote, in which case the impairment loss is written off against loan to customers directly.

14

The movements in the allowance for doubtful debts during the year are as follows:

	2020	2019
	RMB'000		RMB'000
	(Unaudited)		(Audited)
At 1 January	11,111		-
Impairment losses recognised	99,857	11,111
At 31 December	110,968	11,111

The Group applies the simplified approach under IFRS 9 to provide for expected credit losses using the lifetime expected loss provision for all loan to customers. To measure the expected credit losses, loan to customers have been grouped based on shared credit risk characteristics and the days past due. The expected credit losses also incorporate forward looking information.

		Within
		365 days
	Current	past due	Total
At 31 December 2020 (Unaudited)
Weighted average expected loss rate	62%	74%	70%
Receivable amount (RMB'000)	60,300	99,201	159,501
Loss allowance (RMB'000)	37,333	73,635	110,968
At 31 December 2019 (Audited)
Weighted average expected loss rate	0%	14%	7%
Receivable amount (RMB'000)	73,885	79,896	153,781
Loss allowance (RMB'000)	-	11,111	11,111

15

11. TRADE AND OTHER PAYABLES
		2020	2019
		RMB'000		RMB'000
		(Unaudited)		(Audited)
Trade payables due to third parties		105,587	118,905
Other payables and accrued expenses:
- accrued expenses		12,650	6,950
- payables for staff related costs		19,745	17,715
- other taxes payables		737	4,176
- payables for interest expenses		57,662	31,170
- amounts due to non-controlling equity holders	(i)	-	274
- others		32,845	29,555
		123,639	89,840
Total		229,226	208,745

Note:

1. The amounts are unsecured, non-interest bearing and have no fixed terms of repayment.

As of the end of the reporting period, the ageing analysis of trade payables, based on the invoice date, is as follows:

	2020	2019
	RMB'000		RMB'000
	(Unaudited)		(Audited)
Within 90 days	11,448	20,473
91 to 180 days	3,681	8,213
181 to 365 days	9,061	18,794
Over 1 year	81,397	71,425
	105,587	118,905

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12. SHARE CAPITAL

Movements of the share capital of the Company are as follows:

	No. of shares
	'000		HKD'000
Authorised:
Ordinary shares of HK$0.10 each	4,000,000	400,000
Ordinary shares, issued and fully paid:
	No. of shares
	'000		RMB'000
Issued and fully paid:
At 1 January 2019	2,086,345	170,909
Shares issued	356,329	32,114
At 31 December 2019 (audited) and
31 December 2020 (unaudited)	2,442,674	203,023

1. On 2 July 2019, the Company issued 21,415,555 ordinary shares to settle part of the contingent consideration of acquisition of a subsidiary. HK$2,141,000 (equivalent to approximately RMB1,877,000) was credited to share capital and HK$12,635,000 (equivalent to approximately RMB11,076,000) was credited to the share premium account.
2. On 18 October 2019, the Company issued 334,913,945 ordinary shares to settle part of the contingent consideration of acquisition of a subsidiary. HK$33,491,000 (equivalent to approximately RMB30,237,000) was credited to share capital and HK$66,983,000 (equivalent to approximately RMB60,474,000) was credited to the share premium account.

Capital management

The Group's primary objectives when managing capital are to safeguard the Group's ability to continue as a going concern, so that it can continue to provide returns for equity shareholders and benefits for other stakeholders, by pricing products and services commensurately with the level of risk and by securing access to finance at a reasonable cost.

The Group actively and regularly reviews and manages its capital structure to maintain a balance between the higher equity shareholder returns that might be possible with higher levels of borrowings and the advantages and security afforded by a sound capital position, and makes adjustments to the capital structure in light of changes in economic conditions.

The Group monitors its capital structure on the basis of an adjusted net debt-to-capital ratio. For this purpose, adjusted net debt is defined as total debt (which includes bank and other borrowings, corporate bonds, convertible bonds and guaranteed notes) less cash at bank and on hand and restricted bank deposits. Capital comprises all components of equity.

17

MANAGEMENT DISCUSSION AND ANALYSIS

OVERVIEW

2020 was an extremely challenging year for the Group. The nationwide outbreak of COVID-19 led to the suspension of social and economic activities in most cities across China. Inevitably, the results of the Group in 2020 were adversely affected.

The Group's revenue for the year ended 31 December 2020 was RMB48,223,000, representing a year-on-year decrease by approximately 51.3% from RMB99,043,000 for the same period in 2019.

The Company reported a loss attributable to the owners of the Company of RMB380,877,000 for the year ended 31 December 2020, representing an increase of loss of RMB214,361,000 from loss of RMB166,516,000 for the year ended 31 December 2019, or approximately 128.7% when compared with the corresponding period of the previous financial year.

The substantial increase in loss attributable to the owners of the Company was due to the net result of the following reasons: 1) the decline in the Group's revenue and gross profit due to the combining effect of persistent COVID-19 pandemic and the decline in the domestic demand for the Group's services, 2) an increase of impairment losses on trade and bill receivables of RMB126,645,000 (2019: RMB9,476,000), 3) an increase of impairment losses on loan to customers of RMB99,857,000 (2019: RMB11,111,000), 4) an increase of impairment losses on prepayment, deposits and other receivables of RMB73,899,000 (2019: RMB22,518,000), 5) an increase of impairment losses on goodwill of RMB66,708,000 (2019: RMB91,000,000), and 6) a decrease of administrative expenses of RMB36,255,000 (2019: RMB92,832,000).

BUSINESS REVIEW

The Group is principally engaged in the provision of design, deployment and maintenance of optical fibers services, the provision of other communication networks services, environmentally intelligent technical products and services and money lending services.

Design, deployment and maintenance services of optical fibers

During the year ended 31 December 2020, decrease in revenue of deployment services of optical fibers was mainly due to significant decrease in traditional deployment construction revenue in Hebei Province due to keen competition of the market.

Other communication network services

Except for optical fibers related services, the group also provides other integrated services relating to design, construction and maintenance of communication networks.

Environmentally intelligent technical products and services

Provision of environmentally intelligent technical products and services became an operating segment as a result of the acquisition of Yourui in 2018. Yourui positions itself as a high-tech company which provides clients with environmental protection related services and solutions based on big data analysis. The products and services provided by Yourui is mainly in relation to the design, development and integration of hardware and software systems which are based on the Internet and Internet of Things. Yourui also provides tailor-made services to customers in relation to the setting up of customized systems, provision of operation and maintenance services.

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Money lending services

Money lending business has been an operating segment since July 2017. The Group has obtained a money lenders license in Hong Kong under the Money Lenders Ordinance (Chapter 163 of the Laws of Hong Kong). The money lending segment principally earns interest income from loans to third parties.

FUTURE PLANS AND PROSPECTS

Looking forward, the Group expects the operating environment will continue to be challenging. However, the application of wireless technology by the market and the promotion of cloud computing, big data and data centres, together with upgrades in systems and skills and application of 4G and 5G, is expected to lead to a multi-fold increase in the global demand for bandwidth in the next few years. Optical fiber broadband network construction is the forerunner of all infrastructure, and the most important ring for the economic development of countries in the surrounding areas under the One Belt One Road initiative, as well as those in the Middle East and Africa. Upgrade of existing networks and laying of new networks are required to cope with the local needs for future development. The Group is proactively looking for business opportunities to expand its existing business in the PRC and overseas. In order to cope with the anticipated challenges and staying competitive, more efforts will be made to strengthen internal control and management, strictly control production costs and operating expenses. The Group will also continue to explore any opportunities to diversify our business with the ultimate aim of bringing greater value to our shareholders in the long run.

FINANCIAL REVIEW
	Year ended 31 December
	2020	2019	Increase
	RMB'000	RMB'000	(Decrease)%
	(Unaudited)	(Audited)
Revenue	48,223	99,043	(51.3)
Gross loss	(12,236)	(6,143)	99.2
EBITDA	(399,359)	(95,962)	316.2
EBITDA margin %	(828.2%)	(96.9%)	731.3
Net loss	(435,143)	(163,666)	165.9
Loss for the year attributable to the
owners of the Company	(380,877)	(166,516)	128.7
Net loss margin	(902.4%)	(165.2%)	737.2

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	Year ended 31 December
	2020	2019	Increase
	RMB cents	RMB cents	RMB cents
	(Unaudited)	(Audited)
Basic loss per share	(15.59)	(7.69)	7.9
	As at	As at
	31 December	31 December
	2020	2019
	(Unaudited)	(Audited)
Current ratio	0.4	0.8
Gearing ratio	N/A	198.2%

Revenue

The Group's revenue for the year ended 31 December 2020 was RMB48,223,000, representing a decrease of approximately 51.3% over the corresponding period of the previous financial year. The decrease in revenue is the net effect of the decrease in all the four revenue segments－the provision design, deployment and maintenance of optical fiber services, the provision of other communication networks services, the provision of environmentally intelligent technical products and services, and money lending services.

Amongst all, the drop of revenue in the environmentally intelligent technical products and services amounted to RMB27,404,000 was the major factor. The quarantine order, especially either within or nearby the Beijing city had led to the suspension of social and economic activities and it worsened the performance of the environmentally intelligent technical products and services as its major customers were located at these cities.

The revenue derived from design, deployment and maintenance services of optical fibers had decreased by RMB18,220,000. It was mainly due to keen competition of the provision of traditional deployment methods services in the Hebei province.

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Gross (loss)/profit

The Group reported a gross loss for both the year ended 31 December 2020 and 2019. The decrease in the gross margin was primarily due to the drop of profit margin in all the revenue segments due to tight competition.

The following table sets forth the gross (loss)/profit of each of our services for the years indicated:

	Year ended 31 December
	2020		2019
	RMB'000	%		RMB'000	%
	(Unaudited)	(Unaudited)	(Audited)	(Audited)
Gross (loss)/profit by services
Revenue from the provision of design,
deployment and maintenance of optical
fibers services
- Traditional deployment methods	(28,634)	234.0		(36,570)		595.3
- Micro-ducts and mini-cables
system integration methods	(1,049)	8.6		(3,261)		53.1
Sub-total	(29,683)	242.6		(39,831)		648.4
Other communication
networks services	-	-	(574)		9.3
Revenue from the provision of
environmentally intelligent technical
products and services	730		(6.0)	15,580		(253.6)
Money lending	16,717		(136.6)	18,682		(304.1)
	(12,236)	100.0		(6,143)		100.0

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The following table sets forth the gross margin of each of the services for the years indicated:

	Year ended 31 December
			Increase/
	2020	2019	(Decrease)
	%	%	percent point
	(Unaudited)	(Audited)
Gross margin by services
Revenue from the provision of design,
deployment and maintenance of optical
fibers services
- Traditional deployment methods	(104.9)	(122.3)	17.4
- Micro-ducts and mini-cables system
integration methods	(129.5)	(19.3)	(110.2)
Overall	(105.6)	(86.0)	(19.6)
Other communication networks services	-	(18.8)	18.8
Revenue from the provision of
environmentally intelligent technical
products and services	22.2	50.8	(28.6)
Money lending	99.3	98.4	0.9
Overall gross margin	(25.4)	(6.2)	(19.2)

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Other (losses)/gains

The increase in other (losses)/gains was mainly caused by the net result of the following reasons: 1) an increase of impairment losses on trade and bill receivables of RMB126,645,000 (2019: RMB9,476,000), 2) an increase of impairment losses on loan to customers of RMB99,857,000 (2019: RMB11,111,000), 3) an increase of impairment losses on prepayment, deposits and other receivables of RMB73,899,000 (2019: RMB22,518,000, and 4) an increase of impairment losses on goodwill of RMB66,708,000 (2019: RMB91,000,000).

Finance cost

Finance cost mainly included interest charged from bank and other borrowings, corporate bonds and guaranteed notes and net foreign exchange differences on debts. The decrease in finance cost was mainly due to the net foreign exchange difference relating to debts which changed to gain of approximately RMB17,800,000 for the year ended 31 December 2020 from loss of RMB7,227,000 for the same period in 2019.

Loss attributable to owners of the Company

For the reasons above, the Group recorded net loss attributable to owners of the Company of RMB380,877,000 for the year ended 31 December 2020 compared to net loss of RMB166,516,000 for the corresponding period in 2019, representing an increase of loss of approximately 128.7%.

Goodwill

At 31 December 2020, before impairment testing, goodwill of RMB66,708,000 was allocated to the provision of environmentally intelligent technical products and services operations. Due to changes in market condition, the Group has revised its cash flow forecasts for these cash generating units. The goodwill allocated to the provision of environmentally intelligent technical products and services operations has therefore been reduced to zero recoverable amount through recognition of an impairment loss against goodwill of RMB66,708,000 during the year.

Equity investments at fair value through other comprehensive income

Equity investments at fair value through other comprehensive income included investment of RMB22,036,000, representing approximately 1.76% of equity interest of Sino Partner. Sino Partner principally engaged in the design, development, manufacturing and sales of high performance supercars under the brand "Apollo".

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Corporate bonds

The bonds issued will mature in 2 years from the respective dates of issuance and bear interest at 6% per annum payable annually. The effective interest rate is ranging from 10.00 % to 13.21%.

On 27 June 2017, the Company issued convertible bonds with a nominal value of USD4,000,000 (equivalent to HK$31,200,000), to Donghai Investment Fund Series SPC to raise capital for the Group. The initial conversion price of HK$1 for the above issuance of convertible bonds represents a premium of approximately 13.6% (to the closing price of HK$0.880).

These convertible bonds matured on 27 June 2019. The Company will repay all of the outstanding amount of the convertible bond in accordance with a new repayment schedule agreed by the bond holder. As the conversion rights has already expired, the outstanding amount of convertible bonds was transferred to corporate bonds in 2019. For further details, please refer the announcements of the Company dated 17 July 2019 and 18 July 2019.

Guaranteed notes

In January 2017 and June 2017, the Company issued guaranteed notes with a nominal value of USD10,000,000 (equivalent to approximately HK$78,000,000) and USD4,000,000 (equivalent to approximately HK$31,200,000), respectively. These guaranteed notes are guaranteed by Mr. Jiang. In addition, the occurrence of any of the following events, among others, shall constitute an event of default under the corresponding note instrument: (i) Mr. Jiang ceases to be the chairman of the Board; (ii) Mr. Jiang, in his personal capacity or through any entity controlled by him, ceases to, in aggregate own and control more than 30% of the issued shares of the Company; and (iii) all or any substantial part of the assets of the Mr. Jiang is condemned, seized or otherwise appropriated by any person acting under the authority of any national, regional or local government. For details, please refer to Company's announcements dated 18 January 2017, 10 February 2017, 15 June 2017, 27 June 2017 and 17 January 2019. All guaranteed notes have a maturity period of 2 years, with interest bearing at 11% per annum and are repayable semi-annually. The US$4,000,000 guaranteed note and US$10,000,000 guaranteed note have matured on 27 June 2019 and 17 July 2019, respectively. The Company will repay all of the outstanding amount of the guaranteed notes in accordance with a new repayment schedule agreed by the subscribers. For further details, please refer to the announcements of the Company dated 17 July 2019 and 18 July 2019.

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Liquidity and financial resources

As at 31 December 2020, the Group had current assets of approximately RMB255,646,000 (31 December 2019: RMB434,720,000) which comprised cash and cash equivalents amounted to approximately RMB21,652,000 (31 December 2019: RMB29,384,000). As at 31 December 2020, the Group had non-current liabilities and current liabilities amounted to approximately RMB119,903,000 and RMB577,529,000 (31 December 2019: RMB141,051,000 and RMB574,574,000), consisting mainly of payables, corporate bonds, guaranteed notes, bank and other borrowings arising in the normal course of operation. Accordingly, the current ratio, being the ratio of current assets to current liabilities, was around 0.4 as at 31 December 2020 (31 December 2019: 0.8).

The Group finances its operation primarily with the use of internally-generated cashflows and banking facilities.

Gearing ratio

The gearing ratio of the Group is calculated on the basis of an adjusted net debt-to-capital ratio. For this purpose, adjusted net debt is defined as total debt (which includes bank and other borrowings, corporate bonds, convertible bonds and guaranteed notes less cash at bank and on hand and restricted bank deposits. Capital comprises all components of equity. The gearing ratio was N/A as at 31 December 2020 (31 December 2019: approximately 198.2%).

Treasury policies

The Group has adopted a prudent financial management approach towards its treasury policies. The Group strives to reduce exposure to credit risk by performing ongoing credit assessments and evaluations of the financial status of its customers. To manage liquidity risk, the Board closely monitors the Group's liquidity position to ensure that the liquidity structure of the Group's assets, liabilities and other commitments can meet its funding requirements from time to time.

For the year ended 31 December 2020, the Group's bank loans were made in Renminbi carried at fixed rates.

Foreign exchange exposure

For the year ended 31 December 2020, the Group had corporate bonds and guaranteed notes which are denominated in foreign currencies and consequently we have foreign exchange risk exposure from translation of amount denominated in foreign currencies as at the report date. During the year ended 31 December 2020, the Group did not engage in any derivatives activities and did not commit to any financial instruments to hedge its exposure to foreign exchange risk.

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Capital structure

The shares of the Company were listed on Main Board of the Stock Exchange. The capital of the Company mainly comprises ordinary shares and capital reserves.

Capital commitments

Capital commitments contracted but not provided for in the financial statements as at 31 December 2020 are nil (31 December 2019: nil).

Dividend

The Board does not recommend the payment of dividend for the year ended 31 December 2020 (2019: Nil).

Information on employees

As at 31 December 2020, the Group had 150 employees (31 December 2019: 196), including the executive directors. Total staff costs (including directors' emoluments) were approximately RMB17,807,000 for the year ended 31 December 2020 as compared to approximately RMB60,893,000 for the year ended 31 December 2019. Remuneration is determined with reference to market norms and individual employees' performance, qualification and experience.

On top of basic salaries, bonus may be paid with reference to the Group's performance as well as individual's performance. Other staff benefits include contributions to Mandatory Provident Fund scheme in Hong Kong and various welfare plans including the provision of pension funds, medical insurance, unemployment insurance and other relevant insurance for employees who are employed by our Group pursuant to the PRC rules and regulations and the existing policy requirements of the local PRC authorities as well as share options.

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OTHER INFORMATION

PURCHASE, SALE OR REDEMPTION OF LISTED SECURITIES OF THE COMPANY

Neither the Company nor any of its subsidiaries purchased, sold or redeemed any of the Company's listed securities during the year ended 31 December 2020.

IMPORTANT EVENTS AFTER THE END OF THE REPORTING PERIOD

Arbitration against China Mobile

During the period from September 2018 to March 2021,,Hebei Changtong Communication Engineering Co. Ltd.（河北昌通通信工程有限公司 "Hebei Changtong"), a wholly- owned subsidiary of the Group, submitted several batches of applications for arbitration to the Shijiazhuang Arbitration Commission（石家莊仲裁委員會）against China Mobile Group Hebei Co., Ltd（. 中國移動通信集團河北有限公司,"China Mobile Hebei") for the repayment of long outstanding service fees and interests (the "Arbitrations").

As at the date of this announcement, Hebei Changtong has applied for the repayment of a total of approximately RMB324.66 million for the Arbitrations against China Mobile Hebei. As at the date of this announcement, the Shijiazhuang Arbitration Committee and the other arbitration commissions have ordered China Mobile Hebei to repay a total of approximately RMB132.12 million in respect of the Arbitrations. The remaining unawarded amount of service fees and interests would be subject to future decisions to be handed down by the Shijiazhuang Arbitration Committee and the other arbitration commissions.

For further details, please refer to the announcement of the Company dated 30 October 2020 in relation to the Arbitrations.

COMPETING INTERESTS

Save and except for interests in the Group, none of the directors and Mr. Jiang nor their respective associates (as defined under the Listing Rules) had any interest in any other companies as at 31 December 2020 which may, directly or indirectly, compete with the Group's business.

CODE OF CONDUCT REGARDING SECURITIES TRANSACTIONS BY DIRECTORS

The Company has adopted a code of conduct regarding securities transactions by directors on terms no less exacting than the required standard of dealings set out in Rule 5.48 to Rule

5.67 of the Rules Governing the Listing of Securities on the Growth Enterprise Market of the Stock Exchange of Hong Kong Limited (the "GEM Listing Rules") for the period where the Company's shares were listed on GEM. Since the Company's shares were successfully listed on Main Board of the Stock Exchange on 1 August 2014, the Group continues and will continue to ensure compliance with the corresponding provisions set out in Appendix 10 of the Listing Rules. Having made specific enquiries to all the directors, the Company was not aware of any non-compliance with the required standard of dealings and its code of conduct regarding securities transactions by directors throughout the year ended 31 December 2020.

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CORPORATE GOVERNANCE CODE

In the opinion of the directors, throughout the year ended 31 December 2020 the Company has complied with all the code provisions as set out in the Corporate Governance Code contained in Appendix 14 to the Listing Rules except Code Provision A.6.7.

Review of Unaudited Annual Results

For the reasons explained above under Note 1 on page 2 of this announcement, the unaudited annual results contained herein have not yet been agreed with the Company's auditors as required under Rule 13.49(2) of the Listing Rules. An announcement relating to the audited results will be made on or before 15 May 2021 when the auditing process has been completed in accordance with Hong Kong Standards on Auditing issued by Hong Kong Institute of Certified Public Accountants.

The audit committee of the Company has reviewed the unaudited annual results contained herein without disagreement.

Further Announcement

Following the completion of the auditing process, the Company will issue further announcement in relation to (1) the audited results for the year ended December 31, 2020 as agreed by the Company's auditors and the material differences (if any) as compared with the unaudited annual results contained herein, (2) if there are other material development in the completion of the auditing process, (3) the proposed date on which the forthcoming AGM will be held, and (4) the period during which the register of members of the Company will be closed in order to ascertain the eligibility of the Shareholders to attend and vote at the AGM.

Publication of Annual Report

The annual report of the Company will be published on the website of the Company and the website of Hong Kong Exchanges and Clearing Limited, and dispatched to the shareholders of the Company on or before 15 May 2021.

The financial information contained herein in respect of the annual results of the Group for the year ended 31 December 2020 has not been audited and has not been agreed with the auditors. Shareholders and potential investors of the Company are advised to exercise caution when dealing in the securities of the Company.

By order of the Board

China U-Ton Future Space Industrial Group Holdings Ltd.

Jiang Changqing

Chairman and Executive Director

• For identification purpose only

Hong Kong, 31 March 2021

As at the date of this announcement, the executive directors are Mr. Jiang Changqing, Mr. Zhao Feng, Ms. Ji Huifang, Ms. Liu Jianzhou, Mr. Chen Qizheng and Mr. Liu Zhen; the non-executive director is Mr. Ge Lingyue; the independent non-executive directors are Mr. Meng Fanlin, Mr. Wang Haiyu, Ms. Teng Xun and Ms. Wu Hanpu.

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