ANNUAL REPORT 2024 39 AND ANALYSIS MANAGEMENT DISCUSSION ANTICIPATED OR KNOWN RISKS Competition Risk and Ability to Secure New Projects The Group has been thriving in the information and communication technology (“ICT”) solution and e-government services industry given our position as one of the leading security-based ICT solution providers. Our contract-driven revenue model compels us to excel in competitive bidding processes due to the ongoing competition. To address this challenge, we have strategically cultivated core competencies that enable world-class integrated solutions and exceptional service at competitive rates. This approach consistently delivers superior value for our customers, fuels the expansion of our portfolio and increases market share. Datasonic further solidifies our industry position through relentless focus on human capital development and innovation-driven R&D. Customer Concentration Risk While our reliance on government contracts creates the potential risk of revenue loss, Datasonic mitigates this through a proven track record of timely delivery, extensive technical expertise and a deep commitment to customer satisfaction. This focus on client needs has given us a competitive edge, leading to strong customer retention. Additionally, we proactively pursue new business opportunities aligned with our core competencies, particularly in the expanding field of digital transformation and cybersecurity, to further diversify and strengthen our revenue streams. Supply Chain Disruptions Like many other businesses, we are exposed to the risk of potential supply chain disruptions that could result in operational interruptions. To mitigate this risk, the Group has implemented diligent measures where we closely monitor the situation and maintain close communication with our suppliers to assess the likelihood of disruptions. Our long-standing relationships with key suppliers also prove advantageous in managing this risk. Another proactive measures we undertook is to bring the manufacturing of polycarbonate data page in-house, which we successfully developed in FY2023. This will provide us a better control of the quality as well as the supply. At the same time, we maintain sufficient levels of raw materials and inventory as part of our comprehensive risk management strategy.
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