（於香港註冊成立的有限公司）（股份代號：420） 正面盈利預告 本公告乃由福田實業（集團）有限公司（「本公司」，及其附屬公司（統稱「本集團」）根據香港聯 合交易所有限公司證券上市規則（「上市規則」）第 13.09(1)條及香港法例第 571 章證券及期貨條例 第 XIVA 部項下之內幕消息條文而發出。 本公司董事（「董事」）會（「董事會」）謹此告知本公司股東（「股東」）及潛在投資者，經董事 會對本集團截至 2025 年 6 月 30 日止 6 個月之未經審核綜合管理賬目及目前可得的其他資料進行初 步評估後預期，本集團於有關期間錄得盈利明顯改善。本公司擁有人應佔盈利由 2024 年同期虧損 9.9 百萬港元，轉為 2025 年同期盈利 30.7 百萬港元，實現扭虧為盈；本集團期內盈利由 2024 年同期 4.2 百萬港元增至本期 35.8 百萬港元，增長顯著。 本集團業績改善主要歸因於： _______________________________________________________________________________________________ _________________ ...

格隆汇8月1日丨福田实业(00420.HK)宣布，公司将于2025年8月21日（星期四）举行董事会会议，藉以 （其中包括）批准公司及其附属公司截至2025年6月30日止6个月的中期业绩，以及考虑派发中期股息 （如有）。 ...

董事會會議召開日期 福田實業（集團）有限公司之董事會（分別為「本公司」、「董事」及「董事會」）謹此宣佈本公 司將於2025年8月21日（星期四）舉行董事會會議，藉以（其中包括）批准本公司及其附屬公司截至 2025年6月30日止6個月之中期業績，以及考慮派發中期股息（如有）。 香港交易及結算所有限公司及香港聯合交易所有限公司對本公告的內容概不負責，對其準確性或完整性亦不發表任何聲明，並明確表 示，概不就因本公告全部或任何部分內容產生或因依賴該等內容而引致的任何損失承擔任何責任。 （於香港註冊成立的有限公司）（股份代號：420） 於本通告日期，董事會有 5 名執行董事，即劉賢福先生（主席兼行政總裁）、李剛博士、邱恒達先生、 尹堅先生、及張正先生； 2 名非執行董事，即嚴震銘博士（非執行副主席）及周靜女士；及 4 名獨立非執行董 事，即伍國棟先生、應偉先生、王幹芝先生及林琳博士。 _______________________________________________________________________________________________ _______________________ ...

股份發行人及根據《上市規則》第十九B章上市的香港預託證券發行人的證券變動月報表 截至月份: 2025年7月31日 狀態: 新提交 致：香港交易及結算所有限公司 公司名稱: 福田實業（集團）有限公司 呈交日期: 2025年8月1日 I. 法定/註冊股本變動 不適用 備註： 本公司並無法定股本及其股本中並無股份面值。 FF301 第 1 頁 共 10 頁 v 1.1.1 III.已發行股份及/或庫存股份變動詳情 (A). 股份期權（根據發行人的股份期權計劃） 不適用 第 3 頁 共 10 頁 v 1.1.1 FF301 II. 已發行股份及/或庫存股份變動 | 1. 股份分類 | 普通股 | | 股份類別 | 不適用 | | 於香港聯交所上市 (註1) | 是 | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | | 證券代號 (如上市) | 00420 | 說明 | | | | | | | | | | 已發行股份（不包括庫存股份）數目 | | | 庫存股份數目 | | 已發行股份總數 | | | 上月底結存 | | | | 1,225,026,9 ...

Company Operations - Fountain Set Group operates 8 production facilities across China, Sri Lanka, and Indonesia, employing nearly 5,500 staff globally[3]. - The company has a strong global marketing presence with offices in 3 countries[3]. - The company has established trading offices in major cities including Hong Kong, Shanghai, and Ho Chi Minh City to support its sales operations[17]. - The company is committed to expanding its market reach through innovative product development and strategic partnerships[3]. - Future growth strategies may include further market expansion and potential acquisitions to enhance operational efficiency[3]. Financial Performance - Revenue for 2024 was HK$4,426.6 million, a slight decrease from HK$4,440.2 million in 2023, representing a decline of 0.3%[19]. - Profit attributable to owners of the Company dropped to HK$14.3 million in 2024 from HK$50.9 million in 2023, reflecting a decrease of 72.1%[19]. - Profit margin decreased to 0.3% in 2024 compared to 1.1% in 2023[19]. - Basic and diluted earnings per share fell to 1.2 HK cents in 2024 from 4.2 HK cents in 2023, a decline of 71.4%[19]. - Proposed final dividend per share decreased to 1.16 HK cents in 2024 from 3.00 HK cents in 2023, with a dividend payout ratio of 100%[19]. - Total assets decreased to HK$4,614.6 million in 2024 from HK$4,900.8 million in 2023, a decline of 5.8%[19]. - Net current assets decreased to HK$2,123.3 million in 2024 from HK$2,203.5 million in 2023, a decline of 3.6%[19]. - Capital expenditure increased significantly to HK$174.7 million in 2024 from HK$87.9 million in 2023, an increase of 98.4%[19]. - Return on equity decreased to 1.0% in 2024 from 2.0% in 2023[19]. - The Group achieved a core business profit of HK$14 million in 2024, recovering from a core business loss of approximately HK$208 million in 2023, excluding a one-off disposal gain of HK$259 million[72]. - The gross profit margin improved significantly from 7.3% in 2023 to 12.0% in 2024[72]. - The Group's profitability improved significantly in 2024 due to increased order volume from strategic clients and optimized production processes, leading to a noticeable decrease in unit production costs[118]. Sustainability and Certifications - The company received the Global Recycled Standard 4.0 (GRS 4.0) certification from Intertek Testing Services NA, Inc. and Tianxiang Testing Services Co., Ltd.[42]. - The company achieved the Organic Content Standard (OCS 3.0) certification from ECOCERT GREENLIFE S.A.S.[43]. - The company was awarded the Global Organic Textile Standard (GOTS 6.0) certification by ECOCERT GREENLIFE S.A.S.[44]. - The company holds multiple Oeko-Tex Standard 100 certificates issued by TESTEX AG, Swiss Textile Testing Institute, indicating compliance with safety and environmental standards[44]. - The company has received the Low-carbon Manufacturing Plan (Golden Label) certification from the World Wide Fund for Nature[53]. - The company is a certified partner in the Higg Index Facility Environmental Module, demonstrating commitment to sustainability practices[56]. - The company has been recognized as a Water-saving Benchmark Enterprise in Guangdong Province, highlighting its efficiency in water usage[53]. - The establishment of the "Sustainability Development and Enhancement Committee" in 2016 has driven the Group's sustainability objectives and goals[83]. - The 2024 ESG report will be exclusively uploaded on the official websites, reflecting the Group's commitment to sustainability and responsible practices[82]. - Continuous investment in advanced technology is planned to maintain high environmental standards[91]. - The project aims to phase out 28 remaining coal-fired heaters to significantly reduce harmful emissions, contributing to cleaner air[88]. - The adoption of natural gas as a cleaner alternative is expected to minimize carbon footprints and improve ecological conditions[90]. - The company emphasizes the importance of educational initiatives for staff to raise awareness and competence regarding environmental protection[93]. Market Dynamics and Challenges - The textile and apparel industry faced challenges such as sluggish global economic growth and escalating geopolitical risks, impacting overall demand and supply chain integration[117]. - Consumer demand in the apparel industry has shifted towards personalization, functionality, and value for money, with a preference for smaller batches and diverse product varieties[120]. - The textile and apparel industry faces challenges including supply chain restructuring and increased uncertainty in international trade dynamics[200]. - The Group is focusing on international investment projects to expand production capacity and mitigate geographical risks, aiming to optimize supply chain efficiency and reduce costs[198]. - The Group is committed to achieving strategic development goals aligned with China's 14th Five-Year Plan, emphasizing the need for transformation and upgrading in a competitive landscape[199]. Corporate Governance and Leadership - The founder and honorary chairman, Mr. HA Chung Fong, remains a substantial shareholder of the company[4]. - The leadership of the Board of Directors and all staff members were acknowledged for their contributions to the Group's recovery and improved performance[72]. - The Group maintained a consistently low debt ratio and robust cash flow, ensuring operational stability amidst market volatility[80]. - The Group is actively negotiating land resumption deals to adjust production capacity and stabilize operations in light of new market dynamics[125]. Employee and Workforce Management - The Group had approximately 5,500 full-time employees as of December 31, 2024, down from 5,800 in 2023, indicating a reduction in workforce[188].

Financial Performance - For the year ended December 31, 2024, the company's profit before income tax expense increased to HK$77.06 million, compared to a loss of HK$147.88 million in 2023 after excluding a one-time gain from land acquisition[5]. - Revenue for 2024 was HK$4,426.56 million, slightly down from HK$4,440.24 million in 2023, while gross profit rose significantly to HK$529.41 million from HK$321.99 million, resulting in a gross margin increase from 7.30% to 12.00%[6]. - The total comprehensive income for the year was HK$23.86 million, down from HK$63.71 million in 2023, primarily due to increased foreign exchange losses[8]. - Basic and diluted earnings per share for 2024 were HK$1.20, a decrease from HK$4.20 in 2023, which included a one-time gain[6]. - Earnings attributable to owners of the Company for 2024 decreased to HK$14,262,000 from HK$50,903,000 in 2023, representing a decline of approximately 72%[80]. - The Group's net profit attributable to shareholders for the year ended December 31, 2024, was approximately HK$14,262,000, a decrease of 72% from HK$50,903,000 in 2023, with a corresponding profit margin of 0.3% compared to 1.1% in 2023[142]. Dividends - The company plans to pay a final dividend of HK$1.16 per share, with a payout ratio of 100%, compared to HK$3.00 per share and a 71.43% payout ratio in 2023[5]. - A final dividend of HK1.16 cents per share has been proposed for the year ended 31 December 2024, with a payout ratio of 100%[184]. - The Group will also distribute a special dividend of HK4.34 cents per share in celebration of its 55th anniversary, pending shareholder approval[184]. - The company aims to maintain a similar payout ratio to provide substantial returns to shareholders in the coming years[189]. Cost Management - Selling and administrative expenses decreased from 13.00% to 11.60% of revenue, reflecting effective cost control measures[5]. - Finance costs decreased significantly from HK$26,258,000 in 2023 to HK$13,126,000 in 2024, indicating improved financial management[59]. - Overall cost of sales decreased by approximately HK$220,000,000, representing a reduction of 5%, from HK$4,118,246,000 in 2023 to HK$3,897,147,000 in 2024[123][122]. Assets and Liabilities - The company's cash and short-term bank deposits totaled HK$1,295.48 million as of December 31, 2024, compared to HK$1,379.00 million in 2023, with net cash per share increasing to HK$1.02 from HK$0.96[5]. - The company reported a decrease in bank borrowings due within one year to HK$48.80 million from HK$108.47 million in 2023, indicating improved liquidity management[10]. - Non-current liabilities decreased significantly from HK$266,882,000 in 2023 to HK$185,856,000 in 2024, representing a reduction of approximately 30.4%[11]. - The total assets less current liabilities stood at HK$3,641.63 million as of December 31, 2024, compared to HK$3,735.55 million in 2023[10]. - The Group's total assets amounted to approximately HK$4,614,618,000, down from HK$4,900,839,000 in 2023, indicating a decrease of about 5.8%[149]. Operational Efficiency - The Group's profitability improved in 2024 due to increased order volumes from strategic clients and optimized production processes, leading to a decrease in unit production costs[89]. - The Group implemented refined management and technological upgrades in production, contributing to improved operational efficiency[89]. - The Group's production capacity at Yancheng Fuhui Textiles Limited was stabilized, and fabric production capacity at Jiangyin Fuhui was proactively reduced in response to market dynamics[96]. - A comprehensive quality control system was instituted in fabric production, leading to significant customer acclaim and recognition, including awards from Victoria's Secret & Co. and NEXT brand[97]. Market Conditions - The textile and apparel sector faced declining factory prices, intensifying price competition amid evolving consumer demand for personalization and quality[91]. - The Group experienced a positive recovery in the US and Japan markets, with key clients actively replenishing inventories, contrasting with weaker domestic sales in China[90]. - The textile and apparel industry is facing challenges due to supply chain restructuring and increased tariffs, but opportunities arise from emerging markets and domestic economic recovery[166]. Future Outlook - The Group is focusing on international investment projects to expand production capacity and mitigate geographical risks, aiming to enhance its global footprint and operational resilience[164]. - The Group's long-term strategic plans aim to deliver superior returns and benefits for shareholders, customers, employees, and society[171]. - The Group plans to enhance its international investment projects in 2024 to expand knitted fabric production capacity and mitigate geographical risks[166]. Compliance and Governance - The independent auditor's report for both years was unqualified, indicating no significant issues with the financial statements[15]. - The company has established an audit committee comprising three independent non-executive directors to oversee financial reporting and risk management[193]. - The audit committee reviewed the audited consolidated final results and internal control systems for the year ended December 31, 2024[193].

Financial Performance - Revenue for the six months ended June 30, 2024, was HK$2,219,366,000, a slight increase from HK$2,193,867,000 in the same period of 2023, representing a growth of 1.2%[11] - Gross profit for the period was HK$244,814,000, compared to HK$171,339,000 in 2023, indicating a significant increase of 42.7%[11] - Profit for the period attributable to non-controlling interests was HK$14,149,000, a substantial increase from HK$7,080,000 in the previous year, reflecting an increase of 99.5%[11] - The company reported a profit before income tax expense of HK$25,833,000, compared to a loss of HK$43,136,000 in the same period last year, marking a turnaround[11] - The profit for the period ended June 30, 2024, was HK$4,243,000, a significant improvement from a loss of HK$74,527,000 in the same period of 2023[12] - Total comprehensive income for the period was HK$1,006,000, compared to a total comprehensive expense of HK$82,872,000 in the prior year[12] - The loss per share for the period was HK$0.8, an improvement from HK$6.7 in the previous year[11] - The loss attributable to owners of the Company for the six months ended 30 June 2024 was HK$9,906,000, a significant improvement compared to HK$81,607,000 for the same period in 2023, representing a reduction of approximately 87.87%[58] Expenses and Costs - Total administrative expenses decreased to HK$197,065,000 from HK$202,294,000, showing a reduction of 2.3%[11] - Finance costs were reduced to HK$8,014,000 from HK$13,711,000, representing a decrease of 41.5%[11] - Administrative and financing costs decreased by a total of 5.1% compared to the same period last year[94] - Total cost of sales decreased by HK$50 million, a 2.4% decline compared to the same period last year[94] - Distribution and selling expenses increased to approximately HK$53,494,000, representing 2.4% of total revenue, up from 1.7% in the same period last year[127] Assets and Liabilities - Current assets totaled HK$3,227,204,000, a decrease from HK$3,368,807,000 at the end of 2023[13] - Net current assets decreased to HK$2,132,293,000 from HK$2,203,516,000, a decline of approximately 3.2%[14] - Total equity attributable to owners of the Company was HK$3,219,097,000, down from HK$3,268,346,000[14] - The total assets less current liabilities amounted to HK$3,604,871,000, down from HK$3,735,548,000[14] - The Group's total assets as of June 30, 2024, were approximately HK$4,699,782,000, down from HK$4,900,839,000 as of December 31, 2023[140] Cash Flow and Financing - For the six months ended June 30, 2024, net cash used in operating activities was HK$62,541, compared to a net cash generated of HK$32,856 in the same period of 2023[18] - The company reported a net decrease in cash and cash equivalents of HK$263,453 for the six months ended June 30, 2024, compared to HK$110,136 in the prior year[18] - New bank borrowings raised during the period were HK$34,012, significantly lower than HK$172,357 in the same period of 2023[18] - The average effective interest rate on bank borrowings increased to 6.36% as of June 30, 2024, compared to 5.99% at the end of 2023[73] - Total repayments of bank borrowings amounted to HK$178,458,000, down 32.2% from HK$263,119,000 in the prior year[73] Market and Operational Insights - The Group's revenue and profit analysis is segmented by geographical areas, including Hong Kong, PRC, Taiwan, Korea, Sri Lanka, America, Europe, and Others[33] - The Group's operations are segmented into distinct geographical areas, with "Others" aggregating various locations including Bangladesh, Vietnam, Singapore, and Macau[33] - The Group has streamlined the production team at Jiangyin Fuhui to adapt to reduced production volume[32] - The Group implemented strategies to expand into new markets and customer segments, leading to a gradual recovery in demand[93] - The Group ceased fabric dyeing and finishing operations of Jiangyin Fuhui Textiles Limited while increasing capacity at other subsidiaries to enhance order allocation[94] Sustainability and Certifications - The company received multiple certifications in 1H2024, including U.S. Cotton Trust Protocol® membership for several subsidiaries, enhancing its sustainability credentials[104] - The Global Organic Textile Standard (GOTS) Version 6.0 certification was obtained in January 2024, indicating compliance with organic textile production standards[104] - The company achieved a two-star green factory award in January 2024, recognizing its commitment to environmental sustainability[106] - The company is focused on continuous improvement in sustainability practices, as evidenced by multiple certifications from recognized organizations[106] Economic Outlook - The global economic growth rate is projected to stabilize at 2.6% for the year 2024, with a significant slowdown expected in the second half of the year[115] - Economic growth in China is anticipated to slow down to 4.8% in 2024, down from 3.8% in 2023, due to weakened consumer confidence and investment prospects[115] - Nearly 60% of economies, representing over 80% of the global population, are expected to have growth rates lower than the average of the 2010s[115] Shareholder Information - As of June 30, 2024, COFCO Corporation held 485,092,000 shares, representing approximately 39.60% of the issued shares[155] - The Group has complied with all covenant ratios during the reporting periods, with no breaches reported as of June 30, 2024[74] - The financial year end for the company is December 31, 2024, with interim results to be announced on August 23, 2024[171]

[CONDENSED CONSOLIDATED FINANCIAL STATEMENTS](index=1&type=section&id=CONDENSED%20CONSOLIDATED%20FINANCIAL%20STATEMENTS) This section presents the Group's financial performance and position for H1 2024, highlighting a return to profitability and a strengthened balance sheet [CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME](index=1&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENT%20OF%20PROFIT%20OR%20LOSS%20AND%20OTHER%20COMPREHENSIVE%20INCOME) The Group achieved profitability in H1 2024 with a HKD 4.243 million profit, driven by a 42.9% gross profit increase and reduced finance costs Key Profit or Loss Data for H1 2024 (HKD thousands) | Metric | H1 2024 | H1 2023 | Year-on-year Change | | :--- | :--- | :--- | :--- | | **Revenue (HKD thousands)** | 2,219,366 | 2,193,867 | +1.2% | | **Gross Profit (HKD thousands)** | 244,814 | 171,339 | +42.9% | | **Profit/(Loss) before Income Tax (HKD thousands)** | 25,833 | (43,136) | Turned profitable | | **Profit/(Loss) for the Period (HKD thousands)** | 4,243 | (74,527) | Turned profitable | | **Loss Attributable to Owners of the Company (HKD thousands)** | (9,906) | (81,607) | Loss narrowed by 87.9% | | **Basic Loss Per Share (HK cents)** | (0.8) | (6.7) | Loss narrowed by 88.1% | [CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION](index=3&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENT%20OF%20FINANCIAL%20POSITION) As of June 30, 2024, the Group maintained a robust financial position with HKD 4.70 billion in total assets and significantly reduced bank borrowings Key Financial Position Data (HKD thousands) | Metric | June 30, 2024 | December 31, 2023 | Change | | :--- | :--- | :--- | :--- | | **Total Assets (HKD thousands)** | 4,699,782 | 4,900,839 | -4.1% | | **Total Liabilities (HKD thousands)** | 1,266,861 | 1,432,173 | -11.5% | | **Net Assets (HKD thousands)** | 3,432,921 | 3,468,666 | -1.0% | | **Bank Borrowings (HKD thousands)** | 55,323 | 199,557 | -72.3% | | **Bank Balances and Cash (HKD thousands)** | 702,096 | 1,005,127 | -30.1% | [NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS](index=5&type=section&id=NOTES%20TO%20THE%20CONDENSED%20CONSOLIDATED%20FINANCIAL%20STATEMENTS) This section details the accounting policies, segment information, dividend policies, loss per share, and changes in assets and liabilities [3. PRINCIPAL ACCOUNTING POLICIES](index=6&type=section&id=3.%20PRINCIPAL%20ACCOUNTING%20POLICIES) The condensed consolidated financial statements are prepared on a historical cost basis, with new HKFRS amendments having no significant impact - The Group adopted several HKFRS amendments, including those to HKFRS 16 and HKAS 1, with **no significant impact** on financial statements[9](index=9&type=chunk)[12](index=12&type=chunk) [6. REVENUE AND SEGMENT INFORMATION](index=9&type=section&id=6.%20REVENUE%20AND%20SEGMENT%20INFORMATION) Total revenue slightly increased by 1.2% to HKD 2.219 billion, with dyed fabric and yarn sales growing 3.2% and garment sales declining 9.1% Revenue by Business Segment (HKD thousands) | Business Segment | H1 2024 | H1 2023 | Year-on-year Change | | :--- | :--- | :--- | :--- | | **Manufacturing and Sales of Dyed Fabric and Yarn** | 1,893,885 | 1,835,782 | +3.2% | | **Manufacturing and Sales of Garments** | 325,481 | 358,085 | -9.1% | | **Total** | **2,219,366** | **2,193,867** | **+1.2%** | External Sales by Geographical Region (HKD thousands) | Region | H1 2024 | H1 2023 | | :--- | :--- | :--- | | Hong Kong | 357,146 | 326,894 | | China | 729,890 | 766,548 | | Taiwan | 71,144 | 94,997 | | South Korea | 128,083 | 129,954 | | Sri Lanka | 456,997 | 375,906 | | Americas | 103,163 | 123,455 | | Europe | 9,233 | 31,968 | | Other Regions | 363,710 | 344,145 | [10. DIVIDENDS](index=15&type=section&id=10.%20DIVIDENDS) The Board did not recommend an interim dividend for H1 2024, but a 2023 final dividend of HKD 0.03 per share was distributed - The Board decided **not to declare** an interim dividend for 2024 (H1 2023: nil)[32](index=32&type=chunk) - A **2023 final dividend of HKD 0.03 per share**, totaling approximately **HKD 36.751 million**, was approved and distributed on June 21, 2024[31](index=31&type=chunk)[32](index=32&type=chunk) [11. LOSS PER SHARE](index=16&type=section&id=11.%20LOSS%20PER%20SHARE) Basic and diluted loss per share attributable to owners significantly narrowed to **HKD 0.008** in H1 2024 due to reduced losses Loss Per Share Calculation | Metric | H1 2024 | H1 2023 | | :--- | :--- | :--- | | **Loss Attributable to Owners of the Company (HKD thousands)** | (9,906) | (81,607) | | **Weighted Average Number of Ordinary Shares** | 1,225,026,960 | 1,225,026,960 | | **Basic and Diluted Loss Per Share (HK cents)** | (0.8) | (6.7) | [12. MOVEMENTS IN PROPERTY, PLANT AND EQUIPMENT](index=17&type=section&id=12.%20MOVEMENTS%20IN%20PROPERTY%2C%20PLANT%20AND%20EQUIPMENT) The Group invested **HKD 59.342 million** in PPE for upgrades but recognized a **HKD 10.767 million** impairment loss on idle equipment - Capital expenditure for expanding and upgrading production facilities totaled **HKD 59.342 million** (H1 2023: HKD 42.638 million)[36](index=36&type=chunk) - An impairment loss of **HKD 10.767 million** was recognized on idle equipment due to capacity reduction at Jiangyin Fuhui factory[37](index=37&type=chunk)[38](index=38&type=chunk) [17. BANK BORROWINGS](index=21&type=section&id=17.%20BANK%20BORROWINGS) Bank borrowings significantly decreased to **HKD 55.32 million** by June 30, 2024, with all loans unsecured and covenant ratios met - The Group obtained **HKD 34.012 million** in new bank borrowings and repaid **HKD 178 million** during the period[50](index=50&type=chunk)[53](index=53&type=chunk) - Average effective annual interest rate for bank borrowings was **6.36%** (end of 2023: 5.99%), with all borrowings **unsecured**[50](index=50&type=chunk)[53](index=53&type=chunk)[92](index=92&type=chunk) - The Group **complied with all bank-required financial covenant ratios** during the reporting period[51](index=51&type=chunk) [MANAGEMENT DISCUSSION AND ANALYSIS](index=22&type=section&id=MANAGEMENT%20DISCUSSION%20AND%20ANALYSIS) This section provides an overview of the Group's H1 2024 business performance, future outlook, financial review, employee information, and corporate governance practices [BUSINESS REVIEW](index=22&type=section&id=BUSINESS%20REVIEW) Despite external challenges, the Group achieved profitability in H1 2024, driven by a 1.2% revenue increase, 14% sales volume growth, and improved gross margin - The Group achieved a **turnaround to profit before income tax expenses** through strategic adjustments amidst a complex external environment[57](index=57&type=chunk)[59](index=59&type=chunk) H1 2024 Performance Highlights | Metric | H1 2024 | H1 2023 | Change | | :--- | :--- | :--- | :--- | | **Total Revenue** | Approx. HKD 2.219 billion | Approx. HKD 2.194 billion | +1.2% | | **Total Fabric Sales Volume** | Not Applicable | Not Applicable | +14% | | **Gross Profit Margin** | 11.0% | 7.8% | +3.2 percentage points | | **Loss Attributable to Owners of the Company** | Approx. HKD 10 million | Approx. HKD 82 million | Loss significantly narrowed | - Key initiatives for improved performance included **ceasing Jiangyin Fuhui's dyeing and finishing operations**, enhancing capacity at Yancheng Fuhui and Dongguan Shatin Li Hai, and promoting lean production[58](index=58&type=chunk)[59](index=59&type=chunk) [OUTLOOK](index=30&type=section&id=OUTLOOK) The Group holds a cautiously optimistic outlook for H2 2024, expecting further loss reduction driven by secured orders and strategic initiatives - Global economic growth is projected to stabilize at **2.6%** in 2024, according to the World Bank, though challenges persist[75](index=75&type=chunk) - The Group maintains a **cautiously optimistic outlook** for H2 2024, expecting further loss narrowing due to substantial orders and effective cost control[76](index=76&type=chunk)[79](index=79&type=chunk) - Future strategic priorities include **technological innovation**, international market expansion, **production technology transformation** (informatization, automation, intelligence, greening), and enhanced lean management[76](index=76&type=chunk)[79](index=79&type=chunk) [FINANCIAL REVIEW](index=32&type=section&id=FINANCIAL%20REVIEW) The financial review highlights a 1.2% revenue increase, improved gross and EBITDA margins, and reduced bank borrowings in H1 2024 Key Financial Ratios | Ratio | H1 2024 | H1 2023 | | :--- | :--- | :--- | | **Gross Profit Margin (%)** | 11.0% | 7.8% | | **EBITDA Margin (%)** | 5.7% | 3.1% | | **Inventory Turnover Period (Days)** | 79 | 71 | | **Receivables Turnover Period (Days)** | 73 | 76 | | **Payables Turnover Period (Days)** | 62 | 48 | - Revenue increased by **1.2%**, driven by a **14.0% rise in fabric sales volume**, partially offset by an **8.7% decrease in average fabric selling price** due to product mix changes[84](index=84&type=chunk) - Finance costs decreased from **HKD 13.711 million to HKD 8.014 million**, reducing its proportion of revenue from **0.6% to 0.4%**[85](index=85&type=chunk) - As of June 30, 2024, bank balances and cash (including short-term deposits) totaled **HKD 1.114 billion**, with bank borrowings at **HKD 55.32 million**[87](index=87&type=chunk)[88](index=88&type=chunk) [EMPLOYEES AND REMUNERATION POLICIES](index=37&type=section&id=EMPLOYEES%20AND%20REMUNERATION%20POLICIES) The Group had approximately **5,700 full-time employees** as of June 30, 2024, a slight reduction due to production team streamlining and cost control - As of June 30, 2024, the Group had approximately **5,700 full-time employees**, a year-on-year decrease of about **100 individuals**[95](index=95&type=chunk) - To mitigate unfavorable market conditions, the Group has been **reducing production and streamlining its production team** at Jiangyin Fuhui Textile since late 2022 to control labor costs[95](index=95&type=chunk) [CORPORATE GOVERNANCE CODE](index=37&type=section&id=CORPORATE%20GOVERNANCE%20CODE) The company complied with the Corporate Governance Code, with the exception of the combined Chairman and CEO roles, which the Board believes enhances strategic planning - The company deviated from the Corporate Governance Code by having the **Chairman and Chief Executive Officer roles combined** and held by Mr Liu Xianfu[95](index=95&type=chunk) - The Board believes this arrangement facilitates **more efficient strategic planning and objective achievement**, and its appropriateness will be continuously reviewed[95](index=95&type=chunk)[96](index=96&type=chunk)

Financial Performance - Profit attributable to owners of the Company for 2023 was HK$3,268,346,000, a decrease of 8.1% compared to HK$3,560,238,000 in 2021[11]. - Revenue for the year ended December 31, 2023, was HK$4,440.2 million, a decrease of 26.7% from HK$6,053.6 million in 2022[91]. - Profit attributable to owners of the Company for 2023 was HK$50.9 million, compared to a loss of HK$115.5 million in 2022, marking a significant turnaround[91]. - Profit before income tax expense for 2023 was HK$111,128,000, a significant improvement from a loss of HK$20,210,000 in 2022[174]. - The profit margin for 2023 improved to 1.1%, compared to a negative margin of (1.9%) in 2022[91]. - Basic and diluted earnings per share for 2023 were 4.2 HK cents, recovering from a loss of (9.4) HK cents in 2022[91]. Assets and Liabilities - Total assets less current liabilities decreased to HK$3,735,548,000 in 2023 from HK$3,864,591,000 in 2022, reflecting a decline of 3.3%[11]. - Current assets slightly decreased to HK$3,368,807,000 in 2023, down from HK$3,375,223,000 in 2022, indicating a reduction of 0.2%[11]. - Non-current liabilities decreased significantly to HK$266,882,000 in 2023 from HK$440,824,000 in 2022, a reduction of 39.2%[11]. - Total equity for the Company was HK$3,468,666,000 in 2023, a slight increase from HK$3,423,767,000 in 2022, representing a growth of 1.3%[11]. - Total assets decreased to HK$4,900.8 million in 2023 from HK$5,046.8 million in 2022[75]. - Non-current bank borrowings significantly reduced to HK$91.1 million from HK$235.5 million year-over-year[75]. - The total bank borrowings decreased to HK$199.6 million in 2023 compared to HK$436.2 million in 2022[75]. Cash Flow and Financing Activities - Cash and cash equivalents as of 31 December 2023 were HK$1,379 million, a slight decrease from HK$1,394 million as of 31 December 2022[49]. - Net cash from operating activities decreased to HK$293,758,000 in 2023 from HK$905,634,000 in 2022, representing a decline of 67.6%[147]. - New bank borrowings raised totaled HK$252,796,000 in 2023, down from HK$1,193,538,000 in 2022, a decrease of 78.8%[147]. - Repayment of bank borrowings was HK$489,962,000 in 2023, compared to HK$1,084,881,000 in 2022, a reduction of 54.9%[147]. - Net cash used in financing activities increased to HK$309,903,000 in 2023 from HK$171,398,000 in 2022, an increase of 80.9%[147]. Operational Efficiency and Strategy - The Group faced significant challenges including a global economic slowdown and a decrease in average unit prices of exported textile products[34]. - The Group maintained a consistently low debt ratio and ample working capital, ensuring operational stability[49]. - The Group proactively adjusted production capacity, including voluntary redundancy payments to certain employees[34]. - The Group implemented a comprehensive quality control system in fabric production, enhancing tracking mechanisms and standardizing operational processes, which led to improved production standards and customer praise[160]. - The Group strengthened centralized procurement, optimizing supplier management and evaluation, which helped reduce procurement costs by expelling unqualified suppliers and directly procuring from resource owners[162]. Market Presence and Innovation - The Company has received multiple certifications, including the Global Recycled Standard 4.0 and Organic Content Standard 3.0, enhancing its sustainability credentials[13][24]. - The Company continues to focus on expanding its market presence and enhancing product quality through various certifications and partnerships[24]. - The Company is recognized for its commitment to innovation, receiving multiple awards for excellence in supply and sustainability[44][62]. - The Group's strategy includes collaboration with brands and suppliers to develop innovative fabrics and garments for consumers worldwide[35]. - The Company emphasizes research and development, collaborating with brands to innovate fabric and garment products[84]. Inventory and Receivables Management - The average turnover period for trade and bills receivables in 2023 was 76 days, compared to 69 days in 2022[37]. - The inventory turnover period increased to 69 days in 2023 from 62 days in 2022[75]. - The decrease in inventories was HK$143,956,000 in 2023, down from HK$775,744,000 in 2022, indicating a reduction of about 81.5%[174]. - The decrease in trade and bills receivables was HK$127,726,000 in 2023, compared to HK$279,543,000 in 2022, reflecting a decline of approximately 54.3%[174]. Audit and Compliance - The impairment assessment of property, plant, and equipment remains a key focus area due to its significance in financial reporting[125]. - The impairment assessment of property, plant, and equipment, investment properties, and right-of-use assets was identified as a key audit matter due to the significance of their carrying values and the critical assumptions used in the impairment evaluation[127]. - The independent auditor found that the key assumptions and inputs used in the impairment assessment were supportable by available evidence[130]. - The company is required to allocate 10% of its annual profit to statutory reserves before distributing any profits, as per Chinese regulations[145].

Financial Performance - For the year ended December 31, 2023, the company reported a revenue of HK$4,440,235, an increase from HK$4,118,246 in the previous year, representing a growth of approximately 7.8%[3] - The gross profit for the year was HK$321,989, compared to HK$577,817 in the previous year, indicating a decline of about 44.8%[3] - Profit before income tax expense was HK$111,128, a significant recovery from a loss of HK$20,210 in the previous year[3] - The profit for the year attributable to owners of the company was HK$67,844, a turnaround from a loss of HK$93,164 in the previous year[3] - Total comprehensive income for the year attributable to owners was HK$63,714, compared to a loss of HK$128,342 in the previous year[11] - The company’s net assets increased to HK$3,468,666 from HK$3,423,767, reflecting a growth of approximately 1.3%[13] - The finance costs for the year were HK$26,258, up from HK$21,408 in the previous year, indicating an increase of approximately 22.5%[3] - The Group's effective tax expense for 2023 was HK$43,284,000, down from HK$72,954,000 in 2022, indicating a decrease of about 40%[73] - The Group reported a net exchange loss of HK$1,543,000 in 2023, a significant improvement from a loss of HK$6,223,000 in 2022[77] - The gain on disposal of property, plant, and equipment was HK$9,600,000 in 2023, compared to HK$1,467,000 in 2022[77] - The reversal of impairment loss recognized on trade and bills receivables amounted to HK$259,011,000 in 2023, with no such amount in 2022[77] - The total other gains and losses for 2023 were HK$277,529,000, a substantial increase from HK$1,681,000 in 2022[77] - The Group's earnings attributable to owners for 2023 were HK$50,903,000, recovering from a loss of HK$115,532,000 in 2022[89] - Profit attributable to owners of the Company was HK$50,903,000 in 2023, a significant recovery from a loss of HK$115,532,000 in 2022[64] Revenue and Sales - For the year ended 31 December 2023, revenue from the production and sales of dyed fabrics and yarns was HK$4,440,235, a decrease from HK$6,053,645 in 2022, representing a decline of approximately 26.6%[44] - The Group's revenue for the year ended December 31, 2023, was HK$4,440,235,000, a decrease of 26.7% compared to HK$6,053,645,000 in 2022[100] - The core business of manufacturing and selling dyed fabrics and yarns generated revenue of approximately HK$3,639,699,000, accounting for 82.0% of total revenue, down from 85.1% in 2022[147] - Revenue from the production and sales of dyed fabrics and yarns was approximately HK$3,639,699,000, accounting for 82.0% of total revenue, down from 85.1% in 2022[168] - The Group's revenue decreased by 26.7% year-on-year, primarily due to a 22.9% decline in fabric sales volume[169] Costs and Expenses - The Group's cost of sales for 2023 was HK$4,118,246,000, a decrease from HK$5,475,828,000 in 2022, reflecting a reduction of approximately 24.8%[56] - The overall cost of sales for the year was approximately HK$4,118,246,000, down from HK$5,475,828,000 in 2022, resulting in a gross profit margin of 7.3%, compared to 9.5% in 2022[170] - Employee costs, including directors' emoluments, decreased to HK$691,167,000 in 2023 from HK$848,355,000 in 2022, a reduction of approximately 18.5%[56] - The Group's finance costs for 2023 were approximately HK$26,258,000, representing 0.6% of total revenue, compared to 0.4% in 2022[150] - Research and development costs decreased slightly to HK$56,659,000 in 2023 from HK$59,115,000 in 2022[56] Assets and Liabilities - Trade and bills receivables as of 31 December 2023 were HK$808,091, down from HK$928,721 in 2022, indicating a decrease of about 12.9%[45] - Trade receivables decreased to HK$720,569,000 from HK$797,805,000 year-on-year, while bills receivables also fell to HK$122,661,000 from HK$183,025,000[118] - The total inventories decreased to HK$783,908,000 in 2023 from HK$929,526,000 in 2022[92] - Bills payables were HK$1,103,000 as of December 31, 2023, significantly reduced from HK$19,200,000 in 2022[95] - Trade payables increased to HK$651,571,000 from HK$491,299,000, with trade payables within 1 month rising significantly to HK$430,215,000 from HK$260,063,000[120] - As of 31 December 2023, the Group's total assets were approximately HK$4,900,839,000, down from HK$5,046,765,000 in 2022[151] - The Group's inventories as of 31 December 2023 amounted to approximately HK$783,908,000, with an inventory turnover period of 69 days, an increase of 7 days compared to 62 days in 2022[150] Strategic Initiatives - The company is focusing on expanding its market presence and enhancing product offerings, although specific new products and technologies were not detailed in the report[3] - The Group aims to transform from a fabric manufacturing-oriented enterprise to a balanced fabric-to-garment integrated product and technology R&D service-oriented enterprise[183] - The Group plans to enhance product quality and competitiveness, focusing on cotton knitted fabric while addressing weaknesses in synthetic fiber fabrics[186] - The Group will prioritize developing emerging markets and domestic mid-to-high-end markets, targeting renowned international and domestic brand customers[187] - The Group is committed to improving operational efficiency and addressing challenges related to orders, layout, costs, and quality to achieve better returns for stakeholders[188] - The Group proactively adjusted production capacity and order allocation in response to the restructuring of the global textile and apparel supply chain[102] - The Group has strengthened its R&D capabilities for new fiber and functional fabric products to improve customer service levels[160] Dividends and Shareholder Information - The final dividend recommended is HK$3.00 cents per share, with a payout ratio of 71.43%, amounting to approximately HK$36,751,000[100] - The final dividend for 2023 is subject to shareholder approval at the upcoming annual general meeting[100] - The Board has proposed a final dividend to shareholders, subject to approval at the AGM, to be paid on or about 16 July 2024[194] - The Register of Members will be closed from 18 June 2024 to 21 June 2024 for the AGM, during which no share transfers will be registered[197] Governance and Compliance - The Audit Committee, consisting of three independent non-executive directors, has reviewed the Group's audited financial results for the year ended 31 December 2023[198] - The Group's segment profit does not include central administration costs and other expenses, which are essential for resource allocation and performance assessment[42] - The Group has adopted HKFRS 17 for insurance contracts, effective from 1 January 2023, but it has not materially impacted financial performance[37] - The amendments to HKFRSs had no impact on the consolidated financial statements of the Group, ensuring consistency in financial reporting[31] - The Group's financial performance was not materially impacted by the adoption of new and amended HKFRSs, but it did affect the disclosures of accounting policies[30] - The Group aims to enhance overall strategy planning by having the same individual serve as both Chairman and CEO, which is a deviation from the CG Code[193]