Financial Performance - Total revenue for the fiscal year ended March 31, 2022, was HKD 1,177,271,000, a decrease of 2.5% compared to HKD 1,201,784,000 in the previous year[9]. - Gross profit for the same period was HKD 182,259,000, representing a gross margin of approximately 15.5%[9]. - The company reported a net loss of HKD 39,882,000 for the fiscal year, compared to a profit of HKD 28,657,000 in the previous year[9]. - The group recorded a net loss of approximately HKD 39,900,000 for the year, compared to a net profit of HKD 28,700,000 in the previous year[33]. - The gross profit for the year decreased to approximately HKD 182,300,000, down from HKD 226,400,000 in the previous year, resulting in a gross margin of about 15.5% compared to 18.8% in the previous year[34][41]. - Total sales and administrative expenses rose slightly to approximately HKD 89,800,000 from HKD 81,000,000, while overall administrative expenses decreased to about HKD 120,200,000 from HKD 124,600,000[48]. - The company recorded a net loss margin of about 3.4%[54]. - The company's financial costs increased to approximately HKD 20,500,000 from HKD 11,500,000, primarily due to new lease liabilities and bank borrowings[50]. Assets and Liabilities - Non-current assets decreased to HKD 746,089,000 from HKD 813,931,000 in the previous year, indicating a decline of approximately 8.3%[10]. - Current assets also decreased to HKD 553,175,000 from HKD 678,788,000, a decline of about 18.5%[10]. - Total assets for the company were HKD 1,299,264,000, down from HKD 1,492,719,000, reflecting a decrease of approximately 12.9%[10]. - Total liabilities decreased to HKD 660,809,000 from HKD 839,314,000, a reduction of about 21.3%[10]. - The company's equity attributable to owners was HKD 638,455,000, showing a slight decrease from HKD 658,467,000 in the previous year[10]. - The current ratio improved to 1.33 from 1.15, mainly due to a reduction in current liabilities[55]. - The debt-to-asset ratio decreased to approximately 17.0% from 19.4% year-over-year, indicating improved financial stability[68]. - The total bank borrowings as of March 31, 2022, amounted to approximately HKD 221.5 million, down from HKD 290.3 million in the previous year[64]. - The group maintained a cash balance of approximately HKD 122.8 million as of March 31, 2022, compared to HKD 195.5 million a year earlier[64]. Market and Operational Strategies - The company plans to focus on new product development and market expansion strategies in the upcoming fiscal year[12]. - The company aims to expand its market share and strengthen its leading position in the Chinese paper packaging industry by reallocating resources according to its business expansion goals[19]. - The company is committed to enhancing its corporate social responsibility and ensuring compliance with environmental regulations in China[16]. - The company will continue to implement effective internal controls and risk management to maximize long-term returns for shareholders[19]. - The company is expanding its market presence in Southeast Asia, targeting a 25% market share in the region by 2025[164]. - The company is exploring potential acquisitions to enhance its supply chain efficiency, with a budget of $100 million allocated for this purpose[164]. - A strategic partnership with a leading logistics firm is expected to reduce operational costs by 15% over the next two years[164]. Governance and Compliance - The board of directors is committed to maintaining appropriate corporate governance practices to safeguard shareholder interests and ensure compliance with the latest statutory regulations and professional standards[83]. - The company has adopted the standard code for securities trading by directors as outlined in the Listing Rules Appendix 10, ensuring compliance throughout the year[84]. - The board consists of six members, including three executive directors and three independent non-executive directors, ensuring a strong independent element for effective decision-making[88]. - The company has established various committees, including the Audit Committee, Remuneration Committee, and Nomination Committee, to delegate different responsibilities and enhance governance[92]. - The company has implemented a risk management system to identify, assess, and manage risks related to its business operations, with no significant risks identified during the annual assessment[133]. - The internal control system is based on the COSO 2013 framework, ensuring operational effectiveness, reliability of financial reporting, and compliance with applicable laws[134]. - The company has established a diversity policy for its board members, focusing on various measurable targets such as gender, age, and professional experience[116]. Shareholder Engagement - The company encourages open communication with shareholders and provides updates on business developments through various communication tools[149]. - The annual general meeting is scheduled for September 5, 2022, allowing shareholders to engage with the board[149]. - Shareholders can propose suggestions for the annual general meeting by submitting written notice to the company[157]. - The company emphasizes transparency and values shareholder feedback to enhance investor relations[159].

Revenue and Growth - The group's revenue increased from approximately HKD 543.4 million in the same period of 2020 to approximately HKD 630.1 million in 2021, reflecting a growth of about 16%[14]. - The overall retail sales in China increased by 16.4% year-on-year to approximately RMB 3.18 trillion in the first three quarters of 2021[11]. - Revenue from product sales for the six months ended September 30, 2021, was HKD 630,051 thousand, compared to HKD 543,391 thousand for the same period in 2020, representing an increase of 16%[90]. Production and Capacity - The new factory in Dongguan achieved a planned annual production capacity of RMB 200 million, generating revenue of approximately HKD 131.7 million during the period[14]. - The second factory in Dongguan commenced production in July 2021, equipped with advanced automation technology to enhance production efficiency[14]. - The Dongguan plant achieved a revenue contribution of approximately HKD 131,700,000, reaching its maximum annual production capacity of RMB 200 million[25]. - The group plans to enhance production efficiency with the commencement of operations at its Dongguan plants, aiming to meet the increasing demand and strengthen operational capabilities[60]. Financial Performance - The gross profit decreased to approximately HKD 82,500,000, compared to HKD 124,000,000 in the same period last year, reflecting a decline of about 33.8%[30]. - The company recorded a net loss of approximately HKD 9,100,000, compared to a net profit of HKD 34,100,000 in the same period last year[19]. - The total cost of goods sold for the period was HKD 547,530,000, an increase from HKD 419,361,000 in the previous year, representing a year-over-year increase of approximately 30.6%[150]. - The net loss for the period was HKD 9,113 thousand, compared to a profit of HKD 34,092 thousand in the same period last year, reflecting a significant downturn[90]. - The company reported a loss attributable to owners of HKD 8,216,000 for the six months ended September 30, 2021, compared to a profit of HKD 34,127,000 for the same period in 2020[153]. Market and Economic Conditions - The e-commerce sector in China saw a significant increase, with over 60% of consumers shopping online weekly or daily, driving logistics demand[13]. - The total volume of express delivery services in China reached 76.77 billion items in the first three quarters of 2021, representing a year-on-year growth of 36.7%[13]. - The Chinese economy grew by 4.9% year-on-year in Q3 2021, down from 7.9% in Q2 2021, indicating a slowdown due to various factors including energy consumption restrictions[12]. Cost and Expenses - The company faced increased procurement costs due to supply chain disruptions, impacting the ability to source raw materials cost-effectively[30]. - Sales expenses increased to approximately HKD 46,600,000, up from approximately HKD 32,700,000 in the same period last year, driven by the operational launch of two factories in Dongguan[37]. - Other operating expenses surged to approximately HKD 70,200,000, compared to approximately HKD 300,000 in the same period last year, primarily due to one-time costs related to lease terminations[38]. - Financial costs increased to approximately HKD 4,100,000 for bank loan interest, up from approximately HKD 3,700,000 in the same period last year[39]. Corporate Governance and Compliance - The company has complied with the applicable code provisions of the Corporate Governance Code during the period[77]. - The board is committed to maintaining appropriate corporate governance practices to safeguard shareholder interests[76]. - The audit committee consists of three independent non-executive directors, ensuring oversight of financial reporting[80]. Employee and Compensation - As of September 30, 2021, the total employee compensation, including directors' remuneration, was approximately HKD 103.1 million, compared to HKD 73.9 million in the same period last year, reflecting an increase of about 39.5%[57]. - The group employed a total of 1,184 employees as of September 30, 2021, down from 1,469 employees as of March 31, 2021, indicating a reduction of approximately 19.5%[57]. Tax and Provisions - The effective corporate tax rate for the company's subsidiaries in China is 15% due to their qualification as high-tech enterprises[143]. - The company has a tax provision of HKD 21,717,000 related to estimated assessments from the Hong Kong tax authority[146]. - The company’s subsidiaries classified as small and micro enterprises benefit from reduced tax rates under specific conditions, with a maximum tax rate of 20% applicable[144]. Shareholder Information - As of September 30, 2021, Perfect Group Version Limited holds 233,000,000 shares, representing 67.76% of the issued shares[70]. - Public shareholders hold at least 25% of the company's issued shares as of September 30, 2021[87]. - The company's issued and paid-up share capital remained at HKD 20,000,000 as of September 30, 2021, with 2,000,000 shares[167]. Cash Flow and Investments - The net cash generated from operating activities was 11,005 million HKD, compared to 52,730 million HKD in the previous period[101]. - The net cash used in investing activities was (27,485) million HKD, a significant improvement from (44,302) million HKD in the prior period[101]. - The company purchased property, plant, and equipment amounting to approximately HKD 18,141,000 during the reporting period[156].

Financial Performance - For the fiscal year ending March 31, 2021, the company reported total revenue of HKD 1,201,784,000, with a gross profit of HKD 226,392,000, reflecting a gross margin of approximately 18.8%[10] - The company's net profit for the year was HKD 28,657,000, compared to HKD 12,040,000 in the previous year, indicating a year-over-year increase of 138.5%[10] - Operating profit for the year was HKD 47,896,000, with financial costs of HKD 19,362,000[10] - The company reported other income of HKD 9,550,000, which includes various operational gains[10] - The company recorded a revenue contribution of approximately RMB 117,200,000 from the Dongguan factory within just seven months of operation[15] - The company achieved a net profit of approximately HKD 28,700,000, a significant increase from HKD 12,000,000 in the previous year[16] - The company recorded a fair value gain from investment properties of approximately HKD 2,100,000, compared to a loss of HKD 16,400,000 in the previous year[16] - The company's revenue increased from approximately HKD 1,010,700,000 in the previous year to about HKD 1,201,800,000, representing a growth of approximately 18.9%[37] - Gross profit rose to approximately HKD 226,400,000, up from about HKD 203,400,000 in the previous year, marking an increase of about 11.3%[43] - Total net profit increased to approximately HKD 28,700,000 from HKD 12,000,000 in the previous year, resulting in a net profit margin of about 2.4% compared to 1.2% last year[52] Assets and Liabilities - Total assets increased to HKD 1,492,719,000 in 2021, up from HKD 1,149,198,000 in 2020, representing a growth of 30%[11] - The company's total liabilities amounted to HKD 839,314,000, resulting in a net asset value of HKD 653,405,000 for the year[11] - The company's current ratio as of March 31, 2021, was approximately 1.15, compared to 1.18 the previous year[56] - Total bank and cash balance was approximately HKD 195,500,000, down from HKD 200,700,000 the previous year, with unutilized bank financing of about HKD 550,500,000[61] - Accounts receivable increased to approximately HKD 320,500,000 from HKD 219,500,000, with turnover days rising to 82 days from 78 days[58] - Inventory increased to approximately HKD 119,400,000 from HKD 93,400,000, with turnover days reduced to 40 days from 43 days[59] - As of March 31, 2021, the company's debt-to-asset ratio decreased to approximately 19.4% from 22.7% a year earlier, supporting sustainable business growth and potential future investments[65] Market Expansion and Growth Strategy - The company plans to expand its market presence and invest in new product development to drive future growth[14] - The management expressed confidence in achieving a revenue growth target of 10% for the next fiscal year[14] - The company plans to enhance production capacity through the operation of the Dongguan factory and expects to start operations at a second factory in Dongguan in the second half of 2021[20] - The demand for quality paper packaging products is expected to rise due to the rapid growth of e-commerce retail in China[20] - The company has identified potential acquisition targets to further strengthen its market position[14] - The anticipated annual production capacity of the Dongguan plant is expected to be RMB 200 million, which will help meet the rising demand in the region and expand market share in the corrugated paper packaging industry[75] - The company aims to achieve sustainable sales growth by further developing its domestic sales strategy in China, despite the ongoing impact of the pandemic on global economic conditions[75] Corporate Governance - The company is committed to maintaining high standards of corporate governance and compliance with environmental regulations[19] - The board of directors held a total of four meetings during the year to review operational performance and market conditions, approving overall strategies and annual/interim results[94] - All independent non-executive directors confirmed their independence according to the listing rules, ensuring a strong independent element within the board[90] - The company has established various committees, including the audit committee and remuneration committee, to delegate different responsibilities for effective governance[90] - The company emphasizes a diverse board composition, considering factors such as gender, age, educational background, and professional experience[116] Employee Compensation and Contributions - The company provided an additional one-time housing fund contribution of approximately HKD 17,600,000 to all employees in China during the year[16] - The total employee compensation, including directors' remuneration, amounted to approximately HKD 192.3 million, up from HKD 144.7 million in the previous year, with a total of 1,469 employees as of March 31, 2021[74] Risk Management - The company has implemented a risk management system to identify, assess, and manage risks associated with its business operations[130] - No significant risks were identified during the risk assessment conducted in the year[132] - The internal control system complies with the COSO 2013 framework, ensuring operational effectiveness, reliable financial reporting, and compliance with applicable laws[133] Shareholder Relations - The company encourages shareholders to attend annual general meetings to provide feedback and engage with the board[147] - The annual general meeting is scheduled for September 6, 2021, with notices sent to shareholders at least 20 business days prior[147] - The board emphasizes fair and equal treatment of all shareholders and has established a communication policy to provide timely updates on business matters[150] - Shareholders can request a special general meeting if they hold at least 10% of the paid-up capital[150] Capital Expenditures and Investments - The company acquired properties, plants, and equipment for approximately HKD 51,500,000, primarily for regular upgrades and improvements to production facilities[187] - The company paid approximately HKD 14,100,000 as deposits for the acquisition of properties, plants, and equipment, compared to HKD 2,800,000 in the previous year[189] - The company has no significant investment or capital asset plans as of March 31, 2021, indicating a cautious approach to capital allocation[77]

Financial Performance - The group's revenue increased by approximately 1.8% to about HKD 543.4 million for the period, compared to approximately HKD 533.9 million in the same period last year[11]. - Gross profit rose to approximately HKD 124,000,000, with a stable gross margin of about 22.8%, compared to HKD 122,200,000 and 22.9% in the previous year[22]. - Net profit increased to approximately HKD 34,100,000, with a net profit margin of about 6.3%, up from HKD 26,300,000 and 4.9% in the same period last year[15]. - Revenue for the six months ended September 30, 2020, was HKD 543,391,000, a slight increase from HKD 533,875,000 in the same period of 2019, representing a growth of 1.9%[82]. - Gross profit for the same period was HKD 124,030,000, compared to HKD 122,228,000 in 2019, indicating a growth of 1.5%[82]. - Profit for the period rose to HKD 34,092,000, compared to HKD 26,325,000 in 2019, marking an increase of 29.5%[82]. - Total comprehensive income for the period was HKD 54,055,000, significantly higher than HKD 1,192,000 in the previous year[82]. - Basic and diluted earnings per share increased to HKD 9.81, up from HKD 7.48, representing a growth of 31.1%[82]. Revenue Sources - Revenue from Guangdong operations increased to approximately HKD 452,100,000, compared to HKD 434,800,000 in the previous year, with a contribution of about HKD 19,500,000 from the new Dongguan plant[19]. - Revenue from the Fujian plant decreased to approximately HKD 88,500,000 from HKD 96,600,000 in the previous year due to a decline in average selling prices[20]. - Revenue from the corrugated products segment was HKD 477,729,000, while the revenue from the flexo-printed corrugated products segment was HKD 105,294,000, contributing to a total revenue of HKD 543,391,000[102]. - The property leasing segment generated rental income of HKD 2,812,000 during the period[102]. Operational Efficiency - The group's production facilities are nearing maximum utilization, prompting the need for expansion to meet growing demand[12]. - The group has adapted to emerging market demands by enhancing its packaging products and services[9]. - The group continues to maintain high standards of quality control and environmentally friendly operations, strengthening its reputation in the Chinese paper packaging industry[12]. - The company reported a significant increase in cash flow from operating activities, indicating improved operational efficiency[91]. Market Strategy - The group aims to expand its customer base in the domestic market amid the competitive environment in the Chinese paper packaging industry[11]. - The group plans to expand its market share in China to offset the decline in overseas market export sales due to the slow recovery of retail sales in foreign markets[48]. - The ongoing COVID-19 pandemic continues to pose challenges to the global business environment, impacting consumer behavior towards online shopping[48]. Financial Position - As of September 30, 2020, accounts receivable increased to approximately HKD 276.2 million from HKD 219.5 million as of March 31, 2020, resulting in an increase in turnover days from 78 to 83 days[31]. - Accounts payable rose to approximately HKD 200.2 million from HKD 105.3 million, with turnover days extending from 49 to 67 days[34]. - Inventory increased to approximately HKD 147 million from HKD 93.4 million, leading to an increase in inventory turnover days from 43 to 52 days[34]. - The current ratio improved slightly to 1.19 as of September 30, 2020, compared to 1.18 as of March 31, 2020[35]. - The debt-to-asset ratio decreased to 18.7% from 22.7%, indicating improved financial stability[37]. - The group’s cash and bank balance increased to approximately HKD 187 million from HKD 176.7 million, excluding pledged deposits[35]. Investments and Assets - The group acquired assets for approximately RMB 21.9 million to enhance production capacity, effective September 1, 2020[39]. - The group confirmed a lease agreement valued at approximately RMB 105.6 million for a property to be used as a production facility and employee dormitory[39]. - Non-current assets totaled HKD 729,190,000 as of September 30, 2020, compared to HKD 585,323,000 as of March 31, 2020, indicating a growth of 24.6%[84]. - Total assets for the corrugated products segment were HKD 946,002,000, while total liabilities stood at HKD 358,020,000[109]. Shareholder Information - As of September 30, 2020, Mr. Zhuang Jinzhou holds 233 million shares, representing 67.76% of the issued shares, through a controlled corporation[51]. - Perfect Group holds 233,000,000 shares, representing 67.76% of the total shares[57]. - The group has a weighted average number of ordinary shares of 347,863,781 for the six months ended September 30, 2020, down from 353,395,167 in the same period of the previous year[131]. Corporate Governance - The company has complied with the corporate governance code as per the listing rules[65]. - The audit committee consists of three independent non-executive directors, ensuring oversight of financial reporting[69]. - The company appointed a new financial director, replacing the previous one on September 30, 2020[77]. Taxation and Compliance - The group has no tax provisions as of September 30, 2020, and will continue discussions with the Hong Kong tax authority regarding estimated assessments[46]. - The company has not incurred any tax liabilities in other jurisdictions due to the offshore status of its subsidiaries in Macau[123]. - The effective tax rate for Hong Kong profits tax was maintained at 16.5% for the current period[120]. - The company’s subsidiaries in China benefited from a reduced corporate income tax rate of 15% due to their qualification as high-tech enterprises[121].

Financial Performance - For the fiscal year ending March 31, 2020, the company reported total revenue of HKD 1,010,653,000, a decrease of 14.6% compared to HKD 1,184,886,000 in the previous year[9]. - Gross profit for the same period was HKD 203,411,000, down from HKD 217,936,000, reflecting a gross margin of approximately 20.1%[9]. - The company experienced a net profit of HKD 12,040,000, a significant decline from HKD 41,048,000 in the prior year, indicating a net profit margin of about 1.2%[9]. - The group's revenue decreased to approximately HKD 1,010,700,000, down from HKD 1,184,900,000 in the previous year, representing a decline of about 14.6%[31]. - The net profit for the year dropped to around HKD 12 million, compared to HKD 41 million in 2019, primarily due to lower gross profit and a fair value loss on investment properties of approximately HKD 16.4 million[26]. - The group's gross profit decreased to approximately HKD 203,400,000, compared to HKD 217,900,000 in the previous year, aligning with the revenue decline[37]. - The group's net profit significantly dropped to approximately HKD 12,000,000, down from HKD 41,000,000 in the previous year, resulting in a net profit margin of about 1.2%[46]. Assets and Liabilities - Total assets decreased to HKD 1,149,198,000 from HKD 1,212,701,000, while total liabilities also reduced to HKD 562,739,000 from HKD 580,194,000[10]. - The company managed to maintain a net asset value of HKD 586,459,000, slightly down from HKD 632,507,000 in the previous year[10]. - The current ratio was stable at approximately 1.18 as of March 31, 2020, down from 1.22 in 2019, with current assets and liabilities of approximately HKD 563,900,000 and HKD 476,800,000 respectively[58]. - The debt-to-asset ratio improved to 22.7% in 2020 from 31.0% in 2019, indicating a stronger financial position[57]. Market and Strategic Focus - The management highlighted a strategic shift towards focusing on domestic market opportunities in China to enhance brand recognition and long-term sales growth[13]. - The company plans to strengthen its collaboration with key domestic clients to solidify its market position in China[13]. - The overall economic environment was impacted by the US-China trade war and the pandemic, leading to a challenging year for the company[13]. - The group anticipates emerging opportunities in the Chinese market due to government policies promoting the use of paper packaging as an environmentally friendly alternative to single-use plastics[16]. - The demand for transport packaging is expected to grow, driven by the acceleration of e-commerce and delivery platforms amid the COVID-19 pandemic[16]. - The company aims to strengthen its domestic business in China to offset the impact of weak export sales due to the ongoing trade tensions and COVID-19 pandemic, focusing on securing large sales orders from local customers[71]. Operational Challenges and Adaptations - The company faced operational challenges due to the COVID-19 pandemic but was among the first to resume production in mid-February 2020[13]. - The management emphasized the importance of adapting business strategies in response to market changes during the pandemic[13]. - The group successfully implemented a flexible procurement strategy, maintaining stable raw material inventory through long-term relationships with key suppliers, which helped manage costs effectively[25]. - The company is maintaining a diversified procurement strategy to ensure stable and high-quality supply of raw materials at reasonable costs amid an increasingly uncertain external environment[72]. Corporate Governance and Management - The board of directors is committed to effective internal management, including cost control and corporate governance, to maximize sustainable returns for shareholders[72]. - The board consists of six members, including three executive directors and three independent non-executive directors, ensuring a strong independent element for effective decision-making[80]. - The company has established four board committees: Audit Committee, Remuneration Committee, Nomination Committee, and Executive Committee, each with defined responsibilities[96]. - The audit committee's responsibilities include monitoring financial statements and ensuring the effectiveness of risk management and internal control systems[99]. - The company has adopted a standard code for securities trading by directors to ensure compliance with regulations and maintain accountability and transparency[76]. Employee and Community Relations - The group emphasizes the importance of employee relations, ensuring fair compensation and providing regular training for safety and operational skills[196]. - The total employee compensation expenses for the year were approximately HKD 144,700,000, a decrease from HKD 166,000,000 in 2019, with a total of 1,211 employees as of March 31, 2020[68]. Environmental Commitment - The group has established a strong commitment to environmental protection by minimizing its impact through energy conservation and waste reduction initiatives[193].

[Company Information](index=2&type=section&id=Company%20Information) This section details the company's corporate governance structure, including registration information, board and committee members, advisors, and registrars - This section details the company's corporate governance structure, including registration information, board and committee members, advisors, and registrars[5](index=5&type=chunk)[7](index=7&type=chunk) [Management Discussion and Analysis](index=4&type=section&id=Management%20Discussion%20and%20Analysis) This section provides an overview of the company's performance, financial position, and future outlook, analyzing key operational and financial metrics [Industry Review](index=5&type=section&id=Industry%20Review) The report period saw China's manufacturing sector face downward pressure and slower GDP growth due to the US-China trade war, while e-commerce boosted consumer retail and paper packaging demand - China's economic growth faced increased downward pressure, with GDP growth rate decreasing to **6.2%** in the first three quarters of 2019 (compared to 6.7% in the same period last year)[12](index=12&type=chunk) - Despite manufacturing slowdown, total retail sales of consumer goods grew by **8.2%** year-on-year to **RMB 29.67 trillion** in the first three quarters of 2019, driven by e-commerce penetration[12](index=12&type=chunk) - Total profit of large paper and paper product manufacturers decreased by **20.2%** year-on-year in the first nine months of 2019, affected by tighter import paper policies and raw material price fluctuations[13](index=13&type=chunk) [Business Review and Operating Results](index=5&type=section&id=Business%20Review%20and%20Operating%20Results) The Group shifted focus to China's domestic sales to maintain volume amid the US-China trade war, resulting in a revenue decrease to HKD 534 million due to lower raw paper prices and RMB depreciation, yet gross profit margin improved to 22.9% 2019 Interim Results Overview (For the six months ended September 30) | Indicator | 2019 Interim | 2018 Interim | YoY Change | | :--- | :--- | :--- | :--- | | Total Revenue | HKD 533.9 million | HKD 652.7 million | -18.2% | | Gross Profit | HKD 122.2 million | HKD 136.0 million | -10.1% | | Gross Profit Margin | 22.9% | 20.8% | +2.1pp | | Profit for the Period | HKD 26.3 million | HKD 28.5 million | -7.7% | | Net Profit Margin | 4.9% | 4.4% | +0.5pp | - The Group strategically shifted its focus to developing domestic sales clients in China to offset the slowdown in export business growth[14](index=14&type=chunk) - Net profit decreased primarily due to a fair value loss of approximately **HKD 1.7 million** on investment properties (compared to a gain of HKD 7.2 million in the prior period)[17](index=17&type=chunk)[33](index=33&type=chunk) [Segment Performance](index=7&type=section&id=Segment%20Performance) The Group's operations are segmented into Guangdong, Fujian, and property leasing, with Guangdong being the primary revenue and profit driver despite a slight decline in revenue and gross profit, while Fujian experienced a significant drop Performance by Business Segment (For the six months ended September 30) | Business Segment | Revenue (HKD) | YoY Change | Gross Profit (HKD) | Gross Profit Margin | | :--- | :--- | :--- | :--- | :--- | | Guangdong Business | HKD 434.8 million | -16.9% | HKD 107.7 million | 24.8% | | Fujian Business | HKD 96.6 million | -24.0% | HKD 12.2 million | 12.6% | | Property Leasing | HKD 2.5 million | +13.6% | - | - | - Guangdong business, primarily engaged in high-value-added structural design corrugated paperboard and paper packaging products, contributed the majority of the Group's gross profit[29](index=29&type=chunk) - Fujian business primarily produces lower-margin corrugated paperboard products, with its gross profit margin below the Group's overall level[30](index=30&type=chunk) [Expenses and Finance Costs](index=8&type=section&id=Expenses%20and%20Finance%20Costs) During the reporting period, the Group's selling expenses remained stable, administrative expenses significantly decreased, and finance costs increased due to the adoption of new leasing standards and higher bank borrowing interest rates - Overall administrative expenses decreased from **HKD 65.9 million** in the prior period to **HKD 51.3 million**, indicating strengthened internal cost control[31](index=31&type=chunk) - Finance costs totaled approximately **HKD 9.7 million**, including approximately **HKD 2.0 million** in interest on lease liabilities due to the adoption of HKFRS 16 and approximately **HKD 7.7 million** in bank borrowing interest[32](index=32&type=chunk) [Working Capital, Liquidity and Financial Resources](index=9&type=section&id=Working%20Capital%2C%20Liquidity%20and%20Financial%20Resources) The Group's cash conversion cycle increased from 60 to 69 days due to higher accounts receivable and inventory days, while active reduction of bank borrowings improved the gearing ratio from 31.0% to 23.9%, maintaining a stable liquidity ratio of 1.21 Changes in Working Capital Turnover Days | Indicator | September 30, 2019 | March 31, 2019 | | :--- | :--- | :--- | | Trade and Bills Receivables Turnover Days | 77 days | 72 days | | Inventory Turnover Days | 46 days | 41 days | | Trade and Bills Payables Turnover Days | 54 days | 53 days | | Cash Conversion Cycle | 69 days | 60 days | Liquidity and Financial Ratios | Indicator | September 30, 2019 | March 31, 2019 | | :--- | :--- | :--- | | Current Ratio | 1.21 | 1.22 | | Gearing Ratio | 23.9% | 31.0% | - The Group actively reduced bank borrowings during the period, with the total amount decreasing from **HKD 376.5 million** to **HKD 297.1 million**[40](index=40&type=chunk) [Other Financial Information](index=10&type=section&id=Other%20Financial%20Information) This section outlines the Group's foreign exchange risks, asset pledges, capital commitments, contingent liabilities, and employee information, including a tax reassessment from the Hong Kong Inland Revenue Department for which no provision has been made - As of September 30, 2019, the Group pledged assets with a total carrying amount of approximately **HKD 318.2 million** to secure bank financing[43](index=43&type=chunk) - The Group had contracted capital expenditure of approximately **HKD 8.8 million** for the expansion of production facilities[44](index=44&type=chunk) - The Hong Kong Inland Revenue Department issued estimated and additional tax assessments totaling **HKD 12.782 million** to six of the Group's subsidiaries for past assessment years, for which the directors believe no provision is required[49](index=49&type=chunk) - As of September 30, 2019, the Group employed **1,217 staff**, with total staff costs for the period amounting to approximately **HKD 71.5 million**[50](index=50&type=chunk) [Prospects](index=11&type=section&id=Prospects) The Group is optimistic about the demand for quality paper packaging in China's domestic market, particularly in the Greater Bay Area, and plans to expand its Huidong plant while continuing to broaden domestic sales channels and secure export orders outside the US - The Group plans to expand its plant in Huidong, Guangdong Province, to capitalize on market opportunities arising from the Greater Bay Area development[51](index=51&type=chunk) - Marketing strategies will continue to focus on expanding domestic sales channels in China and leveraging existing international client bases to secure export orders outside the US[51](index=51&type=chunk) - To mitigate raw material price fluctuations, the Group will adhere to a diversified procurement strategy, maintaining a balance between domestic and overseas raw material supplies[52](index=52&type=chunk) [Other Information](index=11&type=section&id=Other%20Information) This section covers various corporate governance and financial disclosures, including directors' and major shareholders' interests, share repurchases, corporate governance compliance, share option schemes, and significant events [Interests of Directors, Chief Executive and Major Shareholders in Shares](index=12&type=section&id=Interests%20of%20Directors%2C%20Chief%20Executive%20and%20Major%20Shareholders%20in%20Shares) This section details the shareholdings of the company's directors, chief executive, and major shareholders, with controlling interest primarily held by Chairman Mr. Zhuang Jinchou through his family trust, which beneficially owns approximately 66.35% of the company's shares - Chairman Mr. Zhuang Jinchou and his family members indirectly hold **233,000,000 shares**, representing **66.35%** of the issued shares, through an irrevocable discretionary trust named 'Zhuang Family Trust'[56](index=56&type=chunk)[58](index=58&type=chunk)[62](index=62&type=chunk) [Purchases, Sales or Redemptions of the Company's Listed Securities](index=15&type=section&id=Purchases%2C%20Sales%20or%20Redemptions%20of%20the%20Company%27s%20Listed%20Securities) During the reporting period, the company repurchased a total of 2,300,000 ordinary shares on the Stock Exchange for approximately HKD 1.5 million, all of which have been cancelled Details of Share Repurchases | Month of Repurchase | Number of Shares Repurchased | Price Range Per Share (HKD) | Total Consideration (HKD) | | :--- | :--- | :--- | :--- | | April 2019 | 742,000 | 0.79 - 0.80 | 593,560 | | August 2019 | 1,558,000 | 0.54 - 0.57 | 882,260 | | **Total** | **2,300,000** | | **1,475,820** | [Corporate Governance and Audit Committee](index=15&type=section&id=Corporate%20Governance%20and%20Audit%20Committee) The company complied with the Corporate Governance Code during the reporting period, and the Audit Committee, comprising three independent non-executive directors, reviewed the interim report - The company complied with the applicable code provisions of the Corporate Governance Code set out in Appendix 14 to the Listing Rules[70](index=70&type=chunk) - The Audit Committee, whose members are all independent non-executive directors, has reviewed this interim report[73](index=73&type=chunk)[74](index=74&type=chunk) [Share Option Scheme](index=16&type=section&id=Share%20Option%20Scheme) This section discloses details of outstanding share options under the 2009 Share Option Scheme, with 9,800,000 options unexercised as of the reporting period end, and no options granted, exercised, or lapsed during the period - As of September 30, 2019, a total of **9,800,000 share options** remained unexercised under the Share Option Scheme[77](index=77&type=chunk) - No share options were granted, exercised, or lapsed during the reporting period[77](index=77&type=chunk) [Events During and After the Period](index=17&type=section&id=Events%20During%20and%20After%20the%20Period) During the reporting period, the company completed the acquisition of a property in North Point, Hong Kong, for HKD 28 million and decided not to exercise its pre-emptive right regarding a joint venture equity transfer, with no significant events occurring post-period - On June 13, 2019, the acquisition of a property in North Point, Hong Kong, was completed for a total consideration of **HKD 28.0 million**[81](index=81&type=chunk) - The company decided not to exercise its pre-emptive right regarding the transfer of a **40% equity interest** in the joint venture, Sun Hing Group Limited[82](index=82&type=chunk)[83](index=83&type=chunk) [Unaudited Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=17&type=section&id=Unaudited%20Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) This section presents the unaudited consolidated financial performance of the Group, including revenue, gross profit, operating profit, and profit attributable to owners for the period [Summary of Consolidated Statement of Profit or Loss](index=18&type=section&id=Summary%20of%20Consolidated%20Statement%20of%20Profit%20or%20Loss) For the six months ended September 30, 2019, the company reported revenue of HKD 534 million, an 18.2% decrease year-on-year, with profit attributable to owners of HKD 26.44 million and basic earnings per share of 7.48 HK cents Key Data from Consolidated Statement of Profit or Loss (For the six months ended September 30) | Indicator | 2019 (HKD '000) | 2018 (HKD '000) | | :--- | :--- | :--- | | Revenue | 533,875 | 652,658 | | Gross Profit | 122,228 | 136,042 | | Operating Profit | 46,216 | 48,014 | | Profit Before Tax | 36,524 | 40,850 | | Profit Attributable to Owners of the Company | 26,441 | 26,432 | | Basic and Diluted Earnings Per Share | 7.48 HK cents | 7.29 HK cents | [Unaudited Condensed Consolidated Statement of Financial Position](index=18&type=section&id=Unaudited%20Condensed%20Consolidated%20Statement%20of%20Financial%20Position) This section presents the unaudited consolidated financial position of the Group, detailing assets, liabilities, and equity as of the reporting date [Summary of Consolidated Statement of Financial Position](index=19&type=section&id=Summary%20of%20Consolidated%20Statement%20of%20Financial%20Position) As of September 30, 2019, the Group's total assets were approximately HKD 1.245 billion, total liabilities approximately HKD 623 million, and net assets approximately HKD 622 million, with net current assets of HKD 111 million indicating sound short-term solvency Key Data from Consolidated Statement of Financial Position | Indicator | September 30, 2019 (HKD '000) | March 31, 2019 (HKD '000) | | :--- | :--- | :--- | | Non-current Assets | 606,500 | 529,776 | | Current Assets | 638,957 | 682,925 | | Current Liabilities | 528,155 | 561,535 | | Non-current Liabilities | 95,669 | 18,659 | | **Net Assets** | **621,633** | **632,507** | | Equity Attributable to Owners of the Company | 630,967 | 640,084 | [Unaudited Condensed Consolidated Statement of Changes in Equity](index=19&type=section&id=Unaudited%20Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity) This section presents the unaudited consolidated changes in equity for the Group, detailing movements in various equity components during the reporting period [Summary of Changes in Equity](index=20&type=section&id=Summary%20of%20Changes%20in%20Equity) For the six months ended September 30, 2019, equity attributable to owners decreased from HKD 640 million to HKD 631 million, primarily due to adjustments from new accounting standards, negative exchange differences, and share repurchases, partially offset by profit for the period - Retained profits at the beginning of the period were retrospectively adjusted downwards by approximately **HKD 10.58 million** due to the initial adoption of HKFRS 16[93](index=93&type=chunk) - Share capital and share premium collectively decreased by approximately **HKD 1.485 million** during the period due to share repurchases[93](index=93&type=chunk) - Exchange differences arising from the translation of overseas operations resulted in a decrease of approximately **HKD 23.49 million** in exchange reserves, negatively impacting total equity[93](index=93&type=chunk) [Unaudited Condensed Consolidated Statement of Cash Flows](index=20&type=section&id=Unaudited%20Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) This section presents the unaudited consolidated cash flow activities of the Group, categorizing cash flows from operating, investing, and financing activities for the period [Summary of Cash Flows](index=21&type=section&id=Summary%20of%20Cash%20Flows) During the reporting period, the Group generated net cash inflow of HKD 24.32 million from operating activities and HKD 5.07 million from investing activities, while financing activities resulted in a net cash outflow of HKD 83.66 million, leading to a net decrease in cash and cash equivalents of HKD 54.27 million Key Data from Consolidated Statement of Cash Flows (For the six months ended September 30) | Indicator | 2019 (HKD '000) | 2018 (HKD '000) | | :--- | :--- | :--- | | Net Cash From Operating Activities | 24,318 | (43,511) | | Net Cash From Investing Activities | 5,068 | 24,505 | | Net Cash Used In Financing Activities | (83,657) | (1,118) | | **Net Decrease in Cash and Cash Equivalents** | **(54,271)** | **(20,124)** | | Cash and Cash Equivalents at Beginning of Period | 232,294 | 257,513 | | Cash and Cash Equivalents at End of Period | 164,596 | 229,334 | [Notes to the Unaudited Condensed Consolidated Financial Statements](index=21&type=section&id=Notes%20to%20the%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanatory notes to the unaudited condensed consolidated financial statements, covering accounting policies, segment information, taxation, earnings per share, dividends, and trade balances [Notes 1 & 2: Basis of Preparation and Changes in Accounting Policies](index=22&type=section&id=Notes%201%20%26%202%3A%20Basis%20of%20Preparation%20and%20Changes%20in%20Accounting%20Policies) These financial statements are prepared in accordance with HKAS 34, with HKFRS 16 "Leases" first applied during this period using the modified retrospective approach, leading to the recognition of right-of-use assets and lease liabilities without restating comparative data - The Group first applied HKFRS 16 'Leases' from April 1, 2019, opting for the modified retrospective approach without restating comparative information[101](index=101&type=chunk)[102](index=102&type=chunk) - The cumulative effect of initial application of the standard was recognized as an adjustment to the opening equity balance as of April 1, 2019, with retained profits decreasing by approximately **HKD 10.581 million**[112](index=112&type=chunk) - As of April 1, 2019, the Group recognized total lease liabilities of **HKD 107.1 million**[113](index=113&type=chunk) [Note 3: Revenue and Segment Information](index=25&type=section&id=Note%203%3A%20Revenue%20and%20Segment%20Information) The Group's reportable operating segments include corrugated products, offset-printed corrugated products, and property leasing, with the corrugated products segment being the largest contributor to revenue and profit, recording HKD 440 million in revenue and HKD 37.41 million in segment results Segment Results (For the six months ended September 30, 2019) | Segment | External Sales Revenue (HKD '000) | Segment Results (HKD '000) | | :--- | :--- | :--- | | Corrugated Products | 440,476 | 37,413 | | Offset-Printed Corrugated Products | 90,903 | 15,833 | | Property Leasing | 2,496 | (575) | | **Total** | **533,875** | **52,671** | [Note 6: Income Tax Expense](index=29&type=section&id=Note%206%3A%20Income%20Tax%20Expense) Total income tax expense for the period was HKD 10.2 million, lower than the prior period's HKD 12.36 million, with Shenzhen Jinsheng Packaging enjoying a 15% preferential tax rate as a high-tech enterprise, and no provision made for Hong Kong tax reassessments - Jinsheng Packaging (Shenzhen) Co., Ltd., as a high-tech enterprise, enjoys a preferential corporate income tax rate of **15%**[137](index=137&type=chunk)[138](index=138&type=chunk) - The Group has objected to estimated and additional tax assessments totaling **HKD 12.782 million** issued by the Hong Kong Inland Revenue Department[139](index=139&type=chunk) [Notes 8 & 9: Earnings Per Share and Dividends](index=32&type=section&id=Notes%208%20%26%209%3A%20Earnings%20Per%20Share%20and%20Dividends) Basic and diluted earnings per share for the reporting period increased to 7.48 HK cents from 7.29 HK cents in the prior period, and the Board of Directors did not recommend an interim dividend for the six months ended September 30, 2019 - Basic and diluted earnings per share were **7.48 HK cents**[148](index=148&type=chunk) - The Board of Directors did not recommend the payment of any interim dividend[150](index=150&type=chunk) [Notes 12 & 13: Ageing Analysis of Trade and Other Receivables and Payables](index=33&type=section&id=Notes%2012%20%26%2013%3A%20Ageing%20Analysis%20of%20Trade%20and%20Other%20Receivables%20and%20Payables) This note provides an ageing analysis of trade and other receivables and payables, showing total trade and bills receivables of HKD 242 million, mostly not yet due, and total trade and bills payables of HKD 133 million - Total trade and bills receivables amounted to **HKD 242,005 thousand**, with **HKD 204,348 thousand** being not yet due[156](index=156&type=chunk) - Total trade and bills payables amounted to **HKD 133,030 thousand**, with the largest portion aged within 30 days[159](index=159&type=chunk)

Financial Performance - For the fiscal year ending March 31, 2019, the company reported revenue of HKD 1,184,886,000, a decrease of 10.7% compared to HKD 1,326,986,000 in the previous year[12]. - The gross profit for the same period was HKD 234,316,000, representing a gross margin of approximately 19.8%[12]. - The net profit for the year was HKD 41,048,000, a decline from HKD 95,405,000 in the previous year, indicating a decrease of 57.0%[12]. - The operating profit for the year was HKD 65,390,000, a significant decrease from HKD 135,229,000 in the previous year[12]. - The company's revenue for the year was approximately HKD 1,184,900,000, a decrease from HKD 1,327,000,000 in 2018, reflecting the impact of global economic uncertainty and trade tensions[35]. - The company's net profit decreased to approximately HKD 41,000,000 from HKD 95,400,000 in the previous year, resulting in a net profit margin of about 3.5%[50]. - The overall gross profit was approximately HKD 234,300,000, with a gross profit margin of about 19.8%, maintaining relative stability compared to previous years[41]. Assets and Liabilities - Total assets as of March 31, 2019, were HKD 1,212,701,000, down from HKD 1,371,896,000 in the previous year[13]. - The total liabilities decreased to HKD 580,194,000 in 2019 from HKD 713,906,000 in 2018, reflecting improved financial health[13]. - The company's current ratio was approximately 1.22 as of March 31, 2019, indicating a stable liquidity position[53]. - The debt-to-asset ratio remained stable at approximately 31.0%, up from 29.6% in 2018[60]. - Total bank borrowings decreased to approximately HKD 376.5 million from HKD 405.6 million in 2018, with HKD 338.5 million due within one year[60]. Sales and Market Performance - Domestic sales in China accounted for 80.5% of total sales, amounting to HKD 949,516,000, while export sales contributed 15.5% with HKD 183,149,000[34]. - The company maintained a stable sales volume despite fluctuations in the business environment, attributed to efforts in acquiring new domestic market customers[17]. - Revenue from the Fujian plant increased significantly by approximately 27.5% to about HKD 227,500,000, compared to HKD 178,500,000 in the previous year, indicating strong brand recognition in the Fujian and surrounding markets[39]. - Guangdong business revenue remained stable at approximately HKD 952,700,000, down from HKD 1,109,900,000 in 2018, despite a slight decline in sales volume due to adverse business conditions[38]. Cost Management and Procurement - The company successfully expanded its raw material sourcing to include imports from countries like Vietnam, which helped mitigate cost pressures from rising paper costs in China[18]. - The company emphasized strengthening relationships with key suppliers to reduce supply risks and enhance cost management[18]. - The group has improved its ability to combat cost pressures from domestic raw paper supply by diversifying its procurement sources, including imports from a major supplier's paper mill in Vietnam[70]. - The company plans to continue implementing cost control measures to address ongoing challenges in the market[17]. Research and Development - The company plans to enhance research and development efforts to develop sustainable green packaging, aiming for stable sales growth and expanded revenue sources[23]. - The group has been recognized as a national high-tech enterprise, which provides tax benefits and supports further development in R&D and value-added products[33]. - The group aims to optimize operations and product offerings through effective measures such as integrating production processes and securing stable raw material sources[73]. Corporate Governance - The board proposed a final dividend of HKD 0.04 per share for the year[50]. - The company has established four board committees: audit committee, remuneration committee, nomination committee, and executive committee, each with defined responsibilities[97]. - The audit committee includes three independent non-executive directors and is tasked with monitoring the relationship with external auditors and reviewing financial reports[98]. - The company has established a risk management and internal control system in compliance with the corporate governance code principle C.2[127]. - The board of directors is responsible for reviewing the effectiveness of the risk management and internal control systems annually[140]. Shareholder Engagement - The company encourages shareholders to attend annual general meetings to provide feedback and engage with the board[144]. - The group emphasizes transparency and values shareholder feedback, encouraging communication with the investor relations team[153]. - The company maintains strong relationships with employees, customers, and suppliers, emphasizing communication and feedback[193]. Future Outlook - The company aims to diversify its customer base and raw material sources to stabilize profits amid economic fluctuations[23]. - The management team is actively involved in regional political and business associations, enhancing the company's network[157][160]. - The group has made significant investments in new technologies and product development to drive future growth[169].