Financial Performance - Revenue for the six months ended September 30, 2022, was HK$639.2 million, an increase of 68.5% compared to HK$379.4 million in 2021[9]. - Gross profit for the same period was HK$57.3 million, compared to a gross loss of HK$12.7 million in 2021, resulting in a gross profit margin of 9.0%[9]. - Profit attributable to equity holders of the Company for the period was HK$28.8 million, a significant recovery from a loss of HK$15.5 million in the previous year[9]. - Basic earnings per share for the period was HK$4.28, compared to a loss of HK$2.30 per share in 2021[9]. - Profit before tax for the period was HK$20.6 million, recovering from a loss of HK$25.4 million in the previous year[14]. - Total comprehensive income for the period was a loss of HK$28,347,000, compared to a loss of HK$7,881,000 in the prior year[23]. - The profit for the period ended September 30, 2022, was HK$28,804,000, compared to HK$29,079,000 for the previous period, indicating a slight decline[32]. - The overall profit for the period was HK$29,079,000, compared to a loss of HK$17,438,000 in the same period last year[70]. Dividends and Shareholder Returns - Proposed interim dividend per share is HK$1.8, with a total dividend per share for the period of HK$2.3, reflecting a 15.0% increase from HK$2.0 in 2021[9]. - Dividends paid during the period amounted to HK$13,486,000, a decrease from HK$18,824,000 in the same period of 2021, showing a reduction in shareholder returns[41]. - The company declared a special final dividend of HK$8,740,000 for the year 2021, reflecting ongoing shareholder returns despite the losses reported[37]. - An interim dividend of HK$0.018 per ordinary share was declared for the six months ended September 30, 2022, compared to no interim dividend in 2021[108]. - A special interim dividend of HK$0.005 per ordinary share was declared for the six months ended September 30, 2022, down from HK$0.020 in 2021[108]. Cash Flow and Liquidity - Net cash and cash equivalents as of September 30, 2022, were approximately HK$296.9 million[9]. - Cash and cash equivalents at the end of the period were HK$20,894,000, down from HK$68,580,000 in the previous year, indicating a decrease of 69%[44]. - For the six months ended 30 September 2022, net cash flows from operating activities increased to HK$32,996,000, compared to HK$8,507,000 in the same period of 2021, representing a significant increase of 287%[41]. - The company’s cash and bank balances decreased to HK$20,894,000 from HK$68,580,000, a decline of 69% year-over-year[46]. - The Group's cash and cash equivalents were approximately HK$311.1 million, compared to approximately HK$304 million as of March 31, 2022[200]. - The Group's total bank borrowings were approximately HK$14.2 million, with a gearing ratio of approximately 1.2%[200]. Assets and Liabilities - Non-current assets decreased to HK$789,159,000 from HK$856,893,000 as of March 31, 2022[25]. - Current assets increased to HK$818,584,000 from HK$800,439,000 as of March 31, 2022[25]. - Total assets as of 30 September 2022 were HK$1,607,743,000, a decrease from HK$1,657,332,000 as of 31 March 2022[73]. - Total liabilities as of 30 September 2022 were HK$429,201,000, down from HK$437,591,000 as of 31 March 2022[73]. - Total equity attributable to equity holders of the company decreased to HK$1,169,354,000 from HK$1,210,828,000[28]. - The total non-current liabilities decreased to HK$106,299,000 from HK$112,848,000 as of March 31, 2022[28]. Operational Performance - The Group's performance for the six months ended 30 September 2022 showed a recovery in the global footwear retail sector, with uninterrupted production leading to increased shipment volume and higher capacity utilization[145]. - Shipment volume increased by 41.8%, while the average selling price (ASP) rose by 16.2% during the same period[149]. - The Group's consolidated production capacity reached approximately 8,700,000 pairs of footwear with a utilization rate of 83.3% as of September 30, 2022, up from 78.6% in 2021[163]. - The rugged-shoe category contributed 72.2% of total revenue, an increase from 65.4% in 2021, while premium casual footwear's contribution rose to 14.2% from 11.4%[166]. - The southern Vietnam manufacturing site contributed 61.3% to total volume output, rebounding from 55.0% in 2021, following a robust order pipeline[169]. Market and Customer Insights - Revenue from the United States for the six months ended 30 September 2022 was HK$269,732,000, up from HK$157,041,000 in the same period of 2021[76]. - Revenue from Europe for the six months ended 30 September 2022 was HK$176,412,000, an increase from HK$102,896,000 in the same period of 2021[76]. - Major customers, including Cat, Chaco, Dr. Martens, Merrell, and Wolverine, accounted for 96.0% of total revenue during the period, slightly down from 96.2% in 2021[167]. Strategic Outlook - The Group remains cautiously optimistic about its full-year results despite headwinds from interest rate hikes and rising inflation, which are expected to slow demand growth[191]. - The Group is focusing on six strategic action areas to enhance its revenue portfolio and operational excellence[192]. - The Group is implementing a conservative cash flow management policy and strict cost controls to sustain financial strength amid macroeconomic uncertainties[198]. - The Group anticipates a moderation in second-half orders due to lower visibility in the business pipeline[191]. - The Group's management is cautious about increasing geopolitical tensions and their impact on inflation and economic uncertainty[145].

Financial Performance - Revenue for 2022 was HK$842.7 million, representing a 4.7% increase from HK$804.7 million in 2021[14]. - Gross profit decreased to HK$25.2 million, a decline of 34.1% from HK$38.2 million in the previous year, resulting in a gross profit margin of 3.0%[14]. - The company reported a loss attributable to equity holders of HK$18.0 million, compared to a profit of HK$88.1 million in 2021[14]. - Basic loss per share was HK(2.69) cents, a significant drop from earnings of HK13.05 cents per share in 2021[14]. - Total dividends per share for the year decreased by 20% to HK$4.0 from HK$5.0 in the previous year[14]. - The Group's revenue increased by 4.7% year on year to approximately HK$843 million, compared to approximately HK$805 million in 2021, despite a 0.3% decrease in footwear business volume[77]. - The gross profit for the Year was approximately HK$25 million, down from approximately HK$38 million in 2021, resulting in a gross profit margin of approximately 3.0%[82]. - The Group recorded a net loss attributable to equity holders of approximately HK$18 million, compared to a net profit of HK$88 million in 2021, primarily due to the absence of a one-off fair value gain from investment properties[86]. - The total dividends for the Year were HK4.0 cents per ordinary share, down from HK5.0 cents in 2021[89]. Operational Strategy - The company aims to become the leading lifestyle footwear company trusted by premium brands for value creation and innovation[27]. - The mission includes partnering with leading brands to create the best lifestyle products in footwear[28]. - The Group aims to achieve overall top-line growth in financial year 2023 through six strategic action areas, including recovering new income avenues and promoting operational excellence[33]. - Average selling price (ASP) improvements have been achieved over the past two years, focusing on products with higher profit margins[36]. - The Group is actively managing its clientele portfolio, focusing on customers with positive market performance and growth prospects[36]. - The Group's ongoing strategy focuses on pursuing higher-profit-margin business growth to enhance its revenue profile[77]. Market and Geographic Insights - Revenue by geography showed that Asia accounted for 44.4%, Europe 24.3%, the United States 18.2%, and others 13.1% in 2022[23]. - Revenue from the United States grew significantly to 44.4% of total revenue, up from 21.2% in 2021[100]. - The rugged shoes category contributed 71.3% to the Group's revenue, an increase from 49.9% in 2021[101]. - The premium casual footwear category's contribution dropped to 8.6% from 31.0% in 2021[101]. Production and Capacity - Capacity in Cambodia will be expanded to meet medium-term demand growth, with adjustments in southern Vietnam based on client procurement plans[39]. - The Group's production capacity was around 7 million pairs of shoes, with a utilization rate of 78.0%[98]. - The southern Vietnam manufacturing site contributed 55.0% to total volume output in the Year, down from 69.2% in 2021, due to temporary production halts caused by COVID-19[109]. - The Cambodia site significantly increased its output contribution to 45.0% in pairs, up from 30.8% in 2021, primarily driven by organic growth and improved capacity[111]. - The Cambodia center maintained normal production throughout the Year, with minor breaks for employee vaccinations, and added two stitching lines to support client sourcing plans[112]. Financial Position and Liquidity - Net cash and cash equivalents stood at approximately HK$290 million[9]. - The Group maintained strong liquidity with net cash of approximately HK$290 million as of March 31, 2022, down from HK$378 million in 2021[89]. - The gearing ratio was approximately 1.2% due to a temporary bank loan, compared to nil in 2021[89]. - The current ratio as of March 31, 2022, was approximately 2.5, down from 2.9 in 2021, while the quick ratio was approximately 1.8, compared to 2.3 in 2021[133]. - Shareholders' equity decreased to approximately HK$1,211 million as of March 31, 2022, from approximately HK$1,245 million in 2021[142]. Cost Management and Inflation - Stringent cost control measures are in place to mitigate inflationary pressures, including lean manufacturing and enterprise resource planning systems[45]. - The Group is implementing strict measures to alleviate inflationary pressures, focusing on lean production and enterprise resource planning to control costs[48]. - Increased material costs were attributed to rising prices of raw materials and higher usage of leather for new product development[85]. - Direct labor wages increased to approximately HK$187 million, representing 22.2% of revenue, up from 21.0% in 2021[82]. ESG and Sustainability - Sustainability initiatives are being prioritized, including efforts to reduce the carbon footprint of production and ensure employee and community safety[58]. - The Group aims to improve its performance in environmental, social, and governance aspects and contribute more significantly to the communities where it operates[163]. - The ESG report covers the environmental and social performance of manufacturing facilities located in Vietnam and Cambodia, with no changes in the reporting scope compared to the previous year[164]. - The Group has established ESG goals and objectives with action plans aligned with determined ESG strategies[172]. - The Group integrates sustainability into operations by implementing measures to reduce carbon footprints and mitigate environmental impacts[188]. Workforce and Talent Management - The Group employed approximately 7,700 employees as of March 31, 2022, across its subsidiaries in Hong Kong, Taiwan, the PRC, Vietnam, and Cambodia[155]. - The Group recognizes employees as valuable assets and offers attractive remuneration and training opportunities to retain talent[191]. - The majority of the Group's employees in Vietnam and Cambodia are female, highlighting the importance of gender diversity in operations[200]. - The Group strictly complies with the Labor Law Code of Vietnam and Cambodia, ensuring adherence to employment protection and benefits laws[197]. Risk Management - The operating environment is clouded by uncertainties due to global inflation, increasing interest rates, and geopolitical tensions, necessitating a strong financial position[65]. - The Group remains cautiously optimistic amid ongoing risks associated with COVID-19, including rising logistics and material costs, and labor supply pressures[64]. - The Group's commitment to ESG governance is crucial for fostering sustainable business operations and building resilience against ESG-related risks[171].

Financial Performance - Revenue for the six months ended September 30, 2021, was HK$379,373,000, a decrease of 3.1% from HK$391,565,000 in 2020[20]. - Gross loss for the period was HK$12,685,000, compared to a gross profit of HK$21,056,000 in the same period last year[20]. - Profit attributable to equity holders of the Company was a loss of HK$15,462,000, down from a profit of HK$65,564,000 in 2020[20]. - Basic loss per share was HK(2.30), compared to earnings per share of HK$9.70 in the previous year[20]. - Other income and gains for the period were HK$11,516,000, down from HK$125,587,000 in the previous year[20]. - The Company reported a loss before tax of HK$25,377,000, compared to a profit of HK$88,113,000 in the previous year[20]. - For the six months ended September 30, 2021, the company reported a loss of HK$17,438,000 compared to a profit of HK$58,138,000 in the same period of 2020, representing a significant decline[30]. - Total comprehensive income for the period was a loss of HK$7,881,000, compared to a gain of HK$82,820,000 in the previous year[31]. - The total tax expense for the period was HK$7,939,000, a significant decrease from HK$29,975,000 in 2020[99]. - The group reported a loss attributable to equity holders of HK$15,462,000 for the six months ended September 30, 2021, compared to a profit of HK$65,564,000 in the same period of 2020[102]. Cash Flow and Liquidity - Cash and cash equivalents amounted to approximately HK$364,000,000[14]. - Net cash flows from operating activities for the six months ended 30 September 2021 were HK$8,507,000, compared to a net outflow of HK$2,813,000 in the same period of 2020[50]. - Cash and cash equivalents at the end of the period were HK$68,580,000, up from HK$48,278,000 at the end of the same period in 2020[54]. - The Group's cash and bank balances increased to HK$68,580,000 from HK$48,278,000 year-on-year[54]. - The Group's net decrease in cash and cash equivalents for the period was HK$17,003,000, compared to a decrease of HK$30,985,000 in the prior year[51]. - The Group maintained a healthy liquidity position with net cash of approximately HK$364 million as of September 30, 2021[155]. Dividends - Total dividends per share for the period were HK$2.0, a decrease of 9.1% from HK$2.2 in 2020[15]. - The company declared a special final dividend of HK$8,740,000 for the year 2021[40]. - The group declared a special interim dividend of HK2.0 cents per ordinary share for the period, compared to HK0.7 cents in 2020[110]. - Dividends paid during the period totaled HK$18,824,000, compared to HK$13,518,000 in the previous year[51]. Assets and Liabilities - Non-current assets increased to HK$850,919,000 as of September 30, 2021, from HK$836,847,000 as of March 31, 2021[34]. - Current assets decreased to HK$701,279,000 from HK$806,558,000, primarily due to a reduction in accounts receivable[34]. - Total current liabilities decreased to HK$212,776,000 from HK$280,270,000, indicating improved liquidity management[34]. - The company's total equity as of September 30, 2021, was HK$1,230,014,000, a decrease from HK$1,255,252,000 as of March 31, 2021[37]. - Total assets decreased to HK$1,552,198,000 as of September 30, 2021, down from HK$1,643,405,000 as of March 31, 2021[83]. Operational Challenges - The factory in Thuan An, Vietnam, paused production from mid-July 2021 due to a resurgence of COVID-19, impacting revenue and operating results[144]. - The Group's operations were significantly affected by COVID-19 variants across Southeast Asia, particularly impacting the July-to-September quarter[143]. - The production halt in southern Vietnam since July 2021 significantly impacted operations, leading to a high labor-to-revenue ratio[152]. - The Group will remain vigilant regarding challenges related to production continuity and cost factors amid ongoing global uncertainties[164]. Market Performance - Revenue from the United States increased significantly to HK$157,041,000 in 2021 from HK$50,685,000 in 2020, marking a growth of 209.5%[87]. - Revenue from Europe decreased to HK$102,896,000 in 2021 from HK$131,688,000 in 2020, a decline of 22%[87]. - Revenue from Asia dropped to HK$53,568,000 in 2021 from HK$175,122,000 in 2020, a decrease of 69.4%[87]. - Revenue contribution from European markets decreased to 27.1% (2020: 33.6%), while revenue from the US increased significantly to 41.4% (2020: 12.9%), with other markets accounting for 31.5% (2020: 53.5%)[172]. Production and Capacity - The Group operates two core manufacturing bases in southern Vietnam and Cambodia, with a combined production scale of 27 processing lines and an annual capacity of approximately 6.5 million pairs of shoes, achieving a utilization rate of 78.6% during the Period[170][172]. - The southern Vietnam manufacturing site contributed 55.0% to total volume output during the Period, down from 74.3% in 2020, due to production halts caused by COVID-19[178][182]. - The Cambodian manufacturing site contributed 45.0% of output in pairs during the Period, up from 25.7% in 2020, benefiting from redirected orders from southern Vietnam[187][192]. - The Group plans to prudently expand capacity at the Cambodian site as it matures and gains efficiency in manufacturing more sophisticated models[189]. Strategic Initiatives - The Group has actively worked with customers to reschedule order fulfillments and manage inventory shipments during production disruptions[185]. - The Group has discontinued all manufacturing activities in Mainland China and relocated them to other Asian centers[194]. - The Group's asset enhancement program aims to optimize the use of idle properties and generate additional stable income[199]. - The Board anticipates improved operational efficiency and competitiveness due to scaling up and increased automation in the associated company[197].

信 KINGMAKER (於百慕達註冊成立之有限公司) Stock Code 股份代號：01170 KINGMAKER FOOTWEAR HOLDINGS LIMITED 星 鞋 紫 集 團 有 限 公 司 (Incorporated in Bermuda with limited liability) PERFILLE ANNUAL REPORT 2021年報 ( 275 Contents 目錄 Contents 目錄 Contents 目錄 信星鞋業集團有限公司 年報 2021 1 Corporate Information 公司資料 2 Financial Highlights 財務摘要 4 Chairman's Statement 主席報告 6 Management Discussion and Analysis 管理層討論及分析 15 Environmental, Social and Governance Report 環境、社會及管治報告 28 Corporate Governance Report 企業管治報告 51 Directors and Senior Management Profil ...

Revenue and Profitability - Revenue for the six months ended September 30, 2020, was HK$391,565,000, a decrease of 27.6% compared to HK$541,184,000 in 2019[14]. - Gross profit for the same period was HK$21,056,000, down 44.0% from HK$37,592,000 in 2019[14]. - Profit attributable to equity holders of the Company was HK$65,564,000, compared to a loss of HK$32,382,000 in 2019[14]. - Basic earnings per share for the period was HK$9.70, recovering from a loss of HK$4.70 in the same period last year[14]. - Profit before tax for the period was HK$88,113,000, compared to a loss of HK$48,976,000 in 2019[19]. - The company reported a profit of HK$58,138,000 for the six months ended September 30, 2020, compared to a loss of HK$33,475,000 in the same period last year, indicating a significant turnaround[30]. - Total comprehensive income for the period was HK$82,820,000, a substantial increase from HK$872,000 in the prior year[32]. - The company reported a retained profit of HK$822,021,000 as of September 30, 2020, reflecting a stable financial position[44]. - The Group reported a net profit attributable to equity holders of approximately HK$66 million for the period, a significant recovery from a net loss of approximately HK$32 million in 2019[170][173]. Dividends - Proposed interim and special dividends per share are 1.5 HK cents and 0.7 HK cents, respectively, with total dividends per share increasing by 10% to 2.2 HK cents[14]. - The interim dividend proposed is HK1.5 cents per ordinary share, compared to no interim dividend in the same period of 2019[121]. - Special dividends proposed are HK0.7 cent per ordinary share, down from HK2.0 cents in the previous year[121]. Cash Flow and Liquidity - Cash and cash equivalents as of September 30, 2020, were approximately HK$418,000,000[13]. - The company reported net cash flows used in operating activities were HK$2,813,000, an improvement from HK$17,840,000 in the previous year[56]. - The Group's financial position reflects a significant decrease in cash and cash equivalents compared to the previous year, indicating potential liquidity challenges[61]. - The Group maintained strong liquidity with net cash of approximately HK$418 million as of September 30, 2020, compared to HK$444 million on March 31, 2020[175]. Assets and Liabilities - Total assets as of September 30, 2020, amounted to HK$1,602,799,000, an increase from HK$1,527,591,000 as of March 31, 2020[87]. - Total liabilities increased to HK$355,254,000 from HK$348,954,000, indicating a slight rise in financial obligations[87]. - Current assets decreased to HK$775,938,000 from HK$827,252,000, primarily due to a reduction in inventories[34]. - Current liabilities decreased to HK$256,436,000 from HK$289,429,000, indicating improved financial management[34]. - The Group's accounts receivable as of 30 September 2020 amounted to HK$144,199,000, an increase from HK$137,407,000 as of 31 March 2020[129]. Operational Performance - The Group's production capacity was around 6.3 million pairs of shoes, with an 83.8% utilization rate, down from 90.4% in 2019[186]. - The Group operates two core manufacturing bases in southern Vietnam and Cambodia, equipped with R&D facilities, and holds a 40% interest in an associate company in central Vietnam[185]. - The Group's strategy focused on higher-value products, resulting in a 10.9% increase in average selling price despite the overall sales decline[165]. - The Group has taken measures to control costs and enhance working capital to maintain resilience amid the ongoing uncertainty from the COVID-19 pandemic[184]. Market and Segment Performance - Segment revenue from the manufacturing and sale of footwear products was HK$391,565,000, down from HK$541,184,000 in the same period of 2019, showing a decline of approximately 28%[80]. - The total revenue for the period was HK$391,565,000, down 27.7% from HK$541,184,000 in 2019, with notable declines in all geographical segments, particularly in Europe and Asia[90]. - European markets contributed 33.6% to total turnover, an increase from 31.1% in 2019, while turnover from the US decreased to 12.9% from 15.8% in 2019[192]. - Major customers, including Asics, Clarks, Timberland, Dr. Martens, and Wolverine, collectively contributed 93.3% of total turnover, an increase from 92.5% in 2019[194]. Cost Management - The gross profit margin declined to approximately 5.4% from 6.9% in 2019, impacted by increased material and labor costs[169][172]. - The cost of inventories sold decreased to HK$225,833,000 from HK$295,553,000, reflecting a reduction of 23.5%[97]. - The Group has implemented cost control measures and postponed capital expenditures in response to the COVID-19 pandemic's impact on consumer sentiment and procurement planning[160].

Financial Performance - Revenue for 2020 was HK$1,050,064,000, a decrease of 4.6% from HK$1,100,649,000 in 2019[8]. - Gross profit for 2020 was HK$74,315,000, with a gross profit margin of 7.1%, down from HK$116,255,000 and 10.6% in 2019, representing a decline of 36.1%[8]. - The company reported a loss attributable to equity holders of HK$51,386,000 for 2020, compared to a profit of HK$35,593,000 in 2019[8]. - Basic loss per share for 2020 was HK(7.50) cents, compared to earnings of HK5.14 cents per share in 2019[8]. - Total dividends per share for the year were HK$4.0, a reduction of 33.3% from HK$6.0 in 2019[8]. - For the year ended 31 March 2020, turnover decreased by 4.6% year on year to approximately HK$1,050 million, down from approximately HK$1,101 million in 2019, with a 3.3% decline in business volume and a 2.0% drop in average selling price[104]. - The decline in turnover was attributed to the conservative procurement approach of branded customers, leading to reduced order batch sizes and delays in order placements due to weak purchasing power across target markets[105]. - The Group recorded a net loss of approximately HK$51 million for the year, compared to a profit of approximately HK$36 million in 2019, mainly due to decreased gross profit and increased impairment losses[117]. - Labor costs amounted to approximately HK$318 million, representing 30.3% of turnover, an increase of 1.1 percentage points from 29.2% in 2019[115]. - The average selling price of the Group's sales fell slightly due to clients controlling their R&D budgets, resulting in fewer high-value footwear products being introduced to the market[107]. Strategic Response to COVID-19 - The company plans to adjust its strategies in response to challenges posed by the COVID-19 crisis, focusing on long-term growth and core manufacturing capabilities[21]. - The Group anticipates a dip in growth rates across all markets due to heightened socio-political and economic uncertainties, with declines in apparel and footwear sales expected[29]. - The Group has implemented tighter cost and risk management measures in response to the ongoing crisis, maintaining a focus on prudent financial management[100]. - The Group aims to recover and return to a sustainable growth track following the pandemic[22]. - The Chairman emphasized confidence in the company's long-term strategy and manufacturing competence despite uncertain times[22]. - The Group plans to streamline workforces in anticipation of slower business for the remainder of the financial year, alongside a budgeted decrease in overheads for every operating unit during 2020/21[42]. Operational Adjustments - Manufacturing activities in Zhuhai, PRC, were discontinued in February 2020, with production floors leased out to reduce manufacturing costs and improve gross profit[45]. - The focus remains on enhancing profit margins by raising production efficiency and reallocating production capacity from the People's Republic of China to Southeast Asia[43]. - The company is committed to enhancing production efficiency and has plans to relocate capacity from China to Southeast Asia[46]. - The company is increasing automation and digitalization in its facilities to address labor shortages and improve productivity[53]. - A smart manufacturing system is being phased in to achieve production efficiency and flexibility[56]. - The company is exploring the establishment of a smart supply chain and integrating robotic processes into current production lines[58]. - The Group plans to build new premises to increase production capacity in response to higher utilization rates[157]. - A new plot of land in Vietnam has been secured for long-term expansion purposes[158]. Financial Position and Liquidity - Cash and cash equivalents were approximately HK$444 million at the end of 2020[8]. - The Group maintained a strong liquidity position with net cash of approximately HK$444 million as of March 31, 2020, down from approximately HK$610 million in 2019[128]. - Current and quick ratios improved to 2.9 and 2.3 respectively, compared to 2.7 and 2.3 in 2019, reflecting a healthier financial position[128]. - The Group has no interest-bearing bank borrowings as of March 31, 2020, maintaining a debt-free status[181]. - The Group's financial position remains healthy, with sufficient cash to meet current business needs, allowing it to navigate the challenges posed by the pandemic[100]. - The Group's treasury policies include the cautious use of derivative financial instruments for risk management purposes[188]. Market and Production Insights - The geographical revenue breakdown for 2020 showed that the United States accounted for 41.3%, Europe 28.4%, and Asia 15.6%[17]. - Southeast Asia contributed 89.8% of total production, while mainland China's share dropped to 10.2%[147]. - The Group's manufacturing output in southern Vietnam accounts for 72.6% of total production, up from 68.8% in 2019[161]. - The Group's manufacturing activity in mainland China has decreased to 10.2% of total output, down from 14.8% in 2019, due to rising costs and trade tensions[165]. - Major customers, including Asics and Skechers, contributed 91.9% of total turnover[150]. - Premium casual footwear accounted for 42.7% of turnover, while rugged shoes contributed 34.8%, showing a recovery in popularity[149]. Future Outlook - The Group anticipates that the year ending 31 March 2021 will be even more challenging than the previous year, but it is prepared to face severe headwinds[80]. - The Group is considering the potential for future asset appreciation in the Greater Bay Area, with plans to transform properties into industrial/commercial projects targeting emerging industries[73]. - The Group is committed to building a healthy portfolio of products that can generate higher value and profit margins over the long term despite current adversities[105].

Financial Performance - Revenue for the six months ended September 30, 2019, was HK$541,184,000, a decrease of 16.0% from HK$644,260,000 in 2018[18] - Gross profit dropped to HK$37,592,000, representing a 50.0% decline compared to HK$75,127,000 in the previous year[18] - Gross profit margin decreased to 6.9%, down 4.8 percentage points from 11.7% in 2018[18] - The company reported a loss attributable to equity holders of HK$32,382,000, compared to a profit of HK$38,296,000 in the same period last year[18] - Basic loss per share was HK(4.70), compared to earnings of HK$5.52 per share in 2018[18] - The company incurred a loss before tax of HK$48,976,000, compared to a profit of HK$25,469,000 in the same period last year[23] - The company reported a loss for the period of HK$33,475,000, compared to a profit of HK$37,576,000 in the same period last year, representing a significant decline[35] - Total comprehensive income for the period was HK$872,000, down from HK$17,012,000 year-over-year[36] - The total comprehensive income for the period was HK$872,000, significantly lower than the previous year's comprehensive income of HK$17,732,000[49] - The profit attributable to equity holders of the Company for the period was a loss of HK$32,382,000, compared to a profit of HK$38,296,000 in the previous year[137] Dividends and Shareholder Returns - Total dividends per share for the period were HK$2.0, a reduction of 50.0% from HK$4.0 in the previous year[18] - The company declared special dividends of HK$13,754,000 during the period[46] - The special dividend declared was HK$2.0 cents per ordinary share, a decrease from HK$12.8 cents in the previous year[147] Assets and Liabilities - Cash and cash equivalents amounted to approximately HK$529 million[19] - Non-current assets totaled HK$580,955,000, slightly up from HK$580,234,000[38] - Current assets decreased to HK$893,160,000 from HK$920,389,000, primarily due to a reduction in inventories[38] - Total current liabilities decreased to HK$330,763,000 from HK$338,814,000, indicating improved short-term financial health[38] - The company’s net assets as of September 30, 2019, were HK$1,119,001,000, down from HK$1,136,653,000[41] - Total equity as of September 30, 2019, was HK$1,119,001,000, a decrease from HK$1,136,653,000 as of April 1, 2019[46] - The company's retained profits stood at HK$803,891,000 as of September 30, 2019, down from HK$848,896,000 at the beginning of the period[46] - The total liabilities of the Group as of September 30, 2019, were HK$355,114,000, a decrease from HK$363,970,000 as of March 31, 2019[115] Cash Flow and Financing Activities - Net cash flows used in operating activities amounted to HK$ (31,594,000), a significant improvement compared to HK$ (147,732,000) in the same period last year, reflecting a reduction of approximately 78.6%[55] - Cash and cash equivalents at the end of the period were HK$ 74,421,000, down from HK$ 97,215,000 in the previous year, representing a decrease of about 23.4%[58] - Net cash flows from investing activities were HK$ (3,496,000), a decrease from HK$ 127,779,000 in the prior year, indicating a shift in investment strategy[55] - The financing activities resulted in a net cash outflow of HK$ (5,120,000), compared to a cash inflow of HK$ 474,000 in the same period last year[55] - The company reported a significant decrease in cash flows from financing activities, indicating a potential shift in capital management strategy[55] Segment Performance - The Group has two reportable operating segments: manufacturing and sale of footwear products, and property investment[100] - For the six months ended September 30, 2019, the total revenue from external customers was HK$541,184,000, a decrease of 16% compared to HK$644,260,000 in the same period of 2018[109] - The segment results for the manufacturing and sale of footwear products showed a loss of HK$42,887,000 for the six months ended September 30, 2019, compared to a profit of HK$4,893,000 in 2018[113] - The Group reported a loss before tax of HK$48,976,000 for the six months ended September 30, 2019, compared to a profit before tax of HK$25,469,000 in the same period of 2018[113] Market and Sales Environment - The overall sales environment in the footwear market remained weak, impacting the Group's orders for the six months ended September 30, 2019[193] - The decline in turnover was attributed to a 5.5% decrease in average selling price (ASP) and an 11.9% decrease in business volume (pairs)[189] - Footwear product revenue decreased by 16.0% to approximately HKD 541 million, down from HKD 644 million in the previous year, attributed to a 5.5% decline in average selling price and an 11.9% drop in volume[195] Cost Management and Production - Material costs as a proportion of turnover increased due to the use of more leather for premium products, despite a drop in overall sales[192][197] - The Group incurred additional costs related to the relocation of production lines to adjust to customer sourcing plan changes during the period[200] - The production lines were frequently reorganized to accommodate new products, affecting worker efficiency due to the need for re-adaptation[196] - The lack of repeat orders necessitated frequent changes in production lines, impacting overall manufacturing efficiency[196] - The Group's overall sales volume was affected by conservative procurement plans from brand customers, leading to smaller batch sizes and shorter delivery times[193] Compliance and Accounting Standards - The interim financial information has been prepared in accordance with the applicable disclosure requirements of the Listing Rules and HKAS 34, ensuring compliance with regulatory standards[61] - The Group adopted HKFRS 16 using a retrospective approach, with the first application date being April 1, 2019, and cumulative effects recognized as adjustments to retained earnings[71] - The transition to HKFRS 16 did not have a significant financial impact on the Group's interim financial statements[71]

Financial Performance - Revenue from continuing operations decreased by 5.5% to HK$1,100,649,000 in 2019 from HK$1,164,873,000 in 2018[12] - Gross profit margin declined to 10.6% in 2019, down from 15.7% in 2018, representing a decrease of 5.1 percentage points[12] - Profit attributable to equity holders of the Company fell by 51.1% to HK$39,466,000 in 2019 compared to HK$80,714,000 in 2018[12] - Basic earnings per share decreased by 86.0% to 5.14 HK cents in 2019 from 36.82 HK cents in 2018[12] - Total dividends per share for the year were reduced by 80.0% to 6.0 HK cents from 30.0 HK cents in the previous year[12] - For the year ended March 31, 2019, turnover decreased by 5.5% year-on-year to approximately HK$1,101 million, with a 10.9% drop in business volume (pairs)[89] - Net profit attributable to equity holders decreased by approximately 86.2% year-on-year to approximately HK$36 million, down from HK$257 million[99] - The Group maintained a strong liquidity position with net cash of approximately HK$610 million as of March 31, 2019, down from HK$804 million the previous year[108] - Shareholders' equity decreased to approximately HK$1,118 million as of March 31, 2019, from approximately HK$1,221 million in 2018[173] Market Conditions - The management anticipates a challenging market environment ahead, impacting revenue growth prospects[12] - The footwear industry experienced generally weak retail sales in major markets, with notable bankruptcies among US footwear businesses due to competition and supply-chain interruptions[31] - Southeast Asia's growth rate declined last year, with ongoing pressure expected on Asia's economy, particularly with China's growth anticipated to slow further[28] - The subdued retail conditions in major footwear markets have continued in 2019, with conservative procurement patterns observed among brand customers[68] - The Group faced challenges from a conservative procurement approach by brand customers amid a weak retail environment[90] Strategic Initiatives - The Company plans to focus on new product development and market expansion strategies to improve future performance[12] - The Company is exploring potential mergers and acquisitions to enhance its market position and operational capabilities[12] - The Group has established two main scalable production hubs in Vietnam and Cambodia, supported by a center in Mainland China, to adapt to the trend of footwear brand customers shifting sourcing locations[35][36] - The Group is focusing on higher-value products and brands with growth potential to balance business volume and profitability[33] - Investment in technology and innovation is prioritized to provide effective solutions to customers[33] - The Group aims to improve long-term Return on Investment (ROI) while maintaining a healthy financial position[33] - The Group is enhancing automation and lean manufacturing processes to seek further efficiency improvements[45][47] - The Group is focusing on higher levels of automation, innovation, and digitalization to drive efficiency and quality enhancements, including the use of artificial intelligence[52][53] Production and Capacity - A new factory has been constructed adjacent to existing facilities in southern Vietnam, with plans to ramp up production as utilization increases[38] - The utilization rate of the Group's production capacity was 68.9%, a decrease from 70.0% in the previous year, primarily due to reduced business volume[123] - The Southeast Asian production base contributed 85.2% of total footwear production, an increase from 82.2% in the previous year, while Mainland China's share decreased to 14.8%[124] - The Group's production lines were 89.5% based in Vietnam and Cambodia, with only 10.5% retained in Mainland China[122] - Southern Vietnam contributed 68.8% of total volume output, an increase from 62.1% in 2018, with plans to add 3 production lines in the coming year[131] - The Cambodian factory contributed 16.4% of output, down from 20.1% in 2018, with plans to expand to 12 production lines[139] Cost Management - Stringent cost control measures are being enforced in light of weak market conditions[33] - The operational strategy included frequent assembly line rearrangements to meet client demands for smaller order sizes, impacting economies of scale[85] - The Group maintained strict cost control while investing in refining manufacturing processes and technology[56][58] - Recurring profit decreased due to a reduction in revenue from the core footwear manufacturing business, additional labor costs from converting traditional production lines, and costs associated with reevaluating the business model[105] Employee and Training - The company employed approximately 9,100 employees as of March 31, 2019, across its subsidiaries in Hong Kong, Taiwan, the PRC, Vietnam, and Cambodia[184] - Localization efforts are underway in Vietnam and Cambodia to strengthen long-term development by training local staff for management roles[62] - The affiliate is expected to reduce operating losses in the coming year due to improved worker skills and efficiency, as well as economies of scale[153] Dividends and Shareholder Actions - The Board recommended a final dividend of HK Nil cents and a special dividend of HK2.0 cents, compared to HK2.2 cents and HK12.8 cents in the previous year, resulting in a payout ratio of 116.7%[113] - The Group repurchased and canceled 5,046,000 ordinary shares at an aggregate consideration of approximately HK$8.4 million during the year[174] - A premium of approximately HK$7,909,000 was paid on the repurchase of shares, which has been debited to the share premium account[180] ESG and Sustainability - The ESG Report outlines the Group's performance in environmental protection, human resources, operating practices, and community involvement for the financial year from April 1, 2018, to March 31, 2019[191] - The ESG Report emphasizes the importance of proper disclosure of business activities to build trust with investors and shareholders[197] - The Group's operational strategy aims to continually improve its environmental and social aspects to meet global sustainability standards[188] - The Group conducted a thorough review and evaluation of its existing policies and practices during the preparation of the ESG Report[189]